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                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K

          / X /   Annual Report Pursuant to Section 13 or 15(d)
                     of the Securities Exchange Act of 1934
                  For the fiscal year ended February 28, 2003
                                      or
          /   /  Transition Report Pursuant to Section 13 or 15(d)
                     of the Securities Exchange Act of 1934

                         Commission File Number: 0-20840

                            PRESIDENT CASINOS, INC.
              (Exact name of registrant as specified in its charter)

               Delaware                                  51-0341200
    (State or other jurisdiction of                   (I.R.S. Employer
     incorporation or organization)                  Identification No.)

                802 North First Street, St. Louis, Missouri  63102
                      Address of principal executive offices

                                 314-622-3000
               Registrant's telephone number, including area code

      Securities registered pursuant to Section 12(b) of the Act:  None
         Securities registered pursuant to Section 12(g) of the Act:
                       Common Stock, $.06 par value
                     Preferred Stock Purchase Rights

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

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

  Indicate by check mark whether the Registrant is an accelerated filer
(as defined in Rule 12b-2 of the Exchange Act.)  Yes / /    No /X/

  As of May 28, 2003, the aggregate market value of the voting stock
held by non-affiliates of the Registrant was approximately $974,606.*
  As of May 28, 2003, the number of shares outstanding of the
Registrant's Common Stock was approximately 5,033,161.

* Calculated by excluding all shares that may be deemed to be
beneficially owned by executive officers and directors of the
Registrant, without conceding that all such persons are "affiliates" of
the Registrant for purposes of the federal securities laws.

                 DOCUMENTS INCORPORATED BY REFERENCE - None.
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                                     PART I

Item 1. and Item 2.  Business and Properties.

General

  President Casinos, Inc. owns, operates and develops dockside gaming
casinos through its subsidiaries (collectively, the "Company").  The
Company's current gaming facilities and operations are summarized as
follows:

  Biloxi, Mississippi
    Operating entity                  - The President Riverboat Casino-
                                        Mississippi, Inc.
    Vessel                            - "President Casino-Broadwater"
    Slots                             -    865
    Gaming tables                     -     42
    Opening of casino                 - August 13, 1992
    Opening of current facility       - June 30, 1995

  St. Louis, Missouri
    Operating entity                  - President Riverboat Casino-
                                        Missouri, Inc.
    Vessel                            - "Admiral"
    Slots                             -  1,369
    Gaming tables                     -     39
    Opening of casino without slots   - May 27, 1994
    Opening of casino with slots      - December 9, 1994

  In addition to its gaming operations, the Company owns and manages
certain hotel and ancillary facilities associated with its casino
operations in Biloxi, Mississippi.

  The Company was incorporated in the State of Delaware in June 1992 and
completed the initial public offering of its Common Stock in December
1992.  The Company is the successor to businesses operated in St. Louis,
Missouri  since 1985 and Biloxi, Mississippi since August 1992.  The
Company's principal executive offices are located in an approximately
36,000 square foot building owned by the Company at 802 North First
Street, St. Louis, Missouri 63102, of which the Company occupies
approximately 30,800 square feet and leases the remainder to an
unrelated party.  The Company's telephone number is
(314) 622-3000.  Copies of the Company's filings with the Securities
Exchange Commission and other important information regarding the
Company is available free of charge on the Company's web page
www.presidentcasino.com.

  The Company's business is divided into three main business segments:
St. Louis, Missouri operations, Biloxi, Mississippi operations and
leasing operations.  For information concerning each of these segments,
see "Note 19. Segment Information" in the accompanying Notes to
Consolidated Financial Statements.

  On October 10, 2000, the Company sold the assets of its former
Davenport, Iowa casino and hotel operations for aggregate consideration
of $58.2 million in cash.  The Company recognized a gain of
approximately $34.5 million on the transaction.  The Davenport casino
operations were managed by the Company's wholly-owned subsidiary,
President Riverboat Casino-Iowa, Inc. ("PRC Iowa"), The Connelly Group,
L.P. ("TCG").  The Blackhawk Hotel operations in

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Davenport, which were also sold in the transaction, were managed by a
wholly-which is the general partner of the 95% Company-owned operating
partnership, owned subsidiary of the Company.

  On April 30, 2001, the Company executed an agreement to sell the
assets of Gateway Riverboat Cruises, the Company's non-gaming cruise
operations which provided dinner cruise, excursion and sightseeing on
two riverboats on the Mississippi River.  The transaction was
consummated on July 17, 2001.  The Company recognized a gain of $0.8
million on the sale of these assets.

Substantial Indebtedness; Bankruptcy Proceedings

  The Company continues to experience difficulty generating sufficient
cash flow to meet its debt obligations and sustain its operations.  As a
result of the Company's relatively high degree of leverage and the need
for significant capital expenditures at its St. Louis property, the
Company was unable to make the regularly scheduled interest payments of
$6.4 million that were each due and payable March 15, and September 15,
2000 on its $75.0 million 13% Senior Exchange Notes (the "Senior
Exchange Notes") and $25.0 million 12% Secured Notes (the "Secured
Notes," and collectively with the Senior Exchange Notes, the "Notes").
Under the Indentures pursuant to which the Notes were issued, an Event
of Default occurred on April 15, 2000, and is continuing as of the date
hereof.  Additionally, the Company did not pay the $25.0 million
principal payment due September 15, 2000 on the Senior Exchange Notes.
The holders of at least 25% of the Senior Exchange Notes and the Secured
Notes were notified of the defaults and the Indenture Trustee has
accelerated the Notes and declared the unpaid principal and interest to
be due and payable.

  On November 22, 2000, the Company entered into an agreement with a
majority of the holders of the Senior Exchange Notes and a majority of
the holders of the Secured Notes.  The agreement provided for a proposed
restructuring of the Company's debt obligations under the Notes and the
application of certain of the proceeds received by the Company from the
sale of the Company's Davenport, Iowa assets.  Approximately $43.0
million of the proceeds from the sale were deposited with a trustee.  Of
this amount, $12.8 million was used to pay missed interest payments due
March 15, 2000 and September 15, 2000 on the Notes; $25.0 million was
used to partially redeem the Notes; and $5.2 million was used to pay
interest due March 15, 2001 on the Notes.

  Subsequently, the Company was unable to make the principal and
interest payments due September 15, 2001 and interest payments due March
15, 2002, on its Notes.  As of February 28, 2003, principal due on the
Senior and Secured Notes was $56.2 million and $18.8 million,
respectively.

  On June 20, 2002, President Casinos, Inc. together with its
subsidiary, President Riverboat Casino-Missouri, Inc. ("President
Missouri"), which owns and operates the St. Louis operations, filed
voluntary petitions for reorganization under Chapter 11 of Title 11,
United States Code (the "Bankruptcy Code") in the United States
Bankruptcy Court for the Southern District of Mississippi (the
"Mississippi Bankruptcy Court").  Subsequently, on July 9, 2002,
President Casinos, Inc.'s subsidiary The President Riverboat Casino-
Mississippi, Inc. ("President Mississippi") filed a voluntary
reorganization petition in the same Court.  On July 11, 2002,
substantially all of President Casinos, Inc.'s other operating
subsidiaries filed voluntary reorganization petitions under Chapter 11
in the same Mississippi Bankruptcy Court.  Subsequently, orders were
entered by the Mississippi Bankruptcy Court

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transferring venue of all of the bankruptcy cases, except President
Riverboat Casino-New York, Inc. and President Broadwater Hotel, LLC, to
the United States Bankruptcy Court for the Eastern District of Missouri
(the "Missouri Bankruptcy Court") where they are now pending and being
administered.

  The Company and its subsidiaries each continue in possession and use
of their assets as debtors-in-possession.  The Company and its
subsidiaries have had their Missouri Chapter 11 cases administratively
consolidated under the Company's case.

  Prior to any of the cases being transferred to the Missouri Bankruptcy
Court, the Mississippi Bankruptcy Court established "bar dates" all of
which have expired, by which all claimants were required to submit and
characterize claims against the Company.  As part of the Company's and
its subsidiaries' Chapter 11 reorganization process, the Company has
attempted to notify all known or potential creditors of the filing for
the purpose of identifying all pre-petition claims.  In the Company's
Chapter 11 case, substantially all of the Company's liabilities as of
the filing date are subject to adjustment under a plan of
reorganization.  Generally, actions to enforce or otherwise effect
repayment of all pre-petition liabilities as well as all pending
litigation against the Company are stayed while the Company continues
its business operations as debtors-in-possession.  Schedules have been
filed by the Company with the Bankruptcy Court setting forth the assets
and liabilities of the debtors as of the filing date as reflected in the
Company's accounting records.  Differences between amounts reflected in
such schedules and claims filed by creditors will be investigated and
amicably resolved or adjudicated before the Bankruptcy Courts.  The
ultimate amount and settlement terms for such liabilities are subject to
a plan of reorganization, and accordingly, are not presently
determinable.  Under the Bankruptcy Code, the Company may elect to
assume or reject real estate leases, employment contracts, personal
property leases, service contracts and other executory pre-petition
contracts and unexpired leases, subject to Bankruptcy Court review.  The
Company cannot presently determine or reasonably estimate the ultimate
liability that may result from rejecting leases or from filing of claims
for any rejected contracts, and no provisions have been made for these
items.

  The consummation of a plan or plans of reorganization (a "Plan") is
the principal objective of the Company's Chapter 11 filings.  A Plan
would, among other things, set forth the means for satisfying claims
against and interests in the Company and its subsidiaries, including
setting forth the potential distributions on account of such claims and
interests, if any.  Pursuant to the Bankruptcy Code, the Company had the
exclusive right for 120 days from the filing date to file a Plan, and
for 180 days from the filing date to solicit and receive the votes
necessary to confirm a Plan.  The Company was unable to have a plan
confirmed prior to the expiration of these exclusivity periods, and the
Missouri Bankruptcy Court denied the Company's motion to further extend
the exclusivity period.  Accordingly, in addition to the Company, any
party-in-interest, including a creditor, an equity holder, a committee
of creditors or equity holders, or an indenture trustee, may file its
own Plan for the Company.  Confirmation of a Plan is subject to certain
statutory findings by the Bankruptcy Court.  Subject to certain
exceptions as set forth in the Bankruptcy Code, confirmation of a Plan
requires, among other things, a vote on the Plan by certain classes of
creditors and equity holders whose  creditors or equity holders does not
vote to accept the Plan, but all of the  rights or interests are
impaired under the Plan.  If any impaired class of other requirements of
the Bankruptcy Code are met, the proponent of the Plan

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may seek confirmation of the Plan pursuant to the "cram down" provisions
of  the Bankruptcy Code.  Under these provisions, the Bankruptcy Court
may still  confirm a Plan notwithstanding the non-acceptance of the Plan
by an impaired  class, if, among other things, no claim or interest
receives or retains any  property under the Plan until each holder of a
claim senior to such claim or  interest has been paid in full.  There
can be no assurance that a Plan will be  confirmed by the Bankruptcy
Court, or that any such Plan will be consummated.

  It is not possible to predict the length of time the Company will
operate  under the protection of Chapter 11 and the supervision of the
Bankruptcy  Court, the outcome of the bankruptcy proceedings in general,
or the effect of  the proceedings on the business of the Company or on
the interest of the  various creditors and stakeholders.  Since the
filing date, the Company has  operated in the ordinary course of
business.  Management is in the process of  evaluating their operations
as part of the development of a Plan.  During the  pendency of the
Chapter 11 filings, the Company may, with Bankruptcy Court  approval,
sell assets and settle liabilities, including for amounts other than
those reflected in the financial statements.  The administrative and
reorganization expenses resulting from the Chapter 11 filings will
unfavorably  affect the Company's results of operations.  In addition,
under the priority  scheme established by the Bankruptcy Code, most, if
not all, post-petition  liabilities must be satisfied before most other
creditors or interest holders,  including stockholders, can receive any
distribution on account of such claim  or interest.

  --St. Louis Operations

  On May 15, 2003, the Missouri Bankruptcy Court issued an order
approving a  joint motion filed by the Company, the unsecured creditors'
committee (the  "Committee") and certain bondholders of the Company (the
"Bondholders") with  respect to a timetable and process for the
Company's reorganization  proceedings.  Specifically, the joint motion
sought entry of an order  approving a timetable and process set forth in
a Term Sheet, dated March 25,  2003 (the "Term Sheet"), with respect to
either (i) the refinancing of the  Company by July 18, 2003, or (ii) a
sale of the assets related to the  Company's St. Louis gaming
operations.  In addition, the Court approved  motions by the Company to
approve the appointment of Libra Securities LLC to serve as the
Company's investment banker in connection with any sale of the St. Louis
operations.

  As set forth in the Term Sheet, the Company, the Committee and the
Bondholders have agreed that the Company shall have until July 18, 2003
to effect a recapitalization of the Company pursuant to a plan of
reorganization with qualified financing commitments under which the
unsecured creditors and bondholders would be repaid in full.  The Term
Sheet also outlines a process and timetable under which the Company's
St. Louis operations would be sold in the event that a recapitalization
of the Company is not completed as set forth in the Term Sheet.  As part
of such process, the Company would be required to meet certain
benchmarks which, if not met, would permit the Committee to file a
motion with the Court for the sale of the Company's St. Louis operations
and to appoint a chief restructuring officer to manage the sale process.
Such benchmarks include: (i) submission of draft marketing materials by
May 1, 2003, (ii) delivery of marketing materials to qualified
prospective purchasers within 3 days of the end of the 2003 Missouri
Legislative Session, or no later than June 1, 2003, (iii) execution of a
definitive asset purchase agreement by August 1, 2003, (iv) filing of a
motion to approve the sale by August 4, 2003,

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and (v) good faith efforts by the Company to locate a purchaser and
cooperate with the sale process.  The Term Sheet also contemplates that
preliminary bids would be received by July 11, 2003, and that a
preliminary "stalking horse" bidder would be selected by July 18, 2003.

  The Company believes that, as a practical matter, a refinancing can be
accomplished, if at all, only if Missouri's gaming law is changed to
eliminate current loss limits which place a $500 limit on the amount a
gaming customer can lose during a two-hour gaming session.  Legislation
eliminating loss limits in Missouri was proposed during the January 2003
session of the Missouri General Assembly, but the session was adjourned
without the legislation being passed.  Missouri law gives the Governor
of Missouri the ability to call a special session of the legislature.
The Missouri Governor has announced the veto of several of the bills
passed by the legislature and announced the call on June 2, 2003 of a
special session for these bills to be reconsidered where it is
anticipated that the subject of additional funding for the state will
also be addressed.  The Company currently anticipates that when the
special session is convened the subject of removing the $500 loss limit
will again be presented, and that such a proposal may also be
accompanied by a proposal or proposals to increase tax revenue from
gaming companies.

  If the legislature removes loss limits, and does not modify the
existing gaming tax structure such that a substantial portion of the
economic benefit of removal of the loss limits is decreased through the
imposition of new taxes, it is possible that the Company will be able to
effect a refinancing.  No assurance can be given as to the achievement
of a refinancing due to the uncertainty of the scope of any potential
legislation, the actual and potential effect of the removal of loss
limits as of the date refinancing is sought as well as other inherent
difficulties and risks of obtaining financing on acceptable terms.
However, if loss limits are not removed and a refinancing cannot not be
completed, for whatever reason, then pursuant to the order of the
Missouri Bankruptcy Court, the Company will be obligated to begin a
process pursuant to which the St. Louis operations would be sold.  At
the current time, in the absence of the removal of loss limits, the
Company believes that the value of revenues from operations, projected
at current rates receivable for gaming operations earning such levels,
would in all probability not produce sufficient proceeds to retire in
full all of the Bondholder indebtedness which is currently outstanding.
In such event, following the sale of the St. Louis operations the
Company would continue to owe monies to the Bondholders.  While it is
not possible to predict what might happen in this event, if the proceeds
from any such sale of the St. Louis operations are insufficient to
satisfy the Company's obligations to the Bondholders the Company may be
forced to sell or otherwise liquidate its investment in its Biloxi
operations.  In such event, there can be no assurance that the assets of
the Company will exceed its obligations, or that the Company would not
be dissolved without any distribution to its stockholders.

  --Biloxi, Mississippi

  President Broadwater Hotel, LLC ("PBLLC"), a limited liability company
in which Broadwater Hotel, Inc., a wholly-owned subsidiary of the
Company ("BHI"), has a Class A ownership interest, was in default under
a $30.0 million promissory note and associated $7.0 million loan fee
incurred in connection with the July 1997 purchase by PBLLC of the real
estate and improvements utilized in the Company's operations in Biloxi,
Mississippi.  On

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April 19, 2001, PBLLC filed a voluntary petition for reorganization
under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy
Court for the Southern District of Mississippi.  PBLLC continued in
possession and use of its assets as a debtor-in-possession and had an
agreement with Lehman Brothers Holdings Inc., its lender and largest
creditor ("Lehman"), approved by the Mississippi Bankruptcy Court which
allowed PBLLC's use of its cash collateral.

  On October 16, 2001, PBLLC filed its plan of reorganization which
would permit PBLLC to restructure its debt obligations in a manner which
was designed to permit it to continue as a going concern.  Subsequently,
on February 28, 2003, PBLLC filed Modifications to Debtor's Plan of
Reorganization (together with the plan of reorganization, the "Modified
Plan").  On May 14, 2003, the Mississippi Bankruptcy Court entered the
confirmation order confirming the Modified Plan.  The Modified Plan
became effective May 28, 2003 and the Company consummated the Modified
Plan at that time.  The Modified Plan provides the unsecured creditors
of PBLLC will receive 100% of their claims.  Under the Modified Plan,
the obligations to Lehman were modified with respect to the debt amount,
the interest rate and the due date.  In addition, the obligation was re-
documented substantially along the lines of the original obligation.  On
May 28, 2003, the Company paid $3.6 million to Lehman pursuant to the
Modified Plan.  The principal amount of the restructured loan from
Lehman is $46.4 million plus interest at the rate of 12.75% per annum
from November 1, 2002 until May 28, 2003 on $30.0 million plus interest
at the rate of 8.75% per annum from November 1, 2002 until May 28, 2003
on $7.0 million, less the payment by PBLLC to Lehman of $3.6 million.
On May 28, 2003, the principal amount of the loan under this calculation
was $45.4 million.  The principal amount earns interest at a rate of
12.75% per annum until the obligation is satisfied.  The maturity date
of the Lehman obligation is June 1, 2005.  Interest is payable during
the term of the loan on the adjusted loan obligation amount of $44.0
million, less the payment by PBLLC to Lehman on May 28, 2003, or $40.4
million, plus interest at a rate of 12.75% per annum from November 30,
2002 until the effective date.  On May 28, 2003, the adjusted loan
obligation amount was $43.0 million.  PBLLC is required to pay interest
earned on the adjusted loan obligation payable monthly from May 28, 2003
at a rate of the greater of 7.75% per annum or LIBOR plus 4% per annum
floating.  Certain interest amounts may be deferred until October 31,
2003.  A discount of $3.5 million with respect to the obligation will
occur and the deferred interest amounts will be waived provided payment
of the entire adjusted loan obligation amount is made on or before
November 1, 2003.  In the event that payment in full of the restructured
loan is made after November 1, 2003 but prior to June 2, 2005, interest
on the indebtedness will be calculated at a lower rate as set forth in
the Modified Plan.

  Under the Modified Plan, the obligation to Lehman is accelerated in
the event the Missouri Bankruptcy Court, having jurisdiction over
President Mississippi, does not approve the base rental increase on the
marina leased to the Biloxi casino by PBLLC by November 1, 2003.  This
requirement does not apply if PBLLC's aggregate net cash flow from its
operations, after receiving rental payments from President Mississippi
at the current base rental, and after certain adjustments are made,
equals or exceeds the amount of funds that would be necessary, on an
annual basis, to pay the greater of 7.75% per annum or LIBOR plus 4% per
annum floating on the adjusted loan obligation amount as of November 1,
2003.  The Modified Plan contains an express waiver by PBLLC of rights
to seek future bankruptcy protection.  J. Edward Connelly Associates,
Inc. ("JECA"), the holder of a Class B interest in PBLLC, retains its

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membership interest, but any payments by PBLLC to JECA shall be
restricted until such time as all outstanding obligations to Lehman and
other creditors receiving funds under the Modified Plan are discharged.

  --Leasing Operations

  Due to certain debt covenants and cross default provisions associated
with other debt agreements, the Company is also currently in default
under the terms of its $2.1 million M/V "President Casino-Mississippi"
note.  The vessel and various equipment aboard the M/V "President
Casino-Mississippi" collateralize a term note payable which is also
personally guaranteed by John
E. Connelly, Chairman and Chief Executive Officer of the Company.  The
Company continued to make the quarterly principal and interest payments
on the note prior to the Company's bankruptcy filing.  Under the terms
of the note agreement, $2.1 million principal became due and payable in
August 2002.  In November 2002, the lender brought an action against Mr.
Connelly for breach of contract under his personal guarantee.  In
January 2003, the Mississippi Bankruptcy Court granted a motion to
relieve the lender from the automatic stay in order to enforce its
rights under the Preferred Fleet Ship Mortgage, including but not
limited to the right of the lender to seize and sell the vessel.  In May
2003, the lender filed a motion with the United States District Court
for the Southern District of Illinois for an order directing the Clerk
of Court to issue a warrant for the arrest of the M/V "President Casino-
Mississippi" pursuant to rules of admiralty and maritime claims.  On May
20, 2003, the Court executed the warrant, which will allow the vessel to
be seized and sold.  To date, no further action has been taken by the
lender.

  On March 29, 2001, the Company executed an installment sale agreement
for the M/V "Surfside Princess" (formerly, the "New Yorker").  Under the
terms of the agreement, the Company would receive an aggregate of $9.0
million principal installment payments over a period of thirty months
commencing on March 29, 2001, which included a final principal balloon
payment of $4.4 million due October 2003.  On October 3, 2001, the
Company terminated the installment sale agreement and repossessed the
M/V "Surfside Princess," due to the inability of the purchasing party to
meet the terms of the agreement.  See "Item 3.  Legal Proceedings."

  During the forth quarter of fiscal 2003, the Company held a sealed bid
auction of the "Surfside Princess" in accordance with Section 363 of the
United States Bankruptcy Code.  In February, the auction closed and the
winning bid was $1.5 million.  On May 2, 2003, the purchase agreement on
the vessel was consummated, at which time the liens against the vessel
attached to the proceeds from the sale which are held in an escrow
account.  The Company took a $1.2 million valuation allowance on the
vessel in February to reduce the net book value to the bid price.

  Management is pursuing various strategic financing alternatives in
order to fund its debt obligations and the Company's continuing
operations.  The Company is pursuing alternatives, including the
restructuring and refinancing of outstanding debt obligations and/or the
sale of all or a portion of its assets.  The Company's ability to
continue as a going concern is dependent on its ability to restructure
successfully, including refinancing its debts, selling assets on a
timely basis under acceptable terms and conditions, and the ability of
the Company to generate sufficient cash to fund future operations.
There can be no assurance in this regard.

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  The descriptions of the Company's business, financial condition and
prospects contained in this Annual Report on Form 10-K are qualified in
their entirety by the foregoing description of the significant risks
associated with the Company's bankruptcy proceedings.

Current Operations

  The Company's management views its current operations in three
operating segments:  Biloxi Operations, St. Louis Operations and, to a
much lesser extent, Corporate Leasing Operations, each of which is
discussed more fully below.  Prior to the sale of the Company's
Davenport properties in fiscal 2001, Davenport operations were
considered to be a fourth operating segment.  Revenues, results of
operations and identifiable assets of each of these segments can be
found in Note 19 of the accompanying consolidated financial statements.

  --St. Louis, Missouri Operations

  In May 1994, the Missouri Gaming Commission licensed the Company to
conduct dockside gaming operations on the Company-owned vessel,
"Admiral," in St. Louis through its wholly-owned subsidiary, President
Missouri.  The Company's initial license was subsequently renewed and
was last renewed in May 2002 for a period of two years.  The "Admiral"
is approximately 400 feet long, continuously docked north of the base of
the Gateway Arch in Laclede's Landing, at a mooring site subleased by
the Company from the City of St. Louis Port Commission (the "Port
Commission").

  During July 1998, the Company and the City of St. Louis reached an
agreement for the relocation of the "Admiral" approximately 1,000 feet
north from its former location on the Mississippi River.  The casino was
closed at midnight December 3, 2000 to prepare for the move and reopened
on December 7, 2000.   The new location provides guests with improved
parking and valet service, and better ingress/egress including improved
access from major highways into St.
Louis.  This site is also less susceptible to the negative economic
impact and to flooding than the previous mooring site.

  The aggregate cost to relocate the "Admiral" and construct ancillary
facilities was approximately $8.7 million.  Under the terms of the
agreement, the City funded $3.0 million of the relocation costs, $2.4
million of which amount was financed through bank debt.  The Company
paid for the remaining $5.7 million of relocation costs.  It is
anticipated that the City will repay the debt from annual allocations of
$0.6 million from the City's annual home dock city public safety fund
that is funded by admission taxes from the "Admiral."  The Company has
guaranteed repayment of the bank debt if the City fails to pay the
obligation.  As of February 28, 2003, the Company's guaranteed balance
was $1.1 million.

  Rent under the terms of the new lease consists of base rent plus a
percent of adjusted gross receipts.  The base rent is $27,000 annually
and is subject to rate change every five years based on the
recommendation of the Port Commission.  The percentage rent is 2% of
adjusted gross receipts for any lease year equal to or less than $80.0
million, plus 3% of that portion of adjusted gross receipts for such
lease year which exceed $80.0 million but which are equal to or less
than $100.0 million, plus 4% of that portion of adjusted gross receipts
for such lease year, if any, which exceed $100.0 million.

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  Competition is intense in the St. Louis market area.  There are
presently four other casino companies operating five casinos in the
market area.  Many of these competitors have significantly greater name
recognition and financial and marketing resources than the Company.  Two
of these are Illinois casino companies operating single casino vessels
on the Mississippi River, one across the Mississippi River from the
"Admiral" and the second 20 miles upriver.  There are two Missouri
casino companies, each of which operates casino vessels approximately 20
miles west of downtown St. Louis on the Missouri River.  One company
operates one casino in the City of St. Charles, Missouri and the other
company operates two casinos in Maryland Heights, Missouri.  The
operator of the St. Charles casino replaced its facility and reopened
with nearly double its prior gaming positions in August 2002.

  Applications were submitted to the Missouri Gaming Commission for
approval of potential new licenses at four different locations within
the St. Louis metropolitan area along the Mississippi River.  Three of
the locations are within 20 miles of the "Admiral."  In July 2000, the
Gaming Commission announced its decision to award an additional license
to the applicant proposing a site at the greatest distance from the
"Admiral" of the proposed four locations.  The Commission's decision was
being challenged by one of the applicants whose proposal was not
selected and certain other entities.  In September 2001, the applicant
selected by the Gaming Commission announced it would not proceed with
the development of the project.  The Gaming Commission announced it will
consider licensing an additional casino in the St. Louis market.  The
Gaming Commission has extended the period in which applications can be
filed but has not indicated a specific deadline for such filings.  The
opening of one or more additional casinos in the St. Louis market would
have a material adverse impact on the St. Louis operations under most
possible scenarios.

  Missouri regulations limit the loss per simulated cruise per passenger
by limiting the amount of chips or tokens a guest may purchase during
each two-hour gaming session to $500.  The company that operates
adjacent casinos is able to offer guests who reach the two-hour loss
limit the ability to move to the adjacent casino and continue to play.
The lack of a statutory loss limit on Illinois casinos allows them to
attract higher stake players and guests who do not want to be burdened
with the administrative requirements related to the loss limits.

  During the summer of 1998, all Missouri casinos in the St. Louis
market,
except the "Admiral," migrated from a manual/paper system of regulating
the
Missouri $500 loss limit to an electronic system.  This paperless loss
tracking system is more accommodating to guests and allows for the use
of bill validators on slot machines, a convenience that the
"manual/paper" system does not accommodate.  The slot machines offered
by the "Admiral" lacked bill validators until the end of August 2000.
As a result, the Company could not provide guests the convenience of
using bill validators nor adapt to the paperless loss tracking system,
putting the "Admiral" at a significant competitive disadvantage with the
other casinos in the market.  Effective August 28, 2000, Missouri began
to allow credits generated through use of the bill validators to go
directly to the slot "credit meter" for use by the guests.  Previously,
a guest using a bill validator received tokens in the tray and fed these
tokens into the machine.  The regulatory change provided a
significant added convenience to slot players.

                                   9
<PAGE> 11
  --Biloxi, Mississippi Operations

  The Company manages its Biloxi gaming operations through its wholly-
owned subsidiary, President Mississippi.  Biloxi is located on the Gulf
of Mexico 75 miles east of New Orleans.  The Mississippi Gulf Coast area
has a population of approximately 300,000.  The Company's Mississippi
gaming license was last renewed in April 2001 for a three-year period.

  Since gaming began in Mississippi in August 1992, competition has
steadily increased.  There are currently twelve casinos operating in the
Mississippi Gulf Coast area.  The twelfth casino opened in March 1999
and is the largest casino in the market.  The Company also faces
competition from gaming operations in the metropolitan New Orleans area
and elsewhere in Louisiana and Mississippi.  The New Orleans
metropolitan area currently has four casinos in operation.

  Management believes the Mississippi Gulf Coast has become a major
destination point for gaming entertainment.  The area is becoming more
widely known with many guests coming long distances to enjoy the
weather, beaches, golfing and other entertainment.  Several large gaming
companies have built large hotel/casino complexes and have captured a
significant portion of the Mississippi Gulf Coast market.  Many of these
competitors have substantially greater name recognition and financial
and marketing resources than the Company.  Management believes that as
newer and larger casino complexes have entered the market, it has become
increasingly more difficult to compete and maintain market share.  Thus,
management continues to study strategic alternatives for its Biloxi
operations.  See "Potential Growth Opportunities-Biloxi, Mississippi
Development."

  The Company began dockside gaming operations in Biloxi on August 13,
1992.  Prior to July 1997, the Company was party to an operating lease
with BH
Acquisition Corporation ("BHAC") for its Biloxi mooring site, parking
facilities, offices and a warehouse.  BHAC was a wholly-owned entity of
Mr. Connelly.  Rent under the operating lease agreement was
approximately $3.0 million annually, on a triple net basis.  In July
1997, President Broadwater Hotel, LLC ("PBLLC"), a limited liability
company in which the Company has a Class A ownership interest, and a
wholly-owned entity of Mr. Connelly which has a Class B ownership
interest and certain preferred rights to certain cash flows, acquired
the real estate and improvements from BHAC for $40.5 million.  The
property comprises approximately 260 acres and includes a 111-slip
marina which contains the mooring site of "President Casino-Broadwater,"
two hotels with approximately 500 rooms and an adjacent 18-hole golf
course (collectively, the "Broadwater Property").

  The marina at the Broadwater Property consists of both "tidelands" and
"fast lands" under the Mississippi Trust Tidelands Act (the "Tidelands
Act").  The Tidelands Act provides that land designated as tidelands is
deemed to be owned by the State of Mississippi in trust.  Under
Mississippi law, riparian owners of land designated as tidelands or fast
lands are provided the first opportunity to negotiate with the State of
Mississippi for a lease on the property.

  During August 1992, BHAC entered into a ten-year lease agreement with
the State of Mississippi for the tidelands (the "Tidelands Lease") for
an annual rental fee of $295,000, with an option for a renewal term of
five years, subject to renegotiation of the annual rent.  In November
1993, the Tidelands

                                    10

<PAGE> 12
Lease was amended to allow a new or second vessel to be moored, among
other items, for an annual rent of $525,000.  Effective in August 1995,
BHAC exercised its rights under the agreement and the Company's annual
rent increased to $525,000.  Effective August 1997, the state adjusted
the annual rent to $598,000 in accordance with the terms of the lease.
Effective August 2002, the Company renewed its lease for a term of five
years and the state adjusted the annual rent to $670,000 in accordance
with the terms of the lease.

  During December 1996, BHAC entered into a 40-year lease agreement (the
"Fast Lands Lease") with the State of Mississippi for the fast lands for
an annual rental fee of $21,000, adjustable every five years as defined
in the lease agreement.  Concurrent with the purchase of PBLLC, BHAC
sold its interest in the Tidelands Lease and the Fast Lands Lease to
PBLLC.

  --Leasing Operations

  In addition to the vessels currently owned and utilized in its gaming
operations, the Company owns the M/V "President Casino-Mississippi."
The M/V "President Casino-Mississippi" was previously utilized at the
Company's Biloxi and Davenport operations.  The M/V "President Casino-
Mississippi" is 292-feet long and 65-feet wide, containing approximately
22,000 square feet of gaming space on three decks and formerly
accommodated 620 slot machines and 43 table games.

  The vessel and various equipment aboard the M/V "President Casino-
Mississippi" collateralizes a term note payable which is also personally
guaranteed by Mr. Connelly.  The Company is in default on the term note
payable.  The Company continued to make the quarterly principal and
interest payments on this note prior to the Company's bankruptcy
filings.  Under the terms of the note agreement, $2.1 million principal
became due and payable in August 2002.  In November 2002, the lender
brought an action against Mr. Connelly for breach of contract under his
personal guarantee.  In January 2003, the Mississippi Bankruptcy Court
granted a motion to relieve the lender from the automatic stay in order
to enforce its rights under the Preferred Fleet Ship Mortgage, including
but not limited to the right of the lender to seize and sell the vessel.
In May 2003, the lender filed a motion with the United States District
Court for the Southern District of Illinois for an order directing the
Clerk of Court to issue a warrant for the arrest of the M/V "President
Casino-Mississippi" pursuant to rules of admiralty and maritime claims.
On May 20, 2003, the Court executed the warrant, which will allow the
vessel to be seized and sold.  To date, no further action has been taken
by the lender.

  On March 29, 2001, the Company executed an installment sale agreement
for the M/V "Surfside Princess" (formerly, the "New Yorker").  Under the
terms of the agreement, the Company would receive an aggregate of $9.0
million principal installment payments over a period of thirty months
commencing on March 29, 2001, which included a final principal balloon
payment of $4.4 million due October 2003.  The note bore an annual
interest rate of 10.5%.  On October 3, 2001, the Company terminated the
installment sale agreement and repossessed the M/V "Surfside Princess,"
due to the inability of the purchasing party to meet the terms of the
agreement.  See "Item 3.  Legal Proceedings."

  During the forth quarter of fiscal 2003, the Company held a sealed bid

                                    11


<PAGE> 13
auction of the "Surfside Princess" in accordance with Section 363 of the
United States Bankruptcy Code.  In February, the auction closed and the
winning bid was $1.5 million.  On May 2, 2003, the purchase agreement on
the vessel was consummated, at which time the liens against the vessel
attached to the proceeds from the sale which are held in an escrow
account.  The Company took a $1.2 million valuation allowance on the
vessel in February to reduce the net book value to the bid price.

Potential Growth Opportunities

  --Biloxi, Mississippi Development

  As discussed in "Current Operations-Biloxi, Mississippi," the Company
owns the Broadwater Property in Biloxi, Mississippi.  The property
comprises approximately 260 acres and includes two hotels, an adjacent
18-hole golf course and a 111-slip marina.  The marina is the site of
the Company's Biloxi casino operations and was formerly leased by the
Company under a long-term lease agreement.

  Management believes that this site is ideal for development of
"Destination Broadwater," a full-scale luxury destination resort
offering an array of entertainment attractions in addition to gaming.
The plans for the resort feature a village which will include a cluster
of casinos, hotels, restaurants, theaters and other entertainment
attractions.  Management believes that with its beachfront location and
contiguous golf course, the property is the best site for such a
development in the Gulf Coast market.

  In January 1999, the Company received the permit from the Mississippi
Department of Marine Resources ("DMR") for development of the full-scale
destination resort.  This was the first of three permit approvals
required of the Joint Permit Application submitted in August 1998 to the
DMR, the U.S. Army Corps of Engineers (the "Corps") and the Mississippi
Department of Environment Quality.  The two remaining permit approvals
are still pending and awaiting the completion of the Final Environmental
Impact Statement ("EIS").  The Draft EIS has been completed, notice of
which was posted in the Federal Register in June 2000 for public
comment.  The current permit application to the Corps was cancelled on
June 10, 2002 pending re-submission of a revised project design that
reflects the changes resulting from the Company's work with the Corps.
The cancellation is an administrative measure which will allow the Corps
to remove the application from the Corps' pending action list, and
should not affect future evaluation of the permit request.  The Company
anticipates submitting a revised plan.  At that time, a new application
number will be assigned, and the evaluation of the permit request will
resume.

  In connection with the Company's proposed Destination Broadwater
development plan, to date, the Company has not identified any specific
financing alternatives or sources as the necessary regulatory approvals
have not been obtained.  There can be no assurance that the Company will
be able to obtain the regulatory approvals or the requisite financing.
Should the Company fail to raise the required capital, such failure
would materially and adversely impact the Company's business plan.

Marketing and Sales

  The Company targets its marketing efforts at middle income,
recreational gaming customers.  The Company relies on a mix of
billboards, television,

                                    12

<PAGE> 14
radio and print advertisements in both the local and regional markets to
attain a high recognition level.  The Company also has preferred slot
player programs, together with electronic slot player tracking, a table
player tracking and rating system, hosts, gaming tournaments, special
events, direct mailing, telemarketing and other casino marketing
techniques to identify, recognize and cultivate frequent and better
casino customers.  This effort is supported by direct marketing, a
targeted trade advertising schedule and attendance at industry trade
shows and sales gatherings.  The Company also utilizes its web site at
www.presidentcasino.com to enhance its marketing programs.

Regulatory Matters

  --Gaming Regulations

  General.  The ownership and operation of gaming facilities are subject
to
extensive state and local regulation.  The Company's Biloxi gaming
operations are regulated by the Mississippi Gaming Commission and its
St. Louis gaming operations are regulated by the Missouri Gaming
Commission.  As a condition to obtaining and maintaining a gaming
license, the Company must pay fees and taxes, observe stringent
regulations on operations, submit and update comprehensive applications
and submit detailed financial, operating and other reports to each such
Commission.  Each such Commission has broad powers to suspend or revoke
licenses in which event operations would be terminated or suspended.  In
addition, substantially all of the Company's material transactions are
subject to prior notice to review, and in some instances, approval by
such Commission.  Any person acquiring 5% or more of the Common Stock or
equity securities of any gaming entity must be found suitable by the
appropriate regulatory body.

  Various license fees and taxes are payable to the jurisdictions in
which the Company conducts gaming operations.  These taxes are
calculated in various ways, and may be based upon (i) a percentage of
the gross gaming revenues received by the casino operation, (ii) the
number of slot machines operated by the casino, (iii) the number of
table games operated by the casino and/or (iv) passenger counts.  A
casino entertainment tax may also paid be by the licensee where
entertainment is furnished in connection with the selling of food or
refreshments.  In addition, certain other fees are imposed.

  The Company, its subsidiaries, its employees and other individuals or
entities having material relationships with the Company are required to
obtain and hold various licenses and approvals in Mississippi and
Missouri and will most likely be required to do so in each other
jurisdiction in which the Company may conduct a gaming operation.  If a
gaming authority were to find a director, officer or key employee
unsuitable for licensing or unsuitable to continue to have a
relationship with the Company, the Company would have to suspend or
dismiss such person.  The failure of the Company, or any of its key
personnel, to obtain or retain a license in any jurisdiction could have
a material adverse effect on the Company and its prospects or its
ability to obtain or retain licenses in other jurisdictions.  Generally,
regulatory authorities have broad discretion in granting, renewing and
revoking licenses. Moreover, any jurisdiction into which the Company may
seek to expand its gaming operations may require the Company to apply
for and obtain regulatory approvals with respect to the construction,
design and operational features of the structure it intends to utilize.
Obtaining such licenses and approvals may be costly, time consuming and
cannot be assured.

                                    13

<PAGE> 15
  The Company may be subject to substantial fines for each violation of
a gaming law or regulation.  In addition, a violation of a gaming law or
regulation may subject a license to suspension or revocation.
Limitation, conditioning or suspension of a gaming license could (and
revocation of any
gaming license would) materially adversely affect the financial position
and results of operations of the Company.

  Missouri Gaming Regulations.  Gaming on the Missouri and Mississippi
Rivers in the State of Missouri was originally authorized pursuant to a
statewide referendum on November 3, 1992.  On April 29, 1993, Missouri
enacted revised legislation (as amended, the "Missouri Gaming Law")
which amended the existing legislation.  The Missouri Gaming Law also
established the Missouri Gaming Commission (the "Missouri Commission"),
which is responsible for the licensing and regulation, and enforcement
with respect to some aspects of gaming in Missouri.

  Opponents of gaming in Missouri have brought several legal challenges
to gaming in the past and may possibly bring similar challenges in the
future.  On November 25, 1997, the Missouri Supreme Court overturned a
state lower court and held that a portion of the Missouri Gaming Law
that authorized excursion gaming facilities in "artificial basins" up to
1,000 feet from the Mississippi or Missouri rivers was unconstitutional.
This ruling created uncertainty as to the legal status of several
excursion gaming riverboat facilities in the state; however, as
President Missouri facilities were fully on the Mississippi River, they
did not appear to be affected.  On November 3, 1998, a statewide
referendum was held, whereby the voters amended the constitution to
allow "artificial basins" for existing facilities, effectively
overturning the above Missouri Supreme Court decision.  There can be no
assurances that any future challenges, if brought, would not further
interfere with full-scale gaming operations in Missouri, including the
operations of President Missouri.

  Under the Missouri Gaming Law, the ownership and operation of
riverboat gaming facilities are subject to extensive state and local
regulation. The Company, its parent, subsidiaries and certain of its
officers and employees are subject to various regulations.

  President Missouri must be licensed by the Missouri Commission in
order to conduct its operations.  Licenses issued by the Missouri
Commission to conduct gaming operations are subject to two year renewals
and may not be transferred or pledged as collateral.  In addition to the
information required of the operator, the operator's directors, officers
and other key persons (which include individuals and related companies
designated by the Missouri Commission) must submit applications which
include detailed personal and financial information and are subject to
thorough investigations and licensing.  Also, all gaming employees must
obtain an occupational license issued by the Missouri Commission.  Each
applicant has an ongoing duty to
update the information provided to the Missouri Commission in the
application.  Applications filed with the Missouri Commission are
continuously "pending" and any issue may be reopened at any time.
President Missouri was re-licensed by the Missouri Commission in May
2002.

  The Missouri Gaming Law regulations impose restrictions on the use and
transfer of the gaming licenses as well as limitations on transactions
engaged in by licensees.  The Missouri Gaming Law regulations bar a
licensee from taking any of the following actions without prior notice
to, and approval by,

                                    14

<PAGE> 16
the Missouri Commission:  any transfer or issuance of an ownership
interest of five percent or more of the issued and outstanding ownership
interest, any private incurrence of debt by the licensee or any holding
company of $1.0 million or more, any public issuance of debt by a
licensee or its holding company, and certain defined "significant
related party transactions."  In addition, the licensee must notify the
Missouri Commission of other transactions, including the transfer of
five percent or more of an ownership interest in the licensee or holding
company, and any transaction of at least $1.0 million.  The restrictions
on transfer of ownership apply to the parent as well as the direct
licensee, President Missouri.  Gaming equipment and corporate stock of
some licensees may not be pledged except in narrow circumstances and
subject to regulatory conditions.

  The Missouri Gaming Law imposes operational requirements on riverboat
operators, including a charge of two dollars per gaming customer per
excursion that licensees must pay to the Missouri Commission, a 20% tax
on adjusted gross receipts (in addition to other state taxes and license
fees), requirements regarding minimum payouts, prohibitions against
providing credit to gaming customers (except for the use of credit cards
and cashing checks) and a requirement that each licensee reimburse the
Missouri Commission for all costs of all Missouri Commission staff,
including Missouri Highway Patrol Officers, necessary to protect the
public on the licensee's riverboat.

  Licensees must also submit monthly, quarterly and annual reports of
financial and statistical data and quarterly and annual audited
financial information and compliance reports to the Missouri Commission
and pay the associated auditing fees.

  Other areas of operation which are subject to regulation under the
Missouri Gaming Law rules are the color, denomination and handling of
chips and tokens; the surveillance methods and computer monitoring of
electronic games; accounting and audit methods and procedures; and
approval of an extensive internal control system.  The internal
operating procedures and controls of each facility are subject to the
approval of the Missouri Commission.  The purchase and sale of slot
machines and other gaming equipment are subject to regulation, and must
be purchased from a licensed supplier.  The Missouri Commission requires
comprehensive safety inspections and compliance with local ordinances
and federal safety requirements.  The Missouri Commission regulates
security and surveillance, and the control of cash and chips.  Liquor
licenses are issued and regulated by the Missouri Commission, rather
than local or other state agencies.

  The Missouri Commission has the authority to investigate any potential
violation of the Missouri Gaming Law.  In addition, the Missouri
Commission may take enforcement action against a licensee for the
failure of that licensee to comply with any other law.

  The Missouri Commission has the power and broad discretion in
exercising this power to revoke or suspend gaming or occupational
licenses and impose other penalties for violation of the Missouri Gaming
Law and the rules and regulations promulgated thereunder.  These
penalties may include forfeiture of all gaming equipment used for
improper gaming and fines of up to three times a licensee's highest
daily gross receipts during the preceding twelve months.

  Although the Missouri Gaming Law does not limit the amount of
riverboat space that may be used for gaming, the Missouri Commission is
empowered to

                                    15
<PAGE> 17
impose such space limitations through the adoption of rules and
regulations.  The Missouri Gaming Law provides for a loss limit of five
hundred dollars per person per each two-hour gaming session.  In order
to establish an excursion schedule which allows patrons to enter and
exit the gaming floor at any time during the excursion, the licensee
must prove to the Missouri Commission that it can enforce the $500 loss
limit.

  Mississippi Gaming Regulations.  Gaming was authorized in Mississippi
in June 1990 but gaming operations did not commence until August 1992.
The
ownership and operation of casino gaming facilities in Mississippi are
subject to extensive state and local regulation.  The Company is
registered as a publicly traded holding company under the Mississippi
Gaming Control Act and its gaming operations are subject to the
licensing and regulatory control of the Mississippi Gaming Commission
(the "Mississippi Commission") and various local, city and county
regulatory agencies.

  Licenses to conduct gaming operations in the State of Mississippi are
not transferable and are required to be renewed on a periodic basis.
The Mississippi Commission may at any time revoke, suspend, condition,
limit or restrict a license or deny approval to own shares of stock in
the Company or President Mississippi for any cause it deems reasonable.

  The Mississippi Gaming Law imposes state and local gaming taxes of
approximately 12% of gaming revenues.  In addition, certain other fees
are imposed.

  The Mississippi Commission has the authority to require a finding of
suitability with respect to any Company or President Mississippi
stockholder regardless of such stockholder's percentage of ownership.
The stockholder is required to pay all costs of investigation.  In this
regard, the Company's Restated Certificate of Incorporation provides
that the Company may redeem any shares of the Company's capital stock
held by any person or entity whose holding of shares may cause the loss
or non-reinstatement of a governmental license held by the Company.
Such redemption shall be at fair market value, as defined in the
Company's Restated Certificate of Incorporation, regardless of the price
the stockholder paid for the shares.  Mississippi law also contains a
provision which requires any Company or President Mississippi
stockholder found unsuitable by the Mississippi Commission to
immediately offer its shares to the Company/President Mississippi for
purchase and the Company/President Mississippi to purchase the shares
for cash within ten days of the offer.  In either case, the stockholder
is required to pay all costs of investigation.  In addition, any
individual who is found to have a material relationship to, or material
involvement with, the Company or President Mississippi may be required
to be investigated in order to be found suitable or to be licensed as a
business associate.  Key employees, controlling persons or others who
exercise significant influence upon the management or affairs of the
Company or President Mississippi may be deemed to have such a
relationship or involvement.

  In connection with President Mississippi's license, the Company and
President Mississippi are required to submit detailed financial,
operating and other reports to the Mississippi Commission.
Substantially all loans, leases,
sales of securities and similar financing transactions entered into by
President Mississippi and the Company must be reported to or approved by
the Mississippi Commission.  In addition, the Mississippi Commission
regulates the Company's ability to engage in certain types of
transactions.  For example, a

                                     16

<PAGE> 17
change in control of the Company or a plan of reorganization (as defined
in the Mississippi Commission regulations) by the Company may not occur
without the prior approval of the Mississippi Commission.  Similarly,
Mississippi gaming legislation requires that each person employed by
President Mississippi as a gaming employee obtain a valid work permit
issued by the Mississippi Commission.

  The Mississippi Commission has the authority to approve or disapprove
the Company's future operations outside of Mississippi.  On May 24,
1993, the Company received all requisite approvals from the Mississippi
Commission to conduct gaming operations in the jurisdictions in which it
was then operating
or proposing to operate without further action by the Mississippi
Commission.  The Mississippi regulations require that the Company notify
the Mississippi Commission prior to conducting gaming operations in any
additional jurisdictions and provide certain documentation to the
Mississippi Commission relating to proposed gaming operations.

  A 1999 amendment to a Mississippi Commission regulation requires as a
condition of site and development plan approval that a gaming
establishment's development plan include a 500-car or larger parking
facility in close proximity to the casino complex and infrastructure
facilities, the expenditures for which will amount to at least 100% of
the higher of the appraised value or construction cost of the casino.
The regulation formerly required infrastructure expenditures amounting
to 25% of the casino cost.  Such infrastructure facilities shall include
any of the following:  a 250-room or larger hotel of at least a two-star
rating as defined by the current edition of the Mobil Travel Guide, a
theme park, golf courses, marinas, tennis complex, entertainment
facilities, or any other such facility as approved by the Mississippi
Commission as infrastructure.  Parking facilities, roads, sewage and
water systems, or facilities normally provided by cities and/or counties
are excluded.  The Mississippi Commission may in its discretion reduce
the number of rooms required, where it is shown to the Mississippi
Commission's satisfaction that sufficient rooms are available to
accommodate the anticipated visitor load, and parking spaces may also be
reduced as needed
for small casinos.  Because the amended regulation "grandfathers" in
existing licensees (and applicants for a license receiving a finding of
site suitability from the Mississippi Commission) prior to February 20,
1999, the amendment imposes no new requirement on the Company or
President Mississippi.

  Non-Gaming Regulations

  The Company is subject to certain federal, state and local safety and
health laws, regulations and ordinances that apply to non-gaming
businesses generally, such as the Americans with Disabilities Act, the
Clean Air Act, Clean Water Act, Occupational Safety and Health Act,
Resource and Conservation Recovery Act and the Comprehensive
Environmental Response, Compensation and Liability Act.  The Company has
not made material expenditures with respect to such laws and
regulations.  However, the coverage and attendant compliance costs
associated with such laws, regulations and ordinances may result in
future additional costs to the Company's operations.  For example, in
1990 the U.S. Congress enacted the Oil Pollution Act to consolidate and
rationalize mechanisms under various oil spill response laws.  The
Department of Transportation has proposed regulations requiring owners
and operators of certain vessels to establish through the U.S. Coast
Guard evidence of financial responsibility in the amount of $5.5 million
for clean-up of oil pollution.  This requirement would be satisfied by
either proof of adequate

                                   17

<PAGE> 19
insurance (including self-insurance) or the posting of a surety bond or
guaranty.

  Applicable provisions of the Local Option Alcoholic Beverage Control
Law of the State of Mississippi require that each employee of a licensed
retailer who
handles alcoholic beverages obtain a valid permit issued by the
Alcoholic Beverage Control Division of the Mississippi State Tax
Division.  All employees of President Mississippi who are required to
obtain such permits have either obtained such permits or have completed
applications therefore and are permitted to act in the positions for
which they were hired pending approval of such applications.

  Employees

  As of February 28, 2003, the Company had approximately 1,650
employees.

  In April 1999, certain gaming, service and maintenance employees of
President Missouri ratified a three-year collective bargaining agreement
setting out wages, benefits and other terms and conditions of
employment.  The labor agreement was renegotiated and ratified for a one
year period effective April 2002.  The Company is currently in early
stages of renegotiating a new labor agreement effective April 2003.  The
labor agreement covers approximately 300 of the Company's 700 St. Louis
employees.

Item 3.  Legal Proceedings.

Pending Bankruptcy Proceedings

  On June 20, 2002, the Company together with its subsidiary, President
Missouri, which owns and operates the St. Louis operations, filed
voluntary petitions for reorganization under Chapter 11 of the
Bankruptcy Code in the United States Bankruptcy Court for the Southern
District of Mississippi.  On July 9, 2002, the Company's subsidiary
President Mississippi filed a voluntary reorganization petition in the
same Court.  On July 11, 2002, substantially all of the Company's other
operating subsidiaries filed voluntary reorganization petitions under
Chapter 11 in the same Court.  Subsequently, orders were entered by the
Mississippi Bankruptcy Court transferring venue of all of the Chapter 11
cases, except President Riverboat Casino-New York, Inc. and PBLLC, to
the United States Bankruptcy Court for the Eastern District of Missouri,
where they are now pending and being administered.  The Company and its
subsidiaries each continue in possession and use of their assets as
debtors-in-possession.  The Company and its subsidiaries have had their
Missouri Bankruptcy Chapter 11 cases administratively consolidated under
the Company's case.

  On May 15, 2003, the Missouri Bankruptcy Court issued an order
approving a joint motion filed by the Company, the unsecured creditors'
committee (the "Committee") and certain bondholders of the Company (the
"Bondholders") with respect to a timetable and process for the Company's
reorganization proceedings.  Specifically, the joint motion sought entry
of an order approving a timetable and process set forth in a Term Sheet,
dated March 25, 2003 (the "Term Sheet"), with respect to either (i) the
refinancing of the Company by July 18, 2003, or (ii) a sale of the
assets related to the Company's St. Louis gaming operations.  In
addition, the Court approved motions by the Company to approve the
appointment of Libra Securities LLC to serve as the Company's investment
banker in connection with any sale of the

                                    18

<PAGE> 20
St. Louis operations.

  As set forth in the Term Sheet, the Company, the Committee and the
Bondholders have agreed that the Company shall have until July 18, 2003
to effect a recapitalization of the Company pursuant to a plan of
reorganization with qualified financing commitments under which the
unsecured creditors and bondholders would be repaid in full.  The Term
Sheet also outlines a process and timetable under which the Company's
St. Louis operations would be sold in the event that a recapitalization
of the Company is not completed as set forth in the Term Sheet.  As part
of such process, the Company would be required to meet certain
benchmarks which, if not met, would permit the Committee to file a
motion with the Court for the sale of the Company's St. Louis operations
and to appoint a chief restructuring officer to manage the sale process.
Such benchmarks include: (i) submission of draft marketing materials by
May 1, 2003, (ii) delivery of marketing materials to qualified
prospective purchasers within 3 days of the end of the 2003 Missouri
Legislative Session, or no later than June 1, 2003, (iii) execution of a
definitive asset purchase agreement by August 1, 2003, (iv) filing of a
motion to approve the sale by August 4, 2003, and (v) good faith efforts
by the Company to locate a purchaser and cooperate with the sale
process.  The Term Sheet also contemplates that preliminary bids would
be received by July 11, 2003, and that a preliminary "stalking horse"
bidder would be selected by July 18, 2003.

  PBLLC was in default under a $30.0 million promissory note and
associated $7.0 million loan fee incurred in connection with the July
1997 purchase by PBLLC of the real estate and improvements utilized in
the Company's operations in Biloxi, Mississippi.  On April 19, 2001,
PBLLC filed a voluntary petition for reorganization under Chapter 11 of
the Bankruptcy Code in the United States Bankruptcy Court for the
Southern District of Mississippi.  PBLLC continued in possession and use
of its assets as a debtor-in-possession and had an agreement with Lehman
Brothers Holdings Inc., its lender and largest creditor ("Lehman"),
approved by the Mississippi Bankruptcy Court which allowed PBLLC's use
of its cash collateral.

  On October 16, 2001, PBLLC filed its plan of reorganization which
would permit PBLLC to restructure its debt obligations in a manner which
was designed to permit it to continue as a going concern.  Subsequently,
on February 28, 2003, PBLLC filed Modifications to Debtor's Plan of
Reorganization (together with the plan of reorganization, the "Modified
Plan").  On May 14, 2003, the Mississippi Bankruptcy Court entered the
confirmation order confirming the Modified Plan.  The became effective
on May 28, 2003 and the Company consummated the Modified Plan at that
time.  The Modified Plan provides the unsecured creditors of PBLLC will
receive 100% of their claims.  Under the Modified Plan, the obligations
to Lehman were modified with respect to the debt amount, the interest
rate and the due date.  In addition, the obligation was re-documented
substantially along the lines of the original obligation.  On the
effective date, $3.6 million was paid to Lehman pursuant to the Modified
Plan.  The principal amount of the restructured loan from Lehman is
$46.4 million plus interest at the rate of 12.75% per annum from
November 1, 2002 until May 28, 2003 on $30.0 million plus interest at
the rate of 8.75% per annum from November 1, 2002 until May 28, 2003 on
$7.0 million, less the payment by PBLLC to Lehman $3.6 million.  As of
May 28, 2003, the principal amount of the loan under this calculation is
$45.4 million.  The principal amount earns interest at a rate of 12.75%
per annum until the obligation is satisfied.  The maturity date of the
Lehman obligation is June 1, 2005.  Interest is payable during the term
of the loan

                                     19

<PAGE> 21
on an adjusted loan obligation amount of $44.0 million, less the payment
by PBLLC to Lehman on May 28, 2003, or $40.4 million, plus interest at a
rate of 12.75% per annum from November 30, 2002 until the effective
date.  As of May 28, 2003, the adjusted loan obligation amount was $43.0
million.  PBLLC is required to pay interest earned on the adjusted loan
obligation payable monthly from May 28, 2003 at a rate of the greater of
7.75% per annum or LIBOR plus 4% per annum floating.  Certain interest
amounts may be deferred until October 31, 2003.  A discount of $3.5
million with respect to the obligation will occur and the deferred
interest amounts will be waived provided payment of the entire adjusted
loan obligation amount is made on or before November 1, 2003.  In the
event that payment in full of the restructured loan is made after
November 1, 2003 but prior to June 2, 2005, interest on the indebtedness
will be calculated at a lower rate as set forth in the Modified Plan.

  Under the Modified Plan, the obligation to Lehman is accelerated in
the event the Missouri Bankruptcy Court, having jurisdiction over
President Mississippi, does not approve the base rental increase on a
portion of the land leased to the Biloxi casino by PBLLC by November 1,
2003.  This requirement does not apply if PBLLC's aggregate net cash
flow from its operations, after receiving rental payments from President
Mississippi, at the current base rental, and after certain adjustments
are made, equals or exceeds the amount of funds that would be necessary,
on an annual basis, to pay the greater of 7.75% per annum or LIBOR plus
4% per annum floating on the adjusted loan obligation amount as of
November 1, 2003.  The Modified Plan contains an express waiver by PBLLC
of rights to seek future bankruptcy protection.  J. Edward Connelly
Associates, Inc. ("JECA"), the holder of a Class B interest in PBLLC,
retains its membership interest, but any payments by PBLLC to JECA shall
be restricted until such time as all outstanding obligations to Lehman
and other creditors receiving funds under the Modified Plan are
discharged.

Litigation

  --Poulos, McElmore and Shreier, et al. v. Caesar's World, Inc. et al.

  In 1994, William H. Poulos filed a class-action lawsuit in the United
States District Court for the Middle District of Florida against over
thirty-eight (38) casino operators, including the Company, and certain
suppliers and distributors of video poker and electronic slot machines.
This lawsuit was followed by several additional lawsuits of the same
nature against the same, as well as additional defendants, all of which
have now been consolidated into a single class-action pending in the
United States District Court for the District of Nevada.  Following a
court order dismissing all pending pleadings and allowing the plaintiffs
to re-file a single complaint, a complaint has been filed containing
substantially identical claims, alleging that the defendants
fraudulently marketed and operated casino video poker machines and
electronic slot machines, and asserting common law fraud and deceit,
unjust enrichment and negligent misrepresentation.  Various motions were
filed by the defendants seeking to have this new complaint dismissed or
otherwise limited.  On December 19, 1997, the Court, in general, ruled
on all motions in favor of the plaintiffs.  The plaintiffs then filed a
motion seeking class certification and the defendants opposed it.  On
June 21, 2002, the Court entered an order denying class certification,
and the plaintiffs have appealed this order to the 9th Circuit Court of
Appeals.  The last briefs are scheduled to be filed July 14, 2003.
Extensive paper discovery has occurred.  A motion to stay pending the
Company's bankruptcy proceedings has been filed.  Although the outcome
of litigation is inherently uncertain, management, after

                                     20

<PAGE> 22
consultation with counsel, believes the action will not have a material
adverse effect on the Company's financial position or results of
operations.

  --"Surfside Princess"

  On October 12, 2001, the Company's subsidiary which owned the M/V
"Surfside Princess," formerly known as the M/V "New Yorker," initiated
an action in the United States District Court for the Middle District of
Florida against Southern Gaming, LLC and its assignee for breach of a
Bareboat Charter and
Purchase Agreement dated March 29, 2001 pursuant to which the M/V
"Surfside Princess" was chartered from the Company.  Subsequent
proceedings followed in which various parties claimed various rights
with respect to the vessel and its contents.  The matter is currently
pending before the Court.

  On October 19, 2001, Southern Gaming filed suit in the United States
District for Middle District of Florida seeking damages in connection
with the charter of the "Surfside Princess."  Subsequently this
proceeding was consolidated with the prior proceeding involving Southern
Gaming.  Other suits and claims exist with respect to the vessel.  The
Mississippi Bankruptcy Court granted a motion for the M/V "Surfside
Princess" to be sold outside a plan of reorganization.  On May 2, 2003 a
purchase agreement on the vessel was consummated, at which time the
liens against the vessel attached to the proceeds from the sale which
are held in escrow.  The Company is unable at this time to predict the
outcome of this matter with certainty.

  --Other

  The Company is from time to time a party to litigation, which may or
may not be covered by insurance, arising in the ordinary course of its
business.  The Company does not believe that the outcome of any such
litigation will have a material adverse effect on the Company's
financial condition or results of operations, or which would have any
material adverse impact upon the gaming licenses of the Company's
subsidiaries.

Missouri Gaming Commission

  On May 1, 2001, the Missouri Gaming Commission issued a preliminary
order of discipline in DC-01-004 - DC-01-012 proposing that the Company
be assessed administrative penalties totaling $104,000 for numerous
alleged violations of internal gaming control standards and $25,000 for
one alleged violation of making political contributions prohibited by an
ordinance of the City of St. Louis.   None of the alleged violations of
internal control standards involved any loss of funds or affect the
integrity of gaming.  In August 2002, the Company settled the alleged
internal control standard violations for $55,000.  The Company filed a
declaratory judgment action regarding the validity of the city ordinance
prohibiting political contributions.  In March 2003, the court declared
the ordinance to be invalid, unenforceable and void.

General

  The ownership and operation of casino gaming facilities are subject to
extensive state and local regulation.  As a condition to obtaining and
maintaining a gaming license, the Company must submit detailed
financial, operating and other reports to state gaming commissions, all
of which have broad powers to suspend or revoke licenses.  In addition,
substantially all of the Company's material transactions are subject to
review and/or approval by

                                    21

<PAGE> 23
the various regulatory bodies.  Any person acquiring 5% or more of the
Common Stock or of the equity securities of any gaming entity must be
found suitable by the appropriate regulatory body.  The Biloxi license
was last renewed in April of 2001 and expires in April 2004.  The St.
Louis license was last renewed in May of 2002 and expires in May of
2004.

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

  There were no matters submitted to a vote of security holders during
the fourth quarter of fiscal 2003.

                                    PART II

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

  The Company's Common Stock was delisted from the Nasdaq National
Market effective the close of business November 19, 1998, because the
Company no longer met certain listing requirements.  The stock continues
to trade on the OTC Bulletin Board under the symbol "PREZ.OB."  The
following table sets forth, for the fiscal quarters indicated, the high
and low sale or bid prices for the Common Stock, as reported by the OTC
Bulletin Board:

<TABLE>
<CAPTION>
                                                High         Low
                                               ------       -----

            <S>                               <C>         <C>
            Fiscal 2003
              First Quarter................   $ 1.0500    $ 0.7000
              Second Quarter...............   $ 0.8400    $ 0.2000
              Third Quarter................   $ 0.5100    $ 0.2000
              Fourth Quarter...............   $ 0.4000    $ 0.2600

            Fiscal 2002
              First Quarter................   $ 0.5400    $ 0.3000
              Second Quarter...............   $ 1.0000    $ 0.3100
              Third Quarter................   $ 0.8400    $ 0.5500
              Fourth Quarter...............   $ 1.2000    $ 0.6000

</TABLE>

  The market bid quotations reflect inter-dealer prices, without retail
mark-up, mark-down or commission and may not necessarily represent
actual transactions.  Bid quotations are derived from Commodity Systems,
Inc. through Yahoo.com Historical Quotes.

  On May 28, 2003, there were approximately 1,393 holders of record of
the Company's Common Stock.

  The Company has never paid any dividends on its Common Stock.  The
Company anticipates that for the foreseeable future all earnings, if
any, will be used for the repayment of debt or retained for the
operations and expansion of its business.  Accordingly, the Company does
not anticipate paying any cash dividends in the foreseeable future.  The
payment of dividends by the Company
is restricted under the terms of the indenture governing the Company's
Senior Exchange Notes.  See "Management's Discussion and Analysis of
Financial Position and Results of Operations."

                                    22
<PAGE> 24
  The following table reflects information about the Company's equity
compensation plans as of February 28, 2003.

<TABLE>
<CAPTION>
                                                                         Number of securities
                    Number of securities                               remaining available for
                     to be issued upon     Weighted average exercise    future issuance under
                        exercise of           price of outstanding       equity compensation
Plan category        outstanding options          options                       plans
-------------         ------------------      ------------------          ------------------
<S>                     <C>                        <C>                       <C>

Equity compensation
plans approved by
shareholders            787,293                     $ 0.87                    104,042

Equity compensation
plans not approved
by shareholders             --                          --                        --

</TABLE>

Item 6.  Selected Consolidated Financial Data.

  The following selected financial data of the Company is qualified by
reference to and should be read in conjunction with "Item 7.
Management's Discussion and Analysis of Financial Condition and Results
of Operations" and the consolidated financial statements and notes
thereto included elsewhere herein.  The selected consolidated statement
of operations and balance sheet data are derived from the Company's
consolidated financial statements which are included elsewhere herein.

<TABLE>
<CAPTION>
                                                        Years Ended February 28/29,
                                              2003       2002       2001       2000       1999
                                             ------     ------     ------     ------     ------
                                                     (in thousands, except share data)

<S>                                         <C>        <C>        <C>        <C>        <C>
Consolidated Statement of Operations Data:
Total operating revenues (1)..............  $123,721   $129,184   $152,098   $188,516   $192,185

Operating income (loss)
   before (gain)/loss on disposal
   of property and equipment (2)..........  $  1,542   $ (4,736)  $(12,219)  $  7,623   $  5,871

Gain/(loss) on disposal of property
   and equipment (3)......................  $   (117)  $    771   $ 33,985   $    (99)  $    (14)

Net loss..................................  $ (9,079)  $(20,748)  $   (206)  $(13,373)  $(14,892)

Basic and dilutive loss per share.........   $ (1.80)   $ (4.12)   $ (0.04)   $ (2.66)   $ (2.69)

Consolidated Balance Sheet Data:
Total assets..............................  $120,834   $120,450   $135,744   $165,394   $172,744
Current liabilities.......................  $ 58,429   $145,237   $141,657   $171,755   $ 27,109
Long-term liabilities.....................  $    --    $    --    $    --    $    --    $139,379
Liabilities subject to compromise (4).....  $111,340   $    646        --         --        --
Stockholders' deficit.....................  $(49,614)  $(40,535)  $(19,787)  $(19,581)  $ (6,208)
</TABLE>

(1)  Accounting guidance issued in and effective for fiscal year 2001 (EITF
     00-22) requires that the cost of the cash-back component of the Company's
     players' programs be treated as a reduction of revenue.  Further guidance

                                     23

<PAGE> 25
     (EITF 00-25), which the Company elected during fiscal 2001, requires
     that coupons which are redeemed for tokens be similarly classified as a
     reduction of revenue.  This guidance impacts only the income statement
     classification of these costs.  The prior years' results have been
     restated to reflect the impact of implementing this guidance.

(2)  Management's evaluation of the net realizable value of its assets, based
     on their intended future use and current market conditions, resulted in
     impairments of long-lived assets of $1,167, $7,068 and $12,709,
     respectively, during fiscal years 2003, 2002 and 2001, on two casino
     vessels held for sale.  The assets are accounted for in the Company's
     leasing segment.

(3)  On October 10, 2000, the assets of the Company's Davenport hotel and
     casino operations were sold.  A gain of $34,465 was recognized on
     the transaction.  On July 17, 2001, the assets of Gateway Riverboat
     Cruises, the Company's non-gaming cruise operations in St. Louis were
     sold.  A gain of $778 was recognized on the transaction.

(4)  PBLLC did not pay the $30,000 note and the associated $7,000 loan fee
     due July 22, 2000 related to the Broadwater Property.  PBLLC is the
     owner of the marina in which the Company operates its Biloxi casino
     operations barge.  On April 19, 2001, PBLLC filed for reorganization
     under Chapter 11 of the U.S. Bankruptcy Code in the United States
     Bankruptcy Court for the Southern District of Mississippi.

     On June 20, 2002, President Casinos, Inc. together with its subsidiary,
     President Riverboat Casino-Missouri, Inc. filed voluntary petitions for
     reorganization under Chapter 11 of Title 11, United States Code (the
     "Bankruptcy Code") in the United States Bankruptcy Court for the
     Southern District of Mississippi (the "Mississippi Bankruptcy Court").
     Subsequently, on July 9, 2002, President Casinos, Inc.'s subsidiary The
     President Riverboat Casino-Mississippi, Inc. filed a voluntary
     reorganization petition in the same Court.  On July 11, 2002,
     substantially all of President Casinos, Inc.'s other operating
     subsidiaries filed voluntary reorganization petitions under Chapter 11
     in the same Mississippi Bankruptcy Court.  Subsequently, orders were
     entered by the Mississippi Bankruptcy Court transferring venue of all
     of the bankruptcy cases, except President Riverboat Casino-New York,
     Inc. and President Broadwater Hotel, LLC, to the United States
     Bankruptcy Court for the Eastern District of Missouri where they are
     now pending and being administered.  See Item 1.  "Substantial
     Indebtedness; Bankruptcy Proceedings."

  Gaming operations commenced in Davenport, Iowa on April 1, 1991, in
Biloxi, Mississippi on August 13, 1992 and in St. Louis, Missouri on May
27, 1994.   Hotel operations commenced in Davenport, Iowa on October 30,
1990 and in Biloxi, Mississippi on July 27, 1997.  The assets of the
Davenport operations were sold on October 10, 2000.  The assets of
Gateway Riverboat Cruises, the Company's non-gaming cruise operations in
St. Louis, were sold on July 17, 2001.

                                    24
<PAGE> 26
Item 7.  Management's Discussion and Analysis of Financial Condition and
Results of Operations.

  The following discussion, which covers fiscal years 2001 through 2003,
should be read in conjunction with the consolidated financial statements
of the Company and the separate financial statements of The Connelly
Group, L.P. and the notes thereto included elsewhere in this report.

  President Casinos, Inc., President Riverboat Casino-Missouri, Inc.,
The President Riverboat Casino-Mississippi, Inc., President Broadwater
Hotel, LLC, Broadwater Hotel, Inc., President Riverboat Casino-New York,
Inc., PRC Management, Inc., PRC Holdings Corporation, TCG/Blackhawk,
Inc. and Vegas Vegas, Inc. have each filed voluntary petitions for
reorganization under Chapter 11 of the Bankruptcy Code.  See "Note 1.
Bankruptcy Proceedings" of the Notes to Condensed Consolidated Financial
Statements.

  The Company continues to experience difficulty generating sufficient
cash flow to meet its debt obligations and sustain its operations.  As a
result of the Company's relatively high degree of leverage and the need
for significant capital expenditures at its St. Louis property, the
Company was unable to make the regularly scheduled interest payments of
$6.4 million that were each due and payable March 15, and September 15,
2000 on its $75.0 million 13% Senior Exchange Notes (the "Senior
Exchange Notes") and $25.0 million 12% Secured Notes (the "Secured
Notes," and collectively with the Senior Exchange Notes, the "Notes").
Under the Indentures pursuant to which the Notes were issued, an Event
of Default occurred on April 15, 2000, and is continuing as of the date
hereof.  Additionally, the Company did not pay the $25.0 million
principal payment due September 15, 2000 on the Senior Exchange Notes.
The holders of at least 25% of the Senior Exchange Notes and the Secured
Notes were notified of the defaults and the Indenture Trustee has
accelerated the Notes and declared the unpaid principal and interest to
be due and payable.

  On October 10, 2000, the Company sold the assets of its Davenport
operations for aggregate consideration of $58.2 million in cash.  On
November 22, 2000, the Company entered into an agreement with a majority
of the holders of the Senior Exchange Notes and a majority of the
holders of the Secured Notes.  The agreement provided for a proposed
restructuring of the Company's debt obligations under the Notes and the
application of certain of the proceeds received by the Company from the
sale of the Company's Davenport, Iowa assets.  Approximately $43.0
million of the proceeds from the sale were deposited with a trustee.  Of
this amount, $12.8 million was used to pay missed interest payments due
March 15, 2000 and September 15, 2000 on the Senior Exchange Notes and
the Secured Notes; $25.0 million was used to partially redeem the Senior
Exchange Notes and the Secured Notes; and $5.2 million was used to pay
interest due March 15, 2001 on the Senior Exchange Notes and the Secured
Notes.

  Subsequently, the Company was unable to make the principal and
interest payments due September 15, 2001 and its interest payment due
March 15, 2002, on its Senior and Secured Notes.  As of February 28,
2003, principal due on the Senior and Secured Notes was $56.2 million
and $18.8 million, respectively.

  In July 2001, the Company completed the sale of its non-gaming cruise
operations in St. Louis, Missouri for $1.7 million.  On March 29, 2001,
the Company executed an installment sale agreement for the M/V "Surfside
Princess"

                                   25

<PAGE> 27
(formerly, the "New Yorker").  On October 3, 2001, as a result of the
purchasing party's inability to comply with the terms of the agreement,
the Company terminated the agreement and repossessed the vessel.  The
Mississippi Bankruptcy Court granted a motion to auction the "Surfside
Princess" under the terms of Section 363 of the Bankruptcy Code.  The
auction was completed in February 2003 and the purchase agreement was
consummated in May 2003.

  Due to certain debt covenants and cross default provisions associated
with
other debt agreements, the Company is also currently in default under
its $2.1 million M/V "President Casino-Mississippi" note.  See Liquidity
and Capital Resources.

  Management believes the Company's liquidity and capital resources will
be sufficient to maintain its normal operations at current levels and
does not anticipate any adverse impact on its operations, customers or
employees.  However, costs previously incurred and which will be
incurred in the future in connection with restructuring the Company's
debt obligations and the bankruptcy proceedings have been and will
continue to be substantial and, in any event, there can be no assurance
that the Company will be able to  restructure successfully its
indebtedness or that its liquidity and capital resources will be
sufficient to maintain its normal operations during the restructuring
period.

  The Company's ability to continue as a going concern is dependent on
its ability to restructure successfully, including refinancing its
debts, and the ability of the Company to generate sufficient cash to
fund future operations.  There can be no assurance in this regard.

Overview

  The Company's operating results are affected by a number of factors,
including competitive pressures, changes in regulations governing the
Company's activities, the results of pursuing various development
opportunities, the economic environment and general weather conditions.
Consequently, the Company's operating results may fluctuate from period
to period and the results for any period may not be indicative of
results for future periods.  The Company's operations are not
significantly affected by seasonality.

  --Competition

  Intensified competition for patrons continues to occur at both of the
Company's properties.

  Since gaming began in Biloxi in August 1992, there has been steadily
increasing competition along the Mississippi Gulf Coast, in nearby New
Orleans and elsewhere in Louisiana and Mississippi.  Several large
hotel/casino complexes have been built in recent years with the largest
single resort in the area opening in March 1999.  There are currently
twelve casinos operating on the Mississippi Gulf Coast.  See "Potential
Growth Opportunities" regarding a master plan for a destination resort
the Company is developing in Biloxi, Mississippi.

  Competition is intense in the St. Louis market area.  There are
presently four other casino companies operating five casinos in the
market area.  Many of these competitors have significantly greater name
recognition and financial

                                    26

<PAGE> 28
and marketing resources than the Company.  Two of these are Illinois
casino companies operating single casino vessels on the Mississippi
River, one across the Mississippi River from the "Admiral" and the
second 20 miles upriver.  There are two Missouri casino companies, each
of which operates casino vessels approximately 20 miles west of St.
Louis on the Missouri River.  One company operates two casinos in
Maryland Heights, Missouri and the other company operates one casino in
the City of St. Charles, Missouri.  The operator of the St. Charles
casino replaced its facility and reopened with nearly double its prior
gaming positions in August 2002.

  Applications were submitted to the Missouri Gaming Commission for
approval of potential new licenses at four different locations within
the St. Louis Metropolitan area along the Mississippi River, three of
which were within 20 miles of the "Admiral."  In July 2000, the Gaming
Commission announced its decision to award an additional license to the
applicant proposing a site at the greatest distance from the "Admiral"
of the proposed locations.  The Commission's decision was challenged by
one of the applicants whose proposal was not selected and by other
entities.  In September 2001, the applicant selected by the Gaming
Commission announced it would not proceed with the development of the
project.  The Gaming Commission announced that it will consider
licensing an additional casino in the St. Louis market.  One such
application has been filed to operate a gaming facility approximately 20
miles south of the "Admiral."  The Gaming Commission has extended the
period in which applications can be filed but has not indicated a
specific deadline for such filings.  The opening of a new casino in the
St. Louis market would have a material adverse impact on the St. Louis
operations under most possible scenarios.

  --Regulatory Matters

  Missouri regulations limit the loss per "simulated" cruise per
passenger by limiting the amount of chips or tokens a guest may purchase
during each two-hour gaming session to $500 (the "loss limit").  The
company that operates adjacent casinos is able to offer guests who reach
the two-hour loss limit the ability to move to the adjacent casino and
continue to play.  The lack of a statutory loss limit on Illinois
casinos allows them to attract higher stake players.  Additionally,
their guests are not burdened with the administrative requirements
related to the loss limits, which includes the presentation of
government issued identification.  Any easing of the loss limits in
Missouri would be expected to have a positive impact on the Company's
St. Louis operations.

  --Economic Environment

  The Company's business involves leisure and entertainment.  During
periods of recession or economic downturn, consumers may reduce or
eliminate spending on leisure and entertainment activities.  In the
event that any of the Company's demographic markets suffer adverse
economic conditions, the Company's revenues may be materially adversely
affected.

  --Weather Conditions

  The Company's operating results are susceptible to the effects of
floods, hurricanes and adverse weather conditions.  Historically, the
Company has temporarily suspended operations on various occasions as a
result of such adversities.  Under less severe conditions, high river
levels in St. Louis

                                    27

<PAGE> 29
cause reduced parking and a general public perception of diminished
access to the casino resulting in decreased revenues.  Management
believes the move of the "Admiral" diminished the negative effects of
high water on operations.  However, on May 13, 2002, at 4:00 a.m. the
St. Louis operations were temporarily suspended due to high water
levels.  The "Admiral" was reopened on May 20, 2002 at 6:00 p.m.  During
the same period for the prior year, the Company recorded $1.4 million in
St. Louis gaming revenue.

  On September 25, 2002, all Mississippi Gulf Coast casinos, including
the Company's Biloxi casino, were temporarily closed at 10:00 a.m. by
the Mississippi Gaming Commission in anticipation of Tropical Storm
Isidore.  The Company's Biloxi casino reopened on September 27, 2002 at
5:00 a.m.  On October 2, 2002, all Mississippi Gulf Coast casinos,
including the Company's Biloxi casino, were temporarily closed at 10:00
p.m. by the Mississippi Gaming Commission in anticipation of Hurricane
Lili.  The Company's Biloxi casino reopened on October 3, 2002 at 3:00
p.m.  The Company's Biloxi hotel operations remained open during both
periods.

Potential Growth Opportunities

  Biloxi, Mississippi

  In July 1997, PBLLC purchased for $40.5 million certain real estate
and improvements located on the Gulf Coast in Biloxi, Mississippi from
an entity which was wholly-owned by Mr. Connelly.  The property
comprises approximately 260 acres and includes two hotels, a 111-slip
marina and the adjacent 18-hole Sun Golf Course (collectively, the
"Broadwater Property").  The marina is the site of the Company's casino
operations in Biloxi and was formerly leased by the Company under a
long-term lease agreement.  Broadwater Hotel, Inc. a wholly-owned
subsidiary of the Company ("BHI"), invested $5.0 million in PBLLC.

  PBLLC financed the purchase of the Broadwater Property with $30.0
million of financing from a third party lender, evidenced by a non-
recourse promissory note (the "Indebtedness") and issued a $10.0 million
membership interest to the seller.  PBLLC is obligated to make monthly
payments of interest accruing under the Indebtedness, and was obligated
to repay the Indebtedness in full on July 22, 2000.  In addition, PBLLC
was obligated to pay to the lender a loan fee in the amount of $7.0
million which became fully earned and nonrefundable when the
Indebtedness was due.  See Liquidity and Capital Resources for a
discussion of the default on this obligation.

  The Company has developed a master plan for the Broadwater Property.
Management believes that this site is ideal for the development of
"Destination Broadwater," a full-scale luxury destination resort
offering an array of entertainment attractions in addition to gaming.
The plans for the resort feature a village which will include a cluster
of casinos, hotels, restaurants, theaters and other entertainment
attractions.  Management believes that with its beachfront location and
contiguous golf course, the property is the best site for such a
development in the Gulf Coast market.

  In January 1999, the Company received a permit from the Mississippi
Department of Marine Resources (the "DMR") for development of the full-
scale destination resort.  This is the first of three permit approvals
required of the Joint Permit Application submitted in August 1998 to the
DMR, the U.S. Army Corps of Engineers (the "Corps") and the Mississippi
Department of

                                    28

<PAGE> 30
Environment Quality.  The two remaining permit approvals are still
pending and awaiting the completion of the Final Environmental Impact
Statement ("EIS").  The Draft EIS has been completed, notice of which
was posted in the Federal Register in June 2000 for public comment.  The
current permit application to the Corps was cancelled on June 10, 2002
pending re-submission of a revised project design that reflects the
changes resulting from the Company's work with the Corps.  The
cancellation is an administrative measure which will allow the Corps to
remove the application from the Corps' pending action list, and should
not affect future evaluation of the permit request. The Company
anticipates submitting a revised plan.  At that time, a new application
number will be assigned, and the evaluation of the permit request will
resume.

  In connection with the Company's proposed Destination Broadwater
development plan, to date, the Company has not identified any specific
financing alternatives or sources as the necessary regulatory approvals
have not been obtained.  There can be no assurance that the Company will
be able to obtain the regulatory approvals or the requisite financing.
Should the Company fail to raise the required capital, such failure
would materially and adversely impact the Company's business plan.

Results of Operations

  The results of operations for the years ended February 28, 2003, 2002
and 2001 include the gaming results for the Company's operations in St.
Louis, Missouri and Biloxi, Mississippi and, of much lesser
significance, the hotel operations in Biloxi (the Broadwater Property)
and the non-gaming cruise operations in St. Louis (Gateway Riverboat
Cruises) through the date of sale.
The results of operations also include the Company's gaming operations
in Davenport, Iowa and, to a much lesser significance, the non-gaming
operations in Davenport (the Blackhawk Hotel) through the date of sale.
The assets of the Davenport operations were sold on October 10, 2000 and
the assets of Gateway Riverboat Cruises ("Gateway") were sold July 17,
2001.

                                     29
<PAGE> 31
  The following table highlights the results of the Company's operations
during the periods presented.

            <TABLE>
            <CAPTION>
                                                Twelve Months Ended February 28,
                                                  2003        2002        2001
                                                 ------      ------      ------
                                                         (in millions)
             <S>                                 <C>         <C>          <C>
             St. Louis, Missouri Operations
               Operating revenues                $ 73.9      $ 79.1       $ 62.4
               Operating income (loss)              4.9         6.1         (0.7)

             Biloxi, Mississippi Operations
               Operating revenues                  49.8        50.1         50.2
               Operating income                     2.9         1.9          2.7

             Davenport, Iowa Operations
               Operating revenues                   --          --          39.5
               Operating income (loss) (1)          --         (0.5)         5.8

             Corporate Leasing Operations
               Operating loss                      (2.8)       (8.1)       (15.1)

             Corporate Administration
               and Development
               Operating loss                      (3.5)       (4.1)        (4.9)

             St. Louis operating margin             6.6%        7.7%        (1.1)%
             Biloxi operating margin                5.8%        3.8%         5.4%
             </TABLE>

(1)  During fiscal 2002, the Company's Davenport operations reflect a net loss
     of $0.5 million, of which, $0.7 million related to attorneys fees and
     settlement of certain legal proceedings which were incurred by PRC Iowa,
     the general partner of the 95% Company-owned operating partnership,
     TCG.  TCG managed the Company's Davenport casino operations until the
     sale of the Davenport operations in fiscal 2001.  The $0.7 million legal
     costs and settlement were offset by a net reduction of expense of $0.2
     million primarily related to an adjustment to estimated accrued
     liabilities.

   The following table highlights cash flows of the Company's operations.
            <TABLE>
            <CAPTION>
                                                Twelve Months Ended February 28,
                                                  2003        2002        2001
                                                 ------      ------      ------
                                                         (in millions)
             <S>                                <C>          <C>          <C>
             Cash flows provided by (used in)
               operating activities             $ 10.1       $  3.8      $ (8.5)
             Cash flows provided by (used in)
               investing activities               (4.0)         0.5        39.8
             Cash flows used in
               financing activities               (0.1)        (2.7)      (35.2)
             Cash paid for interest                0.1          6.4        17.1
             </TABLE>

Fiscal 2003 Compared to Fiscal 2002

  Operating revenues.  The Company generated consolidated operating revenues
of $123.7 million during fiscal 2003 compared to $129.2 million during fiscal
2002, a decrease of $5.5 million.  The St. Louis operations experienced a

                                    30

<PAGE> 32
decrease in revenue of $5.2 million and the Biloxi operations experienced a
decrease in revenue of $0.3 million.  Excluding the Gateway operations, St.
Louis revenues decreased $4.5 million.

  Gaming revenues in the Company's St. Louis operations decreased $3.6
million, or 4.6%, during fiscal 2003, compared to fiscal 2002.  The St. Louis
market share decreased to approximately 9.2% during fiscal 2003 from
approximately 10.1% in fiscal 2002.  Management believes this decrease is
primarily attributable to increased competition resulting from expansion by a
competitor in the St. Louis market, high water on the Mississippi River that
caused the casino to be closed for a week, and customer apprehension following
the Company's reorganization filing.  Gaming revenues at the Company's Biloxi
operations increased $0.5 million, or 1.0%, during 2003 compared to prior
year, primarily as a result of increased volume.

  The Company's revenues from food and beverage were $13.3 million during
fiscal 2003, compared to $14.4 million during fiscal 2002, a decrease of $1.1
million.  Excluding the Gateway operations, revenues from food and beverage
decreased $0.8 million, or 5.6%, during fiscal year 2003.  The decrease was
primarily the result of a decrease in St. Louis revenue due to a decrease in
patron volume, a change in the direct mail program which results in a decrease
in food and beverage promotional revenue and the buffet closing one week due
to high water and 11 days for remodeling.

  The Company's revenues from hotel, retail and other were $10.4 million
during fiscal 2003, compared to $11.0 million during fiscal 2002, a decrease
of $0.6 million.  Excluding the Gateway operations, revenues from hotel,
retail and other decreased $0.3 million, or 2.6% during fiscal year 2003.  St.
Louis retail and other revenue decreased $0.3 million primarily as a result of
decrease volume.

  Promotional allowances were $23.1 million during fiscal 2003 compared to
$22.6 million during fiscal 2002, an increase of $0.5 million, or 2.2%.
Promotional allowances in St. Louis decreased $0.3 million and promotional
allowances in Biloxi increased $0.8 million in fiscal 2003.  The decrease in
St. Louis is primarily the result of changes made in the direct mail program.
The increase in Biloxi is the result of an increase in room promotions and
food and beverage complementaries in Biloxi in response to the competitive
environment.

  Operating costs and expenses.  The Company's consolidated gaming costs and
expenses were $70.4 million during fiscal 2003, compared to $72.8 million
during fiscal 2002, a decrease $2.4 million, or 3.3%.  The decrease in gaming
costs was primarily attributable to a $2.1 million decrease in gaming costs in
St. Louis as a result of a (i) $1.7 million decrease in gaming and admissions
taxes which was attributable to decreased gaming revenues, (ii) $0.3 million
decrease in payroll and benefit costs, and (iii) $0.6 million decrease in the
cost of complimentaries offset by an increase slot machine lease expense and
an increase in repairs and maintenance.  Gaming costs decreased $0.3 million
in Biloxi primarily as a result of a decrease in payroll and payroll benefit
costs offset by an increase in rooms provided to casino patrons and an
increase in player development events.

  The Company's costs and expenses for food and beverage were $8.7 million
during fiscal 2003, compared to $9.6 million during fiscal 2002, a decrease of
$0.9 million.  Excluding the Gateway operations, food and beverage expenses

                                    31

<PAGE> 33
decreased $0.6 million, or 6.3%, during fiscal year 2003.  Decreases at both
casino properties are primarily due to more efficient purchasing and reduced
volume.

  The Company's costs and expenses for hotel, retail and other were $2.8
million during fiscal 2003, compared to $3.3 million during fiscal 2002, a
decrease of $0.5 million.  Excluding the Gateway operations, expenses from
hotel, retail and other decreased $0.1 million, or 3.0%, during fiscal year
2003.  The decrease is primarily due to the St. Louis operations change in
product mix and subsequent downsizing of the gift shop in December 2002.

  The Company's consolidated selling, general and administrative expenses were
$30.1 million during fiscal 2003, compared to $32.3 million during fiscal
2002, a decrease of $2.2 million.  Excluding the Gateway operations, selling,
general and administrative expenses decreased $2.0 million, or 6.2%.  The St
Louis casino operations experienced a decrease in selling, general and
administrative costs of $1.2 million primarily due to (i) a reduction of
payroll and payroll benefits of $0.5 million, (ii) a decrease in professional
fees of $0.3 million, and (iii) a decrease in parking related expenses of $0.4
million as a result of the new guest parking lot, changes made in the valet
parking and reduced shuttle bus repairs and maintenance resulting from the
retirement and replacement of the older busses.  Biloxi combined operations
experienced an increase of $0.1 million primarily as a result of increased bus
subsidy in response to the competitive environment.  Corporate leasing
operations' selling, general and administration costs decreased $0.1 million
and Corporate administration selling, general and administration costs
decreased $0.4 million.  Corporate leasing expenses decreased primarily as a
result of the costs associated with repossessing the vessel in fiscal 2002.
Corporate expenses decreased primarily as a result of a reduction in legal
fees charged to selling, general and administration expense associated with
the negotiations with the Company's Noteholders.  Since the filing of the
bankruptcy petitions in the current year, these costs have been charged to
reorganization expense. Excluding the Gateway operations, as a percentage of
consolidated revenues, selling, general and administrative expenses decreased
to 24.3% during fiscal 2003, from 24.8% during fiscal 2002.

  Depreciation expense was $8.9 million during fiscal 2003 compared to $8.4
million during fiscal 2002, an increase of $0.5 million, or 6.0%.  The leasing
operations ceased depreciating assets as of August 31, 2000 based on
management's decision to sell the assets and resumed depreciation in March of
2002 as a result of the adoption of newly issued accounting guidance.  The
leasing operations contributed depreciation expense of $0.6 million for the
year ended February 28, 2003.

  During fiscal 2003 and 2002, management's ongoing evaluation of the net
realizable value of its assets, based on their intended future use and current
market conditions, resulted in the recognition of an impairments of long-lived
assets of $1.2 million and $7.1 million, respectively, on two casino vessels
not used in the Company's gaming operations and accounted for in the Company's
leasing segment.  The $1.2 million impairment recorded in February 2003, was
the result of an auction held on the "Surfside Princess" under the terms of
Section 363 of the United States Bankruptcy Code.  The net book value of the
vessel was written down to the winning bid of $1.5 million.

  The Company incurred development costs of $0.1 million during fiscal 2003,
compared to $0.4 million during fiscal 2002.  During both fiscal years, the

                                    32

<PAGE> 34
costs were incurred for the Destination Broadwater project.

  Operating income.  As a result of the foregoing items, the Company had
operating income of $1.5 million during fiscal 2003, compared to an operating
loss of $4.7 million during fiscal 2002.

  Interest expense, net.  The Company incurred net interest expense of $7.6
million during fiscal 2003, compared to $14.1 million during fiscal 2002, a
decrease of $6.5 million.  The decrease is the result of $6.7 million decrease
in interest expense resulting from June 20, 2002 voluntary petition under
Chapter 11 of the Bankruptcy Code, whereby the noteholders of the Senior
Exchange Notes and the Secured Notes were deemed by management to be under-
secured and as a result, interest ceased to accrue as of the date thereof.
Additionally, there was $0.5 million of interest income in the prior year
which resulted from the installment sale agreement, with no comparable income
in the current year.

  Reorganization items.  The Company incurred reorganization items of $1.5
million during the year ended February 28, 2003, compared to $1.4 million
during the year ended February 28, 2002.  On April 19, 2001, PBLLC filed a
voluntary bankruptcy petition for bankruptcy and began incurring costs
associated with its reorganization.  On June 20, 2002, the Company's parent
company and PRC-Missouri filed voluntary petitions and in July 2002,
substantially all of the Company's other operating subsidiaries filed
voluntary petitions.  Costs associated with the reorganizations consist of
professional fees and U.S. Bankruptcy Trustee fees.

  Gain/loss on disposal of fixed assets.  The Company recorded a loss of $0.1
million during the year ended February 28, 2003, primarily as a result of the
sale of certain gaming equipment in St. Louis.  As previously discussed,
during fiscal 2002, the Company sold the assets of its St. Louis-based non-
gaming cruise riverboats and recognized a gain of $0.8 million.

  Minority interest expense.  The Company incurred $1.3 million in minority
interest expense during fiscal 2003, compared to $1.2 million during fiscal
2002.  During both periods the minority interest relates to Mr. Connelly's
Class B Unit of the Broadwater Property.

  Net loss.  As a result of foregoing items, the Company incurred a net loss
of $9.1 million during fiscal 2003, compared to a net loss of $20.7 million
during fiscal 2002.

Fiscal 2002 Compared to Fiscal 2001

  Operating revenues.  The Company generated consolidated operating revenues
of $129.2 million during fiscal 2002 compared to $152.1 million during fiscal
2001, a decrease of $22.9 million.  The St. Louis casino operations
experienced an increase in revenue of $17.7 million and the Biloxi combined
operations experienced a decrease in revenue of $0.1 million.  Excluding the
Davenport and Gateway operations, revenues increased $17.6 million, or 15.9%.

  Gaming revenues in the Company's St. Louis operations increased $18.7
million, or 31.4%, during fiscal 2002, compared to fiscal 2001.  The St. Louis
operations experienced an increase in market share to approximately 10.1% in
fiscal 2002 from approximately 8.6% for the prior year.  Management believes
this increase is primarily attributable to the relocation of the "Admiral" and

                                   33

<PAGE> 35
an improved slot product which takes advantage of the August 2000 change in
the Missouri gaming regulations, improving the ease of playing multiple coin
slot machines.  Additionally, the St. Louis casino operations increased
staffing levels, focusing on providing a heightened level of quality guest
service.  Gaming revenues at the Company's Biloxi operations increased $0.1
million, or less than 1.0%, during 2002 compared to prior year.

  The Company's revenues from food and beverage, hotel, retail and other were
$25.5 million during fiscal 2002, compared to $31.3 million during fiscal
2001, a decrease of $5.8 million, or 18.5%.  Excluding the Davenport and
Gateway operations, revenues from food and beverage, hotel, retail and other
increased $2.1 million, or 9.2%.  The increase was primarily attributable to
an increase of food and beverage, retail and other revenue of approximately
$1.0 million in St. Louis as a result of the increase in the number of guests
as a result of the "Admiral" relocation and improved slot product, and an
increase of $1.1 million in Biloxi primarily as a result of an increase in the
number of patrons resulting from increased promotions.

  Promotional allowances were $22.6 million during fiscal 2002 compared to
$27.0 million during fiscal 2001.  Excluding the Davenport operations,
promotional allowances were $22.6 million during fiscal 2002 compared to $19.4
million during fiscal 2001, an increase of $3.2 million, or 16.5%.
Promotional allowances in St. Louis and Biloxi increased $2.0 million and $1.2
million, respectively, in fiscal 2002 primarily as a result of (i) increased
cash back and coupon promotions in both locations, (ii) an increase in valet
and buffet complementaries in St. Louis and (iii) an increase in room and food
and beverage complementaries in Biloxi.

  Operating costs and expenses.  The Company's consolidated gaming costs and
expenses were $72.8 million during fiscal 2002, compared to $83.1 million
during fiscal 2001.  Excluding the Davenport operations, gaming costs
increased $8.7 million, or 13.6%.  The increase in gaming costs was primarily
attributable to a $8.2 million increase in gaming costs in St. Louis as a
result of (i) a $5.0 million increase in gaming and admissions taxes which was
attributable to increased gaming revenues, (ii) a $2.3 million increase in
payroll and benefit costs, and (iii) $0.9 million in other costs associated
with increased revenues.  Gaming costs increased $0.5 million in Biloxi
primarily as a result an increase in rooms provided to casino patrons and an
increase in player development events.  Excluding the Davenport operations, as
a percentage of gaming revenues, gaming and gaming cruise costs decreased to
57.7% during fiscal 2002 from 59.6% during fiscal 2001.

  The Company's costs and expenses for food and beverage, hotel, retail and
other were $12.9 million during fiscal 2002, compared to $17.1 million during
fiscal 2001.  Excluding the Davenport and Gateway operations, these costs were
$12.5 million during fiscal 2002 compared to $12.2 million during fiscal 2001,
an increase of $0.3 million, or 2.5%.

  The Company's consolidated selling, general and administrative expenses were
$32.3 million during fiscal 2002, compared to $40.7 million during fiscal
2001, a decrease of $8.4 million.  Excluding the Davenport and Gateway
operations, selling, general and administrative expenses increased to $31.6
million during fiscal 2002 from $31.0 million during fiscal 2001, an increase
of $0.6 million, or 1.9%.  The St Louis casino operations experienced an
increase in selling, general and administrative costs of $1.3 million
primarily due to $0.9 million related to increased revenue and $0.4 million

                                   34

<PAGE> 36
due to increased payroll and payroll benefits.  Biloxi combined operations
experienced an increase of $0.3 million primarily as a result of increased
insurance costs.  These increases were offset by decreases in corporate and
leasing operations' selling, general and administration costs of $0.9 million
and $0.1 million, respectively.  Corporate expenses decreased primarily as a
result in a reduction in legal fees associated with the negotiations with the
Company's Noteholders and reduction in payroll expenses.  Leasing operations
experienced a decrease in selling, general and administrative expenses as a
result of the vessel M/V "Surfside Princess" (formerly the "New Yorker") being
under contract for an installment sale for six months during fiscal 2002,
during which time the purchaser incurred the ongoing costs to maintain the
vessel, offset by the legal fees incurred after the vessel was repossessed.
Excluding the Davenport and Gateway operations, as a percentage of
consolidated revenues, selling, general and administrative expenses decreased
to 24.6% during fiscal 2002, from 27.8% during fiscal 2001.

  Depreciation and amortization expenses were $8.4 million during fiscal 2002
compared to $10.4 million during fiscal 2001, a decrease of $2.0 million, or
19.2%.  The sale of Davenport assets contributed to $1.5 million of the
decrease and the decision to sell the assets of the leasing operations
contributed $1.3 million to the decrease.  These decreases were offset by an
increase in depreciation expense of $1.0 million as a result of placing assets
associated with the relocation of the "Admiral" into service in December 2000.

  The Company incurred development costs of $0.4 million during fiscal 2002,
compared to $0.3 million during fiscal 2001.  During both fiscal years, the
costs were incurred for the Destination Broadwater project.

  During fiscal 2002 and 2001, management's ongoing evaluation of the net
realizable value of its assets, based on their intended future use and current
market conditions, resulted in the recognition of an impairments of long-lived
assets of $7.1 million and $12.7 million, respectively, on two casino vessels
not used in the Company's gaming operations and accounted for in the Company's
leasing segment.

  Operating income.  As a result of the foregoing items, the Company had an
operating loss of $4.7 million during fiscal 2002, compared to an operating
loss of $12.2 million during fiscal 2001.

  Interest expense, net.  The Company incurred net interest expense of $14.1
million during fiscal 2002, compared to $18.6 million during fiscal 2001, a
decrease of $4.5 million or 24.2%.  Decreased principal balances and decreased
variable interest rates primarily contributed to the decrease.

  Reorganization costs.  The Company incurred reorganization costs resulting
from the bankruptcy proceedings of PBLLC of $1.4 million during fiscal 2002.
There were no comparable costs in the prior year.

  Gain/loss on disposal of fixed assets.  As previously discussed, during
fiscal 2002, the Company sold the assets of its St. Louis-based non-gaming
cruise riverboats and recognized a gain of $0.8 million.  During fiscal 2001,
the Company sold the assets of its Davenport operations resulting in a gain of
$34.5 million.  This was partially offset by a loss of $0.5 million resulting
from the disposal of certain assets that were not suitable for the new
location in conjunction with the relocation of the "Admiral."

                                    35
<PAGE> 37
  Minority interest expense.  The Company incurred $1.2 million in minority
interest expense during fiscal 2002, compared to $3.4 million during fiscal
2001, a decrease of $2.2 million.  The decrease is the result of selling the
assets of the Company's 95% owned partnership in Davenport and a decreased
interest rate on the redeemable priority return on the PBLLC minority
interest.

  Net loss.  The Company incurred a net loss of $20.7 million during fiscal
2002, compared to a net loss of $0.2 million during fiscal 2001.

Liquidity and Capital Resources

  The Company meets its working capital requirements from a combination of
internally generated sources including cash from operations and the sale or
charter of assets no longer utilized in the Company's casino operations.

  As discussed above, the Company and its subsidiaries are operating their
businesses as debtors-in-possession under Chapter 11 of the Bankruptcy Code.
In addition to the cash requirements necessary to fund ongoing operations, the
Company anticipates that it will incur significant professional fees and other
restructuring costs in connection with the reorganization.  As a result of the
uncertainty surrounding the Company's current circumstances, it is difficult
to predict the Company's actual liquidity needs and sources at this time.
However, based upon current and anticipated levels of operations, during the
pendency of the bankruptcy, management believes that its liquidity and capital
resources will be sufficient to maintain its normal operations at current
levels.  Costs previously incurred and to be incurred in the future in
connection with the reorganization have been and will continue to be
substantial and, in any event, there can be no assurance that the Company will
be able to reorganize its indebtedness or that its liquidity and capital
resources will be sufficient to maintain its normal operations during the
reorganization period.  The Company's access to additional financing is, and
for the foreseeable future will likely continue to be, very limited.
Additionally, any significant interruption or decrease in the revenues derived
by the Company from its operations would have a material adverse effect on the
Company's liquidity and the ability to maintain the Company's operations as
presently conducted.

  As a result of the Company's high degree of leverage and the need for
significant capital expenditures at its St. Louis property, the Company was
unable to make the regularly scheduled interest payments of $6.4 million that
were each due and payable March 15 and September 15, 2000.  Under the
Indentures pursuant to which the Senior Exchange Notes and Secured Notes were
issued, an Event of Default occurred on April 15, 2000, and is continuing as
of the date hereof.  Additionally the Company did not make the $25.0 million
principal payment due September 15, 2000 on the Senior Exchange Notes.  The
holders of at least 25% of the Senior Exchange Notes and Secured Notes were
notified and instructed the Indenture Trustee to accelerate the Senior
Exchange Notes and Secured Notes and on August 11, 2000, the holders declared
the unpaid principal and interest to be due and payable.

  The Company was unable to make the principal and interest payments due
September 15, 2001 and the interest payment due March 15, 2002, on its Senior
and Secured Notes.  As of February 28, 2003, principal due on the Senior and
Secured Notes was $56.2 million and $18.8 million, respectively.

                                     36
<PAGE> 38
  The Company requires approximately $6.5 million of cash to fund daily
operations.  As of February 28, 2003 and April 30, 2003, the Company had $9.7
million and $15.6 million of non-restricted cash in excess of the $6.5
million.  The Company is heavily dependant on cash generated from operations
to continue to operate as planned in its existing jurisdictions and to make
capital expenditures.  Management believes that its existing available cash
and cash equivalents and its anticipated cash generated from operations will
be sufficient to fund its ongoing operating properties.  The debt obligations
are currently stayed by the bankruptcy proceedings.  To the extent cash
generated from operations is less than anticipated, the Company may be
required to curtail certain planned expenditures or seek other sources of
financing.

  The Company had $5.3 million in restricted cash as of February 28, 2003
related to the Broadwater Property.  Prior to the filing for reorganization
under Chapter 11, PBLLC deposited revenues into lockboxes that were controlled
by its lender.  Expenditures from the lockboxes were limited to the operating
expenses, capital improvements and debt service of the Broadwater Property as
defined by its loan agreement.  The lender continues to control the capital
improvements lockbox.  PBLLC currently operates under a cash collateral
stipulation and agreement, which allows PBLLC to use its cash collateral for
normal operations in accordance with certain terms as defined by the cash
collateral agreement.  Revenues of PBLLC include the operations of the hotels
and golf course and $3.1 million annually of proceeds from rental of the
Biloxi casino's mooring site.

  The Company had $0.7 million in restricted short-term investments as of
February 28, 2003, consisting of certificates of deposit guaranteeing certain
performance obligations of the Company's casino operations.

  The Company generated $10.1 million of cash from operating activities during
fiscal 2003, compared to generating $3.8 million during fiscal 2002.  Accrued
and unpaid interest contributed to $7.9 million of the cash generated from
operating activities during fiscal 2003.

  The Company used $4.0 million of cash in investing activities during fiscal
year 2003.  The Company expended $5.6 million on property and equipment, of
which approximately $4.2 million related the St. Louis operations and $1.4
million was spent in Biloxi.

  The Company used $0.1 million of cash financing activities during fiscal
year 2003 as a result of one principal payment made on the "President Casino-
Mississippi" note.

  In conjunction with the purchase of the Broadwater Property, PBLLC borrowed
the sum of $30.0 million from a third party lender, evidenced by a non-
recourse promissory note (the "Indebtedness"). Except as set forth in the
promissory note and related security and guarantee documents, PBLLC's
obligations under the Indebtedness are nonrecourse and are secured by the
Broadwater Property, its improvements and leases thereon.  The Indebtedness
bears interest at a variable rate per annum equal to the greater of (i) 8.75%
or (ii) 4% plus the LIBOR 30-day rate.

  PBLLC was obligated under the Indebtedness to make monthly payments of
interest accruing under the Indebtedness, and was obligated to repay the
Indebtedness in full on July 22, 2000.  In addition, PBLLC was obligated to

                                    37

<PAGE> 39
pay to the lender a loan fee in the amount of $7.0 million which was fully
earned and non-refundable when the Indebtedness was due.  As of the default
date, the Company began accruing, but had not paid, interest on the unpaid
loan fee at the stipulated rate.  The Company continued to make the monthly
interest payments accruing on the $30.0 million principal through April 19,
2001, when the Company announced that PBLLC had filed for reorganization under
Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court
for the Southern District of Mississippi.

  The term note payable is collateralized by the vessel M/V "President Casino-
Mississippi" and various equipment and is personally guaranteed by Mr.
Connelly.  This note also contains certain covenants which, among other
things, require the Company to maintain a minimum tangible net worth of $40.0
million.  The aforementioned default on the Company's Senior Exchange Notes
and Secured Notes also constituted a default under this note.  Under the terms
of the term note payable, $2.1 million principal became due and payable in
August 2002.  In November 2002, the lender brought an action against Mr.
Connelly for breach of contract under his personal guarantee.  In January
2003, the Mississippi Bankruptcy Court granted a motion to relieve the lender
from the automatic stay in order to enforce its rights under the Preferred
Fleet Ship Mortgage, including but not limited to the right of the lender to
seize and sell the vessel.  In May 2003, the lender filed a motion with the
United States District Court of Southern Illinois for an order directing the
Clerk of Court to issue a warrant for the arrest of the M/V "President Casino-
Mississippi" pursuant to rules of admiralty and maritime claims.  On May 20,
2003, the Court executed the warrant, which will allow the vessel to be seized
and sold.  To date, no further action has been taken by the lender.

  In connection with the Company's proposed "Destination Broadwater"
development plan, to date, the Company has not identified any particular
financing alternatives or sources as the necessary regulatory approvals have
not been obtained.  There can be no assurance that the Company will be able to
obtain the regulatory approvals or the requisite financing.  Should the
Company fail to raise the required capital, such failure would materially and
adversely impact the Company's business plan.

Critical Accounting Policies

  --Significant Accounting Policies and Estimates

  The Company prepares the consolidated financial statements in conformity
with accounting principles generally accepted in the United States.  Certain
of the Company's accounting policies, including the determination of bad debt
reserves, the estimated useful lives assigned to property, plant and
equipment, asset impairment, insurance reserves and player point liability
require that management apply significant judgment in defining the appropriate
assumptions for calculating financial estimates.  By their nature, these
judgments are subject to an inherent degree of uncertainty.  Management's
judgments are based on historical experience, terms of existing contracts,
observance of trends in the gaming industry and information available from
other outside sources.  There can be no assurance that actual results will not
differ from the Company's estimates.  To provide an understanding of the
methodology applied, significant accounting policies and basis of presentation
are discussed where appropriate in this discussion and analysis and in the
notes of the consolidated financial statements.

                                    38
<PAGE> 40
  The carrying values of the Company's assets are reviewed when events or
changes in circumstances indicate that the carrying amount of an asset may not
be recoverable.  Asset impairment is determined to exist if estimated future
cash flows, undiscounted and without interest charges, are less than the
carrying amount.  If it is determined that an impairment loss has occurred,
then an impairment loss is recognized in the statement of operations.  The
resulting impairment loss is measured as the amount by which the carrying
amount of the asset exceeds its fair value, estimated using quoted market
prices, if available, or other acceptable valuation methodologies, including
discounted cash flows or comparable sales.

  --Recently Issued Accounting Standards

  In June 2001, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 143, "Accounting for
Asset Retirement Obligations."  SFAS No. 143 addresses financial accounting
and reporting for obligations associated with the retirement of tangible long-
lived assets and the related asset retirement costs.  This SFAS applies to all
entities and applies to all legal obligations associated with the retirement
of long-lived assets that result from the acquisition, construction,
development and the normal operation of a long-lived asset, except for certain
obligations of lessees.  SFAS No. 143 will be effective for the Company's
fiscal year 2004 financial statements.  The Company believes that this SFAS
will not have a significant impact on its financial position or results of
operations.

  In August 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment
or Disposal of Long-Lived Assets."  SFAS 144 requires one accounting model be
used for long-lived assets to be disposed of by sale and broadens the
presentation of discontinued operations to include more disposal transactions.
The requirements of SFAS No. 144 are effective for the Company beginning after
March 1, 2002.  The adoption of SFAS No. 144 has resulted in depreciation
expense of $0.6 million on its two non-operating vessels for the year ended
February 28, 2003.

  In June 2002, the FASB issued SFAS No. 146, "Accounting for Costs Associated
with Exit or Disposal Activities".  SFAS 146 addresses significant issues
regarding the recognition, measurement and reporting of costs that are
associated with exit and disposal activities, including restructuring
activities that are currently accounted for pursuant to the guidance that the
Emerging Issues Task Force has set forth.  The scope of SFAS 146 also includes
costs related to terminating a contract that is not a capital lease and
termination benefits that employees who are involuntarily terminated receive
under terms of a one-time benefit arrangement that is not an ongoing benefit
arrangement or an individual deferred compensation contract.  SFAS 146 is
effective for exit or disposal activities initiated after December 31, 2002.
The Company will account for all applicable activities, if any, in fiscal year
2004 or future periods in accordance with SFAS 146.

  In November 2002, the FASB issued FASB Interpretation No. 45 ("FIN 45"),
"Guarantor's Accounting and Disclosure Requirements for Guarantees, Including
Indirect Guarantees of Indebtedness of Others" and Interpretation of FASB
Statements Nos. 5, 57 and 107 and recession of FASB Interpretation No. 34.
FIN 45 requires: (1) the guarantor of debt to recognize a liability, at the
inception of the guarantee, for the fair value of the obligation undertaken in
issuing this guarantee, (2) indirect guarantees of debt to be recognized in

                                    39

<PAGE> 41
the financial statements of the guarantor, and (3) the guarantor to disclose
the background and nature of the guarantee, the maximum potential amount to be
paid under the guarantee, the carrying value of the liability associated with
the guarantee and any recourse of the guarantor to recover amounts paid under
the guarantee from third parties.  FIN 45 rescinds all the provisions of FIN
34, "Disclosure of Indirect Guarantees of Indebtedness of Others;" as it has
been incorporated into the provisions of FIN 45.  The provisions of FIN 45 are
effective for all guarantees issued or modified subsequent to December 31,
2002.  The disclosure requirements of FIN 45 are effective for the financial
statements of interim and annual periods ending after December 15, 2002.  The
Company does not have any significant commitments within the scope of FIN 45,
except as disclosed in the footnotes to the consolidated financial statements.

  In December 2002, the FASB issued SFAS No. 148, "Accounting for Stock-Based
Compensation-Transition and Disclosure".  SFAS 148 amends SFAS No. 123,
Accounting for Stock-Based Compensation SFAS 123, to provide alternative
methods of transition when an entity changes from the intrinsic value method
to the fair-value method of accounting for stock-based employee compensation.
SFAS 148 amends the disclosure requirements of SFAS 123 to require more
prominent and more frequent disclosure about the effects of stock based
compensation by requiring pro forma data to be presented more prominently and
in a more transparent format in the footnotes to the financial statements.  In
addition, SFAS 148 requires that the information be included in interim as
well as annual financial statements.  The transition guidance and annual
disclosure provisions of SFAS 148 are effective for periods ending after
December 15, 2002.  The Company intends to continue accounting for stock-based
employee compensation using the intrinsic value method and does not believe
SFAS 148 will have a material impact on the Company's financial position and
results of operations, apart from the additional disclosure requirements of
SFAS 148.

 Forward Looking Statements

  This Annual Report on Form 10-K and certain information provided
periodically in writing and orally by the Company's designated officers and
agents contain certain statements which constitute "forward-looking
statements" within the meaning of Section 27A of the Securities Act of 1933,
as amended and Section 21E of the Securities Exchange Act of 1934, as amended.
The terms "Company," "we," "our" and "us" refer to President Casinos, Inc.
The words "expect," "believe," "goal," "plan," "intend," "estimate," and
similar expressions and variations thereof are intended to specifically
identify forward-looking statements.  Those statements appear in this Annual
Report on Form 10-K and the documents incorporated herein by reference,
particularly "Management's Discussion and Analysis of Financial Condition and
Results of Operations," and include statements regarding the intent, belief or
current expectations of the Company, its directors or its officers with
respect to, among other things: (i) our financial prospects; (ii) our
financing plans and our ability to meet our obligations under our debt
obligations and obtain satisfactory operating and working capital; (iii) our
operating and restructuring strategy; and (iv) the effect of competition and
regulatory developments on our current and expected future revenues.  You are
cautioned that any such forward looking statements are not guarantees of
future performance and involve risks and uncertainties, and that actual
results may differ materially from those projected in the forward looking
statements as a result of various factors. The factors that might cause such
differences include, among others, the following: (i) continuation of future

                                   40

<PAGE> 42
operating and net losses by the Company; (ii) the inability of the Company to
restructure its debt obligations and facilitate its and its subsidiaries
successful emergence from bankruptcy; (iii) the inability of the Company to
obtain sufficient cash from its operations and other resources to fund ongoing
obligations and continue as a going concern; (iv) developments or new
initiatives by our competitors in the markets in which we compete; (v) our
stock price; (vi) adverse governmental or regulatory changes or actions which
could negatively impact our operations; and (vii) other factors including
those identified in the Company's filings made from time-to-time with the
Securities and Exchange Commission.  The Company undertakes no obligation to
publicly update or revise forward looking statements to reflect events or
circumstances after the date of this Annual Report on Form 10-K or to reflect
the occurrence of unanticipated events.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

  As of February 28, 2003, the Company had $114.1 million of debt, including a
loan fee of $7.0 million associated with the $30.0 million note related to the
Broadwater Property.  Of this amount, $75.0 million bears interest at fixed
rates.  The remaining $39.1 million bears interest at variable rates.  The
$30.0 million Broadwater Property note payable and associated $7.0 million
loan fee bear interest at a stipulated variable rate at the greater of (i)
8.75% or (ii) 4.0% plus the LIBOR 30-day rate.  The M/V "President Casino-
Mississippi" note payable of $2.1 million bears interest at 2.0% over the
prime rate of J.P. Morgan Chase & Company.  As of February 28, 2003, the
average interest rate applicable to the debt carrying variable rates was
11.64%.  An increase of one percentage point in the average interest rate
applicable to the variable rate debt outstanding as of February 28, 2003,
would increase the Company's annual interest costs by approximately $0.4
million.  The Company continues to monitor interest rate markets, but has not
engaged in any hedging transactions with respect to such risks.

  Although the Company manages its short-term cash assets to maximize return
with minimal risk, the Company does not invest in market rate sensitive
instruments for trading or other purposes and the Company is not exposed to
foreign currency exchange risks or commodity price risks in its transactions.

Item 8.  Financial Statements and Supplementary Data.

  Reference is made to the Index to Financial Statements and Schedules on page
F-1.

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

  Not applicable.
                                     41

<PAGE> 43
                                    Part III

Item 10.  Directors and Executive Officers Registrant

  As of the date hereof, the directors and executive officers of the Company,
together with certain information about them, are set forth below.

         Name           Age    Director Since    Positions with the Company
         ----           ---    --------------    --------------------------
   John E. Connelly      77        1992          Chairman of the Board and
                                                   Chief Executive Officer
                                                   (Class III)
   John S. Aylsworth     52        1995          President, Chief Operating
                                                   Officer and Director
                                                   (Class III)
   Terrence L. Wirginis  51        1993          Vice Chairman of the Board,
                                                   Vice President-Marine and
                                                   Development and Director
                                                   (Class II)
   Ralph J. Vaclavik     48         --           Senior Vice President and
                                                   Chief Financial Officer
   Karl G. Andren        56        1993          Director (Class I)
   Royal P. Walker, Jr.  43        1996          Director (Class I)

  The Company has a classified Board of Directors consisting of three classes.
At each annual meeting of stockholders, directors are elected for a term of
three years to succeed those directors whose terms are expiring.  No annual
meeting of stockholders has been held since August 2001 and none is scheduled
for 2003.  Each director will continue in office until his successor is duly
elected and qualified.

  Mr. Connelly has served as Chairman and a director of the Company and its
predecessors since their inception.  Mr. Connelly has also served as Chief
Executive Officer of the Company from its inception until March 1995 and from
July 1995 to the present.  Mr. Connelly served as President of the Company
from July 1995 until July 1997.  Entities controlled by Mr. Connelly have
owned and operated the Gateway Clipper Fleet in Pittsburgh from its inception
in 1958 through 1996, the Station Square Sheraton Hotel in Pittsburgh from
1981 to 1998 and the Broadwater Beach Resort from 1992 until such time as the
purchase of the property by a limited liability company in which the Company
and Mr. Connelly have interests.  In 1984, Mr. Connelly founded World Yacht
Enterprises, a fleet of dinner cruise, sightseeing and excursion boats in New
York City.  In 1985, he started Gateway Riverboat Cruises in St. Louis, a
predecessor to the Company.  Mr. Connelly is also the founder, owner and Chief
Executive Officer of J. Edward Connelly Associates, Inc., a marketing firm
based in Pittsburgh, Pennsylvania.

  Mr. Aylsworth has been President and Chief Operating Officer since July
1997, and a director of the Company since July 1995.  Mr. Aylsworth served as
Executive Vice President and Chief Operating Officer of the Company from March
1995 to July 1997.  Prior to joining the Company, Mr. Aylsworth served as an
executive officer for Davis Companies, located in Los Angeles, California.
From January 1992 through October 1994, Mr. Aylsworth was Chief Executive
Officer of The Sports Club Company, a company which operates premier health
and fitness facilities in Los Angeles and Irvine, California.

                                   42

<PAGE> 44
  Mr. Wirginis has served as Vice Chairman of the Board since July 1997.  Mr.
Wirginis has served as Vice President, Marine and Development since August
1995 and as a director since the Company's inception.  Prior to his employment
with the Company, Mr. Wirginis provided consulting services to the Company
with respect to the Company's marine operations and the development and
improvement of the Company's facilities.  The Company has been advised that
Mr. Wirginis devotes an insubstantial amount of his time to Gateway Clipper
Fleet, a company in which he has an ownership interest.  Mr. Wirginis is the
grandson of Mr. Connelly.

  Mr. Vaclavik has been Senior Vice President and Chief Financial Officer of
the Company since September 2000.  Mr. Vaclavik served as Vice President of
Finance of the Company since its inception in June 1992.

  Mr. Andren has been Chairman of Circle-Line Sightseeing Yachts, Inc., a
subsidiary of New York Cruise Lines, Inc. ("NYCL"), which operates the leading
sightseeing cruise line in New York City, since 1981.  In addition, NYCL owns
World Yacht, Inc., a fleet of luxury dinner cruise, sightseeing and excursion
boats in New York City.  Mr. Andren is a principal stockholder in NYCL.  Mr.
Andren is a member of the Company's Audit and Compensation Committees.

  Mr. Walker became a member of the Company's Board of Directors on June 4,
1996.  Mr. Walker holds a J.D. from Texas Southern University in Houston,
Texas, and since June 1, 1992 has served on the staff of The Institute for
Disability Studies at the University of Southern Mississippi.  From June 1991
through May 1992 he served as the first Executive Director of the Mississippi
Gaming Commission.  Mr. Walker is a member of the Company's Audit and
Compensation Committees.

Compliance with Section 16(a) of the Securities Exchange Act of 1934

  Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers ("Reporting Persons") to file with the
Securities and Exchange Commission initial reports of ownership and reports of
changes in ownership of Common Stock of the Company.  The Company has
designated an officer who is available to the Company's Reporting Persons to
assist them in filing the required reports.  To the Company's knowledge, based
solely on its review of the copies of such reports furnished to the Company
and written representations that no other reports were required, during the
year ended February 28, 2003 all Section 16(a) filing requirements applicable
to the Reporting Persons were complied with.

                                   43

<PAGE> 45
Item 11.  Executive Compensation

  The following table sets forth certain information with respect to
compensation paid by the Company during the three fiscal years ended February
28, 2003, 2002 and 2001, respectively, to each of the named executive officers
of the Company.
<Table>
<Caption>

                                    SUMMARY COMPENSATION TABLE
                                                                 Long-Term
                                        Annual Compensation     Compensation
                                        --------------------    ------------
                                                                 Securities          All
                                Fiscal                           Underlying         Other
Name and Principal Position      Year     Salary      Bonus     Options/SARs    Compensation (1)
---------------------------     ------    ------      -----     ------------    ----------------

<S>                              <C>     <C>         <C>          <C>               <C>
John E. Connelly                 2003    $200,000    $    --          --            $ 3,375
Chairman of the Board and        2002     200,000         --          --              2,438
Chief Executive Officer          2001     200,000      33,333         --              3,385

John S. Aylsworth                2003    $450,000    $168,751         --            $ 4,141
President and Chief              2002     450,000      56,251     436,667 (2)         3,525
Operating Officer                2001     450,000      93,750         --              3,006

Terrence L. Wirginis             2003    $205,000    $ 76,125         --            $ 4,157
Vice Chairman of the             2002     205,000      15,376     112,000 (2)         3,438
Board and Vice President         2001     205,000      25,625         --              3,332
-Marine and Development

James A. Zweifel (3)             2003    $ 78,635    $ 48,469         --            $ 3,511
Former Executive Vice            2002     235,000      22,031      86,000 (2)         3,488
President and                    2001     218,269      25,725         --              3,447
General Manager

Ralph J. Vaclavik                2003    $180,000    $ 40,500         --            $ 4,034
Senior Vice President and        2002     180,000      13,501      31,000 (2)         3,526
Chief Financial Officer          2001     141,458      15,625         --              3,493
</Table>
___________________

(1)  Consists of contributions made to the Company's 401(k) plan for the
     account of the named executive.

(2)  On August 28, 2001, the Company repriced certain outstanding stock
     options with exercise prices ranging from $1.875 to $4.000 per share by
     amending the terms of such options to provide for an exercise price of
     $0.87 per share.  In connection with such repricing each of Messrs.
     Aylsworth, Wirginis, Zweifel and Vaclavik had previously granted options
     for all shares indicated in the table repriced.

(3)  Mr. Zweifel resigned from the Company on June 11, 2002.

                                     44

<PAGE> 46
  The following table sets forth information regarding the number and value of
options held by each of the Company's executive officers named in the Summary
Compensation Table during fiscal 2003.  None of the named executive officers
exercised any stock options during fiscal 2003.

<Table>
<Caption>
                                FISCAL YEAR END OPTION/SAR VALUES

                                  Number of Securities
                                 Underlying Unexercised               Value of Unexercised
                                     Options/SARs                   in-the-Money Options/SARs
                                 at Fiscal Year End (#)             at Fiscal Year End ($) (1)
                               -------------------------            --------------------------
Name                       Exercisable       Unexercisable       Exercisable       Unexercisable
----                      --------------     --------------     --------------     --------------

<S>                            <C>               <C>               <C>                <C>
John E. Connelly                   --                --            $    --            $    --
John S. Aylsworth              420,000            16,667                --                 --
Terrence L. Wirginis           107,000               --                 --                 --
James A. Zweifel                86,000               --                 --                 --
Ralph J. Vaclavik               23,500               --                 --                 --
</Table>

(1)  As of February 28, 2003, no options were in the money.

Employment Arrangements

  In June 1998, the Company entered into separate Amended and Restated
Employment Agreements with each of Messrs. Connelly, Aylsworth and Wirginis.
The agreements with each of Messrs. Connelly, Aylsworth and Wirginis provide
for a term of employment through June 1, 2003. The agreements are
automatically renewable thereafter for successive two-year terms unless
terminated by either party.  Each of the employment agreements is an executory
contract which has neither been accepted or rejected in the Company's
bankruptcy proceedings.

  In March 2002, the Company entered into an Employment Agreement with Mr.
Vaclavik for an employment term through June 1, 2004.  The agreement is
renewable thereafter for successive two-year terms unless terminated by either
party within 90 days of its expiration.

  The agreements provide for minimum annual base salaries of $200,000 for Mr.
Connelly and $180,000 for Mr. Vaclavik.  In March 1999, the Amended and
Restated Employment Agreements of Messrs. Aylsworth and Wirginis were further
amended by letter agreements whereby Mr. Aylsworth's minimum annual base
salary is $450,000 and Mr. Wirginis's minimum annual base salary is $205,000.
Such minimum annual base salaries are subject to increases at the discretion
of the Compensation Committee.  Each such executive officer may also receive
incentive bonuses provided through any incentive compensation plan of the
Company.

  Each employment agreement provides that if the Company terminates the
employment of the executive without Cause or if the executive terminates his
employment for Good Reason prior to a Change in Control of the Company, the
Company will be required to pay such executive officer severance benefits
including the continuation of the executive's then-current annual salary for a
maximum of two years (except for Mr. Vaclavik's agreement, which provides for
salary continuation for a one-year period), and the continuation of certain

                                    45

<PAGE> 47
employment benefits to which he otherwise would have been entitled.  "Cause"
is generally defined as (i) any breach or failure to perform duties or follow
instructions of the Board of Directors, (ii) commission of fraud,
misappropriation, embezzlement or other acts of dishonesty, alcoholism, drug
addiction or dependency or conviction of a felony or gross misdemeanor if the
Board of Directors determines such conduct is materially adverse to Company,
(iii) breach of the employment agreement by the executive, or (iv) the refusal
by any gaming commission with jurisdiction over the Company's facilities to
grant a license to the executive or any suspension or revocation of a license
previously granted to the executive.  "Good Reason" is generally defined as
(i) a significant and adverse change in the nature or scope of the executive's
position, authority, duties or responsibility, (ii) a failure to continue the
executive officer's then-current participation in benefits or compensation,
(iii) within a period of one year following a Change in Control (as defined),
resignation by the executive in his sole and absolute discretion, or (iv) any
material breach of the agreement by the Company.

  The employment agreements additionally provide that each such executive
officer will be paid severance benefits in the event that his employment with
the Company is terminated by the Company without Cause or by the executive for
Good Reason within two years of a Change in Control of the Company.  The
Change in Control provisions would require, in addition to any other benefits
to which the executive is entitled, a lump-sum cash payment in an amount equal
to 2.99 times the executive officer's average annual base compensation, as
determined pursuant to the employment agreement, for Messrs. Connelly,
Aylsworth and Wirginis and in an amount equal to 1.5 times for Mr. Vaclavik.
If payment of the foregoing amounts and any other benefits received or
receivable upon termination after a Change in Control would subject such
executive officer to the payment of a federal excise tax, the total amount
payable by the Company to such executive officer would be increased by an
amount sufficient to provide such executive officer (after satisfaction of all
excise taxes and federal income taxes attributable to such increased payment)
with a net amount equal to the amount receivable prior to the federal excise
tax and federal income tax owed by the executive officer.

  Change in Control is generally defined as (i) the acquisition by any person
of beneficial ownership of 20% or more of the combined voting power of the
Company's then outstanding securities, (ii) a change in the composition of the
Company's Board of Directors such that during any two consecutive years the
incumbent directors and their nominees do not constitute a majority of the
Board, (iii) a merger or consolidation of the Company in which the Company is
not the continuing or surviving corporation or pursuant to which the holders
of the Common Stock prior to such event do not have the same proportionate
ownership of the common stock of the surviving corporation, (iv) a merger or
consolidation of the Company in which the Company is the continuing or
surviving corporation in which the holders of the Company's Common Stock
immediately prior to such event do not own 50% or more of the outstanding
stock of the surviving corporation, or (v) approval by the stockholders of the
Company of a complete liquidation or dissolution of the Company or the sale of
substantially all of the assets of the Company.  A transfer by Mr. Connelly
and certain related persons and entities which would otherwise be sufficient
to constitute a Change of Control would not constitute a Change of Control for
the purpose of triggering a payment to Mr. Connelly, but would constitute a
change in control for each of the other executives.

                                    46

<PAGE> 48
Compensation of Directors

  During fiscal 2003, directors who were not employees of the Company received
annual director's fees of $36,000.  Directors who are employees of the Company
do not receive director's fees.  Directors of the Company are entitled to
receive discretionary grants of stock options.  No such grants were made in
fiscal 2003.  In addition, under the Company's existing stock option plan,
each non-employee director elected to the Board of Directors receives a grant
of non-qualified stock options to purchase 5,000 shares of Common Stock at the
fair market value of the Company's Common Stock on the date of grant.  These
stock options are exercisable immediately with respect to one-half of the
shares and become exercisable with respect to the remainder of the shares in
two equal annual installments.

Item 12.  Security Ownership of Certain Beneficial Owners and Management

  The following table sets forth certain information regarding the ownership
of the Company's Common Stock as of the May 28, 2003: (i) by each person known
to the Company to own beneficially more than 5% of the outstanding shares of
the Company's Common Stock; (ii) by each of the Company's directors; (iii) by
each of the executive officers of the Company listed in the Summary
Compensation Table, and (iv) by all of directors and executive officers of the
Company as a group.

  Name of Beneficial Owner          No. of Shares (1)     % of Class (1)
  ------------------------         ------------------     -------------
    John E. Connelly                     615,235 (2)          12.2%
    John S. Aylsworth                    558,985 (3)          10.2%
    Terrence L. Wirginis               1,250,603 (4)          24.3%
    Karl G. Andren                        69,500 (5)           1.4%
    Royal J. Walker, Jr.                  36,000 (6)            *
    Ralph J. Vaclavik                     29,114 (7)            *
    All executive officers and
     directors as a group (6 persons)  2,559,437 (8)          45.0%
________________________
* Less than 1%

(1)  Except as otherwise noted in the footnotes to this table, to the
     Company's knowledge each of the persons named in the table has sole
     voting and investment power with respect to all shares of Common Stock
     shown as beneficially owned by them.  The percentage calculations are
     based upon 5,033,161 shares of Company Common Stock issued and
     outstanding and, for each director or executive officer or the group, the
     number of shares subject to options exercisable by such director or
     executive or the group.

(2)  Includes an aggregate of 615,235 shares owned of record by an entity
     controlled by Mr. Connelly.  Mr. Connelly's address is 2180 Noblestown
     Road, Pittsburgh, PA 15205.

(3)  Includes 436,667 shares issuable pursuant to stock options, 420,000 of
     which are currently exercisable.  Mr. Aylsworth's address is 802 North
     First Street, St. Louis, MO 63102.

                                    47

<PAGE> 49
(4)  Includes 107,000 shares issuable pursuant to stock options which are
     currently exercisable.  Mr. Wirginis's address is 350 West Station
     Square Drive, Pittsburgh, PA 15219.

(5)  Consists of 12,500 shares owned by New York Cruise Lines, Inc., of which
     Mr. Andren is Chairman and a principal stockholder and 57,000 shares
     issuable pursuant to stock options which are currently exercisable.

(6)  Consists solely of shares issuable pursuant to stock options which are
     currently exercisable.

(7)  Includes 23,500 shares issuable pursuant to stock options which are
     currently exercisable.

(8)  Includes 660,167 shares issuable pursuant to stock options, 643,500
     of which are currently exercisable.

Item 13.  Certain Relationships and Related Transactions

  J. Edward Connelly and Associates, Inc. ("JECA"), an entity controlled by
John E. Connelly, the Company's Chairman and Chief Executive Officer, holds a
Class B membership interest in PBLLC.  Under the operating agreement of PBLLC,
such Class B interest is entitled to certain redemption rights and preferred
returns on cash flows.  In April 2001, PBLLC filed a voluntary petition for
relief under Chapter 11 of the Bankruptcy Code.  As part of the plan of
reorganization filed by PBLLC in the bankruptcy proceedings, JECA will retain
its membership interest but any payments by PBLLC to JECA shall be restricted
until such time as all outstanding obligations to Lehman and other interests
receiving funds under the plan of reorganization are discharged.

  The M/V "President Casino-Mississippi" and various equipment aboard the M/V
"President Casino-Mississippi" collateralizes a term note payable which is
also personally guaranteed by Mr. Connelly and his affiliates.  The highest
aggregate sum guaranteed in fiscal 2003 was $2.2 million.  The guaranteed
amount as of February 28, 2003 was $2.1 million.  The Company is in default on
the term note payable.  The Company continued to make the quarterly principal
and interest payments on this note prior to the Company's bankruptcy filing.
Under the terms of the note agreement, $2.1 million principal became due and
payable in August 2002.  In November 2002, the lender brought an action
against Mr. Connelly for breach of contract under his personal guarantee.  In
January 2003, the Mississippi Bankruptcy Court granted a motion to relieve the
lender from the automatic stay in order to enforce its rights under the
Preferred Fleet Ship Mortgage, including but not limited to the right of the
lender to seize and sell the vessel.  In May 2003, the lender filed a motion
with the United States District Court of Southern Illinois for an order
directing the Clerk of Court to issue a warrant for the arrest of the M/V
"President Casino-Mississippi" pursuant to rules of admiralty and maritime
claims.  On May 20, 2003, the Court executed the warrant, which will allow the
vessel to be seized and sold.  To date, no further action has been taken by
the lender.

                                    48

<PAGE> 50
                                    PART IV

Item 14.   Controls and Procedures

  Within 90 days prior to the date of this report, the Company carried out an
evaluation, under the supervision and participation of the Company's
management, including the Company's Chief Executive Officer and Chief
Financial Officer, of the effectiveness of the design and operation of the
Company's disclosure controls and procedures pursuant to Exchange Act Rule
13a-14.  Based upon that evaluation, the Chief Executive Officer and Chief
Financial Officer concluded that the Company's disclosure controls and
procedures are effective in timely alerting them to material information
relating to the Company (including its consolidated subsidiaries) required to
be included in the Company's periodic filings with the United States
Securities and Exchange Commission.

Item 15.   Principal Accountant Fees and Services

  The Company's independent public accountants for 2003 and 2002 were Deloitte
& Touche LLP.

  Audit Fees.  Fees of Deloitte & Touche LLP billed for the audit and review
of the Company's Forms 10-K and 10-Q were $193 and $171 for the fiscal years
2003 and 2002, respectively.

  Audit-Related Fees.  Fees of Deloitte & Touche LLP billed for compliance
with the Missouri and Mississippi Gaming Commissions were $86 and $77 for the
fiscal years 2003 and 2002, respectively.

  Tax Fees.  Aggregate fees billed for professional services rendered by
Deloitte & Touche LLP for tax compliance, tax advice and tax planning were $19
and $20 for the fiscal years 2003 and 2002, respectively.


  The audit committee of the Company's Board of Directors is in the process of
adopting pre-approval policies and procedures for the appointment of
independent public accountants for future services rendered.

Item 16.   Exhibits, Financial Statement Schedules, and Reports on Form 8-K.

(a) 1.     Financial Statements.

           See the Index to Financial Statements and Schedules on page F-1.

    2.     Financial Statement Schedules.

           See the Index to Financial Statements and Schedules on page F-1.

    3.     Exhibits.

           See Exhibit Index on page F-55.

(b)        Reports on Form 8-K.

           On December 13, 2002, the Company filed a Current Report on Form
           8-K dated December 2, 2002, reporting under Item 1 that

                                    49

<PAGE> 51
           pursuant to the terms of an Agreement to Terminate Stock Option
           and Effectuate Stock Purchase dated as of July 29, 2002, John E.
           Connelly, the Chairman and Chief Executive Officer of President
           Casinos, Inc., a Delaware corporation (the "Company"), transferred
           1,040,878 shares of common stock, $0.06 par value per share (the
           "Common Stock"), of the Company to Terrence L. Wirginis, Vice
           Chairman and Vice President - Marine and Development of the
           Company.  The aggregate consideration paid for the 1,040,878
           shares of Common Stock was $104,088.  The entire amount of such
           consideration was paid by Terrence L. Wirginis from personal
           funds.

                                        50
<PAGE> 52
                  INDEX TO FINANCIAL STATEMENTS AND SCHEDULES

I.   PRESIDENT CASINOS, INC. (Debtors-in-Possession)
     Consolidated Financial Statements:
       Independent Auditors' Report .....................................F-1
       Consolidated Balance Sheets as of February 28, 2003 and 2002......F-2
       Consolidated Statements of Operations for the Years
         Ended February 28, 2003, 2002 and 2001..........................F-3
       Consolidated Statements of Stockholders' Equity (Deficit)for
         the Years Ended February 28, 2003, 2002 and 2001................F-4
       Consolidated Statements of Cash Flows for the Years
         Ended February 28, 2003, 2002 and 2001..........................F-5
       Notes to Consolidated Financial Statements........................F-6
     Financial Statement Schedule:
       Schedule II--Valuation and Qualifying Accounts...................F-45
       All other schedules are omitted as the required information is
       inapplicable or is presented in the Company's Consolidated
       Financial Statements or Notes thereto.

II.  THE CONNELLY GROUP, L.P.
     Financial Statements:
       Independent Auditors' Report.....................................F-46
       Balance Sheets as of February 28, 2003 and 2002..................F-47
       Statements of Operations for the Years
         Ended February 28, 2003, 2002 and 2001.........................F-48
       Statements of Partners' Preferred Redeemable Capital and
         General Capital for the Years
         Ended February 28, 2003, 2002 and 2001.........................F-49
       Statements of Cash Flows for the Years
         Ended February 28, 2003, 2002 and 2001.........................F-50
       Notes to Financial Statements....................................F-51
     Financial Statement Schedule:
       Schedule II - Valuation and Qualifying Accounts..................F-54
       All other schedules are omitted as the required information is
       inapplicable or is presented in the Company's Financial Statements
       or Notes thereto.

                                     F-1
<PAGE> 53
INDEPENDENT AUDITORS' REPORT

To the Members of the Board of Directors of
President Casinos, Inc.:

We have audited the accompanying balance sheets of President Casinos, Inc.
(debtors-in-possession), (the "Company") as of February 28, 2003 and February
28, 2002, and the related statements of operations, stockholder's deficit, and
cash flows for each of the three years in the period ended February 28, 2003.
Our audits also include the financial statement schedule listed in the Index
at Item 16(a)2.  These financial statements are the responsibility of the
Company's management.  Our responsibility is to express an opinion on these
financial statements and financial statement schedule based on our audits.

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

In our opinion, such financial statements present fairly, in all material
respects, the financial position of the Company as of February 28, 2003 and
February 28, 2002, and the results of its operations and its cash flows for
each of the three years in the period ended February 28, 2003 in conformity
with accounting principles generally accepted in the United States of America.
Also, in our opinion, such financial statement schedule, when considered in
relation to the basic consolidated financial statements taken as a whole,
presents fairly in all material respects the information set forth therein.

As discussed in Note 1, the Company has filed for reorganization under Chapter
11 of the United States Bankruptcy Code.  The accompanying financial
statements do not purport to reflect or provide for the consequences of the
bankruptcy proceedings.  In particular, such financial statements do not
purport to show (a) as to assets, their realizable value on a liquidation
basis or their availability to satisfy liabilities; (b) as to pre-petition
liabilities, the amounts that may be allocated for claims or contingencies, or
the status and priority thereof; (c) as to shareholder accounts, the effect of
any changes that may be made in the capitalization of the Company; or (d) as
to operations, the effect of any changes that may be made in the business.

The accompanying financial statements have been prepared assuming that the
Company, will continue as a going concern.  As discussed in Notes 1 and 2, the
Company has suffered recurring losses from operations, generated negative cash
flows from operations and has a net stockholder's deficit.  Management's plans
in regard to these matters are also described in Notes 1 and 2.  The financial
statements do not include any adjustments that might result from the outcome
of this uncertainty.

/s/ Deloitte & Touche LLP
St. Louis, Missouri
May 9, 2003, except for paragraph 11 of Note 1, as to which the date is May
14, 2003, paragraph 6 of Note 1, as to which the date is May 15, 2003, and
paragraph 11 of Note 1 and paragraph 1 of Note 15, as to which the date is May
28, 2003
                                    F-2
<PAGE> 54
<TABLE>
<CAPTION>
                                  PRESIDENT CASINOS, INC.
                                  (DEBTORS-IN-POSSESSION)
                                CONSOLIDATED BALANCE SHEETS
                             (in thousands, except share data)

                                                                              February 28,
                                                                            2003       2002
                                                                          --------   --------

<S>                                                                       <C>        <C>
ASSETS

Current Assets:
  Cash and cash equivalents.............................................  $ 16,159   $ 10,110
  Restricted cash and cash equivalents..................................     5,304      6,942
  Restricted short-term investments.....................................       712        775
  Receivables, net of allowance for doubtful accounts of $189 and $180..       659        823
  Inventories...........................................................     1,202      1,143
  Prepaid expenses and other current assets.............................     2,818      2,050
                                                                          ---------  ---------
      Total current assets..............................................    26,854     21,843

Property and Equipment, net.............................................    93,980     98,607
                                                                          ---------  ---------
                                                                          $120,834   $120,450
                                                                          =========  =========
LIABILITIES AND STOCKHOLDERS' DEFICIT

Current Liabilities Not Subject to Compromise:
  Accounts payable......................................................  $  1,513   $  2,980
  Accrued payroll and benefits..........................................     3,866      5,183
  Accrued interest......................................................     9,818     15,558
  Accrued loan fee......................................................     7,000      7,000
  Other accrued liabilities.............................................     6,232      7,311
  Short-term debt.......................................................       --           5
  Current maturities of long-term debt..................................    30,000    107,200
                                                                          ---------  ---------
      Total current liabilities not subject to compromise...............    58,429    145,237
                                                                          ---------  ---------
Liabilities Subject to Compromise.......................................   111,340        646
                                                                          ---------  ---------
       Total liabilities..............................................   169,769    145,883
                                                                          ---------  ---------
Commitments and Contingent Liabilities..................................       --         --
Minority Interest.......................................................       679     15,102
Stockholders' Deficit:
  Preferred Stock, $.01 par value per share; 150,000 shares
    authorized; none issued and outstanding.............................       --         --
  Common Stock, $.06 par value per share; 14,000,000 shares
    authorized; 5,033,161 shares issued and outstanding.................       302        302
  Additional paid-in capital............................................   101,729    101,729
  Accumulated deficit...................................................  (151,645)  (142,566)
                                                                          ---------  ---------
      Total stockholders' deficit.......................................   (49,614)   (40,535)
                                                                          ---------  ---------
                                                                          $120,834   $120,450
                                                                          =========  =========
See Notes to Consolidated Financial Statements.
</TABLE>
                                    F-3
<PAGE> 55
<TABLE>
<CAPTION>
                            PRESIDENT CASINOS, INC.
                            (DEBTORS-IN-POSSESSION)
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                     (in thousands, except per share data)

                                                   Years Ended February 28,
                                                  2003       2002       2001
                                                 ------     ------     ------

<S>                                            <C>        <C>        <C>
OPERATING REVENUES:
Gaming.....................................    $123,177   $126,269   $147,810
Food and beverage..........................      13,278     14,426     18,437
Hotel......................................       6,134      5,502      6,748
Retail and other...........................       4,224      5,539      6,125
Less promotional allowances................     (23,092)   (22,552)   (27,022)
                                               ---------  ---------  ---------
  Total operating revenues.................     123,721    129,184    152,098
                                               ---------  ---------  ---------
OPERATING COSTS AND EXPENSES:
Gaming and gaming cruise...................      70,409     72,812     83,146
Food and beverage..........................       8,690      9,645     12,657
Hotel......................................       1,250      1,351      2,134
Retail and other...........................       1,557      1,946      2,343
Selling, general and administrative........      30,060     32,269     40,676
Depreciation and amortization..............       8,923      8,413     10,360
Impairment of long-lived assets............       1,167      7,068     12,709
Development................................         123        416        292
                                               ---------  ---------  ---------
  Total operating costs and expenses.......     122,179    133,920    164,317
                                               ---------  ---------  ---------

OPERATING INCOME (LOSS)....................       1,542     (4,736)   (12,219)
                                               ---------  ---------  ---------
OTHER INCOME (EXPENSE):
Interest expense (contractual interest of
   $14,551 for the year ended
   February 28, 2003)......................      (7,840)   (14,945)   (19,588)
Interest income............................         190        834        990
Reorganization items, net..................      (1,535)    (1,444)       --
Gain (loss) on sale of
   property and equipment..................        (117)       771     33,985
                                               ---------  ---------  ---------
Total other income (expense), net..........      (9,302)   (14,784)    15,387
                                               ---------  ---------  ---------
INCOME (LOSS) BEFORE MINORITY INTEREST.....      (7,760)   (19,520)     3,168

Minority interest..........................       1,319      1,228      3,374
                                               ---------  ---------  ---------
NET LOSS...................................    $ (9,079)  $(20,748)  $   (206)
                                               =========  =========  =========

Basic and diluted net loss per share.......     $ (1.80)   $ (4.12)   $ (0.04)
                                                ========   ========   ========
Weighted average common and dilutive
 potential common shares outstanding.......       5,033      5,033      5,033
                                                 =======    =======    =======
See Notes to Consolidated Financial Statements.
</TABLE>
                                      F-4
<PAGE> 56
<TABLE>
<CAPTION>
                          PRESIDENT CASINOS, INC.
                          (DEBTORS-IN-POSSESSION)
         CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
                               (in thousands)

                                                Additional
                                      Common      Paid-In   Accumulated
                                       Stock      Capital     Deficit      Total
                                       -----      -------     --------     -----

<S>                                 <C>         <C>         <C>         <C>
Years Ended February 28,
 2001, 2002 and 2003:

Balance as of March 1, 2000.......  $     302   $ 101,729   $(121,612)  $ (19,581)
Net loss..........................        --          --         (206)       (206)
                                    ----------  ----------  ----------  ----------
Balance as of February 29, 2001...        302     101,729    (121,818)    (19,787)
Net loss..........................        --          --      (20,748)    (20,748)
                                    ----------  ----------  ----------  ----------
Balance as of February 28, 2002...        302     101,729    (142,566)    (40,535)
Net loss..........................        --          --       (9,079)     (9,079)
                                    ----------  ----------  ----------  ----------
Balance as of February 28, 2003...  $     302   $ 101,729   $(151,645)  $ (49,614)
                                    ==========  ==========  ==========  ==========

See Notes to Consolidated Financial Statements.
</TABLE>

                                    F-5
<PAGE> 57
<TABLE>
<CAPTION>
                            PRESIDENT CASINOS, INC.
                            (DEBTORS-IN-POSSESSION)
                    CONSOLIDATED STATEMENTS OF CASH FLOWS
                               (in thousands)

                                                           Years Ended February 28,
                                                         2003        2002        2001
                                                        ------      ------      ------

<S>                                                    <C>         <C>         <C>
Cash flows from operating activities:
Net loss............................................   $ (9,079)   $(20,748)   $   (206)
Adjustments to reconcile net loss to net
  cash provided by operating activities:
    Depreciation and amortization...................      8,923       8,413      10,360
    (Gain) loss on disposal of assets...............        117        (771)    (33,985)
    Impairment of long-lived assets.................      1,167       7,068      12,709
    Amortization of deferred financing
      costs and discount............................        --          281       1,547
    Amortization of lease option....................        --          253         --
    Minority interest...............................      1,319       1,228       3,374
    Reorganization items, net.......................      1,535       1,444         --
    Net change in working capital accounts..........      6,124       6,598      (2,454)
    Net change in long-term accounts................        --          --          115
                                                       ---------   ---------   ---------
      Net cash provided by (used in)
        operating activities........................     10,106       3,766      (8,540)
                                                       ---------   ---------   ---------
Cash flows from investing activities:
  Expenditures for property and equipment...........     (5,592)     (4,482)     (9,238)
  Proceeds from the sale of property
     and equipment..................................         12       1,710      58,407
  Proceeds from notes receivable....................        --          596         --
  Changes in restricted cash........................      1,638      (2,538)     (1,624)
  Purchase of short-term investments................        (12)       (250)     (5,663)
  Maturity of short-term investments................         75       5,413         685
                                                       ---------   ---------   ---------
       Net cash provided by (used in)
         investing activities.......................     (3,879)        449      42,567
                                                       ---------   ---------   ---------
Cash flows from financing activities:
  Payments on notes payable.........................       (105)     (2,663)    (35,151)
  Payments on capital lease obligations.............        --           (1)         (5)
  Payment of minority interest......................        (73)        --       (2,720)
                                                       ---------   ---------   ---------
      Net cash used in financing activities.........       (178)     (2,664)    (37,876)
                                                       ---------   ---------   ---------
Net increase (decrease) in cash and
  cash equivalents..................................      6,049       1,551      (3,849)

Cash and cash equivalents at beginning of year......     10,110       8,559      12,408
                                                       ---------   ---------   ---------
Cash and cash equivalents at end of year............   $ 16,159    $ 10,110    $  8,559
                                                       =========   =========   =========

See Notes to Consolidated Financial Statements.
</TABLE>

                                    F-6
<PAGE> 58
                           PRESIDENT CASINOS, INC.
                           (DEBTOR-IN-POSSESSION)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    (Dollars in thousands, except share data and unless otherwise stated)

1.  BANKRUPTCY PROCEEDINGS

  On June 20, 2002, President Casinos, Inc. together with its subsidiary,
President Riverboat Casino-Missouri, Inc. ("President Missouri"), which owns
and operates the St. Louis operations, filed voluntary petitions for
reorganization under Chapter 11 of Title 11, United States Code (the
"Bankruptcy Code") in the United States Bankruptcy Court for the Southern
District of Mississippi (the "Mississippi Bankruptcy Court").  Subsequently,
on July 9, 2002, President Casinos, Inc.'s subsidiary The President Riverboat
Casino-Mississippi, Inc. ("President Mississippi") filed a voluntary
reorganization petition in the same Court.  On July 11, 2002, substantially
all of President Casinos, Inc.'s other operating subsidiaries filed voluntary
reorganization petitions under Chapter 11 in the same Mississippi Bankruptcy
Court.  Subsequently, orders were entered by the Mississippi Bankruptcy Court
transferring venue of all of the bankruptcy cases, except President Riverboat
Casino-New York, Inc. and President Broadwater Hotel, LLC, to the United
States Bankruptcy Court for the Eastern District of Missouri (the "Missouri
Bankruptcy Court") where they are now pending and being administered.  As used
herein, the term "Company" refers to President Casinos, Inc., its wholly-owned
subsidiaries, a 95%-owned limited partnership and a limited liability company
in which a wholly-owned subsidiary of President Casinos, Inc. owns a Class A
ownership interest and in which an entity wholly-owned by the Chairman of
President Casinos, Inc. owns a Class B unit and has a preferred right to
certain cash flows.

  The Company and its subsidiaries each continue in possession and use of
their assets as debtors-in-possession.  The Company and its subsidiaries have
had their Missouri Bankruptcy Chapter 11 cases administratively consolidated
under the Company's case.

  Prior to any of the cases being transferred to the Missouri Bankruptcy
Court, the Mississippi Bankruptcy Court established "bar dates" all of which
have expired, by which all claimants were required to submit and characterize
claims against the Company.  As part of the Company's and its subsidiaries'
Chapter 11 reorganization process, the Company has attempted to notify all
known or potential creditors of the filing for the purpose of identifying all
pre-petition claims.  In the Company's Chapter 11 case, substantially all of
the Company's liabilities as of the filing date are subject to adjustment
under a plan of reorganization.  Generally, actions to enforce or otherwise
effect repayment of all pre-petition liabilities as well as all pending
litigation against the Company are stayed while the Company continues its
business operations as debtors-in-possession.  Schedules have been filed by
the Company with the Bankruptcy Court setting forth the assets and liabilities
of the debtors as of the filing date as reflected in the Company's accounting
records.  Differences between amounts reflected in such schedules and claims
filed by creditors will be investigated and amicably resolved or adjudicated
before the Bankruptcy Court.  The ultimate amount and settlement terms for
such liabilities are subject to a plan of reorganization, and accordingly, are
not presently determinable.  Under the Bankruptcy Code, the Company may elect
to assume or reject real estate leases, employment contracts, personal
property leases, service contracts and other executory pre-petition contracts

                                    F-7

<PAGE> 59
and unexpired leases, subject to Bankruptcy Court review.  The Company cannot
presently determine or reasonably estimate the ultimate liability that may
result from rejecting leases or from filing of claims for any rejected
contracts, and no provisions have been made for these items.

  The consummation of a plan or plans of reorganization (a "Plan") is the
principal objective of the Company's Chapter 11 filings.  A Plan would, among
other things, set forth the means for satisfying claims against and interests
in the Company and its subsidiaries, including setting forth the potential
distributions on account of such claims and interests, if any.  Pursuant to
the Bankruptcy Code, the Company had the exclusive right for 120 days from the
filing date to file a Plan, and for 180 days from the filing date to solicit
and receive the votes necessary to confirm a Plan.  The Company was unable to
have a plan confirmed prior to the expiration of these exclusivity periods,
and the Missouri Bankruptcy Court denied the Company's motion to further
extend the exclusivity period.  Accordingly, in addition to the Company, any
party-in-interest, including a creditor, an equity holder, a committee of
creditors or equity holders, or an indenture trustee, may file its own Plan
for the Company.  Confirmation of a Plan is subject to certain statutory
findings by the Bankruptcy Court.  Subject to certain exceptions as set forth
in the Bankruptcy Code, confirmation of a Plan requires, among other things, a
vote on the Plan by certain classes of creditors and equity holders whose
rights or interests are impaired under the Plan.  If any impaired class of
creditors or equity holders does not vote to accept the Plan, but all of the
other requirements of the Bankruptcy Code are met, the proponent of the Plan
may seek confirmation of the Plan pursuant to the "cram down" provisions of
the Bankruptcy Code.  Under these provisions, the Bankruptcy Court may still
confirm a Plan notwithstanding the non-acceptance of the Plan by an impaired
class, if, among other things, no claim or interest receives or retains any
property under the Plan until each holder of a claim senior to such claim or
interest has been paid in full.  There can be no assurance that a Plan will be
confirmed by the Bankruptcy Court, or that any such Plan will be consummated.

  It is not possible to predict the length of time the Company will operate
under the protection of Chapter 11 and the supervision of the Bankruptcy
Court, the outcome of the bankruptcy proceedings in general, or the effect of
the proceedings on the business of the Company or on the interest of the
various creditors and stakeholders.  Since the filing date, the Company has
operated in the ordinary course of business.  Management is in the process of
evaluating their operations as part of the development of a Plan.  During the
pendency of the Chapter 11 Filings, the Company may, with Bankruptcy Court
approval, sell assets and settle liabilities, including for amounts other than
those reflected in the financial statements.  The administrative and
reorganization expenses resulting from the Chapter 11 Filings will unfavorably
affect the Company's results of operations.  In addition, under the priority
scheme established by the Bankruptcy Code, most, if not all, post-petition
liabilities must be satisfied before most other creditors or interest holders,
including stockholders, can receive any distribution on account of such claim
or interest.

  On May 15, 2003, the Missouri Bankruptcy Court issued an order approving a
joint motion filed by the Company, the unsecured creditors' committee (the
"Committee") and certain bondholders of the Company (the "Bondholders") with
respect to a timetable and process for the Company's reorganization
proceedings.  Specifically, the joint motion sought entry of an order
approving a timetable and process set forth in a Term Sheet, dated March 25,

                                    F-8

<PAGE> 60
2003 (the "Term Sheet"), with respect to either (i) the refinancing of the
Company by July 18, 2003, or (ii) a sale of the assets related to the
Company's St. Louis gaming operations.  In addition, the Court approved
motions by the Company to approve the appointment of Libra Securities LLC to
serve as the Company's investment banker in connection with any sale of the
St. Louis operations.

  As set forth in the Term Sheet, the Company, the Committee and the
Bondholders have agreed that the Company shall have until July 18, 2003 to
effect a recapitalization of the Company pursuant to a plan of reorganization
with qualified financing commitments under which the unsecured creditors and
bondholders would be repaid in full.  The Term Sheet also outlines a process
and timetable under which the Company's St. Louis operations would be sold in
the event that a recapitalization of the Company is not completed as set forth
in the Term Sheet.  As part of such process, the Company would be required to
meet certain benchmarks which, if not met, would permit the Committee to file
a motion with the Court for the sale of the Company's St. Louis operations and
to appoint a chief restructuring officer to manage the sale process.  Such
benchmarks include: (i) submission of draft marketing materials by May 1,
2003, (ii) delivery of marketing materials to qualified prospective purchasers
within 3 days of the end of the 2003 Missouri Legislative Session, or no later
than June 1, 2003, (iii) execution of a definitive asset purchase agreement by
August 1, 2003, (iv) filing of a motion to approve the sale by August 4, 2003,
and (v) good faith efforts by the Company to locate a purchaser and cooperate
with the sale process.  The Term Sheet also contemplates that preliminary bids
would be received by July 11, 2003, and that a preliminary "stalking horse"
bidder would be selected by July 18, 2003.

  The Company believes that, as a practical matter, a refinancing can be
accomplished, if at all, only if Missouri's gaming law is changed to eliminate
current loss limits which place a five hundred dollar limit on the amount a
gaming customer can lose during a two-hour gaming session.  Legislation
eliminating loss limits in Missouri was proposed during the January 2003
session of the Missouri General Assembly, but the session was adjourned
without the legislation being passed.  Missouri law gives the Governor of
Missouri the ability to call a special session of the legislature.  The
Missouri Governor has announced the veto of several of the bills passed by the
legislature and announced the call of a special session on June 2, 2003 for
these bills to be reconsidered where it is anticipated that the subject of
additional funding for the state will also be addressed.  The Company
currently anticipates that, if a special session is convened, the subject of
removing the five hundred dollar loss limit will again be presented, and that
such a proposal may also be accompanied by a proposal or proposals to increase
revenue from gaming companies.

  If the legislature removes loss limits and does not modify the existing
gaming tax structure such that a substantial portion of the economic benefit
of removal of the loss limits is decreased through the imposition of new
taxes, it is possible that the Company will be able to effect a refinancing.
No assurance can be given as to the achievement of a refinancing due to the
uncertainty of the scope of any potential legislation, the actual and
potential effect of the removal of loss limits as of the date refinancing is
sought as well as other inherent difficulties and risks of obtaining financing
on acceptable terms.  However, if loss limits are not removed and a
refinancing cannot not be completed, for whatever reason, then pursuant to the
order of the Missouri Bankruptcy Court, the Company will be obligated to begin

                                    F-9

<PAGE> 61
a process pursuant to which the St. Louis operations would be sold.  At the
current time, in the absence of the removal of loss limits, the Company
believes that the value of revenues from operations, projected at current
rates receivable for gaming operations earning such levels, would in all
probability not produce sufficient proceeds to retire in full all of the
Bondholder indebtedness which is currently outstanding.  In such event,
following the sale of the St. Louis operations the Company would continue to
owe monies to the Bondholders.  While it is not possible to predict what might
happen in this event, if the proceeds from any such sale of the St. Louis
operations are insufficient to satisfy the Company's obligations to the
Bondholders the Company may be forced to sell or otherwise liquidate its
investment in its Biloxi operations.  In such event, there can be no assurance
that the assets of the Company will exceed its obligations, or that the
Company would not be dissolved without any distribution to its stockholders.

  President Broadwater Hotel, LLC ("PBLLC"), a limited liability company in
which Broadwater Hotel, Inc., a wholly-owned subsidiary of the Company
("BHI"), has a Class A ownership interest, was in default under a $30.0
million promissory note and associated $7.0 million loan fee incurred in
connection with the July 1997 purchase by PBLLC of the real estate and
improvements utilized in the Company's operations in Biloxi, Mississippi.  On
April 19, 2001, PBLLC filed a voluntary petition for reorganization under
Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for
the Southern District of Mississippi.  PBLLC continued in possession and use
of its assets as a debtor-in-possession and had an agreement with Lehman
Brothers Holdings Inc., its lender and largest creditor ("Lehman"), approved
by the Mississippi Bankruptcy Court which allowed PBLLC's use of its cash
collateral.

  On October 16, 2001, PBLLC filed its plan of reorganization which would
permit PBLLC to restructure its debt obligations in a manner which was
designed to permit it to continue as a going concern.  Subsequently, on
February 28, 2003, PBLLC filed Modifications to Debtor's Plan of
Reorganization (together with the reorganization plan, the "Modified Plan").
On May 14, 2003, the Mississippi Bankruptcy Court entered the confirmation
order confirming the Modified Plan.  The Modified Plan became effective on May
28, 2003 and the Company consummated the Modified Plan at that time.  The
Modified Plan provides that the unsecured creditors of PBLLC will receive 100%
of their claims.  Under the Modified Plan, the obligations to Lehman were
modified with respect to the debt amount, the interest rate and the due date.
In addition, the obligation was be re-documented substantially along the lines
of the original obligation.  On May 28, 2003, the Company paid Lehman $3,551
pursuant to the Modified Loan.  The principal amount of the restructured loan
is $46,429 plus interest at the rate of 12.75% per annum from November 1, 2002
until May 28, 2003 on $30,000 plus interest at the rate of 8.75% per annum
from November 1, 2002 until May 28, 2003 on $7,000, less the payment by PBLLC
to Lehman of $3,551.  As of May 28, 2003, the principal amount of the loan was
$45,429.  The principal amount  earns interest at a rate of 12.75% per annum
until the obligation is satisfied.  The maturity date of the Lehman obligation
is June 1, 2005.  Interest is payable during the term of the loan on the
adjusted loan obligation amount of $44,000, less the payment by PBLLC to
Lehman on May 28, 2003, or $40,449, plus interest at a rate of 12.75% per
annum from November 30, 2002 until the effective date.  As of May 28, 2003,
the adjusted loan obligation amount was $43,013.  PBLLC is required to pay
interest earned on the adjusted loan obligation payable monthly from May 28,
2003 at a rate of the greater of 7.75% per annum or LIBOR plus 4% per annum
floating.
                                   F-10

<PAGE> 62
Certain interest amounts may be deferred until October 31, 2003.  A discount
of $3,500 with respect to the obligation will occur and the deferred interest
amounts will be waived provided payment of the entire adjusted loan obligation
amount is made on or before November 1, 2003.
In the event that payment in full of the restructured loan is made after
November 1, 2003 but prior to June 2, 2005, interest on the indebtedness will
be calculated at a lower rate as set forth in the Modified Plan.

  Under the Modified Plan, the obligation to Lehman is accelerated in the
event the Missouri Bankruptcy Court, having jurisdiction over President
Mississippi, does not approve the base rental increase on the marina leased to
the Biloxi casino by PBLLC by November 1, 2003.  This requirement does not
apply if PBLLC's aggregate net cash flow from its operations, after receiving
rental payments from President Mississippi at the current base rental, and
after certain adjustments are made, equals or exceeds the amount of funds that
would be necessary, on an annual basis, to pay the greater of 7.75% per annum
or LIBOR plus 4% per annum floating on the adjusted loan obligation amount as
of November 1, 2003.  The Modified Plan contains an express waiver of rights
by PBLLC to seek future bankruptcy protection.  J. Edward Connelly Associates,
Inc. ("JECA"), the holder of a Class B interest in PBLLC, retains its
membership interest, but any payments by PBLLC to JECA shall be restricted
until such time as all outstanding obligations to Lehman and other creditors
receiving funds under the Modified Plan are discharged.

  Due to certain debt covenants and cross default provisions associated with
other debt agreements, the Company is also currently in default under the
terms of its $2,100 M/V "President Casino-Mississippi" note.  The vessel and
various equipment aboard the M/V "President Casino-Mississippi" collateralizes
a term note payable which is also personally guaranteed by Mr. Connelly.  The
Company continued to make the quarterly principal and interest payments on
this note prior to the Company's bankruptcy filings.  Under the terms of the
note agreement, $2,100 principal became due and payable in August 2002.  In
November 2002, the lender brought an action against Mr. Connelly for breach of
contract under his personal guarantee.  In January 2003, the Mississippi
Bankruptcy Court granted a motion to relieve the lender from the automatic
stay in order to enforce its rights under the Preferred Fleet Ship Mortgage,
including but not limited to the right of the lender to seize and sell the
vessel.  In May 2003, the lender filed a motion with the United States
District Court for the Southern District of Illinois for an order directing
the Clerk of Court to issue a warrant for the arrest of the M/V "President
Casino-Mississippi" pursuant to rules of admiralty and maritime claims.  On
May 20, 2003, the Court executed the warrant, which will allow the vessel to
be seized and sold.  To date, no further action has been taken by the lender.

  On March 29, 2001, the Company executed an installment sale agreement for
the M/V "Surfside Princess" (formerly, the "New Yorker").  Under the terms of
the agreement, the Company would receive an aggregate of $9,000 principal
installment payments over a period of thirty months commencing on March 29,
2001, which included a final principal balloon payment of $4,388 due October
2003.  The note bore an annual interest rate of 10.5%.  On October 3, 2001,
the Company terminated the installment sale agreement and repossessed the M/V
"Surfside Princess," due to the inability of the purchasing party to meet the
terms of the agreement.  See "Note 12.  Commitment and Contingent
Liabilities."

                                    F-11

<PAGE> 63
  During the forth quarter of fiscal 2003, the Company held a sealed bid
auction of the "Surfside Princess" in accordance with Section 363 of the
United States Bankruptcy Code.  In February, the auction closed and the
winning bid was $1,500.  On May 2, 2003, the purchase agreement on the vessel
was consummated, at which time the liens against the vessel attached to the
proceeds from the sale which are held in an escrow account.  The Company took
a $1,167 valuation allowance on the vessel in February to reduce the net book
value to the bid price.

  Management is pursuing various strategic financing alternatives in order to
fund its debt obligations and the Company's continuing operations.  The
Company is pursuing alternatives, including the restructuring and refinancing
of outstanding debt obligations and/or the sale of all or a portion of its
assets.  The Company's ability to continue as a going concern is dependent on
its ability to restructure successfully, including refinancing its debts,
selling assets on a timely basis under acceptable terms and conditions, and
the ability of the Company to generate sufficient cash to fund future
operations.  There can be no assurance in this regard.

  The descriptions of the Company's business, financial condition and
prospects contained in this Annual Report on Form 10-K are qualified in their
entirety by the foregoing description of the significant risks associated with
the Company's bankruptcy proceedings.

  As of February 28, 2003, the Company had $16,159 of unrestricted cash and
cash equivalents.  Of this amount, the Company requires approximately $6,500
of cash to fund daily operations.  The Company is heavily dependant on cash
generated from operations to continue to operate as planned in its existing
jurisdictions and to make capital expenditures.  Management anticipates that
its existing available cash and cash equivalents and its anticipated cash
generated from operations will be sufficient to fund its ongoing operations
during the bankruptcy proceedings.  Payments under the Company's defaulted
debt obligations generally will be stayed during the bankruptcy proceedings.
Costs previously incurred and which will be incurred in the future in
connection with the reorganizations have been and will continue to be
substantial and, in any event, there can be no assurance that the Company will
be able to reorganize its indebtedness or that its liquidity and capital
resources will be sufficient to maintain its normal operations during the
reorganization period.  To the extent cash generated from operations is less
than anticipated, the Company may be required to curtail certain planned
expenditures and/or seek additional financing.

2.  BASIS OF PRESENTATION

  The consolidated financial statements set forth herein include the accounts
and operations of President Casinos, Inc., its wholly-owned subsidiaries, a
95%-owned limited partnership and a limited liability company in which a
wholly-owned subsidiary of the Company has a Class A ownership interest and in
which an entity wholly-owned by the Chairman of the Board of the Company owns
a Class B Unit and has preferred rights to certain cash flows.  All material
intercompany balances and transactions have been eliminated.

  The accompanying consolidated financial statements are presented in
accordance with American Institute of Certified Public Accountants Statement
of Position 90-7, "Financial Reporting by Entities in Reorganization under the
Bankruptcy Code," assuming that the Company will continue as a going concern.

                                    F-12

<PAGE> 64
The Company is currently operating under the jurisdiction of Chapter 11 of the
Bankruptcy Code and the Bankruptcy Courts, and continuation of the Company as
a going concern is contingent upon, among other things, its ability to
formulate a reorganization which will gain approval of the requisite parties
under the Bankruptcy Code and confirmation by the Bankruptcy Courts, its
ability to return to profitability, generate sufficient cash flows from
operations, and obtain financing sources to meet future obligations.  These
matters raise substantial doubt about the Company's ability to continue as a
going concern.  The accompanying consolidated financial statements do not
include any adjustments relating to the outcome of these uncertainties.

  The accompanying consolidated balance sheets as of February 28, 2003 and
2002, segregate liabilities subject to compromise, such as unsecured claims,
from liabilities not subject to compromise, such as fully secured liabilities
and liabilities arising subsequent to filing bankruptcy petitions.  A plan of
reorganization could materially change the amounts currently recorded in the
consolidated financial statements.  The consolidated statements that might
result from the outcome of this uncertainty may be materially different than
those presented herein.

  Reorganization items represent expenses incurred by the Company as a result
of the bankruptcy filings and proceedings which are required to be expensed as
incurred.

3.  NATURE OF OPERATIONS

  The Company owns and operates dockside gaming casinos through its
subsidiaries.  The Company conducts dockside gaming operations in Biloxi,
Mississippi through its wholly-owned subsidiary President Mississippi and in
St. Louis, Missouri north of the Gateway Arch through its wholly-owned
subsidiary, President Missouri.  In addition, the Company owns and manages
certain hotel and ancillary facilities associated with its gaming operations.
PBLLC, in which BHI has a Class A ownership interest, owns approximately 260
acres in Biloxi, Mississippi, which includes a 111-slip marina which contains
the mooring site of "President Casino-Broadwater," two hotels with
approximately 500 rooms and an adjacent 18-hole golf course (collectively, the
"Broadwater Property").  BHI is a wholly-owned subsidiary of the Company.
Prior to July 2001, the Company also operated two non-gaming dinner cruise,
excursion and sightseeing vessels in St. Louis near the base of the Gateway
Arch.  The assets of the non-gaming cruise operations were sold July 17, 2001.
See "Note 6.  Property and Equipment."

  On October 10, 2000, the Company sold the assets of its Davenport casino and
hotel operations.  The Davenport casino operations were managed by the
Company's wholly-owned subsidiary, President Riverboat Casino-Iowa, Inc. ("PRC
Iowa"), which is the general partner of the 95% Company-owned operating
partnership, The Connelly Group, L.P. ("TCG").  The Blackhawk Hotel in
Davenport was owned by a wholly-owned subsidiary of the Company.  The
operating results of the Davenport casino and hotel operations have been
included in the consolidated operating results of the Company.

                                    F-13

<PAGE> 65
4.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Cash and Cash Equivalents

  Cash and cash equivalents include highly liquid investments with maturities
of ninety days or less at date of purchase.

Restricted Cash and Cash Equivalents

  Restricted cash and cash equivalents consists of cash and cash equivalents
which are held in segregated accounts to fund potential obligations required
by third parties.  See "Note 5.  Restricted Cash and Cash Equivalents and
Restricted Short-Term Investments."

Restricted Short-Term Investments

  To fulfill certain regulatory and other obligations, the Company invests in
certificates of deposit with maturities greater than ninety days and not in
excess on one year at date of purchase.  Short-term investments are stated at
cost, which approximates fair value.  See "Note 5."

Inventories

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

Property and Equipment

  Property and equipment are recorded at cost and capitalized lease assets are
recorded at their fair market value at the inception of the lease.  Repairs
and maintenance are charged to expense as incurred.  Improvements that extend
the useful life or increase the productivity of the asset are capitalized.
Depreciation and amortization, except on property held for sale or development
in which no depreciation or amortization is taken, are computed on a
straight-line basis over the following estimated useful lives:

         Land and marina improvements          3-20 years
         Buildings and improvements           10-40 years
         Riverboats, barges and improvements   5-20 years
         Leasehold improvements                3-25 years
         Furnishings and equipment             5-10 years

  Leasehold improvements estimated useful lives do not exceed the terms of the
lease agreement.

Gaming Revenues and Promotional Allowances

  In accordance with industry practice, the Company recognizes gaming revenues
as the net win from gaming activities, which is the difference between gaming
wins and losses.  All other revenues are recognized by reference to the
service provided.  Revenues include the retail value of food and beverage,
rooms and other items provided on a complimentary basis to customers.  The

                                    F-14

<PAGE> 66
estimated departmental costs of providing such promotional allowances are
included in gaming costs and expenses and consist of the following:

                                     2003       2002       2001
                                    ------     ------     ------
         Food and beverage......   $ 4,012    $ 4,586    $ 5,619
         Hotel..................       963        772        657
         Other..................       341        351        305
                                   --------   --------   --------
                                   $ 5,316    $ 5,709    $ 6,581
                                   ========   ========   ========

Indirect Expenses

  Certain indirect expenses of operating departments such as selling, general
and administrative and depreciation and amortization are shown separately in
the accompanying statements of operations and are not allocated to
departmental operating costs and expenses.

Reorganization Items, Net

  Reorganization items, net, represent professional fees and U.S. Bankruptcy
Trustee fees, net of forgiveness of certain pre-petition claims by certain
professionals of $134, incurred by the Company as a direct result of the
Chapter 11 proceedings which are required to be expensed as incurred.

Self-Insurance

  The Company was partially self-insured for employee health and workers
compensation claims and third party liability costs through April 1999.
Effective May 1999, the Company became fully insured for workers compensation
claims.  The Company continues to be partially self-insured for certain
employee health and third party liability claims.  The self-insurance claim
liability is based on claims reported and claims incurred but not reported
using the Company's historic experience with such matters.

Minority Interest

  The Company recognizes net income (loss) in TCG, in which the Company has a
95% ownership interest, and PBLLC, in which BHI has 100% interest in the Class
A Unit which controls PBLLC.  In addition, the Company accrues minority
interest at 5% of net income for TCG and recognizes a priority return based on
a percentage per annum equal to the greater of (i) 8.75% or (ii) 4.0% plus
LIBOR, as defined by the terms of the agreement, for PBLLC.  As of February
28, 2003 and 2002, the minority interest on the balance sheet is comprised of
$16,343 and $15,028, respectively, related to its obligation to redeem the
Class B Unit for $10,000, plus any priority return accrued but not paid, of
which $15,484 is included in liabilities subject to compromise as of February
28, 2003.  See "Note 16.  Minority Interest."

Stock-Based Compensation

  As of February 28, 2003, the Company has stock Option Plans, which are
described more fully in "Note 18.  Stock Option Plans."  The Company applies
Accounting Principles Board Opinion No. 25 and related interpretations in

                                     F-15

<PAGE> 67
accounting for its stock-based compensation plans using the intrinsic value
method.  Accordingly, no compensation expense is reflected in net income for
stock options, as all options granted had an exercise price equal to the
market value of the underlying common stock on the date of grant.
Substantially all of the Company's stock options were vested as of February
28, 2003.  Had compensation cost for the Company's Stock Option Plans been
determined based on the fair value at the grant dates for awards under those
plans consistent with the method of Statement of Financial Accounting
Standards ("SFAS") No. 123 "Accounting for Stock-Based Compensation," the
Company's net loss and net loss per share would have been reduced to the pro
forma amounts indicated below:

                                           2003         2002         2001
                                          ------       ------       ------
                                     (in thousands, except per share amounts)

    Net loss, as reported               $ (9,079)    $(20,748)    $   (206)
    Deduct:  Total stock-based
      employee compensation
      expense determined under
      the fair value method,
      net of related taxes                   --          (172)        (462)
                                        ---------    ---------    ---------
    Pro forma net income                  (9,079)     (20,920)        (668)
                                        =========    =========    =========
    Earnings per share:
      Basic and diluted, as reported       (1.80)       (4.12)       (0.04)
      Basic and diluted, pro forma         (1.80)       (4.16)       (0.13)

  The fair value of each option grant is estimated on the date of grant using
the Black-Scholes option-pricing model with the following weighted-average
assumptions used for grants in during fiscal year 2002:  dividend yield of
zero percent expected volatility of 135.68 percent; risk-free interest rates
of 3.11-4.97 percent and the remaining expected lives of the options granted.
There were no options granted in fiscal years 2003 and 2001.  The weighted-
average fair value per share of options granted was $0.87 during 2002.

Basic and Diluted Loss Per Share Information

  Loss per share information is computed using the weighted average number of
shares of Common Stock outstanding and common stock equivalent shares from
diluted stock options from date of grant, using the treasury stock method.
There is no difference between loss per share under the basic and diluted
methods due to the anti-dilutive effect of the stock options, since the
Company has had losses in all periods presented.  See "Note 18.  Stock Option
Plans."

Fair Value of Financial Instruments

  The Company calculates the fair value of financial instruments and includes
this additional information in the Notes to the Consolidated Financial
Statements.  The Company uses quoted market prices whenever available to
calculate these fair values.  When quoted market prices are not available, the
Company uses valuation methodologies which take into account the present value
of estimated future cash flows to determine fair value.

                                    F-16
<PAGE> 68
Recoverability of Long-Lived Assets

  The carrying values of the Company's assets are reviewed when events or
changes in circumstances indicate that the carrying amount of an asset may not
be recoverable.  Asset impairment is determined to exist if estimated future
cash flows, undiscounted and without interest charges, are less than the
carrying amount.  If it is determined that an impairment loss has occurred,
then an impairment loss is recognized in the statement of operations.  The
resulting impairment loss is measured as the amount by which the carrying
amount of the asset exceeds its fair value, estimated using quoted market
prices, if available, or other acceptable valuation methodologies, including
discounted cash flows or comparable sales.

Recently Issued Accounting Standards

  In June 2001, the Financial Accounting Standards Board ("FASB") issued SFAS
No. 143, "Accounting for Asset Retirement Obligations."  SFAS No. 143
addresses financial accounting and reporting for obligations associated with
the retirement of tangible long-lived assets and the related asset retirement
costs.  This SFAS applies to all entities and applies to all legal obligations
associated with the retirement of long-lived assets that result from the
acquisition, construction, development and the normal operation of a long-
lived asset, except for certain obligations of lessees.  SFAS No. 143 will be
effective for the Company's fiscal year 2004 financial statements.  The
Company believes that this SFAS will not have a significant impact on its
financial position or results of operations.

  In August 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment
or Disposal of Long-Lived Assets."  SFAS 144 requires one accounting model be
used for long-lived assets to be disposed of by sale and broadens the
presentation of discontinued operations to include more disposal transactions.
The requirements of SFAS No. 144 are effective for the Company beginning after
March 1, 2002.  The adoption of SFAS No. 144 has resulted in depreciation
expense of $600 on its two non-operating vessels for the year ended February
28, 2003.

  In June 2002, the FASB issued SFAS No. 146, "Accounting for Costs Associated
with Exit or Disposal Activities".  SFAS 146 addresses significant issues
regarding the recognition, measurement and reporting of costs that are
associated with exit and disposal activities, including restructuring
activities that are currently accounted for pursuant to the guidance that the
Emerging Issues Task Force has set forth.  The scope of SFAS 146 also includes
costs related to terminating a contract that is not a capital lease and
termination benefits that employees who are involuntarily terminated receive
under terms of a one-time benefit arrangement that is not an ongoing benefit
arrangement or an individual deferred compensation contract.  SFAS 146 is
effective for exit or disposal activities initiated after December 31, 2002.
The Company will account for all applicable activities, if any, in fiscal year
2004 or future periods in accordance with SFAS 146.

  In November 2002, the FASB issued FASB Interpretation No. 45 ("FIN 45"),
"Guarantor's Accounting and Disclosure Requirements for Guarantees, Including
Indirect Guarantees of Indebtedness of Others" and Interpretation of FASB
Statements Nos. 5, 57 and 107 and recession of FASB Interpretation No. 34.
FIN 45 requires: (1) the guarantor of debt to recognize a liability, at the
inception of the guarantee, for the fair value of the obligation undertaken in

                                    F-17

<PAGE> 69
issuing this guarantee, (2) indirect guarantees of debt to be recognized in
the financial statements of the guarantor, and (3) the guarantor to disclose
the background and nature of the guarantee, the maximum potential amount to be
paid under the guarantee, the carrying value of the liability associated with
the guarantee and any recourse of the guarantor to recover amounts paid under
the guarantee from third parties.  FIN 45 rescinds all the provisions of FIN
34, "Disclosure of Indirect Guarantees of Indebtedness of Others;" as it has
been incorporated into the provisions of FIN 45.  The provisions of FIN 45 are
effective for all guarantees issued or modified subsequent to December 31,
2002.  The disclosure requirements of FIN 45 are effective for the financial
statements of interim and annual periods ending after December 15, 2002.  The
Company does not have any significant commitments within the scope of FIN 45,
except as disclosed in the footnotes to the consolidated financial statements.

  In December 2002, the FASB issued SFAS No. 148, "Accounting for Stock-Based
Compensation-Transition and Disclosure."  SFAS 148 amends SFAS No. 123,
"Accounting for Stock-Based Compensation," to provide alternative methods of
transition when an entity changes from the intrinsic value method to the fair-
value method of accounting for stock-based employee compensation.  SFAS 148
amends the disclosure requirements of SFAS 123 to require more prominent and
more frequent disclosure about the effects of stock based compensation by
requiring pro forma data to be presented more prominently and in a more
transparent format in the footnotes to the financial statements.  In addition,
SFAS 148 requires that the information be included in interim as well as
annual financial statements.  The transition guidance and annual disclosure
provisions of SFAS 148 are effective for periods ending after December 15,
2002.  The Company intends to continue accounting for stock-based employee
compensation using the intrinsic value method and does not believe SFAS 148
will have a material impact on the Company's financial position and results of
operations, apart from the additional disclosure requirements of SFAS 148.

Use of Management Estimates

  The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make certain 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 amounts of
revenues and expenses during the reporting period.  Actual results may differ
from those estimates.

Reclassifications

  Certain amounts have been reclassified to conform with fiscal 2003 financial
statement presentation.

                                    F-18
<PAGE> 70
5.  RESTRICTED CASH AND CASH EQUIVALENTS AND RESTRICTED SHORT-TERM INVESTMENTS

  Restricted cash and cash equivalents consist of the following:

                                                    2003        2002
                                                   ------      ------

        PBLLC restricted cash..................   $  5,304    $  3,088
        TCG restricted cash....................        --        1,500
        BHI restricted cash....................        --        1,702
        Corporate restricted cash..............        --          652
                                                  ---------   ---------
                                                  $  5,304    $  6,942
                                                  =========   =========

  Prior to the filing for reorganization under Chapter 11, PBLLC deposited
revenues into lockboxes that were controlled by its lender.  Expenditures from
the lockboxes were limited to the operating expenses, capital improvements and
debt service of the Broadwater Property as defined by certain agreements.  The
lender continues to control the capital improvements lockbox.  PBLLC currently
operates under a cash collateral stipulation and agreement, which allows PBLLC
to use its cash collateral for normal operations in accordance with certain
terms as defined by the cash collateral agreement.

  As of February 28, 2002, TCG had restricted cash of $1,500 pending the
outcome of litigation.  In May 2002, upon execution of a settlement agreement
and mutual release in the aforementioned case, plaintiffs and defendants
jointly filed a stipulated consent order, releasing the injunction and
dismissing the case with prejudice.  Subsequently, TCG made a $1,356
distribution to its partners, inclusive of the limited partner's 5% share.

  BHI had $1,702 cash restricted for payment to John E. Connelly, the
Company's Chairman and Chief Executive Officer, as partial redemption of its
obligation under the Class B Unit agreement as a component of the Company's
PBLLC initial plan of reorganization.  Based on subsequent modifications to
its plan of reorganization, the cash became unrestricted.

  Corporate restricted cash of $652 was comprised of amounts restricted for
interest payments on the Company's Senior Exchange Notes and the Secured Notes
and became unrestricted upon filing of the voluntary petition for bankruptcy.

  Obligations giving rise to the requirement for restricted short-term
investments consist of the following:

                                                    2003        2002
                                                   ------      ------

        Performance bonds......................   $    612    $    600
        Letter of credit.......................        100         175
                                                  ---------   ---------
                                                  $    712    $    775
                                                  =========   =========

  The Company is required to collateralize a letter of credit and certain
performance bonds.  To fulfill these requirements, the Company invests in
certificates of deposit with maturities greater than ninety days and which do

                                     F-19

<PAGE> 71
not exceed one year at date of purchase.

6.  PROPERTY AND EQUIPMENT

  Property and equipment owned by the Company is summarized as follows:

                                                    2003        2002
                                                   ------      ------

        Land..................................   $    250    $    250
        Land and marina improvements..........      6,634       6,605
        Buildings and improvements............      3,027       2,937
        Boats, barges and improvements........     50,319      49,968
        Leasehold improvements................      5,041       3,947
        Furnishings and equipment.............     41,125      37,224
        Property held for development or
          sale, at net book value.............     46,018      47,747
        Construction in progress..............        330         665
                                                 ---------   ---------
                                                  152,744     149,343
          Accumulated depreciation............    (58,764)    (50,736)
                                                 ---------   ---------
            Property and equipment, net.......   $ 93,980    $ 98,607
                                                 =========   =========

  On March 29, 2001, the Company executed an installment sale agreement for
the M/V "Surfside Princess," (formerly the "New Yorker").  Under the terms of
the agreement, the Company would receive an aggregate of $9,000 principal
installment payments over a period of thirty months commencing on March 29,
2001, which included a final principal balloon payment of $4,388 due October
2003.  The note bore an annual interest rate of 10.5%.  On October 3, 2001,
the installment sale agreement was terminated and the vessel was repossessed.

  During the forth quarter of fiscal 2003, the Company held a sealed bid
auction of the "Surfside Princess" in accordance with Section 363 of the
United States Bankruptcy Code.  In February, the auction closed and the
winning bid was $1,500.  The purchase agreement was consummated on May 2,
2003.  See "Note 12.  Commitments and Contingent Liabilities."  The Company
recognized a $1,167 asset impairment on the vessel in February to reduce the
net book value to the bid price.  The vessel is included in property and
equipment classified as "property held for sale" as of February 28, 2003.

  On April 30, 2001, the Company executed an agreement to sell the assets of
Gateway Riverboat Cruises, the Company's non-gaming cruise operations which
provides dinner cruise, excursion and sightseeing on two riverboats on the
Mississippi River.  The transaction was consummated on July 17, 2001.  The
Company recognized a gain of $778 on the sale of these assets.

  On October 10, 2000, the Company sold the assets of its Davenport casino and
hotel operations for aggregate consideration of $58,200 in cash.  The Company
recognized a net gain of $34,465 on the transaction.

  As a result of management's evaluation of the net realizable value of its
assets, based on their intended future use and current market conditions, the
Company recorded an impairment of long-lived assets of $7,068 and $12,709
during fiscal years 2002 and 2001, respectively, on two casino vessels not

                                    F-20

<PAGE> 72
used in the Company's gaming operations.  The assets are accounted for in the
Company's leasing segment.

7.  CURRENT PORTION OF LONG-TERM DEBT

  As of February 28, 2003, all of the Company's long-term debt, except the
PBLLC note, was classified as liabilities subject to compromise.  See "Note 9.
Liabilities Subject to Compromise and Reorganization Items."  Long-term debt
payable, all of which was classified as current liabilities as of February 28,
2002, are summarized as follows:

<TABLE>
  <CAPTION>
                                                        2003           2002
                                                       ------         ------

  <S>                                                <C>             <C>
  Senior Exchange Notes, 13%......................   $    --         $ 56,250
  Secured Notes, 12%..............................        --           18,750
  Broadwater Hotel note payable, variable
    interest rate, 12.75% and 12.75%..............     30,000          30,000
  M/V "President Casino-Mississippi" note payable,
   variable interest rate, 5.7%...................        --            2,200
                                                     ---------       ---------
                                                     $ 30,000        $107,200
                                                     =========       =========
</TABLE>

  Senior Exchange Notes and Secured Notes

  The Senior Exchange Notes rank equal in right of payment to all present and
future senior debt, as defined in the indenture governing the Senior Exchange
Notes (the "Note Indenture"), of the Company and its subsidiaries and were
payable as follows:  25% of the outstanding principal amount on each of
September 15, 1999 and September 15, 2000 and the remainder of the outstanding
principal amount on September 15, 2001.  In addition, the Senior Exchange
Notes are unconditionally guaranteed, jointly and severally on a senior basis,
by all of the Company's then existing wholly-owned subsidiaries (the
"Guarantors"), and, under certain circumstances, the Company's future
subsidiaries, although the subsidiary guarantee from TCG is limited in amount.
As security for the obligations of the Company and the Guarantors under the
Senior Exchange Notes, the Company and the Guarantors have pledged their
equity interests in each Guarantor and certain indebtedness from, and certain
investments in, certain gaming ventures.  The Note Indenture contains certain
restrictive covenants which, among other things, limit the Company's
Guarantors' ability to pay dividends, incur additional indebtedness (exclusive
of $15,000 of senior debt), issue preferred stock, create liens on certain
assets, merge or consolidate with another company and sell or otherwise
dispose of all or substantially all of its properties or assets.

  On December 3, 1998, the Company repurchased $25,000 of its Senior Exchange
Notes.  The repurchased notes were used to satisfy the $25,000 principal
payment due September 15, 1999 on the Company's $100,000 Senior Exchange
Notes.  The repurchase was funded by the issuance of $25,000 of new 12% notes
due September 15, 2001 (the "Secured Notes").  The Secured Notes have no
mandatory redemption obligation and are secured by mortgages on the "Admiral"
and the M/V "New Yorker," as well as subsidiary guarantees.

                                   F-21
<PAGE> 73
  See "Note 1.  Bankruptcy Proceedings" regarding default of the Senior
Exchange Notes and Secured Notes.

  In light of the current financial condition of the Company and the fact that
the Notes have not been actively trading, management believes it is
impracticable to determine the current value of the Senior Exchange Notes and
Secured Notes.

  Broadwater Hotel Note

  In conjunction with the purchase of the Broadwater Property, PBLLC borrowed
the sum of $30,000 from a third party (the "Indebtedness").  Except as set
forth in the promissory note and related security documents, PBLLC's
obligations under the Indebtedness are nonrecourse and are secured by the
Broadwater Property, its improvements and leases thereon.  The Indebtedness
bears interest at a stipulated variable rate per annum equal to the greater of
(i) 8.75% or (ii) 4% plus the LIBOR 30-day rate.

  PBLLC was obligated under the Indebtedness to make monthly payments of
interest accruing under the Indebtedness, and was obligated to repay the
Indebtedness in full on July 22, 2000.  In addition, PBLLC was obligated to
pay to the lender a loan fee in the amount of $7,000 which was fully earned
and non-refundable when the Indebtedness was due.  Neither the Indebtedness
nor the loan fee payments were made on the due date and the Indebtedness is in
default.  In accordance with the terms of the loan, effective on the default
date, penalty interest of 4.0% is accrued in addition to interest at the
stipulated rate on the $30,000 principal.  Additionally, PBLLC has accrued,
but not paid, interest on the unpaid loan fee at the stipulated rate since the
date of default.  PBLLC continued to make the monthly interest payments
accruing on the $30,000 principal through April 19, 2001, when the Company
announced that PBLLC had filed for reorganization under Chapter 11 in the
Mississippi Bankruptcy Court.  See "Note 1.  Bankruptcy Proceedings" regarding
the Chapter 11 petition filed by PBLLC.

  M/V "President Casino-Mississippi" Note

  The term note payable is collateralized by the vessel M/V "President Casino-
Mississippi" and various equipment and is personally guaranteed by Mr.
Connelly.  This note also contains certain covenants which, among other
things, require the Company to maintain a minimum tangible net worth of
$40,000.  The aforementioned default on the Company's Senior Exchange Notes
and Secured Notes also constituted a default under this note.  The Company
continued to make the quarterly principal and interest payments on this note
prior to the bankruptcy filing.  Under the terms of the note agreement, $2,100
principal became due and payable in August 2002.  In November 2002, the lender
brought an action against Mr. Connelly for breach of contract under his
personal guarantee.  In January 2003, the Mississippi Bankruptcy Court granted
a motion to relieve the lender from the automatic stay in order to enforce its
rights under the Preferred Fleet Ship Mortgage, including but not limited to
the right of the lender to seize and sell the vessel.  In May 2003, the lender
filed a motion with the United States District Court of Southern Illinois for
an order directing the Clerk of Court to issue a warrant for the arrest of the
M/V "President Casino-Mississippi" pursuant to rules of admiralty and maritime
claims.  On May 20, 2003, the Court executed the warrant, which will allow the
vessel to be seized and sold.  To date, no further action has been taken by
the lender.

                                   F-22
<PAGE> 74
  The various agreements governing the notes described above generally limit
borrowings by the Company's affiliates without the respective lenders' prior
consent.

8.  OTHER ACCRUED EXPENSES

  The components of other accrued expenses are as follows:

              <TABLE>
              <CAPTION>
                                                             2003        2002
                                                            ------      ------

              <S>                                          <C>          <C>
              Insurance..............................      $    504   $   1,117
              Reorganization costs...................         2,681       1,350
              Taxes, other than income
                and payroll taxes....................           382         687
              Point liability........................           443         787
              Other..................................         2,222       3,370
                                                           ---------   ---------
                                                           $  6,232    $  7,311
                                                           =========   =========
              </TABLE>

9.  LIABILITIES SUBJECT TO COMPROMISE AND REORGANIZATION ITEMS, NET

  The components of liabilities subject to compromise are as follows:

              <TABLE>
              <CAPTION>
                                                                    2003         2002
                                                                   ------       ------

              <S>                                                <C>          <C>
              Senior Exchange Notes, 13%......................   $ 56,250     $     --
              Secured Notes, 12%,.............................     18,750           --
              M/V "President Casino-Mississippi" note payable,
                variable interest rate, 5.28%.................      2,100           --
              Minority interest...............................     15,669           --
              Accrued interest................................     13,728             9
              Accounts payable and other accrued expenses.....      4,843           637
                                                                 ---------     ---------
                 Total liabilities subject to compromise......   $111,340      $    646
                                                                 =========     =========
              </TABLE>

  As of February 28, 2003, all reorganization items consist of professional
fees.

10.  OPERATING LEASES

  During fiscal 2002, the Company leased two mooring sites in St. Louis,
Missouri and certain other equipment under operating leases.  The Company's
mooring site for Gateway Riverboat Cruises in St. Louis was for a term of five
years commencing August 1986, with four five-year renewal options.  Rent
during fiscal years 2002 and 2001 was $2 and $4, respectively, and was subject
to rate change every five years as recommended by the Port Commission.  The
lease was assumed by the purchaser of Gateway Riverboat Cruises in July 2001.
See "Note 6.  Property and Equipment."

  Prior to the move of the "Admiral," the Company's lease for the mooring site
of the "Admiral" was for a term of twenty five years and terminated in

                                   F-23

<PAGE> 75
December 2008.  The lease provided for base rent plus payments of 2% of
adjusted gross receipts (gross receipts net of winnings paid to wagerers).
The base rent was $6 annually and was subject to rate change every five years
as recommended by the Port Commission.

  In January 2000, in conjunction with the anticipated move of the "Admiral,"
the Company entered into a sublease agreement with the Port Authority of the
City of St. Louis for a mooring site on the St. Louis river front
approximately 1,000 feet north of the then current location of the "Admiral."
The term of the lease is 25 years commencing on the day the "Admiral" moved to
the new mooring site.  At such time the lease for the former mooring site of
the "Admiral" was surrendered and terminated.

  Rent under the terms of the new lease consists of base rent plus a percent
of adjusted gross receipts.  The base rent is $27 annually and is subject to
rate change every five years based on the recommendation of the Port
Commission.  The percentage rent is 2% of adjusted gross receipts for any
lease year equal to or less than $80,000, plus 3% of that portion of adjusted
gross receipts for such lease year which exceed $80,000 but which are equal to
or less than $100,000, plus 4% of that portion of adjusted gross receipts for
such lease year, if any, which exceed $100,000.  Rent expense for the mooring
sites for the years ended February 28, 2003, 2002 and 2001 was $1,508, $1,608
and $1,203, respectively.

  The marina where the Company conducts its Biloxi gaming operations has been
determined by the Secretary of State of Mississippi to constitute both
"tidelands" and "fast lands" under the Mississippi Trust Tidelands Act (the
"Tidelands Act").  The tidelands lease was for an initial period of ten years
commencing August 1, 1992.  During August 2002, the Company exercised its
option to extend the lease for a term of five years under the same terms and
provisions, and renegotiated the annual rental.  The current rent is $672
annually.  The fast lands lease is for a period of 40 years commencing
December 31, 1996 for annual rent of $21, adjustable every five years as
defined in the lease agreement.

  The operating leases related to the Company's Davenport operations were
either terminated or assumed by the purchaser upon the sale of the Davenport
operations.

  Rental expense incurred under operating leases was $5,270, $5,434 and $4,619
for the years ended February 28, 2003, 2002 and 2001, respectively.

                                    F-24
<PAGE> 76
  Future minimum lease commitments under non-cancelable long-term operating
leases as of February 28, 2003, are as follows:

                                          Non-cancelable
                                            Operating
                                              Leases
                                           ------------

           Years ending February 28/29:
             2004........................   $   1,910
             2005........................       1,199
             2006........................         984
             2007........................         942
             2008........................         486
             Thereafter..................         762
                                             ---------
                                             $  6,283
                                             =========

11.  INCOME TAXES

  The Company recognizes deferred tax assets, net of applicable reserves,
related to net operating loss carryforwards and certain temporary differences.
Recognition of future tax benefits is based on the extent the realization of
such benefit is "more likely than not."  As such, the realization of the
deferred tax benefit is dependent on the Company's ability to generate future
taxable income.  Given the level of operations, the increased competition and
the overall uncertainty as to the timing of the Company's ability to return to
profitability, the Company has determined that the tax benefit does not
satisfy the recognition criteria.  Accordingly, a 100% valuation allowance is
maintained against the Company's deferred tax assets.  A net tax benefit was
realized during the year ended February 28, 2001, in the amount of $1,413 for
the utilization of a portion of the federal net operating loss carryforward
and $371 for utilization of capital loss and contribution carryforward
deductions.  No other benefit has been recognized for all other periods
presented.

  The components of the net deferred tax asset are as follows:

      <TABLE>
      <CAPTION>
                                                     2003          2002
                                                    ------        ------
     <S>                                          <C>           <C>
     Deferred tax assets:
       Net operating loss carryforward.......     $ 70,239      $ 66,318
       Pre-opening costs and intangible
         assets..............................        2,601         3,028
       Accounting reserves and liabilities...        2,844         3,058
       Tax credits...........................          280           280
       Other.................................          324           432
                                                  ---------     ---------
                                                    76,288        73,116
       Less: Valuation allowance.............      (70,179)      (67,345)
                                                  ---------     ---------
                                                     6,109         5,771
     Deferred tax liabilities:
       Property..............................        6,109         5,771
                                                  ---------     ---------
          Net deferred tax asset.............     $    --       $    --
                                                  =========     =========
       </TABLE>
                                   F-25

<PAGE> 77
  As of February 28, 2003, the Company had federal, Missouri and Mississippi
net operating loss carryforwards of $170,414, $211,873 and $48,493,
respectively.  These tax benefits will expire between 2008 and 2023 unless
first offset against taxable income.  The availability of the loss
carryforwards may be limited in the event of a significant change in ownership
of the company or its subsidiaries.

  There are numerous and complex tax issues associated with the Company's
filing for protection under Chapter 11 of the Bankruptcy Code and the future
reorganization, such as discharge of indebtedness, sale of property or
potential abandonment of assets.  The impact of these tax issues will affect
the amount of tax attribute carryforwards and deferred taxes; however, such
impact cannot be determined at this time.

12. COMMITMENTS AND CONTINGENT LIABILITIES

Bankruptcy Actions

  On June 20, 2002, the Company together with its subsidiary, President
Missouri, which owns and operates the St. Louis operations, filed voluntary
petitions for reorganization under Chapter 11 of the Bankruptcy Code in the
United States Bankruptcy Court for the Southern District of Mississippi.  On
July 9, 2002, the Company's subsidiary President Mississippi filed a voluntary
reorganization petition in the same Court.  On July 11, 2002, substantially
all of the Company's other operating subsidiaries filed voluntary
reorganization petitions under Chapter 11 in the same Court.  Subsequently,
orders were entered by the Mississippi Bankruptcy Court transferring venue of
all of the Chapter 11 cases, except President Riverboat Casino-New York, Inc.
and PBLLC, to the United States Bankruptcy Court for the Eastern District of
Missouri, where they are now pending and being administered.  The Company and
its subsidiaries each continue in possession and use of their assets as
debtors-in-possession.  See "Note 1.  Bankruptcy Proceedings."

  President Broadwater Hotel, LLC ("PBLLC"), a limited liability company in
which Broadwater Hotel, Inc., a wholly-owned subsidiary of the Company
("BHI"), has a Class A ownership interest, is in default under a $30,000
promissory note and associated $7,000 loan fee incurred in connection with the
July 1997 purchase by PBLLC of the real estate and improvements utilized in
the Company's operations in Biloxi, Mississippi.  On April 19, 2001, PBLLC
filed a voluntary petition for reorganization under Chapter 11 of the
Bankruptcy Code in the Mississippi Bankruptcy Court.  PBLLC continues in
possession and use of its assets as a debtor-in-possession and has entered
into an agreement with its lender approved by the Mississippi Bankruptcy Court
which allows PBLLC's use of its cash collateral.  On October 16, 2001, PBLLC
filed its plan of reorganization which would permit PBLLC to restructure its
debt obligations in a manner which was designed to permit it to continue as a
going concern.  Subsequently, on February 28, 2003, PBLLC filed Modifications
to Debtor's Plan of Reorganization.  See "Note 1.  Bankruptcy Proceedings."

Litigation

  --Poulos, McElmore and Shreier, et al. v. Caesar's World, Inc. et al.

  In 1994, William H. Poulos filed a class-action lawsuit in the United States
District Court for the Middle District of Florida against over thirty-eight
(38) casino operators, including the Company, and certain suppliers and

                                    F-26

<PAGE> 78
distributors of video poker and electronic slot machines.  This lawsuit was
followed by several additional lawsuits of the same nature against the same
and as well as additional defendants, all of which have now been consolidated
into a single class-action pending in the United States District Court for the
District of Nevada.  Following a court order dismissing all pending pleadings
and allowing the plaintiffs to re-file a single complaint, a complaint was
filed containing substantially identical claims, alleging that the defendants
fraudulently marketed and operated casino video poker machines and electronic
slot machines, and asserting common law fraud and deceit, unjust enrichment
and negligent misrepresentation.  Various motions were filed by the defendants
seeking to have this new complaint dismissed or otherwise limited.  On
December 19, 1997, the Court, in general, ruled on all motions in favor of the
plaintiffs on all pending motions.  The plaintiffs then filed a motion seeking
class certification and the defendants opposed it.  On June 21, 2002, the
Court entered an order holding the action could not proceed as a class action.
The decision has been appealed to the 9th Circuit Court of Appeals.  The last
briefs are scheduled to be filed July 14, 2003.  Extensive paper discovery has
occurred.  A motion to stay pending the Company's bankruptcy proceedings has
been filed.  Although the outcome of litigation is inherently uncertain,
management, after consultation with counsel, believes the action will not have
a material adverse effect on the Company's financial position or results of
operations.

  --"Surfside Princess"

  On October 12, 2001, the Company's subsidiary which owned the M/V "Surfside
Princess," formerly known as the M/V "New Yorker," initiated an action in the
United States District Court for the Middle District of Florida against
Southern Gaming, LLC and its assignee for breach of a Bareboat Charter and
Purchase Agreement dated March 29, 2001 pursuant to which the M/V "Surfside
Princess" was chartered from the Company.  The suit alleges breach of the
charter.  Subsequent proceedings followed in which various parties claimed
various rights with respect to the vessel and its contents.  The matter is
currently pending before the Court.

  On October 19, 2001, Southern Gaming filed suit in the United States
District for Middle District of Florida seeking damages in connection with the
charter of the "Surfside Princess."  Subsequently this proceeding was
consolidated with the prior proceeding involving Southern Gaming.  Other suits
and claims exist with respect to the vessel.  The Mississippi Bankruptcy Court
granted a motion for the M/V "Surfside Princess" to be sold outside a plan of
reorganization.  On May 2, 2003 a purchase agreement on the vessel was
consummated, at which time the liens against the vessel attached to the
proceeds from the sale.  The Company is unable at this time to predict the
outcome of this matter with certainty.

  --Other

  The Company is from time to time a party to litigation, which may or may not
be covered by insurance, arising in the ordinary course of its business.
Management of the Company does not believe that the outcome of any such
litigation will have a material adverse effect on the Company's financial
condition or results of operations, or which would have any material adverse
impact upon the gaming licenses of the Company's subsidiaries.

                                   F-27

<PAGE> 80
Missouri Gaming Commission

  On May 1, 2001, the Missouri Gaming Commission issued a preliminary order of
discipline in DC-01-004 - DC-01-012 proposing that the Company be assessed
administrative penalties totaling $104 for numerous alleged violations of
internal gaming control standards and $25 for one alleged violation of making
political contributions prohibited by an ordinance of the City of St. Louis.
None of the alleged violations of internal control standards involved any loss
of funds or affect the integrity of gaming.  In August 2002, the Company
settled the alleged internal control standard violations for $55.  The Company
filed a declaratory judgment action regarding the validity of the city
ordinance regarding the political contributions.  In March 2003, the court
declared the ordinance to be invalid, unenforceable and void.

General

  The ownership and operation of casino gaming facilities are subject to
extensive state and local regulation.  As a condition to obtaining and
maintaining a gaming license, the Company must submit detailed financial,
operating and other reports to state gaming commissions, all of which have
broad powers to suspend or revoke licenses.  In addition, substantially all of
the Company's material transactions are subject to review and/or approval by
the various regulatory bodies.  Any person acquiring 5% or more of the Common
Stock or of the equity securities of any gaming entity must be found suitable
by the appropriate regulatory body.  The Biloxi license was last renewed in
April of 2001 and expires in April 2004.  The St. Louis license was last
renewed in May of 2002 and expires in May of 2004.

13. GUARANTEE OF CITY OBLIGATION

  During 1998, the Company and the City of St. Louis reached an agreement for
the relocation of the "Admiral" approximately 1,000 feet north from its former
location on the Mississippi River.  The casino was closed on December 3, 2000
to prepare for the move and reopened on December 7, 2000.  The aggregate cost
to relocate the "Admiral" and construct ancillary facilities was approximately
$8,744.  Under the terms of an agreement, the City funded $3,000 of the
relocation costs, $2,400 of which was financed through bank debt.  It is
anticipated that the City will repay the debt from annual allocations of $600
from the City's annual home dock city public safety fund that is funded by
admission taxes from the "Admiral."  The Company has guaranteed repayment of
the bank debt if the City fails to pay the obligation.  As of February 28,
2003, the Company's guarantee was $1,075.

14.  RISKS AND UNCERTAINTIES

  --Insurance Risk

  The Company was partially self-insured for employee health and workers
compensation claims and third party liability costs through April 1999.
Effective May 1999, the Company became fully insured for workers compensation
claims.  The Company continues to be partially self-insured for third party
liability claims and certain employee health claims.  The self-insurance claim
liability is estimated on claims reported and claims incurred but not reported
using the Company's historic experience with such matters.

                                     F-28

<PAGE> 80
  The Company does carry "Business Interruption" insurance, but due to the
current insurance market, the current policy does not cover interruption from
either windstorm or flood.

  --Concentration of Credit Risk

  The Company maintains cash balances at certain financial institutions in
excess of amounts insured by federal agencies.  In addition, the Company
maintains significant cash balances on hand at its gaming facilities.

  --Cyclical Nature of Business

  The Company's business involves leisure and entertainment.  During periods
of recession or economic downturn, consumers may reduce or eliminate spending
on leisure and entertainment activities.  In the event that any of the
Company's demographic markets suffer adverse economic conditions, the
Company's revenues may be materially adversely affected.

15.  PRESIDENT BROADWATER LLC FINANCIAL STATEMENTS

  As discussed in "Note 1.  Bankruptcy Proceedings," on April 19, 2001, PBLLC
filed for reorganization under Chapter 11 of the U.S. Bankruptcy Code.  During
fiscal 2003, the Company and substantially all of its other subsidiaries filed
voluntary petitions for reorganization under Chapter 11.  On May 28, 2003,
PBLLC had its plan of reorganization confirmed and emerged from Chapter 11.
The condensed balance sheets and statements of operations of PBLLC are as
follows:

<TABLE>
<CAPTION>
                                                                     Feb. 28,   Feb. 28,
                                                                       2003       2002
                                                                     --------   --------

           <S>                                                       <C>        <C>
           Restricted cash and cash equivalents....................  $  5,304   $  3,088
           Related party receivable................................       394        346
           Other current assets....................................       460        520
           Property and equipment, net.............................    42,109     41,968
                                                                     ---------  ---------
              Total assets.........................................  $ 48,267   $ 45,922
                                                                     =========  =========

           Accounts payable and accrued liabilities................  $ 12,448   $  7,710
           Current portion of long-term debt.......................    30,000     30,000
           Accrued loan fee........................................     7,000      7,000
           Due to related parties..................................        23         46
           Liabilities subject to compromise.......................       754        646
                                                                   ---------  ---------
              Total liabilities....................................    50,225     45,402
                                                                     ---------  ---------
           Redeemable Class B capital..............................    16,343     15,028
           Class A capital.........................................   (18,301)   (14,508)
                                                                     ---------  ---------
              Total liabilities and capital........................  $ 48,267   $ 45,922
                                                                     =========  =========

</TABLE>

                                   F-29
<PAGE> 81
<TABLE>
<CAPTION>
                                                              Years Ended February 28,
                                                             2003       2002       2001
                                                            ------     ------     ------

         <S>                                              <C>        <C>        <C>
         OPERATING REVENUES:
           Hotel......................................    $  6,134   $  5,502   $  5,296
           Related party lease........................       3,204      3,098      2,971
           Retail and other...........................       1,850      2,237      2,483
                                                          ---------  ---------  ---------
             Total operating revenues.................      11,188     10,837     10,750
                                                          ---------  ---------  ---------
         OPERATING COSTS AND EXPENSES:
           Hotel......................................       2,321      2,122      2,274
           Retail and other...........................       1,623      1,694      1,803
           Selling, general and administrative........       4,339      4,524      4,376
           Depreciation and amortization..............         472        736        811
                                                          ---------  ---------  ---------
             Total operating costs and expenses.......       8,755      9,076      9,264
                                                          ---------  ---------  ---------

           OPERATING INCOME...........................       2,433      1,761      1,486
                                                          ---------  ---------  ---------
         OTHER INCOME (EXPENSE):
           Interest income............................          63         74        119
           Interest expense...........................      (4,499)    (4,546)    (5,403)
           Reorganization items, net..................        (475)    (1,444)       --
                                                          ---------  ---------  ---------
           Total other expense, net...................      (4,911)    (5,916)    (5,284)
                                                          ---------  ---------  ---------
           NET LOSS...................................    $ (2,478)  $ (4,155)  $ (3,798)
                                                          =========  =========  =========
</TABLE>

16. MINORITY INTEREST

The Connelly Group, LP

  The Davenport casino operations were managed by the Company's wholly-owned
subsidiary, PRC Iowa, which is the general partner of the 95% Company-owned
operating partnership, TCG.  The partnership agreement provides for the
allocation of income between the general partner and limited partner at 95%
and 5%, respectively.

President Broadwater Hotel, LLC

  To effectuate the acquisition of the Broadwater Property, the Company
entered into a Redemption Agreement dated as of July 22, 1997 (the "Redemption
Agreement") by and among J. Edward Connelly Associates, Inc., a company
controlled by Mr. Connelly ("JECA"), Broadwater Hotel, Inc., a wholly-owned
subsidiary of the Company ("BHI"), and PBLLC, a limited liability company
formed by JECA and BHI for purposes of the transaction.

  BH Acquisition Corporation ("BHAC"), a company wholly-owned by Mr. Connelly,
was the sole owner of the Broadwater Property.  Prior to the closing of the
transactions, JECA, the successor by merger to BHAC became the sole owner of
the Broadwater Property.  In connection with the formation of PBLLC, JECA
transferred its interest in the Broadwater Property to PBLLC as a capital
contribution in exchange for the sole outstanding membership interest in
PBLLC.  Pursuant to the Redemption Agreement, BHI made a capital contribution
of $5,000 to PBLLC in exchange for the Class A Unit of PBLLC as described in

                                  F-30

<PAGE> 82
the Amended and Restated Limited Liability Company Operating Agreement of
PBLLC (the "Amended Operating Agreement").  The Class A Unit affords BHI
control of PBLLC.  Simultaneously with BHI's acquisition of the Class A Unit,
PBLLC redeemed JECA's existing membership interest in PBLLC in exchange for
(i) the cash payment by PBLLC to JECA of $28,484, (ii) redemption of the
$2,016 debt owed by BHAC to the Company and (iii) the issuance by PBLLC to
JECA of the Class B Unit of PBLLC as described in the Amended Operating
Agreement.

  PBLLC is obligated to redeem the Class B Unit from JECA for a redemption
price of $10,000 on the date on which the indebtedness (as defined in "Note 7.
Current Portion of Long-Term Debt") is fully and finally discharged and the
mortgage securing the Indebtedness is released.  In addition, the Class B Unit
entitles JECA to a priority return based on a percentage per annum equal to
the greater of (i) 8.75% or (ii) 4.0% plus LIBOR, as defined by the Redemption
Agreement.

17.  EMPLOYEE BENEFIT PLANS

  The Company maintains an employee savings plan which covers all eligible
employees as defined by the plan.  Pursuant to this savings plan,
participating employees may contribute (defer) a percentage of eligible
compensation.  Employee contributions to the savings plan, up to certain
limits, are partially matched by the Company.  The expense applicable for the
Company's contribution to the savings plan, net of forfeitures, was $195, $234
and $379 for the years ended February 28, 2003, 2002 and 2001, respectively.

18.  STOCK OPTION PLANS

  The Company has adopted non-qualified and incentive stock option plans which
provide for the granting of stock options to eligible directors, officers and
employees.  In addition, the plans authorize the issuance of tandem stock
appreciation rights in connection with the issuance of certain options.  Stock
appreciation rights may only be issued in connection with a non-qualified
stock option.  This right will entitle the holder to receive in cash or stock
an amount equal to the excess of the fair market value on the date of exercise
over the exercise price of the tandem stock option.  The maximum value of any
stock appreciation right will be limited to the exercise price of the tandem
stock option.  A stock appreciation right may be exercisable only at the same
time and to the same extent as the tandem stock option.

  The plans are administered by the Compensation Committee of the Board of
Directors (the "Committee"), whose members determine to whom options will be
granted and the terms of each option.  The exercise price of stock options
granted under the plans are established by the Committee, but the exercise
price may not be less than the market price of the Company's Common Stock on
the date the option is granted.  Each option granted is exercisable in full at
any time or from time to time as determined by the Committee and provided in
the option agreement, provided that no option may have a term exceeding ten
years.  In July 1997 and June 1999, the stockholders of the Company approved
the Company's 1997 and 1999 stock option plans which increased the number of
shares available for grant by 500,000 shares and 300,000 shares, respectively.

  On June 19, 1996 and August 22, 1997, the Committee approved amendments to
certain of the outstanding stock option agreements.  Pursuant to such
amendments, options to purchase an aggregate of 276,340 shares of Common Stock

                                    F-31

<PAGE> 83
at exercise prices ranging from $54.00 to $5.625, per share were repriced to
an exercise price of $11.625 and $2.625, respectively, per share, the market
value of the Common Stock on the date of the repricings.  In addition, the
trading price at which certain options granted to an executive officer with
respect to 16,667 shares of Common Stock would vest was amended from $84.00 to
$5.50 per share.  Except for such amendments, the other terms of the stock
options repricing were not changed.

  On August 28, 2001, the Committee approved further amendments to certain of
the outstanding stock option agreements.  Pursuant to such amendments, options
to purchase an aggregate of 811,618 shares of Common Stock at exercise prices
ranging from $1.875 to $4.000, per share were repriced at an exercise price of
$0.87 per share.  Except for such amendments, the other terms of the stock
options were not changed.  The Over the Counter fair market value of the
Common Stock on August 28, 2001, was $0.87.  Pursuant to the guidance of APB
25, "Accounting for Stock Issued to Employees", the amendments to certain of
the outstanding option agreements modified the options from being fixed stock
option awards to variable stock option awards.  As such, the Company
recognizes compensation cost for increases or decreases in the intrinsic value
of the modified award in periods subsequent to the modification until the
award is exercised, forfeited or expires unexercised.  However, compensation
cost is not adjusted below the intrinsic value, if any, of the modified stock
option at the date of modification unless the award is forfeited because the
employee fails to fulfill an obligation.  The Over the Counter closing market
value of the Common Stock on February 28, 2003, was $0.26, therefore, as of
February 28, 2003, no compensation cost has been recognized.

  The Committee believes that the modifications were necessary and appropriate
in light of competitive conditions in the gaming industry and in order to
provide a meaningful long-term incentive compensation opportunity in light of
recent trading prices of the Common Stock to the management team whose efforts
are essential to the Company's success.

  The Company applies SFAS No. 123, "Accounting for Stock-Based Compensation"
to account for stock compensation arrangements.  SFAS No. 123 provides, among
other things, that companies may elect to account for employee stock options
using a fair value-based method or continue to apply the intrinsic value-based
method prescribed by APB No. 25.  As permitted, the Company has elected to
continue to apply the intrinsic value-based method for stock options.
Accordingly, no compensation cost has been recognized.

  Under the Company's plans, the Company is authorized to grant options up to
an aggregate of 1,325,000 shares, of which 333,665 have expired, to management
team members and directors.  As of February 28, 2003, 100,000 options have
been exercised and 104,042 are available for grant.  Options under the plans
are generally granted at market value at the date of the grant and expire ten
years from the date of grant.  The outstanding options that have been granted
under the plan generally vest either at (i) a rate of 20% each anniversary
date or (ii) 20% on date of grant and 20% on each anniversary date thereafter.
The Company has also granted stock options to external board members under a
non-qualified plan.  These options are granted at market value at the date of
the grant; and generally vest at 50% on date of grant and 25% each anniversary
date thereafter or 20% at the date of grant, 20% on the first anniversary and
60% on the second anniversary; and expire 10 years from date of grant.

                                   F-32
<PAGE> 84
  A summary of the status of the Company's stock option plans as of February
28, 2003, 2002 and 2001, and changes during the years ending on those dates is
presented below:

<TABLE>
<CAPTION>
                            2003                      2002                       2001
                 -------------------------  -------------------------  --------------------------
Variable                  Weighted-Average           Weighted-Average           Weighted-Average
Options          Shares    Exercise Price   Shares    Exercise Price   Shares    Exercise Price
-------------------------------------------------------------------------------------------------

<S>           <C>              <C>         <C>            <C>           <C>          <C>
Outstanding at
 beginning
 of year        989,621        $ 7.26      1,053,022      $ 8.13      1,085,205      $ 7.96
-------------------------------------------------------------------------------------------------
Granted             --            --         811,618        0.87            --          --
Forfeited      (184,828)        35.11       (875,019)       2.38        (32,183)       2.31
Expired         (17,500)         0.87            --          --             --          --
-------------------------------------------------------------------------------------------------
Outstanding
 at end
 of year        787,293          0.87        989,621        7.26      1,053,022        8.13
-------------------------------------------------------------------------------------------------
Options
 exercisable
 at year-end    770,626                      972,152                  1,033,891

Weighted-
 average fair
 value of options
 granted during
 the year          n/a                        $ 0.87                       n/a
-------------------------------------------------------------------------------------------------
</TABLE>

  The following table summarizes information about variable stock options
outstanding at February 28, 2003:

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------
                             Options Outstanding                       Options Exercisable
                ------------------------------------------------   ----------------------------
   Range of       Number       Weighted-Average     Weighted-        Number        Weighted-
   Exercise     Outstanding       Remaining          Average       Exercisable      Average
    Prices      at 02/28/03   Contractual Life    Exercise Price   at 02/28/03   Exercise Price
-------------------------------------------------------------------------------------------------
<S>               <C>            <C>                  <C>          <C>             <C>
$ 0.00 - 1.00     787,293        5.29 years           0.87         770,626         0.87
-------------------------------------------------------------------------------------------------
</TABLE>

19.  SEGMENT INFORMATION

  The Company's reportable segments are based on its two current geographic
gaming operations, its former Davenport operations and its leasing operation.
The Biloxi operations consist of the Biloxi casino and the Broadwater Property
and the St. Louis operations consist of the St. Louis casino and Gateway
Riverboat Cruises ("Gateway").  On July 17, 2001, the assets of Gateway were
sold and operations ceased.  The Davenport Properties consisted of the
Davenport casino and the Blackhawk Hotel, the assets of which were sold, and
operations ceased, on October 10, 2000.

                                   F-33

<PAGE> 85
  The Company's reportable segments, other than the leasing operation, are
similar in operations, but have distinct and separate regional markets.

  The Company had no inter-segment sales and accounts for transfers of
property and inventory at its net book value at the time of such transfer.

<TABLE>
<CAPTION>
                                                 Years Ended February 28,
                                               2003        2002        2001
                                              ------      ------      ------

<S>                                          <C>         <C>         <C>
OPERATING REVENUES:
St. Louis operations...................      $ 73,909    $ 79,103    $ 62,462
Biloxi operations......................        49,812      50,081      50,150
Davenport operations...................           --          --       39,486
                                             ---------   ---------   ---------
 Gaming and ancillary operations.......       123,721     129,184     152,098
Leasing operations.....................           --          --          --
                                             ---------   ---------   ---------
    Total operating revenues...........      $123,721    $129,184    $152,098
                                             =========   =========   =========
</TABLE>

<TABLE>
<CAPTION>
                                                  Years Ended February 28,
                                               2003        2002        2001
                                              ------      ------      ------

<S>                                          <C>         <C>         <C>
OPERATING INCOME (LOSS):
St. Louis operations...................      $  4,870    $  6,095     $  (695)
Biloxi operations......................         2,802       1,930       2,672
Davenport operations...................           --         (468)      5,810
                                             ---------   ---------   ---------
 Gaming and ancillary operations.......         7,672       7,557       7,787
Leasing operations.....................        (2,764)     (8,136)    (15,110)
                                             ---------   ---------   ---------
    Operations income (loss)...........         4,908        (579)     (7,323)

CORPORATE LOSS:
Corporate administration...............        (3,243)     (3,741)     (4,604)
Corporate development..................          (123)       (416)       (292)
                                             ---------   ---------   ---------
     OPERATING LOSS....................      $ (1,542)   $ (4,736)   $(12,219)
                                             =========   =========   =========
</TABLE>

                                  F-34
<PAGE> 86
  A summary of assets by segment, is as follows:

<TABLE>
<CAPTION>
                                                      February 28,
                                                   2003        2002
                                                  ------      ------

      <S>                                        <C>         <C>
      St. Louis operations....................   $ 47,917    $ 46,281
      Biloxi operations.......................     63,562      61,623
      Davenport operations....................        --        1,681
                                                 ---------   ---------
        Gaming and ancillary operations.......    111,479     109,585
      Leasing operations......................      2,349       4,001
                                                 ---------   ---------
        Operations' assets....................    113,828     113,586
      Corporate assets........................      3,747       3,626
      Development assets......................      3,259       3,238
                                                 ---------   ---------
          Net assets..........................   $120,834    $120,450
                                                 =========   =========
</TABLE>

  A summary of net property and equipment and additions to property and
equipment, by segment, is as follows:

<TABLE>
<CAPTION>
                                                      February 28,
                                                   2003        2002
                                                  ------      ------

      <S>                                        <C>         <C>
      Property and Equipment
        St. Louis operations..................   $ 36,540    $ 38,534
        Biloxi operations.....................     51,919      52,812
                                                 ---------   ---------
           Gaming and ancillary operations....     88,459      91,346
        Leasing operations....................      2,250       4,000
                                                 ---------   ---------
          Operations' assets..................     90,709      95,346
        Corporate assets......................         12          23
        Development assets....................      3,259       3,238
                                                 ---------   ---------
            Net property and equipment........   $ 93,980    $ 98,607
                                                 =========   =========
</TABLE>

<TABLE>
<CAPTION>
                                                 Years Ended February 28,
                                                    2003        2002
                                                   ------      ------

      <S>                                        <C>         <C>
      Additions to Property and Equipment:
        St. Louis operations..................   $  4,187    $  2,211
        Biloxi operations.....................      1,384       2,194
                                                 ---------   ---------
           Gaming and ancillary operations....      5,571       4,405
        Leasing operations....................        --          --
                                                 ---------   ---------
          Operations' assets..................      5,571       4,405
        Corporate assets......................          1           8
        Development assets....................         20          71
                                                 ---------   ---------
                                                 $  5,592    $  4,484
                                                 =========   =========
</TABLE>
                                   F-35


<PAGE> 87
  Included in additions to property and equipment is $2 of assets acquired in
exchange for debt in the year ended February 28, 2002.

20. RELATED PARTY TRANSACTIONS

  The Company is related to certain entities through common ownership by its
principal owners or officers.  The Company pays office rent to one such
related party in the amount of $4 annually.  In management's opinion, this
related party transaction is equivalent to the amount which would have been
charged by unrelated third parties.

  To effectuate the acquisition of the Broadwater Property, the Company
entered into a Redemption Agreement dated July 22, 1997 by and among J. Edward
Connelly Associates, Inc., a company controlled by Mr. Connelly, BHI, and
PBLLC.  See "Note 16.  Minority Interest."

  Mr. Connelly has guaranteed debt of the Company totaling $2,100 and $2,200
as of February 28, 2003 and 2002.

21.  SUPPLEMENTAL CASH FLOW STATEMENT DISCLOSURES

  The components of net change in working capital accounts are as follows:

                                                  2003       2002       2001
                                                 ------     ------     ------
  Changes in working capital accounts:
    Receivables, net........................... $   164    $   293    $   285
    Inventories................................     (59)         7         (6)
    Prepaid expenses and other current assets..    (768)       805       (619)
    Accounts payable...........................   1,235     (2,503)     2,010
    Accrued payroll and benefits...............  (1,317)      (193)    (2,127)
    Other accrued expenses.....................   6,869      8,189     (1,997)
                                                --------   --------   --------
                                                $ 6,124    $ 6,598    $(2,454)
                                                ========   ========   ========

  During fiscal years 2002 and 2001, the Company acquired $2 and $5,305 of
property and equipment, respectively, in exchange for indebtedness.

  During fiscal years 2003, 2002 and 2001, the Company paid no income taxes.
Interest paid by the Company was $88, $6,377 and $17,089 for the years ended
February 28, 2003, 2002 and 2001, respectively.

                                F-36

<PAGE> 88
22.  QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

  During the fourth quarter of fiscal year 2002, the Company reclassified
reorganization costs from operating expenses to other income/expense to more
accurately reflect the results of operations.  Such amounts had previously
been classified as operating expenses as they had been immaterial up to such
time.

  The following table sets forth consolidated income statement data for the
periods indicated.  The quarterly information is unaudited, but in
management's opinion reflects all adjustments necessary for a fair
presentation of the information for the periods presented.

<TABLE>
<CAPTION>
                                           Fiscal 2003 Quarters Ended
                                     May 31     Aug. 31    Nov. 30    Feb. 28
                                    --------   ---------  ---------  ---------

<S>                                 <C>        <C>        <C>        <C>
Revenues..........................  $ 33,381   $ 31,955   $ 29,048   $ 29,337

Operating income (loss)...........     1,661        538         17       (674)

Loss before income tax and
  minority interest...............    (2,368)    (1,632)    (1,212)    (2,548)

Net loss..........................    (2,683)    (1,956)    (1,556)    (2,884)
                                    =========  =========  =========  =========
Basic and dilutive net
  loss per share..................   $ (0.53)   $ (0.39)   $ (0.31)   $ (0.57)
                                     ========   ========   ========   ========
</TABLE>

<TABLE>
<CAPTION>
                                           Fiscal 2002 Quarters Ended
                                     May 31     Aug. 31    Nov. 30    Feb. 28
                                    --------   ---------  ---------  ---------

<S>                                 <C>        <C>        <C>        <C>
Revenues..........................  $ 33,101   $ 32,761   $ 30,811   $ 32,511

Operating income (loss) as
  previously reported.............     1,333        608       (846)
Reclassifications for
  reorganization costs............        50        167        113
                                    ---------  ---------  ---------  ---------
Restated net operating
  income (loss)...................     1,383        775       (733)    (6,161)
                                    =========  =========  =========  =========
Loss before income tax and
  minority interest...............    (2,198)    (1,989)    (4,397)    (4,783)

Net loss..........................    (2,486)    (2,296)    (4,710)   (11,256)
                                    =========  =========  =========  =========
Basic and dilutive net
  loss per share..................   $ (0.49)   $ (0.46)   $ (0.94)   $ (2.24)
                                     ========   ========   ========   ========
</TABLE>

                                   F-37
<PAGE> 89
23. SUMMARIZED AND CONDENSED FINANCIAL INFORMATION OF THE COMPANY

  The following summarized and condensed financial information presents the
separate financial information of the parent company, the combined financial
information of the Non-Guarantors and the combined financial information of
the Guarantors of the Company's Senior Exchange Notes and Secured Notes as of
the dates presented.  See "Note 7.  Current Portion of Long-Term Debt."

  The Company has incorporated a wholly-owned subsidiary which is a Non-
Guarantor, BHI, and a limited liability company which is a Non-Guarantor,
PBLLC.  See "Note 16.  Minority Interest."

  All of the Guarantors (other than TCG) are wholly-owned subsidiaries of the
Company and are full joint and several guarantors of the Senior Exchange Notes
(limited only to the extent necessary to insure that it does not constitute a
fraudulent conveyance under applicable law).  The guarantee of TCG, which is a
95% Company-owned partnership, is limited to the amount owed from time to time
by TCG to PRC Holdings ($0 as of February 28, 2003 and 2002).  As security for
the obligations of the Company and the Guarantors under the Senior Exchange
Notes and the Secured Notes, the Company and the Guarantors have pledged their
equity interests in each Guarantor and all of their rights in certain
management agreements with, certain indebtedness from, and certain investments
in, certain gaming ventures.  Separate financial information for TCG is
presented elsewhere herein.

                                  F-38
<PAGE> 90

<TABLE>
<CAPTION>
                        SUMMARIZED AND CONDENSED CONSOLIDATING BALANCE SHEET
                                          FEBRUARY 28, 2003
                                           (in thousands)

                                      President                  Non-    Eliminating
                                    Casinos, Inc. Guarantors  Guarantors   Entries   Consolidated
                                      ---------   ---------   ----------  ---------   ---------
<S>                                    <C>         <C>         <C>         <C>         <C>
ASSETS

CURRENT ASSETS:
  Cash and cash equivalents.........   $      98   $  14,335   $   1,726    $    --    $  16,159
  Restricted cash and short-term
    investments.....................         --          712       5,304         --        6,016
  Related party notes receivable....      75,000     503,915         --     (578,915)        --
  Other current assets..............      13,697       4,361         890     (14,269)      4,679
                                       ----------  ----------  ----------  ----------  ----------
    Total current assets............      88,795     523,323       7,920    (593,184)     26,854
                                       ----------  ----------  ----------  ----------  ----------

PROPERTY AND EQUIPMENT, NET.........         --       51,872      42,108         --       93,980
                                       ----------  ----------  ----------  ----------  ----------
                                       $  88,795   $ 575,195   $  50,028   $(593,184)  $ 120,834
                                       ==========  ==========  ==========  ==========  ==========

LIABILITIES AND STOCKHOLDERS' DEFICIT

LIABILITIES NOT SUBJECT
  TO COMPROMISE:
  Accounts payable..................   $     --    $   1,425    $     88   $     --    $   1,513
  Other current liabilities.........          20       7,678      12,360        (142)     19,916
  Current maturities of long-term
    debt............................         --          --       30,000         --       30,000
  Due to related parties............         --       35,586          47     (35,633)        --
  Accrued loan fee..................         --          --        7,000         --        7,000
  Investments in subsidiaries.......       3,882         --          --       (3,882)        --
                                       ----------  ----------  ----------  ----------  ----------
    Total liabilities not subject
      to compromise.................       3,902      44,689      49,495     (39,657)     58,429
LIABILITIES SUBJECT TO COMPROMISE...     133,828     551,889      12,478    (586,855)    111,340
                                       ----------  ----------  ----------  ----------  ----------
    Total liabilities...............     137,730     596,578      61,973    (626,512)    169,769
                                       ----------  ----------  ----------  ----------  ----------

MINORITY INTEREST...................         679         --          --          --          679

STOCKHOLDERS' DEFICIT...............     (49,614)    (21,383)    (11,945)     33,328     (49,614)
                                       ----------  ----------  ----------  ----------  ----------
                                       $  88,795   $ 575,195   $  50,028   $(593,184)  $ 120,834
                                       ==========  ==========  ==========  ==========  ==========
</TABLE>

                                    F-39
<PAGE> 91
<TABLE>
<CAPTION>
                        SUMMARIZED AND CONDENSED CONSOLIDATING BALANCE SHEET
                                          FEBRUARY 28, 2002
                                           (in thousands)

                                      President                  Non-    Eliminating
                                    Casinos, Inc. Guarantors  Guarantors   Entries   Consolidated
                                      ---------   ---------   ----------  ---------   ---------
<S>                                    <C>         <C>         <C>         <C>         <C>
ASSETS

CURRENT ASSETS:
  Cash and cash equivalents.........   $       1   $  10,109   $     --    $     --    $  10,110
  Restricted cash and short-term
    investments.....................         --        2,927       4,790         --        7,717
  Related party notes receivable....      75,000     492,930          46    (567,976)        --
  Other current assets..............      10,234       3,777         867     (10,862)      4,016
                                       ----------  ----------  ----------  ----------  ----------
    Total current assets............      85,235     509,743       5,703    (578,838)     21,843
                                       ----------  ----------  ----------  ----------  ----------

PROPERTY AND EQUIPMENT, NET.........         --       56,639      41,968        --        98,607
                                       ----------  ----------  ----------  ----------  ----------
                                       $  85,235   $ 566,382   $  47,671   $(578,838)  $ 120,450
                                       ==========  ==========  ==========  ==========  ==========

LIABILITIES AND STOCKHOLDERS'
  EQUITY (DEFICIT)

CURRENT LIABILITIES:
  Accounts payable..................   $       8   $   2,851    $    121   $     --    $   2,980
  Other current liabilities.........      10,242       9,794      18,878     (10,862)     28,052
  Short-term debt...................         --            5         --          --            5
  Current maturities of
    long-term debt..................      75,000     570,176      30,000    (567,976)    107,200
  Accrued loan fee..................         --          --        7,000         --        7,000
  Investments in subsidiaries.......      25,418         --          --      (25,418)        --
                                       ----------  ----------  ----------  ----------  ----------
    Total current liabilities.......     110,668     582,826      55,999    (604,256)    145,237
                                       ----------  ----------  ----------  ----------  ----------

LIABILITIES SUBJECT TO COMPROMISE...         --          --          646         --          646
                                       ----------  ----------  ----------  ----------  ----------
    Total liabilities...............     110,668     582,826      56,645    (604,256)    145,883
                                       ----------  ----------  ----------  ----------  ----------

MINORITY INTEREST...................      15,102         --          --         --        15,102

STOCKHOLDERS' DEFICIT...............     (40,535)    (16,444)     (8,974)     25,418     (40,535)
                                       ----------  ----------  ----------  ----------  ----------
                                       $  85,235   $ 566,382   $  47,671   $(578,838)  $ 120,450
                                       ==========  ==========  ==========  ==========  ==========
</TABLE>

                                   F-40
<PAGE> 92
<TABLE>
<CAPTION>
                  SUMMARIZED AND CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
                                            (in thousands)

                                      President                  Non-    Eliminating
                                    Casinos, Inc. Guarantors  Guarantors   Entries   Consolidated
                                      ---------   ---------   ---------   ----------  ---------
<S>                                  <C>         <C>         <C>         <C>         <C>
Year Ended February 28, 2003:
Operating revenues.................  $     --    $ 115,737   $  11,189   $  (3,205)  $ 123,721
Operating costs and expenses.......         52     116,544       8,788      (3,205)    122,179
                                     ----------  ----------  ----------  ----------  ----------
  Operating income (loss)..........        (52)       (807)      2,401         --        1,542
Equity loss in consolidated
  subsidiaries.....................     (7,707)        --          --        7,707         --
Other income (expense):
  Interest expense, net............        --       (3,238)     (4,412)        --       (7,650)
  Reorganization items, net........        (1)      (1,058)       (476)        --       (1,535)
Gain on disposal of
    property and equipment.........        --         (117)        --          --         (117)
                                     ----------  ----------  ----------  ----------  ----------
    Other expense..................         (1)     (4,413)     (4,888)        --       (9,302)
                                     ----------  ----------  ----------  ----------  ----------
  Loss before minority interest....     (7,760)     (5,220)     (2,487)      7,707      (7,760)
Minority interest..................      1,319         --          --          --        1,319
                                     ----------  ----------  ----------  ----------  ----------
    Net loss.......................  $  (9,079)  $  (5,220)  $  (2,487)  $   7,707   $  (9,079)
                                     ==========  ==========  ==========  ==========  ==========

Year Ended February 28, 2002:
Operating revenues.................  $     --    $ 121,445   $  10,837   $  (3,098)  $ 129,184
Operating costs and expenses.......        116     127,798       9,104      (3,098)    133,920
                                     ----------  ----------  ----------  ----------  ----------
  Operating income (loss)..........       (116)     (6,353)      1,733         --       (4,736)
Equity loss in consolidated
  subsidiaries.....................    (19,404)        --          --       19,404         --
Other income (expense):
  Interest expense, net............        --       (9,639)     (4,472)        --      (14,111)
  Reorganization items, net........        --          --       (1,444)        --       (1,444)
Gain on disposal of
    property and equipment.........        --          771         --          --          771
                                     ----------  ----------  ----------  ----------  ----------
    Other expense..................        --       (8,868)     (5,196)        --      (14,784)
                                     ----------  ----------  ----------  ----------  ----------
  Loss before minority interest....    (19,520)    (15,221)     (4,183)     19,404     (19,520)
Minority interest..................      1,228         --          --          --        1,228
                                     ----------  ----------  ----------  ----------  ----------
    Net loss.......................  $ (20,748)  $ (15,221)  $  (4,183)  $  19,404   $ (20,748)
                                     ==========  ==========  ==========  ==========  ==========

Year Ended February 28, 2001:
Operating revenues.................  $     --    $ 144,320   $  10,749   $  (2,971)  $ 152,098
Operating costs and expenses.......        176     157,848       9,264      (2,971)    164,317
                                     ----------  ----------  ----------  ----------  ----------
  Operating income (loss)..........       (176)    (13,528)      1,485         --      (12,219)
Equity income in consolidated
  subsidiaries.....................      3,344         --          --       (3,344)        --
Other income (expense):
  Interest expense, net............        --      (13,314)     (5,284)        --      (18,598)
  Gain on disposal of
    property and equipment.........        --       33,985         --          --       33,985
                                     ----------  ----------  ----------  ----------  ----------
    Other income (expense).........        --       20,671      (5,284)        --       15,387
                                     ----------  ----------  ----------  ----------  ----------
  Income (loss) before
    minority interest..............      3,168       7,143      (3,799)     (3,344)      3,168
Minority interest..................      3,374         --          --          --        3,374
                                     ----------  ----------  ----------  ----------  ----------
    Net income (loss)..............  $    (206)  $   7,143   $  (3,799)  $  (3,344)  $    (206)
                                    ==========  ==========  ==========  ==========  ==========
</TABLE>
                                   F-41
<PAGE> 93
<TABLE>
<CAPTION>
                  SUMMARIZED AND CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
                                  YEAR ENDED FEBRUARY 28, 2003
                                        (in thousands)

                                      President                  Non-    Eliminating
                                    Casinos, Inc. Guarantors  Guarantors   Entries   Consolidated
                                      ---------   ---------   ----------  ----------   ---------

<S>                                    <C>         <C>         <C>          <C>         <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss.............................  $ (9,079)   $ (5,220)   $ (2,487)    $ 7,707    $ (9,079)
Adjustments to reconcile net
  loss to net cash provided by
  (used in) operating activities:
  Depreciation and amortization......       --        8,451         472         --        8,923
  Gain on sale of fixed assets.......       --          117         --          --          117
  Impairment of long-lived assets....       --        1,167         --          --        1,167
  Equity loss in consolidated
    subsidiaries.....................     7,707         --          --       (7,707)        --
  Minority interest..................     1,319         --          --          --        1,319
  Reorganization items, net..........         1       1,058         476         --        1,535
  Net change in working
    capital accounts.................     3,366       2,277         481        --         6,124
                                       ---------   ---------   ---------   ---------   ---------
    Net cash provided by (used in)
      operating activities...........     3,314       7,850      (1,058)        --       10,106
                                       ---------   ---------   ---------   ---------   ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Expenditures for property
   and equipment.....................       --       (4,978)       (614)        --       (5,592)
  Proceeds from the sale of property.       --           10           2         --           12
  Changes in restricted cash.........       --        2,152        (514)        --        1,638
  Purchase of short-term investments.       --          (12)        --          --          (12)
  Maturity of short-term investments.       --           75         --          --           75
  Payment of minority interest.......       (73)        --          --          --          (73)
                                       ---------   ---------   ---------   ---------   ---------
    Net cash used in
      investing activities...........       (73)     (2,753)     (1,126)        --       (3,952)
                                       ---------   ---------   ---------   ---------   ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Repayment of notes payable.........       --         (105)        --          --         (105)
  Change in intercompany accounts....    (3,144)       (766)      3,910         --          --
                                       ---------   ---------   ---------   ---------   ---------
    Net cash provided by (used in)
      financing activities...........    (3,144)       (871)      3,910         --         (105)
                                       ---------   ---------   ---------   ---------   ---------
NET INCREASE IN CASH
  AND CASH EQUIVALENTS...............        97       4,226       1,726         --        6,049

CASH AND CASH EQUIVALENTS
  AT BEGINNING OF YEAR...............         1      10,109         --          --       10,110
                                       ---------   ---------   ---------   ---------   ---------
CASH AND CASH EQUIVALENTS
  AT END OF YEAR.....................  $     98    $ 14,335    $  1,726    $    --     $ 16,159
                                       =========   =========   =========   =========   =========
</TABLE>

                                    F-42
<PAGE> 94
<TABLE>
<CAPTION>
                  SUMMARIZED AND CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
                                  YEAR ENDED FEBRUARY 28, 2002
                                        (in thousands)

                                      President                  Non-    Eliminating
                                    Casinos, Inc. Guarantors  Guarantors   Entries   Consolidated
                                      ---------   ---------   ----------  ----------   ---------
<S>                                    <C>         <C>         <C>         <C>         <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss.............................  $(20,748)   $(15,221)   $ (4,183)   $ 19,404    $(20,748)
Adjustments to reconcile net
  loss to net cash provided by
  (used in) operating activities:
  Depreciation and amortization......       --        7,677         736         --        8,413
  Gain on sale of fixed assets.......       --         (771)        --          --         (771)
  Impairment of long-lived assets....       --        7,068         --          --        7,068
  Equity loss in consolidated
    subsidiaries.....................    19,404         --          --      (19,404)        --
  Minority interest..................     1,228         --          --          --        1,228
  Amortization of deferred
    financing fees and discount......       281         --          --          --          281
  Amortization of lease option.......       --          253         --          --          253
  Reorganization items, net..........       --          --        1,444         --        1,444
  Changes in assets and liabilities..     4,390      (1,597)      3,805         --        6,598
                                       ---------   ---------   ---------   ---------   ---------
    Net cash provided by (used in)
      operating activities...........     4,555      (2,591)      1,802         --        3,766
                                       ---------   ---------   ---------   ---------   ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Expenditures for property
   and equipment.....................       --       (3,958)       (524)        --       (4,482)
  Proceeds from the sale of property.       --        1,710         --          --        1,710
  Proceeds from notes receivable.....       --          596         --          --          596
  Change in restricted cash..........       --         (329)     (2,209)        --       (2,538)
  Purchase of short-term investments.       --         (250)        --          --         (250)
  Maturity of short-term investments.       --        5,413         --          --        5,413
                                       ---------   ---------   ---------   ---------   ---------
    Net cash provided by (used in)
      investing activities...........       --        3,182      (2,733)        --          449
                                       ---------   ---------   ---------   ---------   ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Repayment of notes payable.........       --       (2,663)        --          --       (2,663)
  Payments on capital
    lease obligations................       --          --           (1)        --           (1)
  Change in intercompany accounts....    (4,555)      3,623         932         --          --
                                       ---------   ---------   ---------   ---------   ---------
    Net cash provided by (used in)
      financing activities...........    (4,555)        960         931         --       (2,664)
                                       ---------   ---------   ---------   ---------   ---------
NET INCREASE IN CASH
  AND CASH EQUIVALENTS...............       --        1,551         --          --        1,551
CASH AND CASH EQUIVALENTS
  AT BEGINNING OF YEAR...............         1       8,558         --          --        8,559
                                       ---------   ---------   ---------   ---------   ---------
CASH AND CASH EQUIVALENTS
  AT END OF YEAR.....................  $      1    $ 10,109    $    --     $    --     $ 10,110
                                       =========   =========   =========   =========   =========
</TABLE>

                                   F-43
<PAGE> 95
<TABLE>
<CAPTION>
                  SUMMARIZED AND CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
                                  YEAR ENDED FEBRUARY 28, 2001
                                        (in thousands)

                                      President                  Non-    Eliminating
                                    Casinos, Inc. Guarantors  Guarantors   Entries   Consolidated
                                      ---------   ---------   ----------  ----------   ---------
<S>                                    <C>         <C>         <C>         <C>         <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)....................  $   (206)   $  7,143    $ (3,799)   $ (3,344)   $   (206)
Adjustments to reconcile net
  income (loss) to net cash provided
  by (used in) operating activities:
  Depreciation and amortization......       --        9,549         811         --       10,360
  Gain on sale of fixed assets.......       --      (33,985)        --          --      (33,985)
  Impairment of long-lived assets....       --       12,709         --          --       12,709
  Equity loss in consolidated
    subsidiaries.....................    (3,344)        --          --        3,344         --
  Minority interest..................     3,374         --          --          --        3,374
  Amortization of deferred
    financing fees and discount......       475          10       1,062         --        1,547
  Changes in assets and liabilities..      (183)     (3,920)      1,764         --       (2,339)
                                       ---------   ---------   ---------   ---------   ---------
    Net cash provided by (used in)
      operating activities...........       116      (8,494)       (162)        --       (8,540)
                                       ---------   ---------   ---------   ---------   ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Expenditures for property
   and equipment.....................       --       (8,944)       (294)        --       (9,238)
  Proceeds from the sale of property.       --       58,407         --          --       58,407
  Change in restricted cash..........       --       (1,823)        199         --       (1,624)
  Purchase of short-term investments.       --       (5,663)        --          --       (5,663)
  Maturity of short-term investments.       --          685         --          --          685
  Minority interest..................    (2,720)        --          --          --       (2,720)
  Investment in subsidiaries.........     2,270      (2,270)        --          --          --
                                       ---------   ---------   ---------   ---------   ---------
    Net cash provided by (used in)
      investing activities...........      (450)     40,392         (95)        --       39,847
                                       ---------   ---------   ---------   ---------   ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Repayment of notes payable.........   (25,000)    (10,151)        --          --      (35,151)
  Payments on capital
    lease obligations................       --          --           (5)        --           (5)
  Change in intercompany accounts....    25,334     (25,596)        262         --        --
                                       ---------   ---------   ---------   ---------   ---------
    Net cash provided by (used in)
      financing activities...........       334     (35,747)        257         --      (35,156)
                                       ---------   ---------   ---------   ---------   ---------
NET DECREASE IN CASH
  AND CASH EQUIVALENTS...............       --       (3,849)        --          --       (3,849)
CASH AND CASH EQUIVALENTS
  AT BEGINNING OF YEAR...............         1      12,407         --          --       12,408
                                       ---------   ---------   ---------   ---------   ---------
CASH AND CASH EQUIVALENTS
  AT END OF YEAR.....................  $      1    $  8,558    $    --     $    --     $  8,559
                                       =========   =========   =========   =========   =========
</TABLE>

                                     F-44
<PAGE> 96
<TABLE>
<CAPTION>
                                      PRESIDENT CASINOS, INC.
                                      (DEBTORS-IN-POSSESSION)
                         SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS
                       For the Years Ended February 28, 2002, 2001 and 2000
                                          (in thousands)

                                                           Additions
                                              Balance at   Charged to
                                              Beginning    Costs and                 Balance at
        Description                            of Year      Expenses    Deductions   End of Year
        -----------                           ---------    ----------    ---------    ---------
<S>                                            <C>          <C>          <C>          <C>
Allowance for Doubtful Accounts Receivable:

Year ended February 28, 2003...............    $   180      $   270      $  (261)(a)  $   189

Year ended February 28, 2002...............        236          125         (181)(a)      180

Year ended February 29, 2001...............        331          415         (510)(a)      236

Allowance for Deferred Income Tax
  Asset Valuation:

Year ended February 28, 2003...............     67,345        2,834 (b)      --        70,179

Year ended February 28, 2002...............     59,089        8,256 (b)      --        67,345

Year ended February 29, 2001...............     57,914        1,175 (b)      --        59,089
</TABLE>

(a)  Write-offs of uncollectible accounts receivable, net of recoveries.

(b)  Recognition criteria under SFAS No. 109 not satisfied.


                                   F-45

<PAGE> 97
Deloitte & Touche LLP
One City Centre
St. Louis, Missouri 63101

Tel: (314) 342 4900
www.us.deloitte.com
                                                         [LOGO]
INDEPENDENT AUDITORS' REPORT

To the Partners of
The Connelly Group, L.P.:

We have audited the accompanying balance sheets of The Connelly Group, L.P., a
limited partnership, (the "Partnership") (a 95% owned subsidiary of President
Casinos, Inc., see Note 1) as of February 28, 2003 and February 28, 2002 and
the related statements of operations, partners' preferred redeemable capital
and general capital, and cash flows for each of the three years in the period
ended February 28, 2003.  These financial statements are the responsibility of
the Partnership's management.  Our responsibility is to express an opinion on
these 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 audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement.  An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements.  An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation.  We believe that our
audits provide a reasonable basis for our opinion.

In our opinion, such financial statements present fairly, in all material
respects, the financial position of the Partnership as of February 28, 2003
and February 28, 2002, and the results of its operations and its cash flows
for each of the three years in the period ended February 28, 2003 in
conformity with accounting principles generally accepted in the United States
of America.

Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole.  The Financial Statement Schedule II
listed in the Index to Financial Statements and Schedules on page F-1 is
presented for the purpose of additional analysis and is not a required part of
the basic financial statements.  Financial Statement Schedule II is the
responsibility of the Partnership's management.  This schedule has been
subjected to the auditing procedures applied in our audits of the basic
financial statements and, in our opinion, is fairly stated in all material
respects when considered in relation to the basic financial statements taken
as a whole.

/s/ Deloitte & Touche LLP
St. Louis, Missouri
May 9, 2003
_________
Deloitte
Touche
Tohmatsu
__________
                                    F-46

<PAGE> 98
<TABLE>
<CAPTION>
                          THE CONNELLY GROUP, L.P.
                               BALANCE SHEETS
                               (in thousands)

                                                       Feb. 28,    Feb. 28,
                                                         2003        2002
                                                        ------      ------

<S>                                                    <C>         <C>
ASSETS

  Cash and cash equivalents......................      $    124    $    176
  Restricted cash................................           --        1,500
  Receivables (net of allowance for doubtful
    accounts of $45 and $54).....................           --          --
                                                       ---------   ---------
                                                       $    124    $  1,676
                                                       =========   =========

LIABILITIES, PARTNERS' PREFERRED REDEEMABLE
  CAPITAL AND GENERAL CAPITAL

LIABILITIES:
  Accounts payable...............................      $    --     $     27
  Other accrued expenses.........................           121         238
  Due to related parties.........................           --           24
                                                       ---------   ---------
      Total liabilities..........................           121         289
                                                       ---------   ---------
COMMITMENTS AND CONTINGENT LIABILITIES...........           --          --

PARTNERS' GENERAL CAPITAL........................             3       1,387
                                                       ---------   ---------
                                                       $    124    $  1,676
                                                       =========   =========

See Notes to Financial Statements.
</TABLE>

                                  F-47
<PAGE> 99
<TABLE>
<CAPTION>
                            THE CONNELLY GROUP, L.P.
                            STATEMENTS OF OPERATIONS
                                 (in thousands)

                                                 Years Ended February 28,
                                               2003        2002        2001
                                              ------      ------      ------

<S>                                          <C>         <C>         <C>
OPERATING REVENUES:
Gaming.................................      $    --     $    --     $ 40,314
Food and beverage......................           --          --        3,510
Retail and other.......................           --          --          465
Less promotional allowances............           --          --       (7,662)
                                             ---------   ---------   ---------
  Total operating revenues.............           --          --       36,627
                                             ---------   ---------   ---------
OPERATING COSTS AND EXPENSES:
Gaming and gaming cruise...............           --          --       19,043
Food and beverage......................           --          --        2,107
Retail and other.......................           --          --          186
Selling, general and administrative....           (65)       (188)      8,180
Depreciation...........................           --          --        1,355
Management fees to related parties.....           --            2       1,776
                                             ---------   ---------   ---------
  Total operating costs and expenses...           (65)       (186)     32,647
                                             ---------   ---------   ---------

OPERATING INCOME.......................            65         186       3,980
                                             ---------   ---------   ---------
OTHER INCOME (EXPENSE):
Gain on disposal of assets.............           --          --       37,359
Interest income........................             7          57         115
Interest expense.......................           --          --         (110)
                                             ---------   ---------   ---------
  Total other income (expense).........             7          57      37,364
                                             ---------   ---------   ---------
NET INCOME.............................      $     72    $    243    $ 41,344
                                             =========   =========   =========

See Notes to Financial Statements.
</TABLE>
                                  F-48
<PAGE> 100
<TABLE>
<CAPTION>
                                      THE CONNELLY GROUP, L.P.
                       STATEMENTS OF PARTNERS' PREFERRED REDEEMABLE CAPITAL
                                        AND GENERAL CAPITAL
                                           (in thousands)

                                                               Partners' General Capital
                                                         ---------------------------------------
                                             Partner's      Limited       General        Total
                                             Preferred     Partner's     Partner's     Partners'
                                             Redeemable     General       General       General
                                              Capital       Capital       Capital       Capital
                                             ---------     ---------     ---------     ---------

<S>                                         <C>           <C>           <C>           <C>
Years Ended February 28, 2001,
 2002 and 2003:

Balance as of March 1, 2000...........      $    --       $    713      $ 13,492      $ 14,205

Capital distributions.................           --         (2,720)      (51,685)      (54,405)
Net income allocated..................           --          2,067        39,277        41,344
                                            ---------     ---------     ---------     ---------
Balance as of February 28, 2001.......           --             60         1,084         1,144


Net income allocated..................           --             12           231        41,344
                                            ---------     ---------     ---------     ---------
Balance as of February 28, 2002.......           --             72         1,315         1,387

Capital distributions.................           --            (73)       (1,383)       (1,456)
Prior years allocation true-up........           --             (3)            3           --
Net income allocated..................           --              4            68            72
                                            ---------     ---------     ---------     ---------
Balance as of February 28, 2003.......      $    --       $     --      $      3      $      3
                                            =========     =========     =========     =========

See Notes to Financial Statements.
</TABLE>

                                  F-49
<PAGE> 101
<TABLE>
<CAPTION>
                          THE CONNELLY GROUP, L.P.
                          STATEMENTS OF CASH FLOWS
                              (in thousands)

                                                 Years Ended February 28,
                                               2003        2002        2001
                                              ------      ------      ------

<S>                                          <C>         <C>         <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income................................   $     72    $    243    $ 41,344
Adjustments to reconcile net income
  to net cash provided by
  operating activities:
    Depreciation..........................        --          --        1,355
    Gain on disposal of
      property and equipment..............        --          --      (37,359)
    Changes in assets and liabilities:
      Receivables, net....................        --           13          52
      Receivables from related parties....        --           33         (33)
      Inventories.........................        --          --           64
      Prepaid expenses....................        --            6         318
      Other non-current assets............        --          --           40
      Accounts payable....................        (27)        (91)       (383)
      Accrued payroll and benefits........        --          --       (1,529)
      Other accrued expenses..............       (117)       (719)     (2,704)
      Due to related parties..............        (24)         22        (951)
                                             ---------   ---------   ---------
Net cash provided by (used in)
  operating activities....................        (96)       (493)        214
                                             ---------   ---------   ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Expenditures for property and equipment
   ($0, $0 and $11 to related parties)....        --          --         (280)
  Proceeds from sales of property and
    equipment.............................        --          --       56,100
  Change in restricted cash...............      1,500         323      (1,823)
                                             ---------   ---------   ---------
Net cash provided by investing activities.      1,500         323      53,997
                                             ---------   ---------   ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Payments on note payable................        --          --       (2,925)
  Capital distributions...................     (1,456)        --      (54,405)
                                             ---------   ---------   ---------
Net cash used in financing activities.....     (1,456)        --      (57,330)
                                             ---------   ---------   ---------
NET DECREASE IN CASH AND
  CASH EQUIVALENTS........................        (52)       (170)     (3,119)
CASH AND CASH EQUIVALENTS AT
   BEGINNING OF YEAR......................        176         346       3,465
                                             ---------   ---------   ---------
CASH AND CASH EQUIVALENTS AT END OF YEAR..   $    124    $    176    $    346
                                             =========   =========   =========

See Notes to Financial Statements.
</TABLE>

                                   F-50

<PAGE> 102
                            THE CONNELLY GROUP, L.P.
                         NOTES TO FINANCIAL STATEMENTS
                  (Dollars in thousands unless otherwise stated)

1.  BASIS OF PRESENTATION

  The Connelly Group, L.P. (the "Partnership") is a Delaware limited
partnership which was organized in January 1990.  The Partnership was formed
to own, manage and operate the President Riverboat Casino, a riverboat gaming
operation, and ancillary facilities in Davenport, Iowa.

  In December 1992, all preferred and general capital interests, except a
limited partner's general capital interest of 5%, were contributed by the
general partners to a newly formed corporation, President Casinos, Inc.
("PCI") in exchange for common stock of PCI.  PCI subsequently transferred its
ownership interest in the Partnership to a wholly-owned subsidiary, President
Riverboat Casino-Iowa, Inc. ("PRC-Iowa").  PCI and its affiliates are engaged
in the business of owning, operating, managing and developing entertainment
oriented operations with its primary focus on gaming.

  On October 10, 2000, the Partnership sold the assets of its Davenport casino
operations to Isle of Capri Casinos, Inc. and ceased gaming operations at that
time.  The Partnership received cash proceeds of $56,100 and recognized a gain
of $37,359 on the transaction.

2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

  Cash and Cash Equivalents -- Cash and cash equivalents include interest
earning deposits with maturities of ninety days or less at date of purchase.

  Restricted Cash -- As of February 28, 2002, the Partnership had restricted
cash of $1,500 pending the outcome of the litigation, "Whalen IV."  In May
2002, upon execution of a settlement agreement and mutual release in the
aforementioned case, plaintiffs and defendants jointly filed a stipulated
consent order, releasing the injunction and dismissing the case with
prejudice.  Subsequently, the Partnership made a $1,356 distribution to its
partners, inclusive of Whalen's 5% share.

  Gaming Revenues and Promotional Allowances -- In accordance with industry
practice, the Partnership recognized as gaming revenues the net win from
gaming activities, which is the difference between gaming wins and losses.
All other revenues were recognized by reference to the service provided.
Revenues include the retail value of food, beverage and other items provided
on a complimentary basis to customers.  The estimated departmental costs of
providing such promotional allowances are included in gaming costs and
expenses.  There were no such costs during fiscal years 2003 and 2002.  During
fiscal year 2001, the Partnership incurred $1,376 of such costs.

  Indirect Expenses -- Certain indirect expenses of operating departments such
as selling, general and administrative, depreciation and management fees are
shown separately in the accompanying statements of operations and are not
allocated to their respective departmental operating costs and expenses.

  Income Taxes -- The Partnership is not subject to federal and state income
taxes.  Taxable income and losses of the Partnership are reportable on the
income tax returns of the respective partners.

                                   F-51


<PAGE> 103
  Self-Insurance -- The Partnership was partially self-insured for both
employee and third party liability costs through April 1999.  Effective May
1999, the Partnership became fully insured for workers compensation claims.
The self-insurance claim liability is determined based on claims filed and an
estimate of claims incurred but not reported.

  Use of Management Estimates -- The preparation of financial statements in
conformity with accounting principles generally accepted in the United States
of America requires management to make certain 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 amounts of revenues and expenses during the reporting period.  Actual
results may differ from those estimates.

3.  OPERATING LEASES

  The Partnership leased various office facilities, parking lots, equipment
and levee property.  In conjunction with the sale of the Partnership's assets,
the obligations under the operating lease agreements were either assumed by
the purchaser or terminated.  There are no future obligations under such
leases.  Rental expense incurred under operating leases was $799 for the year
ended February 28, 2001.

4.  EMPLOYEE BENEFIT PLAN

  The Partnership participated in an employee savings plan sponsored by PCI,
which covered all eligible employees as defined by the plan.  Pursuant to this
savings plan, participating employees could contribute (defer) a percentage of
eligible compensation.  Employee contributions to the savings plan, up to
certain limits, were partially matched by the Partnership.  The expense
applicable for the Partnership's contribution to the savings plan, net of
forfeitures, was $85 for the year ended February 28, 2001.

5.  PARTNER'S PREFERRED REDEEMABLE CAPITAL

  The preferred redeemable capital was originally recorded at the historical
cost of assets and advances contributed by the partners which were entities
under common control and such carrying value was less than the stated value of
the preferred capital as set forth in the partnership agreement.  The
Partnership accrued the difference between the recorded value and stated value
each year to the extent of available net income.  The preferred redeemable
capital had cumulative distribution rights of 13% on the stated value which
were accrued as of February 28, 1998.  During fiscal year 1999, the
Partnership fully redeemed the partner's preferred capital.

6.  PARTNERS' GENERAL CAPITAL

  The partnership agreement provides for the allocation of income (losses)
between the general partner and limited partner at 95% and 5%, respectively,
after preferred capital accounts are allocated their cumulative preferred
return and any difference between the carrying value and stated value of
preferred capital is accrued.  The limited partner's capital account cannot be
reduced below zero.

                                   F-52

<PAGE> 104
7.  RELATED PARTY TRANSACTIONS

  The Partnership is related to other entities through common ownership by its
partners or principal officers.  The Partnership purchased various services
and property and equipment from such related parties.  The amounts charged
were based on specific identification of the products or services provided.
In addition, the Partnership entered into a management advisory agreement with
the general partner for advisory services related to gaming and riverboat
operations.  The agreement provides for management fees based on a percentage
of revenues.  Transactions with such related parties consist of the following:

                                         2003       2002       2001
                                        ------     ------     ------
        Management fees............    $   --     $     2    $ 1,776
        Property and equipment.....        --         --          11
        Hotel, retail and other....        --         --         438

8.  COMMITMENTS AND CONTINGENT LIABILITIES

  The Partnership is a party to legal proceedings arising in the normal
conduct of business.  Management believes that the final outcome of these
matters will not have a material adverse effect upon the Partnership's
financial position or results of operations.

9.  SUPPLEMENTAL CASH FLOWS DISCLOSURES

  There were no material noncash investing and financing activities during
fiscal years 2003 and 2002.  During fiscal year 2001, the Partnership acquired
$178 of gaming equipment financed through non-interest bearing short-term
notes.

  No interest was paid by the Partnership during fiscal years 2003 and 2002.
Interest paid by the Partnership was $147 for the year ended February 28,
2001.

                                    F-53
<PAGE> 105
                              THE CONNELLY GROUP, L.P.
                  SCHEDULE II--VALUATION AND QUALIFYING ACCOUNTS
              For the Years Ended February 28, 2003, 2002 and 2001
                                  (in thousands)
<TABLE>
<CAPTION>

                         Additions
                                              Balance at   Charged to
                                               Beginning    Costs and                 Balance at
        Description                            of Year      Expenses    Deductions   End of Year
        -----------                           ---------    ----------   ----------   -----------

<S>                                             <C>          <C>          <C>           <C>
Allowance for Doubtful Accounts Receivable:

Year ended February 28, 2003...............     $  54        $  --        $  (9)(a)     $  45

Year ended February 28, 2002...............       108           --          (54)(a)        54

Year ended February 29, 2001...............        84           249        (225)(a)       108


(a)  Write-offs of uncollectible accounts receivable, net of recoveries.
</TABLE>

                                    F-54
<PAGE> 106
                            PRESIDENT CASINOS, INC.
                                EXHIBIT INDEX
  Exhibits
   2.1      Asset Sale Agreement, dated as of July 19, 2000, by and among The
            Connelly Group, L.P. ("TCG"), TCG/Blackhawk, Inc. ("Blackhawk")
            (collectively, the  "Sellers"), and IOC-Davenport, Inc. and Isle
            of Capri Casinos, Inc. ("Purchasers"). (25)
   3.1      Restated Articles of Incorporation of the Company. (28)
   3.2      By-Laws of the Company, as amended. (14)
   4.1      Indenture dated as of August 26, 1994, by and among the Company,
            the Guarantors and United States Trust Company of New York ("U.S.
            Trust"). (6)
   4.1.1    Form of Senior Exchange Note issued pursuant to Indenture. (5)
   4.1.2    Warrant Agreement dated as of September 23, 1993, by and between
            the Company and U.S. Trust, as Warrant agent. (4)
   4.1.3    Warrant Agreement dated as of August 26, 1994, by and between the
            Company and U.S. Trust. (6)
   4.1.4    Subsidiary Stock Pledge and Collateral Assignment Agreement dated
            as of August 26, 1994, by the Company and Subsidiary Pledgors in
            favor of U.S. Trust, as collateral agent. (6)
   4.2      Rights Agreement, dated as of November 20, 1997, between the
            Company and ChaseMellon Shareholder Services, LLC. (17)
   4.3      Agreement to Exchange Securities, dated December 3, 1998 by and
            among the Company, President Riverboat Casino-Iowa, Inc.
            ("President Iowa"), President Riverboat Casino-Missouri, Inc.
            ("President Missouri"), The President Riverboat Casino-
            Mississippi, Inc. ("President Mississippi"), Blackhawk, P.R.C.-
            Louisiana, Inc., President Riverboat Casino-New York, Inc.
            ("President New York"), President Casino New Yorker, Inc., PRC
            Holdings Corporation, PRC Management, Inc. ("PRC Management"),
            PRCX Corporation, President Riverboat Casino-Philadelphia, Inc.
            ("President Philadelphia"), Vegas, Vegas, Inc., and TCG and each
            holder of the Company's 13% Senior Exchange Notes due 2001. (20)
   4.3.1    Indenture dated as of December 3, 1998, among The Company,
            President Iowa, President Missouri, President Mississippi,
            Blackhawk, P.R.C.-Louisiana, Inc., President New York, President
            Casino New Yorker, Inc., PRC Holdings Corporation, PRC Management,
            PRCX Corporation, President Philadelphia, Vegas, Vegas, Inc. and
            TCG and U.S. Trust Company of Texas, N.A. (20)
   4.4.2    President Casinos, Inc. Supplemental Indenture with respect to
            $25,000,000 12% Notes due September 15, 2001. (26)
   4.4.3    President Casinos, Inc. Supplemental Indenture with respect to
            $75,000,000 13% Senior Notes due September 15, 2001. (26)
   10.1     Amended and Restated Agreement of Limited Partnership of TCG. (1)
   10.2     Agreement between the Company and John E. Connelly. (2)
   10.3     Employment Agreement dated November 4, 1992, between the Company
            and Mr. Connelly. (2)
   10.3.1   Amendment No. 1 to Employment Agreement dated December 15, 1994,
            between the Company and Mr. Connelly. (7)
   10.3.2   Amended and Restated Employment Agreement, dated June 26, 1998 by
            by and between the Company and Mr. Connelly. (19)
 * 10.4     The Company's 1992 Stock Option Plan, as amended. (5)
 * 10.4.1   The Company's 1996 Amended and Restated Stock Option Plan. (11)
 * 10.4.2   The Company's 1997 Stock Option Plan. (16)
 * 10.4.3   The Company's 1999 Incentive Stock Plan. (23)
   10.5     Amended and Restated Davenport-Connelly Development Agreement

                                    F-55

<PAGE> 107
            dated November 29, 1990, between TCG and the City of Davenport,
            Iowa (the "Development Agreement"). (1)
   10.5.1   First Amendment to the Development Agreement dated August 21,
            1991.(1)
   10.5.2   Second Amendment to the Development Agreement dated April 10,
            1992. (1)
   10.6     Operator's Contract dated December 28, 1989, between the Riverboat
            Development Authority and TCG. (1)
   10.6.1   Amendment to Operator's Contract, dated December 29, 1993, between
            the Riverboat Development Authority and TCG. (5)
   10.6.2   Amendment to the Operator's Agreement dated March 1, 1998. (18)
   10. 7    Lease dated November 29, 1990, between the City of Davenport, Iowa
            and TCG. (1)
   10.8     Management Advisory Agreement for TCG. (1)
   10.9     Credit Agreement dated as of March 11, 1991, among TCG, Blackhawk
            and Firstar Bank Davenport, N.A. ("Firstar"). (1)
   10.9.1   Note dated March 11, 1991, from TCG and Blackhawk to Firstar. (1)
   10.9.2   Security Agreement dated March 11, 1991 between TCG and Firstar.
            (1)
   10.9.3   First Preferred Fleet Mortgage dated March 11, 1991, from TCG to
            Firstar. (1)
   10.9.4   Mortgage, Security Agreement, Fixture Financing Statement and
            Assignment of Leases and Rents, dated March 11, 1991, by TCG to
            Firstar on the Landing Promenade Property.  A similar mortgage has
            been given to Firstar by Blackhawk on the Blackhawk Hotel. (1)
   10.9.5   Amendment to Note dated March 16, 1993, from TCG and Blackhawk
            to Firstar. (2)
   10.9.6   Second Amendment to Note dated March 31, 1997, from TCG and
            Blackhawk to Firstar. (12)
   10.10    Lease Agreement dated August 7, 1986, between the City of St.
            Louis and St. Louis River Cruise Lines, Inc. (the "'Belle'
            Lease"). (1)
   10.10.1  Amended Lease Agreement dated July 16, 1990, amending the "Belle"
            Lease. (1)
   10.10.2  Second Amendment to Lease Agreement, effective June 19, 1992,
            amending the "Belle" Lease. (1)
   10.11    Lease Agreement dated December 20, 1983 between the City of St.
            Louis and S.S. Admiral Partners (the "'Admiral' Lease"). (1)
   10.11.1  Amendment and Assignment of Mooring Lease dated December 12, 1990,
            amending the "Admiral" Lease. (1)
   10.11.2  Second Amendment to Lease Agreement effective June 19, 1992,
            amending the "Admiral" Lease. (1)
   10.12    Promissory Note (Vessel-Term) dated July 8, 1992, from President
            Mississippi to Caterpillar. (3)
   10.12.1  Loan Agreement dated July 31, 1992, between President Mississippi
            and Caterpillar. (1)
   10.12.2  Preferred Fleet Mortgage dated July 8, 1992, between President
            Mississippi and Caterpillar. (1)
   10.13    Form of Indemnification Agreement for Directors and Officers. (1)
   10.14    Agreement for Purchase of Partnership Interest dated September 24,
            1997, by and among Massena Management Corp., Gary A. Melius,
            Native American Management Corp., PRC-St. Regis, Inc. and Naussau
            County Native American, Inc. (18)
   10.14.1  Agreement dated September 24, 1997, by and among Massena
            Management LLC, Native American Management Corp., Gary A. Melius,
            PRC-St. Regis, Inc. and Massena Management Corp. (18)

                                    F-56

<PAGE> 108
   10.15    Employment Agreement dated March 13, 1995, by and between the
            Company and John S. Aylsworth. (7)
   10.15.1  Option Agreement dated March 13, 1995, by and between Mr.
            Aylsworth and the Company. (9)
   10.15.2  Amended and Restated Employment Agreement, dated June 26, 1998 by
            by and between the Company and Mr. Aylsworth. (19)
   10.16    Promissory Note dated February 17, 1995, from BH Acquisition Corp.
            ("BHAC") to PRC Management. (9)
   10.16.1  Surety Agreement dated February 13, 1995, between Mr. Connelly
            and PRC Management. (9)
   10.16.2  Amended and Restated Promissory Note dated February 15, 1996, from
            BHAC to PRC Management. (10)
   10.16.3  Promissory Note dated February 15, 1996, from BHAC to PRC
            Management. (10)
   10.16.4  Amended and Restated Surety Agreement dated February 15, 1996,
            between Mr. Connelly and PRC Management. (10)
   10.16.5  Collateral Pledge Agreement dated February 15, 1996, between
            Connelly Hotel Associates, Inc. and PRC Management. (10)
   10.17    Employment Agreement dated November 1, 1995, by and between the
            Company and James A. Zweifel. (8)
   10.17.1  Amended and Restated Employment Agreement, dated June 26, 1998 by
            by and between the Company and Mr. Zweifel. (19)
   10.18    "Natatorium Site" Lease Agreement dated July 20, 1995, by and
            between the City of Davenport, Iowa and TCG through the President
            Iowa. (8)
   10.19    Independent Contractor Consulting Agreement dated May 15, 1996, by
            and between the Company and Mr. Wirginis. (10)
   10.19.1  Employment Agreement dated May 1, 1996, by and between the Company
            and Mr. Wirginis. (10)
   10.19.2  Amended and Restated Employment Agreement, dated June 26, 1998 by
            by and between the Company and Mr. Wirginis. (19)
 * 10.20    1998 Fiscal Year Management Incentive Plan Participant Form. (14)
   10.21    Promissory Note dated July 22, 1997, by and between President
            Broadwater Hotel, L.L.C. (Broadwater LLC) and Lehman Brothers
            Holdings Inc. ("Lehman"). (13)
   10.21.1  Redemption Agreement dated July 22, 1997, by and among J. Edward
            Connelly Associates, Inc. ("JECA") and Broadwater LLC and
            Broadwater Hotel, Inc. (13)
   10.21.2  Indemnity Agreement dated July 22, 1997, by Broadwater LLC, the
            Company and President Mississippi, jointly and severally, in favor
            of Lehman. (13)
   10.21.3  Indemnity and Guaranty Agreement dated July 22, 1997, by the
            Company and President Mississippi in favor of Lehman. (15)
   10.21.4  Unconditional Guaranty of Lease Obligations dated July 22, 1997,
            by the Company. (13)
   10.21.5  Amended and Restated Limited Liability Company Operating
            Agreement, dated as of July 22, 1997, by and between JECA and
            President Broadwater Hotel, Inc. (13)
   10.22    Public Trust Tidelands Lease Agreement dated August 6, 1992, by
            and between the Secretary of State, with the approval of the
            Governor, for and on behalf of the State of Mississippi, and BHAC.
            (21)
   10.22.1  Amendment to Public Trust Tidelands Lease Agreement dated November
            10, 1993, by and between the Secretary of State, with the approval
            of the Governor, for and on behalf of the State of Mississippi,
            and BHAC. (21)

                                    F-57

<PAGE> 109
   10.22.2  Amendment No. 1 to the Lessee's Assignment of Public Trust
            Tidelands Lease dated July 22, 1997, between JECA, successor by
            merger to BHAC, and President Broadwater Hotel, LLC. (21)
   10.23    Public Trust Tidelands Lease of Fast Lands dated December 31,
            1996, by and between the Secretary of State, with approval of the
            Governor, for and on behalf of the State of Mississippi, and BHAC.
            (21)
   10.23.1  Amendment No. 1 to the Lessee's Assignment of Fast Lands Lease
            dated July 22, 1997, between JECA, successor by merger to BHAC
            and President Broadwater Hotel, Inc. (21)
   10.24    Sale and Purchase of Real Estate Agreement dated March 30, 1999,
            by and among R. David Sanders, James W. Sanders, Julia Sheila
            Sanders and June Sanders Clement and President Casinos, Inc. (22)
   10.24.1  Deer Island Agreement dated March 30, 1999, by and between Eric
            Clark and President Casinos, Inc. (22)
   10.25    Relocation Funding Agreement entered into January 18, 2000, by and
            among the City of St. Louis, Missouri, the Port Authority of the
            City of St. Louis, President Missouri and Mercantile Bank National
            Association. (24)
   10.25.1  Lease and Sublease Agreement entered into January 18, 2000, among
            the City of St. Louis, the Port Authority of the City of St. Louis
            and President Missouri. (24)
   10.25.2  Escrow Agreement made as of January 18, 2000, by and among
            Mercantile Bank, President Missouri and U.S. Title Guaranty
            Company, Inc. (24)
   10.25.3  Escrow Agreement made as of January 18, 2000, by and among the
            Port Authority of the City of St. Louis, President Missouri and
            U.S. Title Guaranty Company, Inc. (24
   10.26    Agreement, dated as of October 10, 2000, entered into by and among
            the Company, PRC Holdings Corporation, PRC Management, PRCX, Inc.,
            President Philadelphia, P.R.C. Louisiana, Inc., Vegas Vegas, Inc.,
            President New York, President Mississippi Charter Corp.,
            President Missouri, President Mississippi, Broadwater Hotel, Inc.,
            President Iowa, Blackhawk, President Casino New Yorker, Inc.,
            TCG, and President Broadwater Hotel, LLC, and each of the
            undersigned holders of the US $100.0 million 13% Senior Notes, due
            September 15, 2001 issued pursuant to that certain indenture dated
            as of August 26, 1994 by and between the Company and United States
            Trust Company of New York, as trustee, of which  US $75.0 million
            in principal amount is outstanding, and holders of the US $25.0
            million 12% Notes, due September 15, 2001 issued pursuant to that
            certain indenture dated as of December 3, 1998, by and between the
            Company and U.S. Trust Company of Texas, N.A., as trustee. (25)
   10.27    Bareboat charter and purchase agreement, dated March, 29, 2001, by
            and between President New York and Southern Gaming, LLC. (27)
   10.28    Purchase agreement, dated April 30, 2001, by and between President
            Missouri and the Bi-State Development Agency of the Missouri-
            Illinois Metropolitan District. (27)
   21       Schedule of subsidiaries of the Company.
   23.1     Consent of Deloitte & Touche, L.L.P. with respect to the Company's
            Registration Statements on Form S-8, as filed on June 8, 1994,
            January 8, 1998 and October 10, 2001.
   99.1     Certification of Chief Executive Officer Pursuant to 18 U.S.C.
            Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-
            Oxley Act of 2002.

                                     F-58

<PAGE> 110

   99.2     Certification of Chief Financial Officer Pursuant to 18 U.S.C.
            Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-
            Oxley Act of 2002.

  __________________

(1)  Incorporated by reference from the Company's Registration Statement on
     Form S-1 (File No. 33-48446) filed on June 5, 1992.
(2)  Incorporated by reference from the Company's Registration Statement on
     Form S-1 (Registration No. 33-63174), filed on May 21, 1993.
(3)  Incorporated by reference from the Company's Annual Report on Form 10-K
     for the Fiscal Year Ended February 28, 1993 filed on June 1, 1993.
(4)  Incorporated by reference from the Company's Registration Statement on
     Form S-4 (File No. 33-71332) filed November 5, 1993.
(5)  Incorporated by reference from the Company's Registration Statement on
     Form S-8 dated June 8, 1994.
(6)  Incorporated by reference from the Company's Registration Statement on
     Form S-4 (File No. 33-86386) filed November 15, 1994.
(7)  Incorporated by reference from the Company's Report on Form 8-K dated
     March 16, 1995.
(8)  Incorporated by reference from the Company's Quarterly Report on Form
     10-Q for the quarterly period ended November 30, 1995 filed January 12,
     1996.
(9)  Incorporated by reference from the Company's Annual Report on Form 10-K
     for the Fiscal Year Ended February 28, 1995 filed on May 30, 1995.
(10) Incorporated by reference from the Company's Annual Report on Form 10-K
     for the Fiscal Year Ended February 29, 1996 filed on May 30, 1996.
(11) Incorporated by reference from the Company's Quarterly Report on Form
     10-Q for the quarterly period ended November 30, 1996 filed January 14,
     1997.
(12) Incorporated by reference from the Company's Annual Report on Form 10-K
     for the Fiscal Year Ended February 28, 1997 filed on May 30, 1997.
(13) Incorporated by reference from the Company's Report on Form 8-K dated
     July 24, 1997.
(14) Incorporated by reference from the Company's Quarterly Report on Form
     10-Q for the quarterly period ended August 31, 1997 filed October 10,
     1997.
(15) Incorporated by reference from the Company's Quarterly Report on Form
     10-Q for the quarterly period ended November 30, 1997 filed January 14,
     1998.
(16) Incorporated by reference from the Company's Definitive Proxy Statement
     for the 1997 Annual Meeting of Stockholders.
(17) Incorporated by reference from the Company's Registration Statement on
     Form 8-A dated December 5, 1997.
(18) Incorporated by reference from the Company's Annual Report on Form 10-K
     for fiscal year ended February 28, 1998 filed on May 29, 1998.
(19) Incorporated by reference from the Company's Quarterly Report on Form
     10-Q for the quarterly period ended August 31, 1998 filed October 15,
     1998.
(20) Incorporated by reference from the Company's Report on Form 8-K
     dated December 15, 1998.
(21) Incorporated by reference from the Company's Annual Report on Form 10-K
     for the Fiscal Year Ended February 28, 1999 filed on May 28, 1999.
(22) Incorporated by reference from the Company's Quarterly Report on Form
     10-Q for the quarterly period ended May 31, 1999 filed July 12, 1999.

                                    F-59

<PAGE> 111
(23) Incorporated by reference from the Company's Quarterly Report on Form
     10-Q for the quarterly period ended August 31, 1999 filed October 15,
     1999.
(24) Incorporated by reference from the Company's Annual Report on Form 10-K
     for the Fiscal Year Ended February 29, 2000 on May 30, 2000.
(25) Incorporated by reference from the Company's Quarterly Report on Form
     10-Q for the quarterly period ended August 31, 2000 filed October 19,
     2000.
(26) Incorporated by reference from the Company's Report on Form 8-K dated
     November 22, 2000.
(27) Incorporated by reference from the Company's Annual Report on Form 10-K
     for the Fiscal Year Ended February 28, 2001 on May 29, 2001.
(28) Incorporated by reference from the Company's Registration Statement on
     Form S-8 dated October 10, 2001.

 *   Compensatory plan filed as an exhibit pursuant to Item 14(c) of this
     report.

                                   F-60
<PAGE> 112
<Table>
<S><C>
                                          SIGNATURES

  Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly
authorized.

PRESIDENT CASINOS, INC.

By:     /s/ Ralph J. Vaclavik
    ---------------------------
    Name:   Ralph J. Vaclavik
    Title:  Senior Vice President
            and Chief Financial Officer

    Date:   May 28, 2003

  Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed
on this 28th day of May, 2003 by the following persons on behalf of the registrant in the
capacities indicated.

Signature                            Capacity
----------                           --------

  /s/ John E. Connelly              Chief Executive Officer, Chairman
--------------------------          and Director
John E. Connelly


  /s/ John S. Aylsworth             President, Chief Operating Officer
--------------------------          and Director
John S. Aylsworth


  /s/ Karl G. Andren                Director
--------------------------
Karl G. Andren


  /s/ Royal P. Walker, Jr.          Director
--------------------------
Royal P. Walker, Jr.


  /s/ Terrence L. Wirginis          Vice Chairman, Vice President and Director
--------------------------
Terrence L. Wirginis


  /s/ Ralph J. Vaclavik             Senior Vice President and
--------------------------          Chief Financial Officer
Ralph J. Vaclavik

</Table>

                                   F-61




<PAGE> 113
                                CERTIFICATION

I, John E. Connelly, certify that:

(1)  I have reviewed this annual report on Form 10-K of President Casinos,
     Inc.;

(2)  Based on my knowledge, this annual report does not contain any untrue
     statement of a material fact or omit to state a material fact necessary
     in order to make the statements made, in light of the circumstances
     under which such statements were made, not misleading with respect to
     the period covered by this annual report; and

(3)  Based on my knowledge, the financial statements, and other financial
     information included in this annual report, fairly present in all
     material respects the financial condition, results of operations and
     cash flows of the registrant as of, and for, the periods presented in
     this annual report.

(4) The registrant's other certifying officer and I are responsible for
    establishing and maintaining disclosure controls and procedures (as
    defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
    have:

    (a)  designed such disclosure controls and procedures to ensure that
         material information relating to the registrant, including its
         consolidated subsidiaries, is made known to us by others within
         those entities, particularly during the period for which this
         annual report is being prepared;

    (b)  evaluated the effectiveness of the registrant's disclosure controls
         as of a date within 90 days prior to the filing date of this
         annual report (the "Evaluation Date"); and

    (c)  presented in this annual report our conclusions about the
         effectiveness of the disclosure controls and procedures based on our
         evaluation as of the Effective Date;

(5)  The registrant's other certifying officer and I have disclosed, based
     on our most recent evaluation, to the registrant's auditors and the
     audit committee of the registrant's board of directors (or persons
     performing the equivalent function):

     (a)  all significant deficiencies in the design or operation of internal
          controls which could adversely affect the registrant's ability to
          record, process, summarize and report financial data and have
          identified for the registrant's auditors any material weaknesses in
          internal controls; and

     (b)  any fraud, whether or not material, that involves management or
          other employees who have a significant role in the registrant's
          internal controls; and

(6)  The registrant's other certifying officer and I have indicated in this
     annual report whether or not there were significant changes in
     internal controls or in other factors that could significantly affect

                                  F-62

<PAGE> 114
     internal controls subsequent to the date of our most recent evaluation,
     including any corrective actions with regard to significant deficiencies
     and material weaknesses.

Date: May 28, 2003                 /s/ John E. Connelly
                                   -------------------------------------------
                                    John E. Connelly
                                    Chief Executive Officer of
                                    President Casinos, Inc.

                                  F-63
<PAGE> 115
                                CERTIFICATION

I, Ralph J. Vaclavik, certify that:

(1)  I have reviewed this Annual Report on Form 10-K of President Casinos,
     Inc.;

(2)  Based on my knowledge, this annual report does not contain any untrue
     statement of a material fact or omit to state a material fact necessary
     in order to make the statements made, in light of the circumstances
     under which such statements were made, not misleading with respect to
     the period covered by this annual report; and

(3)  Based on my knowledge, the financial statements, and other financial
     information included in this annual report, fairly present in all
     material respects the financial condition, results of operations and
     cash flows of the registrant as of, and for, the periods presented in
     this annual report.

(4) The registrant's other certifying officer and I are responsible for
    establishing and maintaining disclosure controls and procedures (as
    defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
    have:

    (a)  designed such disclosure controls and procedures to ensure that
         material information relating to the registrant, including its
         consolidated subsidiaries, is made known to us by others within
         those entities, particularly during the period for which this
         annual report is being prepared;

    (b)  evaluated the effectiveness of the registrant's disclosure controls
         as of a date within 90 days prior to the filing date of this
         annual report (the "Evaluation Date"); and

    (c)  presented in this annual report our conclusions about the
         effectiveness of the disclosure controls and procedures based on our
         evaluation as of the Effective Date;

(5)  The registrant's other certifying officer and I have disclosed, based
     on our most recent evaluation, to the registrant's auditors and the
     audit committee of the registrant's board of directors (or persons
     performing the equivalent function):

    (a)  all significant deficiencies in the design or operation of internal
         controls which could adversely affect the registrant's ability to
         record, process, summarize and report financial data and have
         identified for the registrant's auditors any material weaknesses in
         internal controls; and

    (b)  any fraud, whether or not material, that involves management or
         other employees who have a significant role in the registrant's
         internal controls; and

(6)  The registrant's other certifying officer and I have indicated in this
     annual report whether or not there were significant changes in
     internal controls or in other factors that could significantly affect

                                 F-64

<PAGE> 116
     internal controls subsequent to the date of our most recent evaluation,
     including any corrective actions with regard to significant deficiencies
     and material weaknesses.

Date: May 28, 2003                 /s/ Ralph J. Vaclavik
                                   -------------------------------------------
                                    Ralph J. Vaclavik
                                    Chief Financial Officer of
                                    President Casinos, Inc.

                                   F-65