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UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

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FORM 10-K

|ý | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ------------------------------------------------------------------------------------

For the Fiscal Year Ended December 31, 2001

|o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ----------------------------------------------------------------------------------------

Commission file number 333-11811

ELDORADO RESORTS LLC
ELDORADO CAPITAL CORP.(Exact names of registrants as specified in their charters)

Nevada

88-0115550Nevada

88-0367075(State or Other Jurisdiction of
Incorporation or Organization)

(I.R.S. Employer
Identification No.)


345 North Virginia Street, Reno, Nevada 89501(Address of principal executive offices, including zip code)

(775) 786-5700(Registrants' 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: None

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

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

Aggregate
market value of the Registrants' voting stock held by non-affiliates of the Registrants: None

Number
of shares of common stock of Eldorado Capital Corp. outstanding at March 27, 2002: 2,500 Shares.

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PART I

Item 1.Business.

Introduction

Eldorado Resorts LLC, a Nevada limited liability company ("Resorts"), was formed to be the successor to Eldorado Hotel Associates Limited Partnership (the
"Predecessor Partnership") pursuant to an exchange of all of the then outstanding partnership interests in the Predecessor Partnership for membership interests in Resorts (the "Reorganization"). The
Reorganization was effective on July 1, 1996. Insofar as they relate to periods prior to the effective date of the Reorganization, references to Resorts are to the Predecessor Partnership
except to the extent the context requires otherwise. Eldorado Capital Corp., a Nevada corporation wholly-owned by Resorts ("Capital"), was incorporated with the sole purpose of serving as
co-issuer of $100,000,000 principal amount of 101/2% Senior Subordinated Notes due 2006 issued by Resorts and Capital on July 31, 1996. Accordingly, Capital holds no
significant assets and conducts no business activity. Resorts and Capital, together with Eldorado Limited Liability Company, a Nevada limited liability company which is 96% owned by Resorts ("ELLC"),
are collectively referred to as the "Company."

The
Company owns and operates the Eldorado Hotel & Casino (the "Eldorado"), a premier hotel/casino and entertainment facility in Reno, Nevada. The Company has established the
Eldorado as a luxury destination resort by creating a sophisticated, elegant atmosphere and providing unsurpassed personal service and cuisine, a dynamic gaming environment and a wide variety of
amenities attractive to multiple market segments. The Eldorado is centrally located in downtown Reno and is easily accessible both to vehicular traffic from Interstate 80, the principal highway
linking Reno to its primary visitor markets in northern California, and to pedestrian traffic from nearby casinos. In addition to owning the Eldorado, ELLC owns a 50% interest in a 50/50 joint venture
(the "Silver Legacy Joint Venture") which owns the Silver Legacy Resort Casino (the "Silver Legacy"), a major themed hotel/casino located adjacent to the Eldorado. The other partner in the Silver
Legacy Joint Venture is a wholly-owned subsidiary of Mandalay Resort Group ("Mandalay").

In
2000, Resorts acquired a 21.25% interest in Tamarack Junction, a small casino then being constructed in south Reno, which commenced operations September 4, 2001, and acquired
an interest in MindPlay LLC, which is developing a system that, if successfully completed, will permit tracking and surveillance of pit gaming operations. In January 2001, Resorts exercised
options to acquire an additional 15% interest in MindPlay LLC for a total interest of 19%. For additional information concerning these transactions see "Compensation Committee Interlocks and Insider
Participation" in Item 11 of this report and Item 13 of this report.

Business Strategy

The Company has a broad experienced management team that includes, among others, Donald Carano and several members of his immediate family. Donald Carano, the
Chief Executive Officer and a member of the Board of Managers of Resorts, co-founded the Eldorado in 1973 and has been the driving force behind its development. In addition to Donald
Carano, each of the Company's other seven senior executives has in excess of 10 years of operating experience in the gaming industry. Management believes that its family-oriented,
hands-on approach has enabled the Company to operate the Eldorado successfully for over twenty-five years. In addition to their roles in management of the Company, members of
the Carano family beneficially own 63% of Resorts.

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The
Company's business strategy draws upon its extensive gaming management experience gained from successfully operating the Eldorado. Key elements of the Company's strategy include the
following:

Unsurpassed Personal Service and High Quality Amenities.One of the cornerstones of the Company's business strategy is to
provide its customers with an extraordinary level of personal service. The Company's senior management is actively involved in the daily operations of the Eldorado, frequently interacting with hotel,
restaurant and gaming patrons to ensure that they are receiving the highest level of personal attention. Management believes that extraordinary personal service is an integral part of fostering
customer loyalty and generating repeat business. Management regularly conducts feedback sessions and focus groups with customers to elicit comments and suggestions on ways it can improve each
customer's experience at the Eldorado. Additionally, management personally responds to suggestions made on comment cards placed in each of the Eldorado's hotel rooms. Furthermore, management
continually strives to instill in each employee a dedication to superior service designed to exceed guests' expectations.

In
addition to personalized service, the Eldorado has earned a reputation for high quality amenities and an excellent price-to-value relationship. Locals and
visitors alike are attracted to the Eldorado's selection of dining venues and exceptional food quality, for which the Eldorado has received national recognition. Management believes that the
Eldorado's excellent cuisine adds to the overall atmosphere
and prestige of the hotel and therefore emphasizes outstanding food and ambiance and a wide variety of dining choices.

The
Eldorado continually monitors its casino operations to react to changing market conditions and customer demands. The Company targets premium-play customers as well as the
value-conscious gaming patron with its state-of-the-art casino featuring the latest in game technology, electronic displays and customer-convenient features.

Marketing to Target Gaming Patrons.The Company primarily targets its marketing programs to four segments of the gaming
market: the free and independent traveler, preferred casino customers, local patrons and the wholesale/specialty groups.

The
free and independent traveler segment consists of those travelers not affiliated with groups who make their reservations directly with the Eldorado or through independent travel
agents. To attract the independent traveler, the Company uses print media, radio, television and direct mail to advertise in northern California, the Pacific Northwest and other regional travel
markets.

Preferred
casino customers are those patrons who maintain the necessary gaming criteria to become established casino guests. The Company uses a broad special events agenda and an
extensive guest development program, including providing casino credit, to attract and retain preferred casino customers. In addition, the Company utilizes its quality hotel rooms, excellent
restaurant venues and other amenities to offer complimentaries to a broad spectrum of established casino guests, from the frequent players who place relatively modest wagers to the true premium
players who consistently wager high amounts. The Company believes that the ability to reward the more modest gaming patrons fosters intense loyalty and repeat business.

Wholesale/specialty
groups consist of those customers participating in travel packages offered by air tour operators, groups of up to 100 people with strong gaming profiles and visitors
attending tournaments at the National Bowling Stadium. The Eldorado sales force targets this segment by attending trade shows in order to establish relationships with airlines, travel agents, meeting
planners and wholesalers. The Eldorado has developed special marketing programs and tools to cultivate relationships with these air tour operators and specialty groups, including offering
familiarization tours of the Eldorado. The Eldorado attempts to utilize this market segment as a means of creating a consistent utilization of its rooms during the calendar year.

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The
Eldorado has a state-of-the-art, real-time customer tracking system which comprehensively tracks its gaming customers throughout the
casino. Customers are given an electronically readable card to insert into slot machines and to provide to floor supervisors at table games. The slot machines automatically
transmit gaming data to a central computer and floor supervisors manually enter certain data relating to gaming customers which is then computerized. The system enables the Eldorado to obtain
up-to-the-minute information on a customer's gaming habits, maximum and minimum wagers, the total amount wagered and length of play. The Eldorado can thereby ensure
that customers receive prompt recognition and complimentaries based on their levels of gaming. This innovation is enhanced by a friendly, knowledgeable staff and a conveniently located promotion
center. In addition, "Club Eldorado," the casino's full-service slot club, offers an array of special events and exciting tournaments and convenient ways of earning complimentaries.

The
cost incurred by the Company for advertising in 2001 was $3,946,000 compared with $4,523,000 in 2000.

Strategic Expansion and Improvements.Since opening the Eldorado in 1973, the Company has employed a strategy of periodic
expansion and improvement in order to maintain and enhance its position as a leader in the Reno market. Continuing this strategy, the Company has undertaken a number of improvements over the past five
years. In May 1997, the Eldorado opened a state-of-the-art 566-seat showroom which added an entertainment experience that management believes
attracts a larger and broader audience of entertainment seekers. The showroom features the only nightly production show of its kind in downtown Reno. In addition, the Company opened a new VIP Lounge
in December 1997, offering a relaxing atmosphere, including a complimentary full service bar and VIP room registration for preferred casino customers. In 1998, the Eldorado opened a new slot
area across from the property's microbrewery,The Brew Brothers,and a portion ofChoices Restaurantwas
enclosed and remodeled into a 78-seat Asian cuisine restaurant, theGolden Fortune. In December 1999 the Eldorado opened the BuBinga Lounge,a
sophisticated intimate nightclub, featuring live music, a dance floor, a cigar room and two themed bars, all presented in an elegant
atmosphere. In 2000,Choices Restaurantwas remodeled adding a sushi bar and Reno's first Dim Sum kitchen. In December 2000, two retail outlets
across fromThe Brew Brotherswere removed and additional slot machines were added.

The
Company owns a 31,000 square foot piece of property across the street from and west of the Eldorado which could be used for further expansion of the Eldorado, although there are no
immediate plans for the development of this site.

Eldorado Hotel & Casino

The Eldorado is centrally positioned in the heart of Reno's prime gaming area and room base. Easily accessible to both foot and vehicular traffic, the Eldorado is
strategically located directly off Interstate 80, the principal highway linking the Reno market with San Francisco, Sacramento and other cities in its primary visitor market of northern California.
With three towers, including a 26-story tower that lights up with over 2,000 feet of neon at night, the Eldorado is visible from Interstate 80, attracting visitors to the downtown area and
generating interest in the property. Management believes the Eldorado serves as a downtown landmark, situated to attract a large volume of foot traffic from other casinos as well as from the local
populace. In addition, the Eldorado is easily accessible to visitors competing in and attending the various bowling tournaments that are held in the National Bowling Stadium, which is located just one
block away.

As
of December 31, 2001, the Eldorado offered approximately 84,000 square feet of gaming space, with approximately 1,826 slot machines, 78 table games consisting of blackjack,
craps, roulette, Pai Gow Poker, Let It Ride®, Caribbean stud poker, mini-baccarat, two keno games and a poker room. The Eldorado's casino includes a mix of slot machines and
table games which management believes makes

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it attractive to both middle-income and premium-play customers. Slot machines, which are offered in denominations from 1 cent to $100, generated approximately 68% of the Eldorado's total
gaming revenues in 2001. A diverse selection of table games and a variety of table limits allow play from a wide range of gaming customers, which management believes makes the Eldorado one of the
premier table games casinos in the Reno market.

The
interior of the hotel is designed to create a European ambiance and offers 816 finely-appointed rooms and suites, including 18 specialty suites, 93 "Eldorado Player's Spa Suites"
with bedside spas and 26 one-bedroom and two-bedroom penthouse suites. Hotel guests enjoy panoramic views of Reno's skyline and the majestic Sierra Nevada mountain range.
Management believes that attention to detail, decor and architecture have created an identifiable and innovative presence in the Reno market for the Eldorado. In 2001 and 2000, the Eldorado achieved a
89.6% and 91.7% average hotel occupancy rate at an Average Daily Rate ("ADR") of approximately $59 in both 2001 and 2000, respectively.

The
Eldorado is nationally recognized for its exceptional cuisine. Management believes that the Eldorado's superior cuisine and wide-ranging selection of dining opportunities
are crucial factors in attracting and retaining customers. All of the Eldorado's dining venues, which range from buffet to gourmet, offer high quality food at reasonable prices. The following chart
details the Eldorado's dining venues, their respective seating capacities and their outstanding attributes, including the awards and distinctions each has received.

ELDORADO RESTAURANTS

|Dining Venue      |  | Seating
Capacity |  | Description
|----------------- |  | ---------------- |  | -----------
|Roxy              |  | 190              |  |           
|                  |  |                  |  |           
|                  |  |                  |  |           
|                  |  |                  |  |           
|                  |  |                  |  |           
|                  |  |                  |  |           
|La Strada         |  | 172              |  |           
|                  |  |                  |  |           
|                  |  |                  |  |           
|The Brew Brothers |  | 160              |  |           
|                  |  |                  |  |           
|                  |  |                  |  |           
|                  |  |                  |  |           

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|                     |  |     |  |  |  | Named area's best saloon inNevadamagazine's Best of Nevada Poll 1999, 2000 and 2001                                                                                                                
|-------------------- |  | --- |  | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|The Prime Rib Grill  |  | 214 |  |  |  | A spirited, lively steak and seafood house specializing in prime rib and grilled entrees                                                                                                           
|                     |  |     |  |  |  | Offers top quality USDA choice cuts of beef and fresh seafood and a "never ending" salad and fruit bar with homemade soups                                                                         
|Chefs' Buffet        |  | 516 |  |  |  | A 220-foot buffet offering a variety of cuisine, including American, Italian, Chinese, Mexican, a pizza station, omelet station and a salad, fruit and ice cream bar and a daily Mongolian barbecue
|                     |  |     |  |  |  | Features specialty nights including a Friday night seafood buffet                                                                                                                                  
|                     |  |     |  |  |  | Serves food fresh from Eldorado's own bakery, butcher shop, pasta shop and gelato factory                                                                                                          
|                     |  |     |  |  |  | NamedBest BuffetbyCasino Playermagazine 2000                                                                                                                                                       
|Tivoli Gardens       |  | 223 |  |  |  | A 24-hour restaurant with a menu featuring Asian, Italian, Mexican and South American cuisines                                                                                                     
|                     |  |     |  |  |  | Features the Eldorado Coffee Company, where fresh coffee beans are roasted each day for use throughout the hotel and for retail purchase                                                           
|Choices Express Cafe |  | 207 |  |  |  | A food court offering a variety of American and Italian specialties and authentic Chinese food                                                                                                     
|                     |  |     |  |  |  | Features Reno's first Dim Sum kitchen and sushi bar                                                                                                                                                
|Golden Fortune       |  | 78  |  |  |  | Authentic Hong Kong style cuisine offering 90 specialties in a classic Chinese setting featuring hand blown and stained glass imported from China                                                  
|                     |  |     |  |  |  | NamedBest Chinese RestaurantbyCasino Playermagazine 2001                                                                                                                                           

The
Eldorado's selection of high-quality food and beverages reflects the Carano family's emphasis on the dining experience. Eldorado chefs utilize homemade pasta, carefully
chosen imported ingredients, fresh seafood and top quality USDA choice cuts of beef. Throughout the property, beverage offerings includeThe Brew
Brothersmicrobrewed beers and wines from the Ferrari Carano Winery.

The
Eldorado features a 566-seat showroom, theBuBinga Lounge, which is an intimate nightclub, and a VIP lounge. Other
amenities offered by the Eldorado include retail shops, a versatile 12,400 square foot convention center and an outdoor plaza located diagonal to the Eldorado which hosts a variety of special events.
The Eldorado has parking facilities for over 1,000 vehicles including a 656-space self-park garage and a 369-space valet parking facility.

Silver Legacy Resort Casino

The Silver Legacy opened in July 1995 as the first major newly-constructed hotel/casino in the Reno market since 1978 and its first themed
mega-resort. Plans for the Silver Legacy were originally formulated in 1993 by the Company and Mandalay, who jointly recognized the potential synergies of constructing a new hotel/casino
in between the Eldorado and Mandalay's property, Circus Circus-Reno.

The
Silver Legacy's design is inspired by Nevada's rich mining heritage and the legend of Sam Fairchild, a fictitious silver baron who "struck it rich" on the site of the casino. Silver
Legacy's hotel, the tallest building in northern Nevada, is a "Y"-shaped structure with three wings, consisting of 37-,

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34- and 31-floor tiers. Silver Legacy's opulent interior showcases a casino built around Sam Fairchild's famed 120-foot tall mining rig, which appears to mine for
silver. The rig is situated beneath a 180-foot diameter dome, which is a distinctive landmark on the Reno skyline. The interior surface of the dome features dynamic sound and laser light
shows, providing visitors with a unique experience when they are in the casino. The Company's management believes that the Silver Legacy is a "must see" attraction for visitors to the Reno market.

The
Silver Legacy is situated on two city blocks, encompassing 240,000 square feet in downtown Reno. The hotel currently offers 1,710 guest rooms, including 145 player spa suites and
eight penthouse suites. Many of the Silver Legacy's guest rooms feature views of Reno's skyline and the Sierra Nevada
mountain range. The Silver Legacy's 10-story parking facility can accommodate approximately 1,800 vehicles. At December 31, 2001, the Silver Legacy's casino featured approximately
87,300 square feet of gaming space and contained 2,112 slot machines and 82 table games, including blackjack, craps, roulette, Pai Gow Poker, Let It Ride®, Caribbean stud poker, Baccarat
and Pai Gow, a keno lounge and a race and sports book. "Club Legacy," the Silver Legacy's slot club, offers customers exciting special events and tournaments and convenient ways of earning
complimentaries.

The
Silver Legacy's dining options incorporate fine dining and casual elegance in six venues:



In
addition, the hotel sponsors entertainment events which are held in the hotel's convention area. The Silver Legacy's other amenities include custom retail shops, exercise facilities,
a beauty salon and an outdoor swimming pool and sundeck, as well as a video arcade.

The
Eldorado, Silver Legacy, and Circus Circus-Reno properties are connected in a "seamless" manner by 200-foot wide skyway corridors. These enclosed corridors
serve as entertainment bridgeways between the three properties and house several restaurants and custom retail shops. The Eldorado, Silver Legacy and Circus Circus-Reno comprise the heart
of the Reno market's prime gaming area and room base, providing the most extensive and the broadest variety of gaming, entertainment, lodging and dining amenities in the Reno area, with an aggregate
of 4,099 rooms, 20 restaurants and enough parking to accommodate over 6,000 vehicles, and as of December 31, 2001, approximately 5,534 slot
machines and 233 table games. The Company's management believes that the centralized location and critical mass of these three properties, together with the ease of access between the facilities,
provide the Eldorado with significant advantages over other freestanding hotel/casinos in the Reno market.

Silver Legacy Joint Venture

Background.The Silver Legacy was developed by the Silver Legacy Joint Venture, which was formed
pursuant to the Agreement of Joint Venture of Circus and Eldorado Joint Venture dated as of March 1, 1994 (the "Original Joint Venture Agreement"), between ELLC and Galleon, Inc.
("Mandalay Sub"). Under the terms of the Original Joint Venture Agreement, ELLC and Mandalay

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Sub (each a "Partner" and, together, the "Partners") each acquired a 50% interest in the Silver Legacy Joint Venture (each Partner's "Percentage Interest"). Each of the Partners was obligated to
contribute cash or property to the Silver Legacy Joint Venture with a value approximating 15% of the total budgeted cost for developing and constructing the Silver Legacy. To satisfy their respective
obligations, ELLC contributed the land on which the Silver Legacy was constructed, at an agreed value of $25 million, and $26.9 million in cash, and Mandalay Sub contributed
$51.9 million in cash. Until March 5, 2002, when the Original Joint Venture Agreement was amended and restated, as described below, additional capital contributions in proportion to each
Partner's Percentage Interest could be required by Silver Legacy Joint Venture's managing partner, Mandalay Sub, to defray any net loss (not including depreciation and amortization expenses) incurred
by the Silver Legacy Joint Venture. In addition, pursuant to the Original Joint Venture Agreement, Mandalay Sub's parent corporation, Mandalay Resort Group, provided certain loans to the Silver Legacy
Joint Venture relating to the development and construction of the Silver Legacy (the remaining balance of which was repaid in 1997) and also provided credit support for a $230 million credit
agreement originally entered into by the Silver Legacy Joint Venture on May 30, 1995 (the "Original Silver Legacy Credit Agreement") to fund the balance of the Silver Legacy's development and
construction costs. In return, Mandalay Resort Group received from the Silver Legacy Joint Venture an annual fee equal to 1.5% of the average outstanding principal balance of such financing until
March 5, 2002. The Original Silver Legacy Credit Agreement, as amended and restated, was secured by a deed of trust on the Silver Legacy and by security interests in substantially all of the
other assets of the Silver Legacy Joint Venture. Under the terms of the Original Silver Legacy Credit Agreement, the borrowing limit ($157.0 million at December 31, 2001) was subject to
scheduled reductions, adjustable ratably for any voluntary permanent reductions (with the next such reduction being due on March 31, 2002), of $5.5 million quarterly through
December 31, 2002, $6 million on March 31, 2003, and balance on June 30, 2003 when any indebtedness then outstanding under the Original Silver Legacy Credit Agreement would
have been due and payable. As of December 31, 2001, the assets of the Silver Legacy Joint Venture, including the Silver Legacy, were subject to encumbrances securing the repayment of
indebtedness in the principal amount of $145 million (representing the principal amount then outstanding under the Original Silver Legacy Credit Agreement) plus accrued interest of $130,000.

On
March 5, 2002, the Partners executed a new amendment and restatement of the Original Joint Venture Agreement (the "New Joint Venture Agreement"), the terms of which are
summarized below,
and the Silver Legacy Joint Venture and its wholly-owned finance subsidiary, Silver Legacy Capital Corp., issued $160 million principal amount of 101/8% mortgage notes due 2012
(the "Silver Legacy Notes"). Concurrently with the issuance of the Silver Legacy Notes, the Silver Legacy Joint Venture (i) repaid the entire outstanding balance of the Original Silver Legacy
Credit Agreement, (ii) entered into a new senior secured credit facility comprised of a $20.0 million term loan facility that will amortize over a period of five years and a
$20.0 million revolving facility with a five year maturity (the "New Silver Legacy Credit Agreement"), and (iii) made distributions of $10 million to ELLC and $20 million
to Mandalay Sub, utilizing the balance of the net proceeds of the Silver Legacy Notes and $26.0 million of borrowings under the New Silver Legacy Credit Agreement. The New Silver Legacy Credit
Agreement is secured by a first priority security interest in substantially all of the existing and future assets (other than certain licenses which may not be pledged under applicable law) and the
Silver Legacy Notes are secured by a security interest in the same assets which is junior to the security interest securing the New Silver Legacy Credit Agreement.

Silver Legacy Joint Venture Agreement.The following is a summary of the New Joint Venture Agreement.
The summary is qualified in its entirety by reference to the New Joint Venture Agreement, a copy of which is included as Exhibit 10.1.2 to this report.

Additional Capital Contributions.The New Joint Venture Agreement provides that the Partners shall not be permitted or
required to contribute additional capital to the Silver Legacy Joint Venture

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without the consent of both Partners, which consent may be given or withheld in each Partner's sole and absolute discretion.

Partnership Distributions.Subject to any contractual restrictions to which the Silver Legacy Joint Venture is subject and
prior to the occurrence of a "Liquidating Event," the Silver Legacy Joint Venture will be required by the New Joint Venture Agreement to make distributions to its Partners as follows:



As
defined in the New Joint Venture Agreement, the term "Net Cash From Operations" means the gross cash proceeds received by the Silver Legacy Joint Venture, less the following amounts:
(i) cash operating expenses and payments of other expenses and obligations of the Silver Legacy Joint Venture, including interest and scheduled principal payments on Silver Legacy Joint Venture
indebtedness, including indebtedness owed to the Partners, if any, (ii) all capital expenditures made by the Silver Legacy Joint Venture, and (iii) such reasonable reserves as the
Partners deem necessary in good faith and in the best interests of the Silver Legacy Joint Venture to meet anticipated future obligations and liabilities of the Silver Legacy Joint Venture (less any
release of reserves previously established, as similarly determined).

The Managing Partner.The New Joint Venture Agreement designates Mandalay Sub as the managing partner with responsibility and
authority for the daytoday management of the business affairs of the Silver Legacy Joint Venture, including overseeing the daytoday operations of
the Silver Legacy and other Silver Legacy Joint Venture business, preparation of the Silver Legacy Joint Venture's budgets, implementation of the decisions made by the Partners and the preparation and
submission of the Silver Legacy Joint Venture's annual business plan for review and approval by the Silver Legacy Joint Venture's executive committee.

The
New Joint Venture Agreement also provides that the managing partner shall appoint the general manager and the other principal senior management of the Silver Legacy Joint Venture and
Silver Legacy, who shall perform such functions, duties, and responsibilities as the managing partner may assign, and shall serve at the direction and pleasure of the managing partner. Until the
execution of the New Joint Venture Agreement, ELLC selected the general manager and Mandalay Sub was entitled to receive a priority allocation which began May 1, 1997.

The
New Joint Venture Agreement provides that the unanimous approval of both Partners is required for certain actions, including the admission of an additional partner, the purchase of
additional real property, encumbrances on Silver Legacy, sales or other dispositions of all or substantially all of the assets of the Silver Legacy Joint Venture, refinancing or incurrence of

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indebtedness involving in excess of $250,000 other than in the ordinary course of business, capital improvements involving more than $250,000 that are not included in an approved annual business
plan, and any obligation, contract, agreement, or commitment with a partner or an affiliate of a partner which is not specifically permitted by the New Joint Venture Agreement.

Replacement of the Managing Partner.If the actual net operating results of the business of the Silver Legacy Joint Venture
for any four consecutive quarters are less than 80% of the projected amount as
set forth in the Silver Legacy Joint Venture's annual business plan, after appropriate adjustments for factors affecting similar business in the vicinity of the Silver Legacy, ELLC may require
Mandalay Sub to resign from its position as managing partner.

In
addition, in the event Mandalay Sub resigns as managing partner, ELLC will have the right and option to become the managing partner of the Silver Legacy Joint Venture and assume all
the obligations of the managing partner under the New Joint Venture Agreement, or the Partners are required to attempt to appoint a third party to manage the daytoday
business affairs of the Silver Legacy Joint Venture. In such event, if the Partners are unable to agree on a manager, then the Silver Legacy Joint Venture shall be dissolved and liquidated in
accordance with the provisions of the New Joint Venture Agreement.

The Executive Committee.An executive committee of the Silver Legacy Joint Venture is authorized to review, monitor and
oversee the performance of the management of the Silver Legacy. The executive committee consists of five members, with three members appointed by the managing partner and two members appointed by the
other Partner. In the event that neither of the Partners is the managing partner, then the executive committee will consist of five members, with two members appointed by each Partner and a fifth
member appointed by a third party manager selected by the Partners. All actions of the executive committee must be approved by a majority of all of the members of the executive committee. The current
members of the executive committee are Stephen J. Greathouse, Thomas D. Robinson and Yvette E. Landau, each of whom was appointed by Mandalay Sub, and Robert M. Jones and Gene Carano, each of whom was
appointed by ELLC.

Subject
to the requirement of unanimous approval of the Partners for certain actions, the duties of the executive committee include, but are not limited to, (i) reviewing,
adjusting, approving, developing, and supervising the Silver Legacy Joint Venture's annual business plan, (ii) reviewing and approving the terms of any loans made to the Silver Legacy Joint
Venture, (iii) approving all material purchases, sales, leases or other dispositions of the Silver Legacy Joint Venture's property, other than in the ordinary course of business, and
(iv) approving the appointment of the Silver Legacy Joint Venture's general manager, who is the Silver Legacy Joint Venture's chief executive officer, and the controller, who is the Silver
Legacy Joint Venture's chief financial and accounting officer, and determining the compensation of the general manager and the controller.

Transfer of Partnership Interests.Except as expressly permitted by the New Joint Venture Agreement, neither Partner may
transfer all or any portion of its interest in the Silver Legacy Joint Venture or any rights therein without the unanimous consent of both Partners. The New Joint Venture Agreement provides that a
Partner may transfer or convey all or any portion of its interest in the Silver Legacy Joint Venture to an affiliate of such Partner (subject to certain limitations), members of the Partner's family
(which includes the Partner's spouse, natural or adoptive lineal descendants, and trusts for their benefit), another Partner, a personal representative of the Partner or any person or entity approved
by the unanimous consent of the Partners.

Unless
otherwise agreed by Mandalay Sub, Donald L. Carano or a member of his immediate family acceptable to Mandalay Sub, which acceptance may not be unreasonably withheld, or an
affiliate
controlled by Donald L. Carano or a member of his immediate family acceptable to Mandalay Sub, which acceptance may not be unreasonably withheld, is required to be the manager of and control

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ELLC (or, if applicable, any entity that is a permitted transferee and to which ELLC has transferred its interest in the Silver Legacy Joint Venture). Unless otherwise agreed by ELLC, which may not
be unreasonably withheld, Mandalay Sub (or, if applicable, any entity that is a permitted transferee and to which Mandalay Sub has transferred its interest in the Silver Legacy Joint Venture) is
required to be controlled by Mandalay Resort Group. In the event the limitation in this paragraph with respect to either Partner is breached, the other Partner will have the right (but not be
required) to exercise the buy-sell provisions described below.

Limitation on Partners' Actions.The New Joint Venture Agreement includes each Partner's covenant and agreement not to
(i) take any action to require partition or to compel any sale with respect to its Silver Legacy Joint Venture interest, (ii) take any action to file a certificate of dissolution
or its equivalent with respect to itself, (iii) take any action that would cause a bankruptcy of such Partner, (iv) withdraw or attempt to withdraw from the Silver Legacy Joint Venture,
(v) exercise any power under the Nevada Uniform Partnership Act to dissolve the Silver Legacy Joint Venture, (vi) transfer all or any portion of its interest in the Silver Legacy Joint
Venture (other than as permitted hereunder), (vii) petition for judicial dissolution of the Silver Legacy Joint Venture, or (viii) demand a return of such Partner's contributions or
profits (or a bond or other security for the return of such contributions or profits) without the unanimous consent of the Partners. The New Joint Venture Agreement also provides that if a Partner
attempts to (A) cause a partition or (B) withdraw from the Silver Legacy Joint Venture or dissolve the Silver Legacy Joint Venture, or otherwise take any action in breach of its
aforementioned agreements, the Silver Legacy Joint Venture shall continue and (1) the breaching Partner shall immediately cease to have the authority to act as a Partner, (2) the other
Partner shall have the right (but shall not be obligated unless it was so obligated prior to such breach) to manage the affairs of the Silver Legacy Joint Venture, (3) the breaching Partner
shall be liable in damages, without requirement of a prior accounting, to the Silver Legacy Joint Venture for all costs and liabilities that the Silver Legacy Joint Venture or any Partner may incur as
a result of such breach, (4) distributions to the breaching Partner shall be reduced to 75% of the distributions otherwise payable to the breaching Partner and (5) the breaching Partner
shall continue to be liable to the Silver Legacy Joint Venture for any obligations of the Silver Legacy Joint Venture pursuant to the New Joint Venture Agreement, and to be jointly and severally
liable with the other Partners for any debts and liabilities (whether actual or contingent, known or unknown) of the Silver Legacy Joint Venture existing at the time the breaching Partner withdraws or
dissolves.

Buy-Sell ProvisionAt any time on or after July 1, 2005 either Partner (provided such Partner is not in default of any
of the provisions of the New Joint Venture Agreement) may make an offer to purchase ("Offer") the interest of the other Partner, which will constitute an irrevocable offer by the Partner giving the
Offer either to (i) purchase all, but not less than all, of the interest in the Silver Legacy Joint Venture of the other Partner free of liens and encumbrances for the amount specified in the
Offer (the "Sales Price"), or (ii) sell all, but not less than all, of its interest in the Silver Legacy Joint Venture free of liens and encumbrances to the other Partner for the amount
specified in the Offer (the "Purchase Price"). The Partner receiving an Offer will have a period of two months to accept the Offer to sell at the Sales Price or, in the alternative, to require that
the offering Partner sell its interest to the other Partner at the Purchase Price. The closing of the transaction for the sale or purchase of the Silver Legacy Joint Venture interest shall occur not
later than six months after the notice of election or at such other time as may be required by the Nevada Gaming Authorities. Subject to any agreements to
which the Silver Legacy Joint Venture is a party, the Partner purchasing the Silver Legacy Joint Venture interest (the "Purchasing Partner") shall be entitled to encumber the Silver Legacy Joint
Venture property in order to finance the purchase, provided that the other Partner (the "Selling Partner") will have no liability, contingent or otherwise, under such financing. The Purchasing Partner
may assign all or part of its right to purchase the Silver Legacy Joint Venture interest of the Selling Partner to an affiliate of the Purchasing Partner, provided that no such assignment relieves the
Purchasing Partner of its obligations in the event of a default by the affiliate.

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Dissolution, Winding Up and Liquidation.The New Joint Venture Agreement provides that the Silver Legacy Joint Venture shall
dissolve and commence winding up and liquidating upon the first to occur of any of (i) January 1, 2053, (ii) the sale of all or substantially all of the Silver Legacy Joint
Venture property, (iii) the unanimous vote of the Partners to dissolve, wind up, and liquidate the Silver Legacy Joint Venture, (iv) the happening of any other event that makes it
unlawful or impossible to carry on the business of the Silver Legacy Joint Venture, (v) the occurrence of an Event of Bankruptcy (as defined the New Joint Venture Agreement) of a Partner, or
(vi) the Partners are unable to agree upon a replacement managing partner as provided in the New Joint Venture Agreement (each, a "Liquidating Event").

The
New Joint Venture Agreement also includes the Partners' agreement that the Silver Legacy Joint Venture shall not dissolve prior to the occurrence of a Liquidating Event,
notwithstanding any provision of the Nevada Uniform Partnership Act to the contrary. If it is determined by a court of competent jurisdiction that the Silver Legacy Joint Venture has dissolved prior
to the occurrence of a Liquidating Event, the Partners have agreed to continue the business of the Silver Legacy Joint Venture without a winding up or liquidation.

Upon
the occurrence of a Liquidating Event, the Silver Legacy Joint Venture will continue solely for the purpose of winding up its affairs in an orderly manner, liquidating its assets,
and satisfying the claims of its creditors and Partners. The managing partner will be responsible for overseeing the winding up and liquidation of the Silver Legacy Joint Venture, taking full account
of the Silver Legacy Joint Venture's liabilities and assets, causing the assets to be liquidated as promptly as is consistent with obtaining the fair market value thereof, and causing the proceeds
therefrom, to the extent sufficient therefor, to be applied and distributed (i) first, to the payment and discharge of all of the Silver Legacy Joint Venture's debts and liabilities to
creditors other than Partners, (ii) second, to the payment and discharge of all of the Silver Legacy Joint Venture's debts and liabilities to Partners, and (iii) the balance, if any, to
the Partners in the amount of their respective capital accounts, after giving effect to all contributions, distributions, and allocations for all periods or portions thereof.

Potential Amendments to the New Joint Venture Agreement.The New Joint Venture Agreement may be amended by the written
agreement of both Partners. The Partners have engaged in discussions regarding potential amendments to the New Joint Venture Agreement that would alter the relative levels of control that the Partners
are able to exercise over the operations of the Silver Legacy Joint Venture. We anticipate that the overall impact of any such amendments would be to enhance ELLC's
role relative to that of Mandalay Sub. We cannot be certain if or when any such amendments will be agreed upon by the Partners.

Reno Market

The Reno market, one of the larger gaming markets in the United States, generated approximately $1.0 billion of gaming revenues in 2001. The opening of the
Silver Legacy in 1995 represented an approximately 13% increase in the number of hotel rooms and an approximately 10% increase in the number of gaming positions in the Reno market. As of
December 31, 2001, the Reno market featured approximately 15,459 hotel rooms, 23,386 slot machines and 676 table games. For the twelve months ended December 31, 2001, the Reno market had
an estimated 76.9% average hotel occupancy rate.

Reno
is the second largest metropolitan area in Nevada, with a population of approximately 340,000 according to the most recently available U.S. Census data, and is located at the base
of the Sierra Nevada Mountains along Interstate 80, approximately 135 miles east of Sacramento, California and 225 miles east of San Francisco, California. Reno is a destination resort market that
primarily attracts "drive-in" visitors by offering gaming as well as numerous other summer and winter recreational activities. In addition to gaming, the Reno area features numerous
national forests, mountains and lakes (including Lake Tahoe) and offers outstanding year-round opportunities for

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outdoor activities of all types. Management believes that approximately two-thirds of visitors to the Reno market arrive by some form of ground transportation. The Reno area enjoys
relatively mild weather, with abundant sunshine throughout the year and low humidity. Reno's annual snowfall is modest, although heavier snowfall in the mountain passes around Reno can obstruct
traffic to Reno. Special annual events in the Reno area include Hot August Nights, the National Championship Air Races, the Reno Balloon Races, Street Vibrations, the Reno/Tahoe Open PGA golf
tournament and the Reno Rodeo. According to the Reno-Sparks Convention and Visitors Authority (the "Visitors Authority"), the greater Reno area attracted an estimated 5.2 million
visitors for the twelve months ended June 30, 2001 and 2000.

The
following table sets forth certain statistical information for the Reno market for the years 1997 through 2001 as reported by the Visitors Authority, the Nevada State Gaming Control
Board and Reno/Tahoe International Airport.

|                                 |  | The Reno Market |          
|-------------------------------- |  | --------------- | ---------
|
|Gaming Revenues (000's)(1)       |  | $               | 901,989  
|Gaming Positions(2)(3)           |  |                 | 31,762   
|Hotel Rooms(2)                   |  |                 | 15,773   
|Average Hotel Occupancy Rate(1)  |  |                 | 80.3     
|Airline Passenger Arrivals(1)(4) |  |                 | 3,503,112
|Visitors(5)                      |  |                 | 5,155,649

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The
National Bowling Stadium, located approximately one block from the Eldorado and Silver Legacy, opened in February 1995 at a reported cost of approximately $48 million.
The state-of-the-art facility, which features 80 bowling lanes, has been selected to host tournaments for the American Bowling Congress (the "ABC") and the Women's
International Bowling Congress (the "WIBC") through 2009 and is expected to host many other tournaments for other bowling organizations. The National Bowling Stadium was the site of the WIBC's
National Championship Bowling Tournament in 1997 and 2000 and has been selected as the site of that tournament in 2003, 2006 and 2009. The National Bowling Stadium was the site of the ABC's National
Championship Bowling Tournament in 1998 and 2001 has been selected as the site of that tournament in 2004 and 2007, providing a major bowling tournament in Reno two out of every three years through
the year 2009. According to the Visitors Authority, bowling tournaments held at the National Bowling Stadium attract visitors from markets that do not normally contribute substantially to Reno's
visitor profile. The National Bowling Stadium also features a large-screen movie theater, nightclub and retail space and can be configured to host special events and conventions.

At
December 31, 2001, eight scheduled airlines and a number of other charter airlines were providing daily non-stop departures on 77 flights between Reno and
approximately 16 North American cities, providing outbound available seats for more than 9,109 people daily. The primary user of the airport is Southwest Airlines, with approximately 81 daily flights
to or from Reno as of December 31, 2001. The Eldorado and the Silver Legacy are within a 10-minute drive of the airport, making them easily accessible to visitors traveling to Reno
by air.

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Competition

The gaming industry includes land-based casinos, dockside casinos, riverboat casinos, casinos located on Native American reservations and other forms
of legalized gaming. There is intense competition among companies in the gaming industry, many of which have significantly greater resources than we do.
Certain states have legalized casino gaming and other states may legalize gaming in the future. Legalized casino gaming in these states and on Native American reservations near our markets or changes
to gaming laws in states surrounding Nevada could increase competition and could adversely affect our operations. The Company also competes to a lesser extent, with gaming facilities in other
jurisdictions with dockside gaming facilities, state-sponsored lotteries, on-and-off track pari-mutuel wagering, Internet gaming, card clubs, riverboat casinos and
other forms of legalized gambling.

The
Company competes for customers primarily on the basis of locations, range and pricing of amenities and overall atmosphere. Of the 34 casinos currently operating in the Reno market,
the Company competes principally with the eight other hotel-casinos that, like the Eldorado, each generate at least $36 million in annual gaming revenues, including the Silver Legacy. Although
no hotel-casino projects are currently under construction in the Reno area, we cannot predict the extent to which new projects will be undertaken or the extent to which current hotel space may be
expanded in the near future. The Company expects that any additional rooms added in the Reno market will increase competition for visitor revenue. There can be no assurance that any growth in Reno's
current room base or gaming capacity will not adversely affect our financial condition or results of operations. The Company also competes with hotel-casinos located in the nearby Lake Tahoe region as
well as those in Las Vegas, Nevada. A substantial number of customers travel to both Reno and the Lake Tahoe area during their visits. Consequently, the Company believes that the Eldorado's success is
influenced to some degree by the success of the Lake Tahoe market. While the Company does not anticipate a decline in the popularity of either Reno or Lake Tahoe as tour destination areas in the
foreseeable future, any such decline could adversely affect our operation.

Land-based,
riverboat, or dockside casino gaming (other than that conducted on Native American-owned land) is currently legal in nine states and casino gaming on Native
American-owned land is legal in at least 29 states, including California, Washington, and Oregon. Management believes the Reno market draws over 50% of its visitors from California. California allows
other non-casino style gaming, including pari-mutuel wagering, a state-sponsored lottery, card clubs, bingo, and off-track betting. The competitive impact on Nevada
gaming establishments, in general, and our operations, in particular, from the continued growth of gaming outside Nevada cannot be determined at this time. The Company believes that the expansion of
casino gaming on Native American lands in California, and to a lesser extent in Washington and Oregon, could have a material adverse affect on its operations depending on the nature, location, and
scope of those operations.

On
March 7, 2000, California voters approved Proposition 1A which amended the California constitution and legalized "Nevada-style" gaming on Native American reservations. The
passage of this amendment has allowed the expansion of existing Native American gaming operations, as well as the opening of new Native American gaming facilities. Additionally, numerous tribes have
announced that they intend to open gaming facilities. There are approximately 107 federally recognized Native American tribes in California. In order to conduct gaming operations in California, a
Native American tribe must enter into a compact with the state. As of December 31, 2001, the State of California had entered into compacts with approximately 60 tribes. Each Native American
tribe in California is limited to a maximum of 2,000 slot machines and there may not be more than two gaming facilities on any one reservation. Under the governor of California's interpretation of the
compacts, all Native American tribes in California are permitted to operate a total of approximately 45,000 slot machines. However, there remains substantial uncertainty as to the total number of slot
machines authorized by the compacts and it is possible that the approximately 45,000-machine limit will increase, and, if so, the

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increase may be substantial. In addition to allowing the expansion of slot machines, the compacts allow for the expansion of other casino-style games, including blackjack and poker. Most existing
Native American gaming facilities in northern California are modest compared to Reno market casinos. However, there are several more significant Native American casinos which currently compete with
the Reno market, including: (1) the Cache Creek Indian Bingo & Casino in Brooks, California, approximately 58 miles northwest of Sacramento and (2) the Jackson Rancheria Casino,
Hotel and Conference Center in Jackson, California, approximately 59 miles southeast of Sacramento.

In
addition to the existing gaming facilities, numerous Native American tribes have announced that they are in the process of developing or are considering establishing large-scale hotel
and gaming facilities in northern California, including two which have entered into development and management agreements with established gaming operations. Station Casinos, Inc. has entered
into agreements with the United Auburn Indian Community to develop and manage a gaming and entertainment facility on a proposed 49-acre site approximately 21 miles northeast of Sacramento.
The United States Interior Department's Bureau of Indian Affairs has approved the application of the United Auburn Indian Community to take the 49-acre site into trust for the planned
casino development. Lakes Gaming Inc. has entered into agreements with the Shingle Springs Rancheria to develop and manage a large-scale hotel-casino approximately 35 miles southeast of
Sacramento. Other tribes are at various stages of planning new or expanded facilities in northern California, such as the Buena Vista Rancheria of MeWuk Indians, on land located approximately 50 miles
southwest of Sacramento, and the Lytton Band of Pomo Indians, on land located approximately 21 miles northeast of San Francisco.

Nevada Regulation and Licensing

The ownership and operation of casino gaming facilities in Nevada are subject to the Nevada Gaming Control Act (the "Nevada Act") and regulations promulgated
thereunder as well as various local regulations. The Company's gaming operations are subject to the licensing and regulatory control of the Nevada Gaming Commission (the "Nevada Commission"), the
Nevada State Gaming Control Board (the "Nevada Board") and various local and governmental authorities (collectively with the Nevada Commission and the Nevada Board, the "Nevada Gaming Authorities").
The laws, regulations and supervisory procedures of the Nevada Gaming Authorities are based upon declarations of public policy which seek to, among other things, (i) prevent unsavory or
unsuitable persons from having any direct or indirect involvement with gaming at any time or in any capacity, (ii) establish and maintain responsible accounting practices and procedures,
(iii) maintain effective control over the financial practices of licensees, including establishing minimum procedures for internal fiscal affairs and the safeguarding of assets and revenues,
providing reliable recordkeeping and requiring the filing of periodic reports with the Nevada Gaming Authorities, (iv) prevent cheating and fraudulent practices and (v) provide a source
of state and local revenues through taxation and licensing fees. Changes in such laws, regulations and procedures could have an adverse effect on the Company's gaming operations.

Resorts,
which operates the Eldorado, is licensed by the Nevada Gaming Authorities and is a corporate licensee (a "Corporate Licensee") under the terms of the Nevada Act. The gaming
license requires the periodic payment of fees and taxes and is not transferable. Resorts and Capital each are registered by
the Nevada Commission as a publicly traded corporation (a "Registered Corporation"). Registered Corporations are required periodically to submit detailed financial and operating reports to the Nevada
Commission and furnish any other information that the Nevada Commission may request. No person may become a member of, or receive any percentage of the profits from, the Company without first
obtaining licenses and approvals from the Nevada Gaming Authorities. All of the members of Resorts have obtained the licenses and approvals necessary to own their respective interests in the Company.
The Company has obtained from the Nevada Gaming Authorities the various registrations, approvals, permits and licenses required in order to engage in gaming activities at the Eldorado.

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The
Nevada Gaming Authorities may investigate any individual who has a material relationship to, or material involvement with, the Company in order to determine whether such individual
is suitable or should be licensed as a business associate of the Company. Officers, directors and certain key employees of the Company must file applications with the Nevada Gaming Authorities and may
be required to be licensed or found suitable by the Nevada Gaming Authorities. The Nevada Gaming Authorities may deny an application for licensing for any cause which they deem reasonable. A finding
of suitability is comparable to licensing, and both require submission of detailed personal and financial information followed by a thorough investigation. The applicant for licensing or a finding of
suitability must pay all the costs of the investigation. Changes in licensed positions must be reported to the Nevada Gaming Authorities and, in addition to their authority to deny an application for
a finding of suitability or licensure, the Nevada Gaming Authorities have jurisdiction to disapprove a change in a corporate position.

If
the Nevada Gaming Authorities were to find an officer, director or key employee of the Company unsuitable for licensing or unsuitable to continue having a relationship with the
Company, the Company would have to sever all relationships with such person. In addition, the Nevada Commission may require the Company to terminate the employment of any person who refuses to file
appropriate applications. Determinations of suitability or of questions pertaining to licensing are not subject to judicial review in Nevada.

The
Company is required to submit detailed financial and operating reports to the Nevada Commission. Substantially all material loans, leases, sales of securities and similar financing
transactions by the Company must be reported to, or approved by, the Nevada Commission.

If
it were determined that the Nevada Act was violated by the Company, the gaming licenses it holds could be limited, conditioned, suspended or revoked, subject to compliance with
certain statutory and regulatory procedures. In addition, the Company and the persons involved could be subject to substantial fines for each separate violation of the Nevada Act at the discretion of
the Nevada Commission. Further, a supervisor could be appointed by the Nevada Commission to operate the Company's gaming properties and, under certain circumstances, earnings generated during the
supervisor's appointment (except for the reasonable rental value of the Company's gaming properties) could be forfeited to the State of Nevada. Limitation, conditioning or suspension of any gaming
license
or the appointment of a supervisor could (and revocation of any gaming license would) materially adversely affect the Company's gaming operations.

The
Nevada Commission may, in its discretion, require the holder of any debt security of the Company, including the 101/2% Senior Subordinated Notes due 2006 of Resorts
and Capital, to file applications, be investigated and be found suitable to own such debt security. If the Nevada Commission determines that a person is unsuitable to own such security, then pursuant
to the Nevada Act, the Company can be sanctioned, including the loss of its licenses, if without the prior approval of the Nevada Commission, it: (i) pays to the unsuitable person any dividend,
interest or any distribution whatsoever, (ii) recognizes any voting right by such unsuitable person in connection with such securities, (iii) pays the unsuitable person remuneration in
any form or (iv) makes any payment to the unsuitable person by way of principal, redemption, conversion, exchange, liquidation or similar transaction.

Any
beneficial holder of a Registered Corporation's voting securities, regardless of the number of shares owned, may be required to file an application, be investigated and have his
suitability as a beneficial holder of a Registered Corporation's voting securities determined if the Nevada Commission has reason to believe that such ownership would otherwise be inconsistent with
the declared policies of the State of Nevada. The applicant must pay all costs of investigation incurred by the Nevada Gaming Authorities in conducting any such investigation.

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The
Nevada Act requires any person who acquires beneficial ownership of more than 5% of a Registered Corporation's voting securities to report the acquisition to the Nevada Commission.
The Nevada Act requires that beneficial owners of more than 10% of a Registered Corporation's voting securities apply to the Nevada Commission for a finding of suitability within 30 days after
the Chairman of the Nevada Gaming Board mails the written notice requiring such filing. Under certain circumstances, an "institutional investor," as defined in the Nevada Act, which acquires more than
10%, but not more than 15%, of a Registered Corporation's voting securities may apply to the Nevada Commission for a waiver of such finding of suitability if such institutional investor holds the
voting securities for investment purposes only. An institutional investor will not be deemed to hold voting securities for investment purposes unless the voting securities were acquired and are held
in the ordinary course of business as an institutional investor and not for the purpose of causing, directly or indirectly, the election of a majority of the members of the board of directors of a
Registered Corporation, any change in a Registered Corporation's corporate charter, bylaws, management, policies or operations or any of its gaming affiliates or any other action which the Nevada
Commission finds to be inconsistent with holding the Registered Corporation's voting securities for investment purposes only. Activities which are not deemed to be inconsistent with holding voting
securities for investment purposes only include: (i) voting on all matters voted on by shareholders, (ii) making financial and other inquiries of management of the type normally made by
securities analysts for informational purposes and not to cause a change in management, policies or operations, and (iii) such other activities as the Nevada Commission may determine to be
consistent with such investment intent. If the beneficial holder of voting securities who must be found suitable is a corporation, partnership or trust, it must submit detailed business and financial
information including a list of beneficial owners. The applicant is required to pay all costs of investigation.

Any
person who fails or refuses to apply for a finding of suitability or a license within 30 days after being ordered to do so by the Nevada Commission or the Chairman of the
Nevada Board may be found unsuitable. The same restrictions apply to a record owner of the Company's securities if the record owner, after request, fails to identify the beneficial owner of such
securities. Any shareholder found unsuitable and who holds, directly or indirectly, any beneficial ownership of the voting securities of a Registered Corporation beyond such period of time as may be
prescribed by the Nevada Commission may be guilty of a criminal offense. A Registered Corporation is subject to disciplinary action if, after it receives notice that a person is unsuitable to be a
member of or to have any other relationship with such corporation, the Registered Corporation (i) pays that person any dividend or interest upon voting securities of such corporation,
(ii) allows that person to exercise, directly or indirectly, any voting right conferred through securities held by that person, (iii) pays remuneration in any form to that person for
services rendered or otherwise or (iv) fails to pursue all lawful efforts to require such unsuitable person to relinquish his voting securities, including, if necessary, the immediate purchase
of such voting securities for cash at fair market value.

A
Registered Corporation is required to maintain a current stock ledger in Nevada which may be examined by the Nevada Gaming Authorities at any time. If any securities are held in trust
by an agent or by a nominee, the record holder may be required to disclose the identity of the beneficial owner to the Nevada Gaming Authorities. A failure to make such disclosure may be grounds for
finding the record holder unsuitable. A Registered Corporation is also required to render maximum assistance in determining the identity of the beneficial owner. The Nevada Commission has the power to
require the stock certificates of a Registered Corporation to bear a legend indicating that the securities are subject to the Nevada Act.

Neither
the Company nor a Registered Corporation may make a public offering of its securities without the prior approval of the Nevada Commission if the securities or proceeds therefrom
are intended to be used to construct, acquire or finance gaming facilities in Nevada or to retire or extend obligations incurred for such purposes. Such approval, if given, does not constitute a
finding,

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recommendation or approval by the Nevada Commission or the Nevada Board as to the accuracy or adequacy of the prospectus or the investment merits of the securities. Any representation to the contrary
is unlawful.

Changes
in control of a Registered Corporation through merger, consolidation, stock or asset acquisitions, management or consulting agreements or any act or conduct by a person whereby
he obtains control may not occur without the prior approval of the Nevada Commission. Entities seeking to acquire control of a Registered Corporation must satisfy the Nevada Board and Nevada
Commission with respect to a variety of stringent standards prior to assuming control of such Registered Corporation. The Nevada Commission may also require controlling shareholders, officers,
directors and other persons having a material relationship or involvement with the entity proposing to acquire control to be investigated and licensed as a part of the approval process relating to the
transaction.

The
Nevada legislature has declared that some corporate acquisitions opposed by management, repurchases of voting securities and corporate defense tactics affecting Registered
Corporations may be injurious to stable and productive corporate gaming. The Nevada Commission has established a regulatory scheme to ameliorate the potentially adverse effects of these business
practices upon Nevada's gaming industry and to further Nevada's policy to: (i) assure the financial stability of corporate gaming operators and their affiliates, (ii) preserve the
beneficial aspects of conducting business in the corporate form and (iii) promote a neutral environment for the orderly governance of corporate affairs. Approvals are required in certain
circumstances from the Nevada Commission before a Registered Corporation may make exceptional repurchases of voting securities above the current market price thereof and before a corporate acquisition
opposed by management may be consummated. The Nevada Act also requires prior approval of a plan of recapitalization proposed by a Registered Corporation's Board of Directors in response to a tender
offer made directly to the Registered Corporation's shareholders for the purposes of acquiring control of the Registered Corporation.

License
fees and taxes, computed in various ways depending on the type of gaming or activity involved, are payable to the State of Nevada and to the counties and cities in which the
Nevada licensee's respective operations are conducted. Depending upon the particular fee or tax involved, these fees and taxes are payable either monthly, quarterly or annually and are based upon
either: (i) a percentage of the gross revenues received, (ii) the number of gaming devices operated or (iii) the number of table games operated. A casino entertainment tax is also
paid by casino operations where entertainment is furnished in connection with the selling of food or refreshments.

Any
person who is licensed, required to be licensed, registered, required to be registered or is under common control with such person (collectively, "Licensees"), and who proposes to
become involved in a gaming venture outside of Nevada, is required to deposit with the Nevada Gaming Board, and thereafter maintain, a revolving fund in the amount of $10,000 to pay the expenses of
investigation by the Nevada Board of their participation in such foreign gaming. The revolving fund is subject to increase or decrease at the discretion of the Nevada Commission. Thereafter, Licensees
are required to comply with certain reporting requirements imposed by the Nevada Act. Licensees are also subject to disciplinary action by the Nevada Commission if they knowingly violate any laws of
the foreign jurisdiction pertaining to the foreign gaming operation, fail to conduct the foreign gaming operation in accordance with the standards of honesty and integrity required of Nevada gaming
operations, engage in activities that are harmful to the State of Nevada or its ability to collect gaming taxes and fees or employ a person in the foreign operation who has been denied a license or
finding of suitability in Nevada for the reason of personal unsuitability.

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Internal Revenue Service Regulations

The Internal Revenue Service requires operators of casinos located in the United States to file information returns for U.S. citizens, including names and
addresses of winners, for keno, bingo and slot machine winnings in excess of stipulated amounts. The Internal Revenue Service also requires operators to withhold taxes on some keno, bingo and slot
machine winnings of nonresident aliens. We
are unable to predict the extent, to which these requirements, if extended, might impede or otherwise adversely affect operations of, and/or income from, the other games.

Regulations
adopted by the Financial Crimes Enforcement Network of the Treasury Department and the Nevada gaming regulatory authorities require the reporting of currency transactions in
excess of $10,000 occurring within a gaming day, including identification of the patron by name and social security number. This reporting obligation began in May 1985 and may have resulted in
the loss of gaming revenues to jurisdictions outside the United States which are exempt from the ambit of these regulations.

Other Laws and Regulations

The Eldorado and the Silver Legacy are subject to extensive state and local regulations and, on a periodic basis, must obtain various licenses and permits,
including those required to sell alcoholic beverages. The Company believes that it has obtained all required licenses and permits and that our business is conducted in substantial compliance with
applicable laws.

The National Gambling Impact Study Commission's Recommendations

A National Gambling Impact Study Commission (the "Commission") was established by the United States Congress to conduct a comprehensive study of the social and
economic impact of gaming in the United States. On April 28, 1999, the Commission voted to recommend that the expansion of gambling be curtailed. In June 1999, the Commission issued a
final report of its findings and conclusions, together with recommendations for legislative and administrative actions, including a recommendation to restrict legal gaming to those at least
21 years of age. Any additional regulation of the gaming industry which may result from the Commission's report may have an adverse effect on the gaming industry, including operations at the
Eldorado and the Silver Legacy.

Environmental Matters

As is the case with any owner or operator of real property, the Company is subject to a variety of federal, state and local governmental regulations relating to
the use, storage, discharge, emission and disposal of hazardous materials. Federal, state and local environmental laws and regulations also impose liability on potentially responsible parties,
including the owners or operators of real property, to clean up, or contribute to the cost of cleaning up, sites at which hazardous wastes or materials were disposed of or released. The Company does
not have environmental liability insurance to cover such events.

Certain
of the Company's properties and former properties, including the Silver Legacy property, had or have varying degrees of petroleum contamination in the soil and/or groundwater. In
each instance where such petroleum contamination has been identified, investigation or remediation activities have been undertaken or are ongoing. The possibility exists that additional contamination,
as yet unknown, may exist at these or other of the Company's properties. In addition, under the terms of an Environmental Indemnity, dated May 30, 1995 (the "Environmental Indemnity"), the
Company agreed jointly and severally with Mandalay to indemnify, defend and hold harmless the agents and lenders under a bank credit facility of the Silver Legacy Joint Venture which was paid in full
on March 5, 2002 from and against any and all Environmental Losses (as defined in the Environmental Indemnity) suffered or incurred on the premises of the Silver Legacy or arising through the
ownership,

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use, occupancy or operation thereof. Generally, liability under the Environmental Indemnity covers the period prior to the date the lenders foreclose on and take possession of the real property
securing their loans to the Silver Legacy Joint Venture. The agents and lenders are not required to seek payments from the Silver Legacy Joint Venture before pursuing payments from the Company and
Mandalay for Environmental Losses. In all cases, the Company believes that the contamination arose from activities of prior owners or occupants, or from offsite sources and not as a result of any
actions or operations conducted by the Company.

In
1998 the Silver Legacy received reimbursement and indemnification from Chevron Company USA of $750,000 for petroleum contamination identified on the Silver Legacy property. The
possibility exists that other responsible parties may be identified for this or other sites, and the Company will determine whether to seek contribution or reimbursement from such parties. In
addition, reimbursement for some of the expenditures has been, and further reimbursement may be, obtained from the State of Nevada Petroleum Fund which has been established to reimburse parties for
costs incurred in clean-up of underground storage tank related contamination.

The
Company's properties and former properties also lie within the proposed Central Truckee Meadows Remediation District, encompassing much of the City of Reno, which will address
groundwater contaminated with solvents as identified by the Nevada Division of Environmental Protection. The Company does not believe that it has contributed to this solvent contamination. The Company
has not been required to conduct any remediation or investigation of this matter nor to contribute toward any costs associated therewith. However, the possibility remains that funding of the
investigation or remediation of this regional groundwater issue could result in a special assessment on the Company's properties or former properties among others within the Remediation District. The
possibility exists that the entire area of contamination, or a portion thereof, could be listed under the Comprehensive Environmental Response, Compensation and Liability Act of 1980.

Asbestos
has been determined to be present in the sheetrock of approximately 400 of the Eldorado's older hotel rooms. Removal of the asbestos will be required only in the event of the
demolition of the affected rooms or if the asbestos is otherwise disturbed. Management currently has no plans to renovate or demolish the affected rooms in a manner that would require removal of the
asbestos at this time.

The
Company has expended approximately $738,000 in connection with environmental matters from January 1, 1993 through December 31, 2001, of which approximately $225 was
expended during 2001 and approximately $1,425 was expended in 2000.

Employees

As of December 31, 2001, the Company had 2,166 employees, the substantial majority of whom are nonmanagement personnel. The number of people employed at
any time is subject to seasonal fluctuation. None of the Company's employees is covered by a collective bargaining agreement. The Company believes that employee relations are excellent.

Factors that May Affect the Company's Future Results

(Cautionary
Statements Under the Private Securities Litigation Reform Act of 1995)

Certain
information included in this report and other materials filed or to be filed by the Company with the Securities and Exchange Commission (as well as information included in oral
statements or other written statements made or to be made by the Company) contains or may contain 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. These statements can be identified by the fact that they do not relate strictly to historical or current facts. The
Company has based these

19

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forward-looking statements on its current expectations about future events. These forward-looking statements include statements with respect to the Company's beliefs, plans, objectives, goals,
expectations, anticipations, intentions, financial condition, results of operations, future performance and business, including:



Such
statements include information relating to capital spending, financing sources and the effects of regulation (including gaming and tax regulation) and competition. From time to
time, oral or written forward-looking statements are also included in the Company's periodic reports on Forms 10-Q and 8-K, press releases and other materials released to the
public.

Any
or all of the forward-looking statements in this report and in any other public statements the Company makes may turn out to be wrong. This can occur as a result of inaccurate
assumptions or as a consequence of known or unknown risks and uncertainties. Many factors discussed in this report, such as government regulation and the competitive environment, will be important in
determining the Company's future performance. Consequently, actual results may differ materially from those that might be anticipated from forward-looking statements.

The
Company undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise. However, any further
disclosures made on related subjects in the Company's subsequent reports on Forms 10-K, 10-Q and 8-K should be consulted. The following discussion of risks,
uncertainties and possible inaccurate assumptions relevant to the Company's business includes factors the Company believes could cause its actual results to differ materially from expected and
historical results. Other factors beyond those listed below could also adversely affect the Company. This discussion is provided as permitted by the Private Securities Litigation Reform Act of 1995.



20

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Item 2.Properties.

The Company's executive offices are located inside the Eldorado, which is situated on an approximately 159,000 square foot parcel at 345 North Virginia Street,
Reno, Nevada. The Company owns the entire parcel, except for approximately 30,000 square feet which is leased by the Company from C, S and Y Associates, a general partnership of which Donald Carano is
a general partner. See "Compensation Committee Interlocks and Insider Participation" in Item 11 of this report. The lease expires on June 30, 2027. Annual rent is equal to the greater of
(i) $400,000 and (ii) an amount based on a decreasing percentage of the Eldorado's gross gaming revenues ranging from 3.0% of the first $6.5 million of gross gaming revenues to
0.1% of gross gaming revenues in excess of $75.0 million. Rent in 2001 totaled approximately $642,000. Substantially all of the Company's real property, including the Eldorado, is subject to
encumbrances securing the repayment of the Company's revolving credit facility (the "New Credit Facility"). The New Credit Facility provided for a revolving credit facility of $40.0 million as
of December 31, 2001 and, by its terms, the facility reduces by $1.6 million on March 31, 2003 and the end of each subsequent quarter until March 31, 2006, when the
facility terminates and any balance then outstanding becomes due and payable. At December 31, 2001, the indebtedness outstanding under the New Credit Facility was $21.8 million. At that
date the Company also had pledged a letter of credit in the amount of $685,000 which reduced the credit available under the New Credit Facility by the amount of the pledged letter of credit. The New
Credit Facility is

21

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secured by a first deed of trust and security interest in all real property interests and fixtures underlying the Eldorado, certain parking facilities, a second deed of trust on the 31,000 square
foot property referred to below, all related personal property, substantially all other assets of the Company and a pledge of the Company's interest in ELLC. In addition, Capital has guaranteed
Resorts' obligations under the New Credit Facility.

The
Company owns a 35,000 square foot parcel of land located at 444 North Center Street, Reno, Nevada, on which the Company's human resources offices are located, and owns approximately
90 acres of land located in Verdi, Nevada. The New Credit Facility is secured by a first deed of trust and security interest in all real property interests and fixtures relating to the land located in
Verdi and the land located at 444 North Center Street.

The
Company owns a 31,000 square foot parcel of property across the street from and west of the Eldorado, which could be used for expansion of the Eldorado. As of December 31,
2001, this property was subject to an encumbrance securing the repayment of indebtedness of $1,578,000 in addition to the aforementioned second deed of trust securing the Company's interest under the
New Credit Facility.

The
Company and Mandalay each owns a one-half interest in a 63,000 square foot parcel of land across the street from the Silver Legacy.

The
Company's 96% owned subsidiary, ELLC, owns a 50% joint venture interest in the Silver Legacy, a major themed hotel/casino located adjacent to the Eldorado. Reference is made to the
information appearing under the headings "Silver Legacy Resort Casino" and "Silver Legacy Joint Venturebackground" in Item 1 of this report, which information is hereby
incorporated in this Item 2 by this reference.

Item 3.Legal Proceedings.

The Company from time to time is involved in litigation arising in the ordinary course of its business. The Company does not believe that such litigation to which
the Company or any subsidiary of the Company is a party or of which any of their property is the subject will, individually or in the aggregate, have a material adverse effect on the Company's
financial position or the results of its operations.

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

Not applicable.

22

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PART II

Item 5.Market for Registrants' Common Equity and Related Stockholder Matters.

There is no established public trading market for (i) Resorts' outstanding membership interests which were owned of record by three entities, two
individuals and various trusts for the benefit of members of the Carano family as of December 31, 2001, or (ii) the common stock of Capital, which is a wholly-owned subsidiary of
Resorts. See Item 12 of this report for additional information concerning the ownership of Resorts' membership interests. As a limited liability company, Resorts is not (and its
predecessor, the Predecessor Partnership, was not) subject to Federal income tax liability. Because the Company's holders of membership interests are (and the Predecessor Partnership's partners were)
required to include their respective shares of Resorts or the Predecessor Partnership's taxable income in their individual income tax returns, Resorts and the Predecessor Partnership have made
distributions to their members and partners to cover such tax liabilities. Distributions for 2001 were, and distributions for subsequent years will be, limited in accordance with the provisions of the
Operating Agreement of Eldorado Resorts LLC dated as of June 28, 1996 (the "Operating Agreement"). The Operating Agreement provides that the Board of Managers will distribute each year to each
member an amount equal to such member's allocable share of taxable income multiplied by the highest marginal combined Federal, state, and local income tax rate applicable to individuals for that year;
provided that such distributions will not be made after any event that causes Resorts to thereafter be taxed under the Internal Revenue Code of 1986, as amended, as a corporation. Distributions by
Resorts to its members aggregated $6.0 million and $8.1 million for 2001 and 2000, respectively, all of which was for income taxes.

23

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Item 6.Selected Financial Data.

SELECTED CONSOLIDATED FINANCIAL DATA  (dollars in thousands)

|                                                                        |                                                             | Years Ended December 31, |        
|----------------------------------------------------------------------- | ----------------------------------------------------------- | ------------------------ | -------
|
|Consolidated Statement of Income Data:                                  |                                                             |                          |        
|Operating revenues:                                                     |                                                             |                          |        
|                                                                        | Casino                                                      |                          | $      
|                                                                        | Food, beverage and entertainment                            |                          |        
|                                                                        | Hotel                                                       |                          |        
|                                                                        | Equity in net income (loss) of unconsolidated affiliates(1) |                          |        
|                                                                        | Other                                                       |                          |        
|                                                                        | Less promotional allowances                                 |                          |        
|                                                                        |                                                             |                          |        
|                                                                        |                                                             | Net revenues             |        
|Operating expenses:                                                     |                                                             |                          |        
|                                                                        | Casino                                                      |                          |        
|                                                                        | Food, beverage and entertainment                            |                          |        
|                                                                        | Hotel                                                       |                          |        
|                                                                        | Other                                                       |                          |        
|                                                                        | Selling, general and administrative(2)                      |                          |        
|                                                                        | Depreciation                                                |                          |        
|                                                                        |                                                             |                          |        
|                                                                        |                                                             | Total Operating expenses |        
|                                                                        |                                                             |                          |        
|Operating income                                                        |                                                             |                          | 26,094 
|Equity in net (loss) of unconsolidated affiliate(3)                     |                                                             |                          | (207   
|(Loss) on investments                                                   |                                                             |                          | (225   
|Interest expense, net.                                                  |                                                             |                          | (12,153
|Other Income                                                            |                                                             |                          |       
|                                                                        |                                                             |                          |        
|Net income before minority interest.                                    |                                                             |                          | 13,509 
|Minority interest in net income of unconsolidated affiliate(4).         |                                                             |                          | (403   
|                                                                        |                                                             |                          |        
|Net income before extraordinary items                                   |                                                             |                          | 13,106 
|Extraordinary gain on repurchase of bonds, net of unamortized loan fees |                                                             |                          | 343    
|                                                                        |                                                             |                          |        
|Net Income(5)                                                           |                                                             | $                        | 13,449 
|                                                                        |                                                             |                          |        
|Other Data:                                                             |                                                             |                          |        
|EBITDA(6)                                                               |                                                             | $                        | 28,639 
|Net cash provided by (used in):                                         |                                                             |                          |        
|                                                                        | Operating activities                                        |                          |        
|                                                                        | Investing activities                                        |                          |        
|                                                                        | Financing activities                                        |                          |        
|Capital expenditures                                                    |                                                             |                          | 6,364  
|Operating Data(7):                                                      |                                                             |                          |        
|Number of hotel rooms(8)                                                |                                                             |                          | 816    
|Average hotel occupancy rate(8)                                         |                                                             |                          | 89.6   
|Casino square footage(8)                                                |                                                             |                          | 84,000 
|Number of slot machines(8)                                              |                                                             |                          | 1,826  
|Number of table games(8)                                                |                                                             |                          | 78     

|                                 |  | At December 31,
|-------------------------------- |  | ---------------
|
|Consolidated Balance Sheet Data: |  |                
|Cash and cash equivalents        |  | $              
|Total assets                     |  |                
|Total debt                       |  |                
|Members' equity(9)               |  |                

See footnotes to Selected Consolidated Financial Data which appear on the next page.

24

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Footnotes to Selected Consolidated Financial Data

25

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Item 7.Management's Discussion and Analysis of Financial Condition and Results of Operations.

General

Eldorado Resorts LLC ("Resorts") was formed in June 1996 to be the successor to Eldorado Hotel Associates Limited Partnership (the "Predecessor
Partnership") pursuant to an exchange of all the outstanding partnership interests in the Predecessor Partnership for membership interests in Resorts (the "Reorganization"). The Reorganization was
effective on July 1, 1996. Resorts owns and operates the Eldorado Hotel & Casino (the "Eldorado"), a premier hotel/casino and entertainment facility in Reno, Nevada. In addition to
owning the Eldorado, Resorts' 96% owned subsidiary, Eldorado Limited Liability Company, a Nevada limited liability company ("ELLC"), owns a 50% interest in a joint venture (the "Silver Legacy Joint
Venture") which owns the Silver Legacy Resort Casino (the "Silver
Legacy"), a major, themed hotel/casino located adjacent to the Eldorado. Resorts, ELLC and Eldorado Capital Corp. ("Capital"), a wholly-owned subsidiary of Resorts, which holds no significant assets
and conducts no business activity, are collectively referred to as the "Company."

The
Company accounts for its investment in the Silver Legacy Joint Venture, Tamarack and MindPlay utilizing the equity method of accounting. MindPlay is currently in the developmental
stage. The Company's consolidated net income includes its proportional share of Silver Legacy Joint Venture's, Tamarack's, and MindPlay's net income (loss) before taxes.

September 11 Events

Terrorist attacks on the World Trade Center in New York City and the Pentagon outside Washington, D.C. on September 11, 2001 had an adverse effect on our
operations in the weeks immediately following September 11. Eldorado's hotel occupancy rate for the remainder of the year following the September 11 attacks declined 6.9% as compared to
the same period in 2000. The volume of gaming, showroom occupancy and customer counts at the Eldorado's restaurants also were down significantly during the remainder of the year compared to the same
period in 2000. Effective September 24, 2001, the Company reacted to the effects of the September 11 attacks by implementing a hiring freeze, a reduction in staff through attrition and
adjustment of our hourly employees' work week to correspond to reduced business levels. During the fourth quarter of 2001, the weekend business at the Eldorado returned to near-normal levels, in terms
of customer traffic, and midweek business improved, although we have yet to achieve the midweek levels we experienced during the corresponding periods of the prior year. Because our results for the
year ended December 31, 2001 were impacted by a number of factors, including an economy that was already weakening before September 11 and increased competition from Native American
casinos in northern California, it is difficult to measure the precise impact the September 11 attacks had on our 2001 results. The Company cannot predict the extent to which the events of
September 11 will continue to directly or indirectly impact our future operating results, and the Company cannot predict the extent to which any future security alerts and/or additional
terrorist attacks such as those that occurred on September 11 may impact our future operations.

The
following discussion of the Company's operations relates to the Eldorado except as otherwise indicated.

Year Ended December 31, 2001 Compared to
Year Ended December 31, 2000

Net Revenues

Net revenues decreased by approximately $22.5 million, or 12.4%, to $159.7 million for the year ended December 31, 2001 compared to
$182.3 million for the year ended December 31, 2000. The decrease in net revenues resulted from decreases in casino revenues, food, beverage and entertainment

26

---

revenues and hotel revenues. Net revenues for the year ended December 31, 2001 include $10.4 million of income from the Company's unconsolidated affiliates, the Silver Legacy Joint
Venture and Tamarack (which commenced operations September 4, 2001), as compared to $11.9 million for the same period in 2000. See Note 7 of the notes to the Company's
consolidated financial statements incorporated by reference in Item 8 of this report.

Casino
revenues decreased by 14.0% to $97.7 million for the year ended December 31, 2001, compared to $113.6 million for the year ended December 31, 2000. The
decrease in casino revenues was due to decreased gaming volumes and lower hold percentages as compared to the previous period.

Food,
beverage and entertainment revenues decreased by approximately $4.4 million, or 8.6%, to $46.4 million for the year ended December 31, 2001 compared to
$50.8 million in 2000. The decrease was primarily due to lower showroom occupancy and fewer customer counts in the 2001 period.

Hotel
revenues decreased to $17.4 million for the year ended December 31, 2001 from $18.0 million for the year ended December 31, 2000, a decrease of 3.2%.
This decrease is attributable to a decrease in hotel occupancy to approximately 90% for the year ended December 31, 2001 compared to 92% for the same period in 2000. The Company's average daily
rate ("ADR") remained comparable at approximately $59 for the years ended December 31, 2001 and 2000. The hotel occupancy decrease was partly due to remodeling of hotel rooms in 2001 which put
nearly 3,100 available room nights out of order. Had some of these room nights been available on select weekends, the hotel would have been at capacity on these weekends. There was also an overall
decline in hotel occupancy in the Reno market, partly due to the events of September 11, which was also felt at the Eldorado, particularly during the weeks following September 11.

Other
revenues decreased slightly to $5.3 million for year ended December 31, 2001 as compared to $5.5 million in 2000. The decrease is attributable to lower
revenues in retail sales.

Promotional
allowances, expressed as a percentage of casino revenues, were 18.0% in 2001 compared to 15.5% in 2000.

Operating Expenses

The Company's operating expenses decreased by 7.6% to $133.6 million for the year ended December 31, 2001 from $144.6 million for the year
ended December 31, 2000. This decrease is mainly attributable to decreased casino, food, beverage and entertainment and selling, general and administrative expenses.

Casino
expenses decreased by 5.5% to $50.2 million for the year ended December 31, 2001 from $53.1 million for the year ended December 31, 2000. The decrease
is attributable to decreases in bad debt, gaming taxes and payroll expenditures.

Food,
beverage and entertainment expenses decreased by approximately $2.8 million, or 7.9%, to $32.0 million for the year ended December 31, 2001 from
$34.8 million for the year ended December 31, 2000. The decrease is primarily a result of decreases in payroll expenditures, showroom professional services and lower food and beverage
cost of sales.

Hotel
expenses decreased by 6.8%, or $0.5 million, to $7.5 million for the year ended December 31, 2001 from $8.0 million for the year ended
December 31, 2000 due to various decreases in hotel operating expenses.

Selling, General and Administrative Expenses and Management Fees

Selling, general and administrative expenses and management fees decreased by 9.5% to $29.1 million for the year ended December 31, 2001 from
$32.1 million during the same period in 2000.

27

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The decrease was primarily due to decreases in advertising, payroll expenditures, management fees and accrued bonuses in the 2001 period.

Depreciation

Depreciation decreased to $13.0 million for the year ended December 31, 2001 compared to $13.4 million in 2000, due to some assets becoming
fully depreciated.

Interest Expense, Net

Interest expense, net of capitalized interest and interest income, decreased 6.6%, or $0.9 million, to $12.2 million for the year ended
December 31, 2001 compared to $13.0 million for the year ended December 31, 2000. In October 2001, the Company purchased $10.2 million principal amount of its
101/2% Notes on the open market. Interest expense decreased as a result of a lower average interest rate and the purchase of the 101/2% Notes during 2001 as compared to
2000. The Company capitalized interest of approximately $132,000 for the year ended December 31, 2001 compared to $105,000 during 2000.

Net Income

As a result of the factors described above, net income for the year ended December 31, 2001 decreased by 44.4% to $13.4 million compared to a net
income of $24.2 million in 2000.

Year Ended December 31, 2000 Compared to
Year Ended December 31, 1999

Net Revenues

Net revenues increased by approximately $11.0 million, or 6.4%, to $182.3 million for the year ended December 31, 2000 compared to
$171.3 million for the year ended December 31, 1999. The principal contributor to the increase was $11.9 million of income for the year ended December 31, 2000 compared to
$2.9 million for the same period in 1999 from our unconsolidated affiliate, the Silver Legacy Joint Venture. The Company recognized income from its unconsolidated affiliate for only part of the
year in 1999 as the result of a priority allocation to Galleon, Inc. pursuant to the Joint Venture Agreement. See Note 7 of the notes to the Company's consolidated financial statements
incorporated by reference in Item 8 of this report.

Casino
revenues increased by 0.6% to $113.6 million for the year ended December 31, 2000, compared to $113.0 million for the year ended December 31, 1999. The
principal contributor to this increase was slot revenue, which benefited from an increase in the number of lower denomination slots which produced an increased slot hold percentage as compared to the
previous period.

Food,
beverage and entertainment revenues increased by approximately $2.7 million, or 5.6%, to $50.8 million for the year ended December 31, 2000 compared to
$48.1 million in 1999. The increase was
primarily due to the opening of theBuBinga Loungein December 1999 and the opening of the Eldorado Coffee Company in January 2000.

Hotel
revenues increased slightly to $18.0 million for the year ended December 31, 2000 from $17.8 million for the year ended December 31, 1999, an increase
of 1.0%. The increase is primarily a result of an increase in the Company's average daily rate ("ADR") to approximately $59 for the year ended December 31, 2000 compared to approximately $58
for the same period in 1999. The hotel occupancy was comparable at approximately 92% for the years ended December 31, 2000 and 1999.

28

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Other
revenues decreased to $5.5 million for year ended December 31, 2000 as compared to $6.0 million in 1999. The decrease is attributable to lower revenue in
retail and the Arcade, due to a decrease in the number of retail outlets and decreasing the size of the Arcade.

Promotional
allowances expressed as a percentage of casino revenues were 15.5% in 2000 as compared to 14.6% in 1999.

Operating Expenses

The Company's operating expenses increased by 2.9% to $144.6 million for the year ended December 31, 2000 from $140.6 million for the year
ended December 31, 1999. This increase is mainly attributable to increased casino, food, beverage and entertainment and selling, general and administrative expenses.

Casino
expenses increased by 3.8% to $53.1 million for the year ended December 31, 2000 from $51.2 million for the year ended December 31, 1999. The increase
is attributable to increases in bad debt, charter buses and slot promotional expenditures, offset by outsourcing the race and sports book.

Food,
beverage and entertainment expenses increased by approximately $1.6 million, or 4.7%, to $34.8 million for the year ended December 31, 2000 from
$33.2 million for the year ended December 31, 1999. The increase is primarily a result of the opening of theBuBinga Loungein
December 1999 and an increase in food cost of sales and payroll expenditures.

Hotel
expenses increased by 8.0%, or $0.6 million, to $8.0 million for the year ended December 31, 2000 from $7.4 million for the year ended
December 31, 1999 due to a slight increase in payroll expenditures and upgrading guest amenities.

Selling, General and Administrative Expenses and Management Fees

Selling, general and administrative expenses and management fees increased by 3.3% to $32.1 million for the year ended December 31, 2000 from
$31.1 million during the same period in 1999. The increase was primarily due to an increase in payroll expenditures and increased utility costs.

Depreciation

Depreciation decreased slightly to $13.4 million for the year ended December 31, 2000 compared to $13.7 million in 1999, due to some assets
becoming fully depreciated.

Interest Expense, Net

Interest expense, net of capitalized interest and interest income, increased 7.1%, or $0.9 million, to $13.0 million for the year ended
December 31, 2000 compared to $12.2 million for the year ended December 31, 1999. Interest expense increased as a result of an increase in the average outstanding borrowings
during 2000 as compared to 1999. The Company capitalized interest of approximately $105,000 for the year ended December 31, 2000 compared to $36,000 during 1999.

Other Income

In 1999, Travelbyus.com purchased, for approximately $660,000 and approximately $1.1 million of its stock, the Company's one-third interest in
Express Vacations LLC d.b.a. QQuick Escapes. The Company recognized an approximate $1.7 million gain on the transaction. The Company also recognized distributions in the amount of $597,000 made
by QQuick Escapes in 1999. In 2000, the Company had a $60,000 gain on the sale of the Travelbyus.com stock.

29

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Net Income

As a result of the factors described above, net income for the year ended December 31, 2000 increased by 16.6% to $24.2 million compared to a net
income of $20.8 million in 1999.

Corporate Expenses/Management Fees

The Company pays management fees to Recreational Enterprises, Inc. and Hotel Casino Management, Inc., the owners of 55% and 29% of the Company's
equity interests, respectively. The management fees paid to Recreational Enterprises, Inc. and Hotel Casino Management, Inc. are included in selling, general and administrative expenses
and totaled $1.2 million, $1.8 million and $1.9 million for the years ended December 31, 2001, 2000 and 1999, respectively. Historically, the salaries of senior executive
officers and certain other key employees were not directly incurred but were paid from a portion of the management fees paid to Recreational Enterprises, Inc. As of July 1, 1996, the
aggregate annual salaries of such senior executive officers and other key employees became payroll obligations of the Company and the Company entered into a Management Agreement with Recreational
Enterprises, Inc. and Hotel Casino Management, Inc. providing that future management fees paid to Recreational Enterprises, Inc. and Hotel Casino Management, Inc. will not
exceed 1.5% of the Company's annual net revenues. As a result of the Management Agreement and the Company's assumption of responsibility for the salaries of senior executive officers and other key
employees previously paid by Recreational Enterprises, Inc. from its management fee, the Company incurred such salaries and management fees for the years ended December 31, 2001, 2000
and 1999 of $3.0 million, $4.0 million and $4.4 million, respectively.

Seasonality

Hotel/casino operations in the Reno market are subject to seasonal variation, with the strongest operating results occurring in the third quarter of each year and
the weakest results occurring during the period from November through February. Such variations occur when weather conditions have made travel to Reno by visitors from northern California and the
Pacific Northwest difficult. The following table shows the Company's percentage of gross revenues by quarter for each of 2001, 2000 and 1999.

2001

2000

1999First quarter

23.2
%
23.2
%
21.6
%Second quarter

26.7
%
25.9
%
25.3
%Third quarter

27.7
%
28.9
%
27.6
%Fourth quarter

22.4
%
22.0
%
25.5
%Total

100.0
%
100.0
%
100.0
%


Liquidity and Capital Resources

The Company's primary sources of liquidity and capital resources have been through cash flow from operations, borrowings under various credit agreements and the
issuance in July 1996 of $100 million in aggregate principal amount of the 101/2% Notes. Since 1996, the Company has completed several expansion and remodeling projects,
accounting for a significant use of cash flow from operations and borrowed funds. The Company's earnings before interest, taxes, depreciation and amortization as adjusted to exclude equity in net
income of its unconsolidated affiliates was $28.6 million for the year ended December 31, 2001, as compared to $39.1 million during the same period in 2000. Net cash provided by
operating activities was $20.6 million for the year ended December 31, 2001 compared to $27.7 million for the prior year.

30

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At
December 31, 2001, the Company had $9.9 million of cash and cash equivalents and, after giving effect to then outstanding borrowings and letters of credit, it had
approximately $17.6 million available pursuant to its New Credit Facility (as defined below). The net proceeds of the offering by the
Company and its wholly-owned subsidiary, Eldorado Capital Corp., of the 101/2% Notes (the "Offering") were used to repay a portion of the indebtedness under the Loan Agreement dated as
of March 25, 1994, between the Company, the banks named therein and Bank of America NT&SA, as administrative agent (the "Former Credit Facility"). The Former Credit Facility was amended
concurrently with the closing of the Offering to provide the Company with a senior secured revolving credit facility in the original amount of $50 million (as amended, the "Credit Facility").
On July 17, 2001, the Company's credit facility was amended and restated (the "New Credit Facility"). The New Credit Facility provides for a senior secured revolving credit facility of
$40 million. The amount of credit available pursuant to the New Credit Facility reduces by $1.6 million on March 31, 2003 and at the end of each subsequent quarter until
March 31, 2006, when the facility terminates and any balance then outstanding becomes due and payable. Borrowings under the New Credit Facility bear interest, at the Company's option, at either
(i) the greater of (a) the rate publicly announced from time to time by Bank of America as its "Prime Rate" or (b) the Federal Funds Rate plus .50% ("Base Rate") or (ii) a
Eurodollar rate determined in accordance with the New Credit Facility. The effective rate of interest on borrowings under the New Credit Facility at December 31, 2001 was 4.42% per annum. The
New Credit Facility is secured by substantially all of the Company's real property. The New Credit Facility includes various restrictions and other covenants including: (i) restrictions on the
disposition of property, (ii) restrictions on investments and acquisitions, (iii) restrictions on distributions to members of Resorts, (iv) restrictions on the incurrence of liens
and negative pledges, (v) restrictions on the incurrence of indebtedness and the issuance of guarantees, (vi) restrictions on transactions with affiliates and, (vii) restrictions
on annual capital expenditures including capital leases. The New Credit Facility also contains financial covenants including a maximum total debt to EBITDA ratio, a maximum senior debt to EBITDA
ratio, a minimum fixed charge coverage ratio and a minimum equity requirement. As of December 31, 2001 the Company was in compliance with all provisions of the New Credit Facility.

As
of December 31, 2001, the Company had outstanding (i) $89.9 million in aggregate principal amount of the 101/2% Notes,
(ii) $21.8 million of borrowings and an additional $0.7 million of letter of credit under the New Credit Facility and (iii) $1.7 million of other long term debt (net
of current portion).

The
Operating Agreement of Resorts dated June 28, 1996 obligates Resorts to distribute each year for as long as it is not taxed as a corporation to each of its members an amount
equal to such members' allocable share of the taxable income of Resorts multiplied by the highest marginal combined Federal, state and local income tax rate applicable to individuals for that year.
For the year ended December 31, 2001, Resorts made distributions of $6.0 million to its members as compared with distributions of $8.1 million during 2000, all of which was for
income taxes.

During
the year ended December 31, 2001, the Company's principal uses of funds, remaining after the aforementioned distributions, related to debt service, our investments in
MindPlay and Tamarack Junction, discussed in Note 7 of the notes to the Company's consolidated financial statements incorporated by reference in Item 8 of this report and recurring
capital expenditures. Total capital expenditures for the year ended December 31, 2001 were $6.4 million.

The
Company's future sources of liquidity are anticipated to be from its operating cash flow, funds available from the New Credit Facility and capital lease financing for certain of its
fixed asset purchases. The Company's anticipated uses of cash in 2002 will be for hotel remodeling ($3.2 million), recurring capital expenditures (estimated at approximately
$2.8 million) and debt service.

31

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Contractual Commitments

The following table summarizes our material obligations and commitments to make future payments under certain contracts, including long-term debt obligations,
capitalized leases and operating leases.

|                           |       | Payment Due by Period (In Thousands)
|-------------------------- | ----- | ------------------------------------
|
|Long-Term Debt Instruments |       | $                                   
|Capital Leases             |       |                                     
|Operating Leases           |       |                                     
|                           |       |                                     
|                           | Total |                                     
|                           |       |                                     

We
routinely enter into operational contracts in the ordinary course of our business, including construction contracts for minor projects that are not material to our business or
financial condition as a whole. Our commitments relating to these contracts are recognized as liabilities in our consolidated
balance sheets when services are provided with respect to such contracts. We expect to spend approximately $3.2 million in 2002 to complete the hotel room remodel.

At
December 31, 2001, we had outstanding a letter of credit in the amount of $685,000 which reduced the amount of our available borrowing under the New Credit Facility. We do not
have any other guarantees, contingent commitments or other material liabilities that are not reflected on our consolidated balance sheets.

Recently Issued Accounting Standards

In August 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment on Disposal of Long-Lived Assets", effective January 1, 2002. SFAS No. 144
supercedes SFAS No. 121 and portions of other accounting statements. The provisions applicable to us are substantially the same as those applied under SFAS No. 121 and we, therefore, do not believe
that the adoption of SFAS No. 144 will have a material impact on our results of operations or financial position.

Market Risk

Market risk is the risk of loss arising from adverse changes in market rates and prices, such as interest rates, foreign currency exchange rates and commodity
prices. The interest rate on a portion of the Company's debt ($21.8 million at December 31, 2001) is subject to fluctuation based on changes in short-term interest rates.
Interest expense could increase as a result of this factor. To date, we have not invested in derivative or foreign currency based financial instruments. We attempt to limit our exposure to interest
rate risk by managing the mix of our long-term fixed-rate borrowings under our bank credit facilities.

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

Not applicable.

Item 8.Financial Statements and Supplementary Data.

Reference is made to the Report of Independent Public Accountants and the consolidated financial statements of Eldorado Resorts LLC appearing on pages 50 through
68 of this report and the Report of Independent Public Accountants and the consolidated financial statements of Circus and Eldorado
Joint Venture appearing on pages 70 through 83, which are incorporated in this Item 8 by such reference.

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

Not applicable.

32

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PART III

Item 10.Directors and Executive Officers of the Registrants.

Resorts is managed by its Board of Managers, which currently consists of four Board Members. The initial Board Members designated in the Operating Agreement are
Donald Carano, Recreational Enterprises, Inc. and Hotel Casino Management, Inc. In September 1996, the Members elected Leslie Stone Heisz as an additional Board Member. Each
corporation that serves as a Board Member must select a corporate officer as its representative. Recreational Enterprises, Inc. has selected Gary Carano as its representative and Hotel Casino
Management, Inc. has selected Raymond Poncia as its representative and each has served in such capacity since 1996. A corporation which is a Board Member may change its representative at any
time by providing notice to Resorts. The Operating Agreement provides that the Board of Managers will consist of at least three, but not more than seven, Board Members, as determined by a majority of
the Board of Managers.

Board
Members are elected at annual meetings of the Resorts' members for one-year terms. Any Board Member may be removed from office with a vote of 60% of the membership
interests, but no Board Member may be removed where there would be enough votes to elect that Board Member at an election. In an election, each Member is entitled to as many votes as equals the number
of percentage points of such Member's interest multiplied by the number of Board Members to be elected. Members can cast all of their votes for a single Board Member or distribute them among the
candidates for Board Members as they see fit. The Board of Managers generally has control over the management and affairs of Resorts. Board Members are required to devote enough time to Resorts to
reasonably perform their duties. Resorts' Chief Executive Officer, Donald L. Carano, supervises the day-to-day operations of Resorts. Members and interest holders have no right
to participate directly in management or control of Resorts, except for votes required for certain extraordinary transactions described in the Operating Agreement.

The
Operating Agreement provides that no Board Member or Officer will be liable to Resorts, its Members or holders of its membership interests for acts or omissions of such Board Member
or Officer in connection with the business or affairs of Resorts, including for breach of fiduciary duty or mistake of judgment, except for acts involving intentional misconduct, fraud or knowing
violations of the law. The Operating Agreement also provides that Resorts will indemnify, defend and hold harmless every
Board Member and Officer for any losses arising out of Resorts or its business or affairs, unless such losses are based on acts or omissions involving intentional misconduct, fraud or a knowing
violation of the law.

The
following tables set forth certain information with respect to the individuals who are members of the Board of Managers (each a "Board Member"), executive officers of Resorts or the
Eldorado and other significant employees. Also set forth are the respective positions with Capital held by each individual who is a director or officer of Capital.

33

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Board Members and Executive Officers

|Name                   |  | Age |  | Position(s)                                                                                                 
|---------------------- |  | --- |  | ------------------------------------------------------------------------------------------------------------
|Donald L. Carano       |  | 70  |  | Presiding Board Member, Chief Executive Officer and President of Resorts; President and Director of Capital 
|Robert M. Jones        |  | 59  |  | Chief Financial Officer of Resorts                                                                          
|Gene R. Carano         |  | 46  |  | Vice President and Secretary of Resorts and General Manager of the Eldorado; Treasurer of Capital           
|Gregg R. Carano        |  | 42  |  | Vice President of Resorts and Vice President of Food and Beverage of the Eldorado; Director of Capital      
|Gary L. Carano         |  | 49  |  | Board MemberAppointed by Recreational Enterprises, Inc. as its corporate representative                    
|Raymond J. Poncia, Jr. |  | 68  |  | Board MemberAppointed by Hotel Casino Management, Inc. as its corporate representative; Director of Capital
|Leslie Stone Heisz     |  | 41  |  | Board Member                                                                                                

|Name              |  | Age |  | Significant Employees Position(s)                                 
|----------------- |  | --- |  | ------------------------------------------------------------------
|Robert B. MacKay  |  | 54  |  | Director of Administration of the Eldorado                        
|Robert B. Mouchou |  | 46  |  | Vice President of Operations of the Eldorado                      
|Rick W. Murdock   |  | 46  |  | Vice President of Sales and Casino Marketing of the Eldorado      
|Rhonda B. Carano  |  | 48  |  | Vice President of Advertising and Public Relations of the Eldorado

Donald L. Carano.Mr. Carano has served as Chief Executive Officer of, and has owned a controlling interest in,
Resorts or its predecessor since 1973. Previously, he was an attorney with the firm of McDonald Carano Wilson McCune Bergin Frankovich & Hicks LLP, with which he maintains an "of
counsel" relationship. Mr. Carano has been involved in the gaming industry and has been a licensed casino operator since 1969. Mr. Carano's commitment to the development and promotion of
tourism in Reno has earned him several awards, including the Nevada Food and Beverage Directors Association Man-of-the-Year Award, the American Lung Association
1993 Distinguished Community Service Award and the 1992 Hotelier of the Year Award. Also, since 1984, Mr. Carano has been the Chief Executive Officer of the Ferrari Carano Winery. He is the
father of Gary, Gene, Glenn and Gregg Carano and is married to Rhonda Carano.

Robert M. Jones.Mr. Jones has served as Chief Financial Officer of Resorts or its predecessor since 1989. Prior to
joining the Predecessor Partnership in 1984, Mr. Jones spent fourteen years in public accounting, ten of which were as an audit principal with the international accounting firm of Arthur
Young & Company. Mr. Jones is a former Certified Public Accountant, was an honors graduate of the University of Arizona with a major in accounting and has a Master of Business
Administration degree in taxation from Golden Gate University in San Francisco.

34

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Gene R. Carano.Mr. Carano has served as General Manager of the Eldorado since July 1998 and served as Vice
President of Resorts or its predecessor since 1993 and has been Secretary of Resorts since June 1996. From 1993 until 1998 he served as a Co-General Manager of the Eldorado. From
1986 to 1993, Mr. Carano served as the Eldorado's Director of Gaming. Prior to joining the Eldorado, Mr. Carano held various positions at another major casino in northern Nevada,
including slot floor supervisor and pit boss. Mr. Carano studied business management and hotel administration at Utah State University and the University of Nevada, Las Vegas.

Gregg R. Carano.Mr. Carano has served as Vice President of Resorts or its predecessor since 1994 and has served as
Vice President of the Eldorado since July 1998. From 1993 until July 1998 he served as a Co-General Manager of the Eldorado. He served as General Manager of Circus
Circus-Reno from 1993 to 1994. From 1985 to 1993, Mr. Carano served as Director of Food and Beverage at the Eldorado. Mr. Carano holds a Bachelor of Science Degree in
Hotel/Restaurant Management from Florida International University and an Associates Degree in Occupational Studies in Culinary Arts from the Culinary Institute of America.

Gary L. Carano.Mr. Carano has served as General Manager of the Silver Legacy since 1995. Previously, he served as
Assistant General Manager, General Manager and Chief Operating Officer of the Eldorado from 1980 to 1994. Mr. Carano holds a Bachelors Degree in Business Administration from the University of
Nevada, Reno.

Raymond J. Poncia, Jr.Mr. Poncia has had an ownership interest in the Eldorado since 1973 and has been
involved in the gaming industry since 1968. He has been involved with the Eldorado in the areas of development, architectural and interior design, construction financing and business planning.
Mr. Poncia received his architectural degree from Case-Reserve University and has been a licensed architect in private practice since 1960.

Leslie Stone Heisz.Ms. Heisz has been a Board Member since 1996. Since December 1996, she has been a Managing
Director of Dresdner Kleinwort & Wasserstein, where she has been a director since 1995. Prior thereto, Ms. Heisz was a Vice President at Salomon Brothers Inc. where she provided
capital raising and financial advisory services to a wide variety of companies. Ms. Heisz received a M.B.A. and a B.S. from U.C.L.A.

Robert B. MacKay.Mr. MacKay has been the Director of Administration of the Eldorado since 1989. From 1985 to 1989,
Mr. MacKay served as the Eldorado's Treasurer. He also has held the positions of Director of Finance and Controller of the Eldorado. Mr. MacKay is a Certified Public Accountant and is a
graduate of the University of Nevada, Reno with a degree in Accounting.

Robert B. Mouchou.Mr. Mouchou has been the Vice President of Operations of the Eldorado since 1997.
Mr. Mouchou joined the Eldorado in 1979 and has held a variety of positions, including Director of Gaming, Games Manager, Assistant Slot Manager, Casino Analyst, Assistant Controller and Audit
Supervisor.

Rick W. Murdock.Mr. Murdock has been Vice President of Sales and Casino Marketing of the Eldorado since 1999,
previously serving as Director of Casino Marketing of the Eldorado from 1995 until he assumed his current position. He began his career at the Eldorado in 1981 and has since held various positions,
including Director of Sales, National Sales Manager and Assistant Hotel Manager.

Rhonda B. Carano.Mrs. Carano has been the Vice President of Advertising and Public Relations of the Eldorado since
1999, previously serving as Director of Advertising and Public Relations of the Eldorado from 1978 until 1999. Mrs. Carano is the Vice President of the Ferrari Carano Winery. She received a
Bachelor of Science degree from the University of Nevada, Reno.

35

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Item 11.Executive Compensation.

Summary Compensation Tables

The following table sets forth all compensation paid by Resorts for the period from January 1, 1999 through December 31, 2001, to the Resort's
officers named below (the "Named Officers").

|                                                                                               |  | Annual Compensation(1) |  |   |                        
|---------------------------------------------------------------------------------------------- |  | ---------------------- |  | - | -----------------------
|
|
|Donald Carano
Board Member and Chief Executive Officer of Resorts                              |  | 2001
2000
1999         |  | $ | 363,500
550,000
550,000
|Robert Jones
Chief Financial Officer of Resorts                                                |  | 2001
2000
1999         |  | $ | 320,000
320,000
320,000
|Gene Carano
Vice President of Resorts and General Manager of the Eldorado                      |  | 2001
2000
1999         |  | $ | 300,000
300,000
300,000
|Gregg Carano
Vice President of Resorts and Vice President of Food and Beverage of the Eldorado |  | 2001
2000
1999         |  | $ | 300,000
300,000
300,000
|Rob Mouchou
Vice President of Operations of the Eldorado                                       |  | 2001
2000
1999         |  | $ | 300,000
300,000
300,000

---

1995 Performance and Appreciation Rights Plan

Until June 1, 2000, the Eldorado Hotel Associates Limited Partnership 1995 Performance and Appreciation Rights Plan (the "Rights Plan"), which was adopted
effective January 1, 1995, permitted the grant to certain executives and other key employees of the Company who had substantial responsibility for its management and growth with incentives and
rewards in the form of performance rights and appreciation rights. No performance rights were granted under the Rights Plan, which is administered by a Committee comprised of Donald Carano and two
other individuals selected by the members of the Company (the "Rights Committee"). An employee's performance rights terminate upon such employee's exercise of any appreciation rights or the
termination of such employee's employment with the Company. Upon the termination of an employee's employment with the Company, the employee will be entitled to exercise appreciation rights only to the
extent that such rights have vested to such date.

36

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An
appreciation right allows an employee upon exercise to receive compensation based on the difference between the value of the membership interests of the Company at the date the right
was granted and the date of exercise. One appreciation right is intended to represent the economic equivalent of ownership of .00001% of one membership interest in the Company. Appreciation rights do
not, however, entitle holders thereof to any rights in or to own or control any membership interests in the Company.

Appreciation
rights may not be transferred other than by will or the laws of descent and distribution or to a family trust created solely for the benefit of an employee or such
employee's spouse and descendants. Appreciation rights may be exercised only by the employee holding such rights (or a legal guardian, legal representative, trustee of a family trust or executor of
the estate of a deceased employee). The Rights Committee, however, may in its discretion allow certain other transfers of appreciation rights, such as transfers during the lifetime of an employee to
the spouse and children of the employee.

The
Company has not granted any appreciation rights to the Named Officers since 1996. Nor did any of the Named Officers exercise any appreciation rights during 2001. The following table
provides certain information with respect to the appreciation rights held by the Named Officers as of December 31, 2001.

Number of Unexercised
Appreciation Rights as of
December 31, 2001

Value of Unexercised
Appreciation Rights as of
December 31, 2001NameExercisable

Unexercisable

Exercisable

UnexercisableDonald Carano









Robert Jones

50,000

25,000

$
0

$
0Gene Carano

62,500

37,500

$
0

$
0Gregg Carano

62,500

37,500

$
0

$
0Rob Mouchou

37,500

12,500

$
0

$
0


Deferred Compensation Plan

Effective January 1, 1990, the Eldorado Hotel Casino Deferred Compensation Plan (the "Deferred Compensation Plan") was established for the benefit of a
select group of management and highly compensated employees. As of December 31, 2001, six employees of the Company were eligible to participate. Under the Deferred Compensation Plan, as
presently administered, an eligible employee may elect each year to defer the receipt of a portion of his or her compensation from the Company. A participating employee is 100% vested with respect to
any amount deferred pursuant to his or her deferral election. Amounts deferred in years prior to 1991, which were determined in the sole discretion of Resorts' Chief Executive Officer, Donald Carano,
vest 20% per year so that they become vested over a five-year period. A participating employee becomes 100% vested in all amounts credited to such employee's account upon retirement,
death, permanent disability or termination of employment with the Company for any reason other than fraud, or upon a sale of substantially all of the Company's assets or if the Carano family ceases to
have majority ownership or control of the Company.
Participating employees are entitled to receive annual distributions commencing upon the earliest of the second month after death, permanent disability, retirement or, if employment is terminated for
reasons other than death or disability prior to attainment of age 60, attainment of age 60. However, Resorts' Chief Executive Officer may in his sole discretion elect to make a distribution to a
terminated employee prior to such terminated employee attaining age 60. In addition, Resorts' Chief Executive Officer may in his sole discretion elect to distribute an employee's benefits in the form
of a lump sum distribution and may elect to distribute benefits to an employee over a shorter period of time than that provided for in the Deferred Compensation Plan. Amounts the Company is obligated
to distribute to

37

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participants, including the Named Officers, pursuant to the Deferred Compensation Plan represent an unfunded obligation of the Company which, as of December 31, 2001, totaled $1,417,000.

401(k) Retirement Savings Plan

The Company maintains a savings plan (the "401(k) Plan") qualified under Sections 401(a) and 401(k) of the Internal Revenue Code of 1986, as amended.
Generally, all employees of the Company in the United States who are 21 years of age or older, who have completed six months and 1,000 hours of service and who are not covered by
collective bargaining agreements are eligible to participate in the 401(k) Plan. Employees who elect to participate in the 401(k) Plan may defer up to 15% but not less than 1% of their annual
compensation, subject to statutory and certain other limits. The Company makes matching contributions of 25% of the employees' contributions, up to a maximum of 1.5% of the employees' annual
compensation and subject to certain other limitations.

Compensation Committee Interlocks and Insider Participation

The Company has historically paid a management fee to each of Recreational Enterprises, Inc. and Hotel Casino Management, Inc. A portion of these
fees represented compensation for services provided to the Company by certain members of the Carano family. Effective July 1, 1996, the Company entered into a new Management Agreement (the
"Management Agreement") with Recreational Enterprises, Inc. and Hotel Casino Management, Inc. which provides that Recreational Enterprises, Inc. and Hotel Casino
Management, Inc. (collectively, the "Managers") will, among other things, (a) develop strategic plans for the Company's business, including preparing annual budgets and capital
expenditure plans, (b) provide advice and oversight with respect to financial matters of the Company, (c) establish and oversee the operation of financial accounting systems and controls
and regularly review the Company's financial reports, (d) provide planning, design and architectural services to the Company and (e) furnish advice and recommendations with respect to
certain other aspects of the Company's operations. In consideration for such services, the Company will pay to the Managers a management fee not to exceed 1.5% of the Company's annual net revenues.
The current term of the Management Agreement continues in effect until July 1, 2002 and will be automatically renewed for additional three-year terms until terminated by one of the
parties. In 2001, the management fees paid by the Company to Recreational Enterprises, Inc. and Hotel Casino Management, Inc. pursuant to the Management Agreement aggregated $904,000 and
$297,000, respectively. There can be no assurance that the terms of the Management Agreement are at least as favorable to the Company as could be obtained from unaffiliated third parties.

The
Company owns the entire parcel on which the Eldorado is located, except for approximately 30,000 square feet which is leased by the Company from C, S and Y Associates, a general
partnership of which Donald Carano is a general partner (the "C, S and Y Lease"). The C, S and Y Lease expires on June 30, 2027. Annual rent is equal to the greater of (i) $400,000 or
(ii) an amount based on a decreasing percentage of the Eldorado's gross gaming revenues ranging from 3% of the first $6.5 million of gross gaming revenues to 0.1% of gross gaming
revenues in excess of $75 million. In 2001, the rent paid pursuant to the C, S and Y Lease, totaled approximately $642,000. In the opinion of the Company's management, the terms of the C, S and
Y Lease are at least as favorable to the Company as could have been obtained from unaffiliated third parties.

Donald
Carano has been an attorney with the firm of McDonald Carano Wilson McCune Bergin Frankovich & Hicks LLP ("McDonald Carano") since 1961. Mr. Carano maintains
an "of counsel" relationship with McDonald Carano, but is not involved in the active practice of law or in the representation of the Company or any of its affiliates as an attorney. Donald Carano
receives no compensation from McDonald Carano. The Company currently retains McDonald Carano in connection with a variety of legal matters. In the opinion of the Company's management, the fees paid

38

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to McDonald Carano are at least as favorable to the Company as could be obtained from any other law firm for comparable services.

Effective
December 13, 2000, Resorts entered into an agreement to form Tamarack Crossings, LLC and Tamarack Partners, LLC, each a Nevada limited liability company
(collectively the "Tamarack Entities"), to develop, own and operate Tamarack Junction ("Tamarack"), a small casino then being constructed in south Reno, Nevada. In May 2001, the Tamarack
Entities consummated a plan of merger with Tamarack Crossings, LLC being the surviving entity. In June 2001, Resorts entered into an agreement with the Robert and Nana Sullivan Family
Trust (the "Trust"), an affilated entity, to reduce Resorts' percentage interest in Tamarack Crossings, LLC to 21.25% from 42.5%. Donald Carano, who then owned a 5% interest, exercised an option
effective February 19, 2002 to purchase from the Trust an additional 21.25%, thus increasing his total interest to 26.25%, subject to approval of the Nevada Gaming Commission. Resorts has a
nontransferable option to purchase from Donald Carano, at a purchase price equal to his cost plus any undistributed income attributable thereto, an additional 10% interest in Tamarack Crossings, LLC
which is exercisable until June 30, 2010. Tamarack, which opened September 4, 2001, has approximately 210 slot machines, a keno game, a sportsbook and a themed restaurant. The business
and affairs of the Tamarack are managed by four members of Tamarack Crossings, LLC, including Resorts, which has been designated "Chief Executive Manager" and is responsible for overseeing the
day-to-day operations of the Tamarack. Resorts has designated Gene Carano as its representative. At December 31, 2001, Resorts' financial investment in Tamarack
Crossings, LLC was $3.4 million of which $3.0 million was invested in 2001. Resorts' capital contribution to Tamarack Crossings, LLC represents its proportionate share of
the total capital contributions of the members. Additional capital contributions of the members, including Resorts, may be required for certain purposes, including the payment of operating costs and
capital expenditures or the repayment of loans, to the extent such costs are not funded by prior capital contributions and earnings. The Company's investment in Tamarack is accounted for using the
equity method of accounting. The Tamarack purchased products prior to its opening and has continued purchasing various products, such as meat and bakery items, from or through the Eldorado which
totaled $331,000 in 2001. The Tamarack purchased these products at the Company's cost.

Effective
July 1, 2000, Resorts and Avereon Research LTD. ("ARL") entered into an agreement to form MindPlay, LLC (the "MindPlay Entity"), for the
purpose of developing, owning and marketing a sophisticated system which, if successfully completed, will permit the tracking and surveillance of pit gaming operations ("MindPlay"). MindPlay is in the
developmental stage and there is no assurance that the system will ever be successfully developed and marketed. The MindPlay Entity, in which Resorts owns a 19% interest, is managed by a Board of
Managers, which consists of three Managers designated by ARL and two Managers designated by Resorts. Other investors in the MindPlay Entity include Robert Jones, Gene Carano, Gary Carano, Glenn
Carano, Gregg Carano, Rhonda Carano, Rob Mouchou, Rick Murdock and Robert B. Mackay, each an affiliate or executive of Resorts, each of whom owns an individual interest in MindPlay, which in the
aggregate is 11.3%. The individuals acquired their interests in MindPlay under the same terms and conditions as those of Resorts. At December 31, 2001, Resorts' financial investment in the
MindPlay Entity was $1.4 million of which $1.1 million was invested in 2001. The Company's investment in MindPlay is accounted for using the equity method of accounting. Equity in net
loss related to MindPlay for the year ended December 31, 2001 of $207,000 is included as a component of non-operating income.

In
January 2002, the Company guaranteed 54.28% of a working capital line for the MindPlay Entity in the amount of $1 million. This line of credit shall be available for draw down
for a period of two years. Each draw on the line of credit must be approved by the president of MindPlay and Robert Jones, Chief Financial Officer of Resorts.

39

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In
2001, the Eldorado purchased advertising posters, banners and other material from Lexicon Design, Inc., a corporation which is wholly-owned by the wife of Glenn Carano, son of
Donald Carano. For such purchases, the Eldorado paid Lexicon Design, Inc. $207,000 in 2001.

The
Company from time to time leases an aircraft owned by Recreational Enterprises, Inc., for use in operating the Company's business. In 2001, lease payments for the aircraft
totaled $313,000. In the opinion of Resorts' management, the payments are at least as favorable to Resorts as could have been obtained from an unaffiliated third party.

The
Company does not have a compensation committee or other committee of the Board of Managers performing equivalent functions. The compensation paid in 2001 to each of the Company's
Board Members and executive officers was determined by the Chief Executive Officer, and it is anticipated that such compensation will be so determined in the future.

Item 12.Security Ownership of Certain Beneficial Owners and Management.

The following chart illustrates the ownership of the Company and the Silver Legacy Joint Venture. Recreational Enterprises, Inc. is beneficially owned by
members of the Carano family and Hotel Casino Management, Inc. is beneficially owned by members of the Poncia family. Capital is a wholly-owned subsidiary of Resorts.

LOGO

40

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The
following table sets forth certain information regarding the beneficial ownership of the Resorts' outstanding membership interests by (i) each person known by Resorts to be a
beneficial owner of 5% or more of the outstanding membership interests, (ii) each Board Member, (iii) each of the Named Officers and (iv) all Board Members and executive officers
of Resorts as a group.

Name and Address of Beneficial Owner

Membership
Interest %Donald L. Carano(1)(2)

58.0
%Recreational Enterprises, Inc.(3)

55.0
%Raymond J. Poncia, Jr.(4)(5)

29.0
%Hotel Casino Management, Inc.(5)(6)

29.0
%Hotel Casino Realty Investments, Inc.(7)

6.0
%Gene R. Carano(2)(7)(8)

6.6
%Gregg R. Carano(2)(7)(8)

6.6
%Gary L. Carano(2)(7)(8)

6.6
%Cindy L. Carano(2)(7)(8)

6.6
%Glenn T. Carano(2)(7)(8)

6.6
%Ludwig J. Corrao(9)

5.0
%Robert M. Jones

Rob B. Mouchou

Leslie Stone Heisz

All Board Members and executive officers as a group

95.0
%


---

41

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Item 13.Certain Relationships and Related Transactions.

Reference is made to the information which appears under the heading "Compensation Committee Interlocks and Insider Participation" in Item 11 of this
report, which information is incorporated herein by this reference.

PART IV

Item 14.Exhibits, Financial Statement Schedules and Reports on Form 8-K.

| |  | (a)(1) |  | Financial Statements                                                                                                                                                      
| |  | ------ |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  |        |  | Incorporated by reference in Item 8 of this report and included on pages 50 through 68 hereof are the following consolidated financial statements of Eldorado Resorts LLC:
| |  |        |  | Report of Independent Public Accountants                                                                                                                                  
| |  |        |  | Consolidated Balance Sheets at December 31, 2001 and December 31, 2000                                                                                                    
| |  |        |  | Consolidated Statements of Income and Comprehensive Income for the Years Ended December 31, 2001, 2000 and 1999                                                           
| |  |        |  | Consolidated Statements of Members' Equity for the Years Ended December 31, 2001, 2000 and 1999                                                                           
| |  |        |  | Consolidated Statements of Cash Flows for the Years Ended December 31, 2001, 2000 and 1999                                                                                
| |  |        |  | Notes to Consolidated Financial Statements                                                                                                                                
| |  | (a)(2) |  | Financial Statement Schedules                                                                                                                                             
| |  |        |  | Included on 70 through 83 of this report are the following financial statements of Circus and Eldorado Joint Venture:                                                     
| |  |        |  | Report of Independent Public Accountants                                                                                                                                  
| |  |        |  | Balance Sheets at December 31, 2001 and December 31, 2000                                                                                                                 
| |  |        |  | Statements of Operations for the Years Ended December 31, 2001, 2000 and 1999                                                                                             
| |  |        |  | Statements of Partners' Equity for the Years Ended December 31, 2001, 2000 and 1999                                                                                       
| |  |        |  | Statements of Cash Flows for the Years Ended December 31, 2001, 2000 and 1999                                                                                             
| |  |        |  | Notes to Financial Statements                                                                                                                                             
| |  | (a)(3) |  | Exhibits:                                                                                                                                                                 
| |  |        |  | The following exhibits are filed as part of this report or incorporated herein by reference:                                                                              

42

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|EXHIBIT
NUMBER |  | DESCRIPTION OF EXHIBIT                                                                                                                                                                                                                                                                                                                                                                 
|-------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2.1            |  | Eldorado Resorts LLC Articles of Merger. (Incorporated by reference to Exhibit 2.1 to the Registrants' Form S-4 Registration StatementSecurities and Exchange Commission File No. 333-11811)                                                                                                                                                                                          
|2.2            |  | Agreement and Plan of Merger dated as of June 28, 1996 by and between Eldorado Hotel Associates Limited Partnership and Eldorado Resorts LLC. (Incorporated by reference to Exhibit 2.2 to the Registrants' Form S-4 Registration
StatementSecurities and Exchange Commission File No. 333-11811)                                                                                     
|3.1            |  | Articles of Organization of Eldorado Capital Corp. (Incorporated by reference to Exhibit 3.1 to the Registrants' Form S-4 Registration StatementSecurities and Exchange Commission File No. 333-11811)                                                                                                                                                                                
|3.2            |  | Articles of Incorporation of Eldorado Capital Corp. (Incorporated by reference to Exhibit 3.2 to the Registrants' Form S-4 Registration StatementSecurities and Exchange Commission File No. 333-11811)                                                                                                                                                                               
|3.3            |  | Operating Agreement of Eldorado Resorts LLC dated as of June 28, 1996 by and among Recreational Enterprises Inc., Hotel-Casino Management, Inc., Hotel Casino Realty Investments, Inc., Donald L. Carano and Ludwig J.
Corrao. (Incorporated by reference to Exhibit 3.3 to the Registrant's Form S-4 Registration StatementSecurities and Exchange Commission File No. 333-11811)    
|3.4            |  | Bylaws of Eldorado Capital Corp. (Incorporated by reference to Exhibit 3.4 to the Registrants' Form S-4 Registration StatementSecurities and Exchange Commission File No. 333-11811)                                                                                                                                                                                                  
|4.1            |  | Indenture dated July 31, 1996 between Eldorado Resorts, Eldorado Capital Corp. and Fleet National Bank, as trustee, and Form of Exchange Note. (Incorporated by reference to Exhibit 4.1 to the Registrants' Form S-4 Registration
StatementSecurities and Exchange Commission File No. 333-11811)                                                                                    
|4.2            |  | Registration Rights Agreement dated as of July 31, 1996 by and among Eldorado Resorts LLC, Eldorado Capital Corp., Bear, Stearns & Co. Inc., Wassertstein Perella Securities, Inc. and BA Securities, Inc.
(Incorporated by reference to Exhibit 4.2 to the Registrants' Form S-4 Registration StatementSecurities and Exchange Commission File No. 333-11811)                        
|4.3            |  | Second Amended and Restated Loan Agreement dated as of June 29, 2001 among Eldorado Resorts LLC and Bank of America, N.A. (formerly Bank of America National Trust and Savings Association), as sole initial Bank, Issuing Bank and
Administrative Agent. (Incorporated by reference to Exhibit 4.8 to the Registrants' Form 10-Q for the quarter ended June 30, 2001)                 
|4.4            |  | Amendment No. 1 to Second Amended and Restated Loan Agreement, dated as of December 31, 2001, by and among Eldorado Resorts LLC, the banks referred to therein, and Bank of America, N.A., as administrative agent, and related
consents of Eldorado Capital Corporation and the lenders. (Incorporated by reference to Exhibit 4 to the Registrants' Form 8-K dated December 31, 2001)
|10.1.1         |  | Agreement of Joint Venture of Circus and Eldorado Joint Venture dated as of March 1, 1994 by and between Eldorado Limited Liability Company and Galleon, Inc. (Incorporated by reference to Exhibit 10.1 to the Registrants' Form S-4
Registration StatementSecurities and Exchange Commission File No. 333-11811)                                                                    
|               |  |                                                                                                                                                                                                                                                                                                                                                                                        

43

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|10.1.2 |  | Amended and Restated Agreement of Joint Venture of Circus and Eldorado Joint Venture by and between Eldorado Limited Liability Company and Galleon, Inc.                                                                                                                                                                        
|------ |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.2.1 |  | Management Agreement dated as of June 28, 1996 by and between Eldorado Resorts LLC, Recreational Enterprises, Inc. and Hotel-Casino Management, Inc. (Incorporated by reference to Exhibit 10.3 to the Registrants' Form S-4
Registration StatementSecurities and Exchange Commission File No. 333-11811)                      
|10.2.2 |  | Written Consent in Lieu of Meeting of Members of Eldorado Limited Liability Company (Incorporated by reference to Exhibit 10 to the Registrants' quarterly report on Form 10-Q for the period ended June 30, 1998)                                                                                                              
|10.3   |  | Indemnity Agreement dated as of July 25, 1996 between Eldorado Resorts LLC and Eldorado Capital Corp. (Incorporated by reference to Exhibit 10.4 to the Registrants' Form S-4 Registration StatementSecurities and Exchange
Commission File No. 333-11811)                                                                     
|10.4   |  | Purchase Agreement and Joint Escrow Instructions dated June 26, 1996 by and between Daniel's Motor Lodge, Inc. and Eldorado Hotel Associates Limited Partnership. (Incorporated by reference to Exhibit 10.5 to the Registrants'
Form S-4 Registration StatementSecurities and Exchange Commission File No. 333-11811)         
|10.5.1 |  | Lease dated July 21, 1972 by and between C. S. & Y. Associates and Eldorado Hotel Associates. (Incorporated by reference to Exhibit 10.6.1 to the Registrants' Form S-4 Registration StatementSecurities and Exchange
Commission File No. 333-11811)                                                                           
|10.5.2 |  | Addendum to Lease dated March 20, 1973 by and between C. S. & Y. Associates and Eldorado Hotel Associates. (Incorporated by reference to Exhibit 10.6.2 to the Registrants' Form S-4 Registration StatementSecurities and
Exchange Commission File No. 333-11811)                                                              
|10.5.3 |  | Amendment to Lease dated January 1, 1978 by and between C. S. & Y. Associates and Eldorado Hotel Associates. (Incorporated by reference to Exhibit 10.6.3 to the Registrants' Form S-4 Registration StatementSecurities and
Exchange Commission File No. 333-11811)                                                            
|10.5.4 |  | Amendment to Lease dated January 31, 1985 by and between C. S. & Y. Associates and Eldorado Hotel Associates. (Incorporated by reference to Exhibit 10.6.4 to the Registrants' Form S-4 Registration StatementSecurities and
Exchange Commission File No. 333-11811)                                                           
|10.5.5 |  | Third Amendment to Lease dated December 24, 1987 by and between C. S. & Y. Associates and Eldorado Hotel Associates. (Incorporated by reference to Exhibit 10.6.5 to the Registrants' Form S-4 Registration
StatementSecurities and Exchange Commission File No. 333-11811)                                                    
|10.6*  |  | Eldorado Hotel Associates Limited Partnership 1995 Performance and Appreciation Rights Plan effective January 1, 1995. (Incorporated by reference to Exhibit 10.7 to the Registrants' Form S-4 Registration StatementSecurities and
Exchange Commission File No. 333-11811)                                                    
|10.7*  |  | Eldorado Hotel Casino Deferred Compensation Plan effective January 1, 1990. (Incorporated by reference to Exhibit 10.8 to the Registrants' Form S-4 Registration StatementSecurities and Exchange Commission File No. 333-11811)                                                                                               
|10.8*  |  | Eldorado Hotel Casino Deferred Compensation Plan Trust Agreement dated December 1, 1990 by and between Eldorado Hotel Associates Limited Partnership and Donald L. Carano. (Incorporated by reference to Exhibit 10.9 to the Registrants'
Form S-4 Registration StatementSecurities and Exchange Commission File No. 333-11811)
|       |  |                                                                                                                                                                                                                                                                                                                                 

44

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|10.9.1  |  | Amended and Restated Credit Agreement, dated November 24, 1997, by and among Circus and Eldorado Joint Venture, the Banks named therein and Bank of America National Trust and Savings Association as Administrative Agent, and the related Note,
Amended and Restated Make-Well Agreement and Amended and Restated Deed of Trust. (Incorporated by reference to Exhibit 4(h) to the quarterly report for the quarterly period ended October 31, 1997 of Circus Circus Enterprises, Inc.
(Mandalay Resort Group) (Commission File No. 1-8570.)
|------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.9.2  |  | Second Amended and Restated Credit Agreement, dated as of March 5, 2002, among Circus and Eldorado Joint Venture, the banks referred to therein and Bank of America, N.A., as administrative agent.                                                                                                                                                                                                                                                                                                                                           
|10.9.3  |  | Guaranty dated as of March 5, 2002, made by Silver Legacy Capital Corp., in favor of Bank of America, N.A. as administrative agent.                                                                                                                                                                                                                                                                                                                                                                                                           
|10.9.4  |  | Second Amended and Restated Security Agreement, dated as of March 5, 2002, by and between Circus and Eldorado Joint Venture and Bank of America, N.A. as administrative agent.                                                                                                                                                                                                                                                                                                                                                                
|10.9.5  |  | Guarantor Security Agreement, dated as of March 5, 2002, by and between Silver Legacy Capital Corp. and Bank of America, N.A., as administrative agent.                                                                                                                                                                                                                                                                                                                                                                                       
|10.9.6  |  | Second Amended and Restated Deed of Trust, dated as of February 26, 2002, but effective March 5, 2002, by and among Circus and Eldorado Joint Venture and Bank of America, N.A., as administrative agent.                                                                                                                                                                                                                                                                                                                                     
|10.9.7  |  | Second Amended and Restated Assignment of Rent and Revenues entered into as of February 26, 2002, but effective as of March 5, 2002, by and between Circus and Eldorado Joint Venture and Bank of America, N.A., administrative
agent.                                                                                                                                                                                                                                                                                                        
|10.9.8  |  | Second Amended and Restated Collateral Account Agreement, dated March 5, 2002, by and between Circus and Eldorado Joint Venture and Bank of America, N.A., as administrative agent.                                                                                                                                                                                                                                                                                                                                                           
|10.9.9  |  | Intercreditor Agreement, dated as of March 5, 2002, by and among Bank of America, N.A., as administrative agent, The Bank of New York, as trustee, Circus and Eldorado Joint Venture and Silver Legacy Capital Corp.                                                                                                                                                                                                                                                                                                                          
|10.10.1 |  | Indenture, dated as of March 5, 2002, among Circus and Eldorado Joint Venture, Silver Legacy Capital Corp., and The Bank of New York, as trustee.                                                                                                                                                                                                                                                                                                                                                                                             
|10.10.2 |  | Deed of Trust, dated as of February 26, 2002, by Circus and Eldorado Joint Venture, to First American Title Company of Nevada for the benefit of the Bank of New York.                                                                                                                                                                                                                                                                                                                                                                        
|10.10.3 |  | Security Agreement, dated as of March 5, 2002, by and between Circus and Eldorado Joint Venture and Silver Legacy Corp. for the benefit of The Bank of New York, as trustee.                                                                                                                                                                                                                                                                                                                                                                  
|10.10.4 |  | Assignment of Rent and Revenues entered into as of February 26, 2002, by and between Circus and Eldorado Joint Venture and The Bank of New York, as trustee.                                                                                                                                                                                                                                                                                                                                                                                  
|10.10.5 |  | Collateral Account Agreement, dated as of March 5, 2002, by and among Circus and Eldorado Joint Venture, Silver Legacy Capital Corp., and The Bank of New York, as trustee.                                                                                                                                                                                                                                                                                                                                                                   
|10.10.6 |  | Environment Indemnity Agreement entered into as of March 5, 2002, by Circus and Eldorado Joint Venture and Silver Legacy Capital Corp.                                                                                                                                                                                                                                                                                                                                                                                                        
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

45

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|10.11 |  | Operating Agreement of Tamarack Crossings LLC dated as of December 13, 2000 by and among Eldorado Resorts LLC, The Robert and Nana Sullivan Family Trust, Robert E. Armstrong, Donald L. Carano and Patrick C. Sullivan.
(Incorporated by reference to Exhibit 10.12 to the Registrants' Form 10-K for the year ended December 31, 2000)                        
|----- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.12 |  | Operating Agreement of MindPlay LLC dated as of July 1, 2000 by and among Eldorado Resorts LLC, Avereon Research LTD. and others, and Amendment thereto. (Incorporated by reference to Exhibit 10.13 to the Registrants'
Form 10-K for the year ended December 31, 2000)                                                                                        
|10.13 |  | Articles of Merger dated May 31, 2001 by and between Tamarack Partners, LLC and Tamarack Crossings, LLC. (Incorporated by reference to Exhibit 10.14 to the Registrants' Form 10-Q for the quarterly period ended June 30,
2001)                                                                                                                                
|10.14 |  | Unit Option Agreement dated June 29, 2001 by and among The Robert and Nana Sullivan Family Trust and Eldorado Resorts LLC. (Incorporated by reference to Exhibit 10.15 to the Registrants' Form 10-Q for the quarterly period ended
June 30, 2001)                                                                                                              
|10.15 |  | First Amendment to Operating Agreement of Tamarack Crossings, LLC dated as of June 29, 2001 by and among Eldorado Resorts LLC, The Robert and Nana Sullivan Family Trust, Robert G. Armstrong, Donald L. Carano and
Patrick C. Sullivan. (Incorporated by reference to Exhibit 10.16 to the Registrants' Form 10-Q for the quarterly period ended June 30, 2001)
|21    |  | List of Subsidiaries.                                                                                                                                                                                                                                                                                                                                           
|99    |  | Letter re: Representations of Independent Public Accountants                                                                                                                                                                                                                                                                                                    

---



46

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrants have duly caused this report to be signed on
their behalf by the undersigned, thereunto duly authorized.

|                     |  | ELDORADO RESORTS LLC  
|-------------------- |  | ----------------------
|Date: March 27, 2002 |  | By:                   
|                     |  | ELDORADO CAPITAL CORP.
|Date: March 27, 2002 |  | By:                   

Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrants and in the capacities and on
the dates indicated.

|Signature                           |  | Title                                                                                                                                                                                                                      |  | Date          
|----------------------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | --------------
|                                    |  |                                                                                                                                                                                                                            |  |               
|/s/DONALD L. CARANODonald L. Carano |  | Chief Executive Officer, President and Presiding Manager of the Board of Managers of Eldorado Resorts LLC (Principal Executive Officer) and President (Principal Executive Officer) and Director of Eldorado
Capital Corp. |  | March 27, 2002
|/s/ROBERT M. JONESRobert M. Jones   |  | Chief Financial Officer of Eldorado Resorts LLC (Principal Financial and Accounting Officer)                                                                                                                               |  | March 27, 2002
|/s/GENE R. CARANOGene R. Carano     |  | Treasurer of Eldorado Capital Corp. (Principal Financial and Accounting Officer)                                                                                                                                           |  | March 27, 2002
|                                    |  |                                                                                                                                                                                                                            |  |               

47

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|/s/RAYMOND J. PONCIA, JR.Raymond J. Poncia, Jr. |  | Member of the Board of Managers of Eldorado Resorts LLCappointed by Hotel Casino Management, Inc. as its corporate representative and Director of Eldorado Capital Corp. |  | March 27, 2002
|----------------------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | --------------
|/s/GARY L. CARANOGary L. Carano                 |  | Member of the Board of Managers of Eldorado Resorts LLCappointed by Recreational Enterprises, Inc. as its corporate representative                                       |  | March 27, 2002
|/s/GREGG R. CARANOGregg R. Carano               |  | Director of Eldorado Capital Corp.                                                                                                                                        |  | March 27, 2002
|/s/LESLIE STONE HEISZLeslie Stone Heisz         |  | Member of the Board of Managers of Eldorado Resorts LLC                                                                                                                   |  | March 27, 2002

48

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INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

|                                                           |  | Page
|---------------------------------------------------------- |  | ----
|Report of Independent Public Accountants                   |  | 50  
|Consolidated Balance Sheets                                |  | 51  
|Consolidated Statements of Income and Comprehensive Income |  | 52  
|Consolidated Statements of Members' Equity                 |  | 53  
|Consolidated Statements of Cash Flows                      |  | 54  
|Notes to Consolidated Financial Statements                 |  | 55  

49

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REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Members of Eldorado Resorts LLC:

We
have audited the accompanying consolidated balance sheets of ELDORADO RESORTS LLC, (a Nevada limited liability company) and subsidiaries (the "Company"), as of December 31, 2001 and 2000,
and the related consolidated statements of income and comprehensive income, members' equity and cash flows for the three years then ended. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

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

In
our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Eldorado Resorts LLC and subsidiaries as of December 31, 2001 and
2000, and the results of their operations and their cash flows for the three years then ended in conformity with accounting principles generally accepted in the United States.

ARTHUR
ANDERSEN LLP

Las
Vegas, Nevada
March 5, 2002

50

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ELDORADO RESORTS LLC        CONSOLIDATED BALANCE SHEETS  (dollars in thousands)

|                                                |                                              | December 31,
|----------------------------------------------- | -------------------------------------------- | ------------
|
|ASSETS                                         
|CURRENT ASSETS:                                 |                                              |             
|                                                | Cash and cash equivalents                    |             
|                                                | Restricted cash                              |             
|                                                | Accounts receivable, net                     |             
|                                                | Inventories                                  |             
|                                                | Prepaid expenses                             |             
|                                                |                                              |             
|                                                |                                              |             
|INVESTMENT IN JOINT VENTURES                    |                                              |             
|PROPERTY AND EQUIPMENT, net                     |                                              |             
|OTHER ASSETS, net                               |                                              |             
|                                                |                                              |             
|                                                |                                              |             
|                                                |                                              |             
|LIABILITIES AND MEMBERS' EQUITY                
|CURRENT LIABILITIES:                            |                                              |             
|                                                | Current portion of long-term debt            |             
|                                                | Current portion of capital lease obligations |             
|                                                | Accounts payable                             |             
|                                                | Construction and retention payables          |             
|                                                | Interest payable                             |             
|                                                | Accrued and other liabilities                |             
|                                                | Due to members and affiliates                |             
|                                                |                                              |             
|                                                |                                              |             
|LONG-TERM DEBT, less current portion            |                                              |             
|CAPITAL LEASE OBLIGATIONS, less current portion |                                              |             
|OTHER LIABILITIES                               |                                              |             
|                                                |                                              |             
|                                                |                                              |             
|                                                |                                              |             
|MINORITY INTEREST                               |                                              |             
|COMMITMENTS AND CONTINGENCIES (Notes 11 and 12) |                                              |             
|MEMBERS' EQUITY                                 |                                              |             
|                                                |                                              |             
|                                                |                                              |             
|                                                |                                              |             

The
accompanying notes are an integral part of these consolidated statements.

51

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ELDORADO RESORTS LLC        CONSOLIDATED STATEMENTS OF INCOME  AND COMPREHENSIVE INCOME  (dollars in thousands)

|                                                            |                                                                    | For the years ended December 31, |        
|----------------------------------------------------------- | ------------------------------------------------------------------ | -------------------------------- | -------
|
|OPERATING REVENUES:                                         |                                                                    |                                  |        
|                                                            | Casino                                                             |                                  | $      
|                                                            | Food, beverage and entertainment                                   |                                  |        
|                                                            | Hotel                                                              |                                  |        
|                                                            | Equity in net income (loss) of unconsolidated affiliates           |                                  |        
|                                                            | Other                                                              |                                  |        
|                                                            |                                                                    |                                  |        
|                                                            |                                                                    |                                  | 177,327
|                                                            | Lesspromotional allowances                                        |                                  |        
|                                                            |                                                                    |                                  |        
|                                                            | Net revenues                                                       |                                  |        
|                                                            |                                                                    |                                  |        
|OPERATING EXPENSES:                                         |                                                                    |                                  |        
|                                                            | Casino                                                             |                                  |        
|                                                            | Food, beverage and entertainment                                   |                                  |        
|                                                            | Hotel                                                              |                                  |        
|                                                            | Other                                                              |                                  |        
|                                                            | Selling, general and administrative                                |                                  |        
|                                                            | Management fees                                                    |                                  |        
|                                                            | Depreciation                                                       |                                  |        
|                                                            |                                                                    |                                  |        
|                                                            | Total operating expenses                                           |                                  |        
|                                                            |                                                                    |                                  |        
|OPERATING INCOME                                            |                                                                    |                                  | 26,094 
|                                                            | Equity in net (loss) of unconsolidated affiliate                   |                                  |        
|                                                            | (Loss) on investments                                              |                                  |        
|                                                            | Interest expense, net                                              |                                  |        
|                                                            | Other income                                                       |                                  |        
|                                                            |                                                                    |                                  |        
|NET INCOME BEFORE MINORITY INTEREST AND EXTRAORDINARY ITEMS |                                                                    |                                  | 13,509 
|MINORITY INTEREST IN NET INCOME OF UNCONSOLIDATED AFFILIATE |                                                                    |                                  | (403   
|                                                            |                                                                    |                                  |        
|NET INCOME BEFORE EXTRAORDINARY ITEMS                       |                                                                    |                                  | 13,106 
|                                                            |                                                                    |                                  |        
|EXTRAORDINARY ITEMS:                                        |                                                                    |                                  |        
|                                                            | Gain on repurchase of bonds, net of unamortized loan fees          |                                  |        
|                                                            |                                                                    |                                  |        
|NET INCOME                                                  |                                                                    | $                                | 13,449 
|                                                            |                                                                    |                                  |        
|UNREALIZED GAIN/(LOSS) ON SECURITIES:                       |                                                                    |                                  |        
|                                                            | Unrealized holding gain/(loss) arising during period               |                                  |        
|                                                            | Less: Reclassification adjustment for gains included in net income |                                  |        
|                                                            |                                                                    |                                  |        
|COMPREHENSIVE INCOME                                        |                                                                    | $                                | 13,449 
|                                                            |                                                                    |                                  |        

The
accompanying notes are an integral part of these consolidated statements.

52

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ELDORADO RESORTS LLC        CONSOLIDATED STATEMENTS OF MEMBERS' EQUITY  (dollars in thousands)

|BALANCE, December 31, 1998 |                                       | $ | 87,486  |        
|-------------------------- | ------------------------------------- | - | ------- | -------
|                           | Distributions                         |   |         | (29,600
|                           | Net Income                            |   |         | 20,768 
|                           | Comprehensive Income                  |   |         | 1,123  
|                           |                                       |   |        
|BALANCE, December 31, 1999 |                                       |   | 79,777  |        
|                           | Distributions                         |   |         | (8,110 
|                           | Net Income                            |   |         | 24,207 
|                           | Comprehensive Income Reclassification |   |         | (1,123 
|                           |                                       |   |        
|BALANCE, December 31, 2000 |                                       |   | 94,751  |        
|                           | Distributions                         |   |         | (5,996 
|                           | Net Income                            |   |         | 13,449 
|                           |                                       |   |        
|BALANCE, December 31, 2001 |                                       | $ | 102,204 |        
|                           |                                       |   |        

The
accompanying notes are an integral part of these consolidated statements.

53

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ELDORADO RESORTS LLC        CONSOLIDATED STATEMENTS OF CASH FLOWS  (dollars in thousands)

|                                                  |                                                                                   | For the years ended December 31,                                                                                                                           |    
|------------------------------------------------- | --------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------- | ---
|
|CASH FLOWS FROM OPERATING ACTIVITIES:             |                                                                                   |                                                                                                                                                            |    
|                                                  | Net income                                                                        |                                                                                                                                                            | $  
|                                                  | Adjustments to reconcile net income to net cash provided by operating activities: |                                                                                                                                                            |    
|                                                  |                                                                                   | Depreciation                                                                                                                                               |    
|                                                  |                                                                                   | Amortization of loan/bond costs                                                                                                                            |    
|                                                  |                                                                                   | Equity in net (income) of unconsolidated affiliates in excess of distributions                                                                             |    
|                                                  |                                                                                   | Minority interest in net income of unconsolidated affiliates in excess of distributions                                                                    |    
|                                                  |                                                                                   | (Gain) on sale of property and equipment                                                                                                                   |    
|                                                  | (Increase) Decrease in                                                           |                                                                                                                                                            |    
|                                                  |                                                                                   | Restricted cash                                                                                                                                            |    
|                                                  |                                                                                   | Accounts receivable, net                                                                                                                                   |    
|                                                  |                                                                                   | Note receivable                                                                                                                                            |    
|                                                  |                                                                                   | Inventories                                                                                                                                                |    
|                                                  |                                                                                   | Prepaid expenses                                                                                                                                           |    
|                                                  | (Decrease) Increase in                                                           |                                                                                                                                                            |    
|                                                  |                                                                                   | Accounts payable, construction and retention payable, interest payable, accrued and other liabilities, due to members and affiliates and other liabilities |    
|                                                  |                                                                                   |                                                                                                                                                            |    
|                                                  |                                                                                   | Net cash provided by operating activities                                                                                                                  |    
|                                                  |                                                                                   |                                                                                                                                                            |    
|CASH FLOWS FROM INVESTING ACTIVITIES:             |                                                                                   |                                                                                                                                                            |    
|                                                  |                                                                                   | Purchases of property and equipment                                                                                                                        |    
|                                                  |                                                                                   | (Purchases of)/Proceeds from sale of marketable securities                                                                                                 |    
|                                                  |                                                                                   | Gain on sale of marketable securities                                                                                                                      |    
|                                                  |                                                                                   | (Increase) in joint venture investments                                                                                                                    |    
|                                                  |                                                                                   | (Increase) in investment                                                                                                                                   |    
|                                                  |                                                                                   | Loss on investment                                                                                                                                         |    
|                                                  |                                                                                   | Proceeds from sale of property and equipment                                                                                                               |    
|                                                  |                                                                                   | Decrease/(Increase) in other assets, net                                                                                                                   |    
|                                                  |                                                                                   |                                                                                                                                                            |    
|                                                  |                                                                                   | Net cash used in investing activities                                                                                                                      |    
|                                                  |                                                                                   |                                                                                                                                                            |    
|CASH FLOWS FROM FINANCING ACTIVITIES:             |                                                                                   |                                                                                                                                                            |    
|                                                  |                                                                                   | Proceeds from long-term and other debt                                                                                                                     |    
|                                                  |                                                                                   | Principal payments on long-term and other debt                                                                                                             |    
|                                                  |                                                                                   | Payment on bond repurchase                                                                                                                                 |    
|                                                  |                                                                                   | Extraordinary gain on bond repurchase, net of unamortized loan fees                                                                                        |    
|                                                  |                                                                                   | Loan origination costs                                                                                                                                     |    
|                                                  |                                                                                   | Distributions                                                                                                                                              |    
|                                                  |                                                                                   |                                                                                                                                                            |    
|                                                  |                                                                                   | Net cash used in financing activities                                                                                                                      |    
|                                                  |                                                                                   |                                                                                                                                                            |    
|INCREASE IN CASH AND CASH EQUIVALENTS             |                                                                                   |                                                                                                                                                            | 543
|                                                  | CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR                                    |                                                                                                                                                            |    
|                                                  |                                                                                   |                                                                                                                                                            |    
|                                                  | CASH AND CASH EQUIVALENTS AT END OF YEAR                                          |                                                                                                                                                            | $  
|                                                  |                                                                                   |                                                                                                                                                            |    
|SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: |                                                                                   |                                                                                                                                                            |    
|                                                  | Cash paid during year for interest, net of amounts capitalized                    |                                                                                                                                                            | $  
|                                                  |                                                                                   |                                                                                                                                                            |    

The accompanying notes are an integral part of these consolidated statements.

54

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ELDORADO RESORTS LLC        NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.    Summary of Significant Accounting Policies



The consolidated financial statements include the accounts of Eldorado Resorts, LLC ("Resorts") a Nevada limited liability company, Eldorado Capital Corp.,
("Capital"), a Nevada Corporation and wholly-owned subsidiary of Resorts, and a majority owned subsidiary, Eldorado Limited Liability Company ("ELLC") and, for the period prior to July 1, 1996,
Resorts' Predecessor, Eldorado Hotel Associates Limited Partnership (the "Predecessor Partnership") (together, the "Company"). All significant intercompany accounts and transactions have been
eliminated in consolidation.

The
Company shall be liquidated upon the occurrence of any event requiring dissolution of the Company. Proceeds from liquidation shall be dispersed first to creditors, including Members
and interest holders who are creditors for debts other than their respective capital contributions, and second to Members and interest holders in accordance with their capital account balances.

The
Company owns and operates the Eldorado Hotel & Casino, an 816-room hotel casino in downtown Reno, Nevada. ELLC, a Nevada limited liability company owned 96.12% by
Resorts, owns a 50% interest in the Circus and Eldorado Joint Venture which owns the Silver Legacy Resort Casino, a 1,710 room hotel casino that opened July 28, 1995 and is located contiguous
to the Eldorado Hotel & Casino.

Capital
was incorporated with the sole purpose of serving as co-issuer of the 101/2% Senior Subordinated Notes due 2006 (the "Notes") in order to facilitate
the offering thereof.



The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ from those estimates.



Cash and cash equivalents include investments purchased with an original maturity of 90 days or less.



The Company has a certificate of deposit for $306,000, which is used for security with the Nevada Department of Insurance for its self-insured workers
compensation. The certificate of deposit has a maturity date of January 25, 2002.



Inventories are stated at the lower of cost, using a first-in, first-out basis, or market value.



Property and equipment are stated at cost. Depreciation is computed using the straight-line method over the estimated useful life of the asset or the
term of the capitalized lease, whichever is less.

55

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Costs of major improvements are capitalized, while costs of normal repairs and maintenance are charged to expense as incurred.



The Company capitalizes interest on funds disbursed during the active construction and development phases of its facilities and other major projects. Interest
capitalized during the fiscal years ended December 31, 2001, 2000, 1999 was approximately $132,000, $105,000 and $36,000, respectively.



The Company accounts for ELLC's 50% joint venture interest in the Silver Legacy Joint Venture and its 21.25% interest in Tamarack using the equity method of
accounting and is reported as a component of operating income. The Company accounts for its 19% interest in MindPlay under the equity method of accounting and is reported as a component of
non-operating income.



In accordance with industry practice, the Company recognizes as casino revenue the net win from gaming activities, which is the difference between gaming wins and
losses. The retail value of food, beverage, rooms and other services furnished to customers on a complimentary basis is included in gross revenue and then deducted as promotional allowances. The cost
of providing such complimentary services is charged to operating expenses in the casino department. Such costs of providing complimentary services are as follows (in thousands):

For the years ended December 31,2001

2000

1999Food, beverage and entertainment

$
9,824

$
10,123

$
9,325Hotel


1,914


1,932


1,788Other


1,470


1,030


1,010$
13,208

$
13,085

$
12,123




Advertising costs are expensed the first time the advertising takes place. Advertising costs included in selling, general and administrative expenses were
$3,946,000, $4,523,000 and $3,918,000 for the years ended December 31, 2001, 2000 and 1999, respectively.



In October 2001, the Company purchased $10.2 million principal amount of its 101/2% Notes on the open market. The Company borrowed
$9.7 million under its New Credit Facility to facilitate the purchase. The Notes were purchased at a discount resulting in an extraordinary gain of $343,000 after writing off unamortized fees
relating to the bond offering.



The Predecessor Partnership was not subject to income taxes; therefore, no provision for income taxes was made as the Partners included their respective shares of
partnership income in their income tax returns. As a limited liability company, Resorts is not subject to income tax liability. Therefore, holders of membership interests will include their respective
shares of Resorts' taxable income in their income tax returns and Resorts will continue to make distributions for such tax liabilities.

56

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The
Operating Agreement of Eldorado Resorts LLC dated June 28, 1996 obligates Resorts to distribute each year, for as long as it is not taxed as a corporation, to each of its
members an amount equal to such member's allocable share of the taxable income of Resorts multiplied by the highest marginal combined Federal, state and local income tax rate applicable to individuals
for that year.

The
reported amounts of the Company's assets and liabilities exceeded the net tax basis by $1,871,000 and $2,325,000 at December 31, 2001 and 2000, respectively.



The fair value of the Company's 101/2% Senior Subordinated Notes approximates their recorded value at December 31, 2001 and 2000. The
approximate fair market value of the Notes, including those held by the Company, based on quoted market prices, were approximately $96.5 million and $99.0 million, respectively. The fair
values are not necessarily indicative of the amounts the Company could realize in a current market exchange.



The Company accounted for its marketable securities in accordance with the provisions of Statement of Financial Accounting Standards No. 115, "Accounting
for Certain Investments in Debt and Equity Securities" ("SFAS No. 115"). This standard requires that certain debt and equity securities be adjusted to market value at the end of each accounting
period. This standard also requires marketable securities to be classified into one of three categories: (1) trading (2) available-for-sale and
(3) held-to maturity.

Management
determined the proper classifications of investments at the time of purchase and reevaluates such designations as of each balance sheet date. At December 31, 1999, all
marketable securities were designated as available-for-sale. Accordingly, these securities were stated at fair value, with unrealized gains and losses included in Comprehensive
Income.



Statement of Financial Accounting Standards No. 130 ("SFAS No. 130"), "Reporting Comprehensive Income", requires that the Company disclose
comprehensive income and its components. The objective of SFAS No. 130 is to report a measure of all changes in equity of a company that result from transactions and other economic events of
the period other than transactions with members. Comprehensive income is the total of net income and all other non-member changes in equity ("Comprehensive Income").

In
accordance with SFAS No. 115 as described above, the Company has recorded the changes in marketable securities value as Comprehensive Income in the accompanying consolidated
financial statements. During 2000, all marketable securities were sold on a specific identification basis, which, at December 31, 1999 had a fair value of $2,239,000. The proceeds from the
securities' sales totaled $1,176,000. The amount of unrealized gain reclassed out of Comprehensive Income was $1,123,000, which yielded a net realized gain of $60,000 over the purchase cost of
$1,116,000.



In August 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment on Disposal of Long-Lived Assets", effective January 1, 2002. SFAS No. 144
supercedes SFAS No. 121 and portions of other accounting statements. The provisions applicable to us are substantially the same as those applied under SFAS No. 121 and we, therefore, do not believe
that the adoption of SFAS No. 144 will have a material impact on our results of operations or financial position.

57

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Certain reclassifications have been made to prior years' consolidated financial statements, which have no effect on net income, to conform to current year
presentation.

2.    Certain Risks and Uncertainties

A significant portion of the Company's revenues and operating income are generated from patrons who are residents of Northern California. A change in general
economic conditions or the extent and nature of casino gaming in California, Washington or Oregon could adversely affect the Company's operating results. On September 10, 1999, California
lawmakers approved a constitutional amendment that would give Indian tribes the right to offer slot machines and a range of house-banked card games. On March 7, 2000, California voters approved
the constitutional amendment which legalized "Nevada-style" gaming on Native American reservations.

3.    Operating Agreement of Resorts

The rights and obligations of the equityholders of Resorts (the "Members") are governed by the Operating Agreement of Eldorado Resorts LLC dated as of
June 28, 1996, as amended (the "Operating Agreement"), entered into in connection with the Reorganization. In accordance with the Reorganization, all assets and liabilities of the Predecessor
Partnership became the assets and liabilities of Resorts. Each Members' interest in Resorts is equal to the percentage of capital contributed by that Member, in accordance with the ownership
percentages previously held in the Predecessor Partnership. The Operating Agreement provides that no officer or member of the Board of Managers ("Board Member") of Resorts will be liable to Resorts,
its Members or holders of its membership interests for acts or omissions of such officer or Board Member in connection with the business or affairs of Resorts, including for any breach of fiduciary
duty or mistake of judgment, except for acts involving intentional misconduct, fraud or knowing violations of the law. Resorts will dissolve upon the earliest to occur of:
(a) December 31, 2030, (b) the sale or disposition of all or substantially all of the assets in Resorts, (c) the written consent of Members holding more than a 75% voting
interest in Resorts or (d) any event that, pursuant to the Operating Agreement, terminates a Member's interest, unless there are at least two remaining Members and at least a Majority Interest,
as defined in the Operating Agreement, of the remaining Members agree to continue Resorts.

4.    Accounts Receivable

Components of accounts receivable, net are as follows (in thousands):

For the years ended
December 31,2001

2000Accounts receivable

$
4,531

$
6,580Due from members and affiliates


92


92Allowance for doubtful accounts


(1,034
)

(2,206
)Total

$
3,589

$
4,466


The
provision for bad debt expense is $437,000, $1,710,000, and $1,203,000 for the years ended December 31, 2001, 2000 and 1999, respectively.

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5.    Property and Equipment

Property and equipment consist of the following (in thousands):

Estimated
Service
Life
(years)

December 31,2001

2000Land and improvements



$
19,086

$
19,086Buildings and other leasehold improvements

10-33


163,159


161,252Furniture, fixtures and equipment

5-15


66,084


62,694Property held under capital lease (Note 12)

3-15


6,662


6,405Construction in progress




1,744


2,052256,735


251,489LessAccumulated depreciation




(116,769
)

(104,930
)Property and equipment, net



$
139,966

$
146,559


At
December 31, 2001, accumulated depreciation includes $5.9 million of depreciation related to assets acquired under capital leases of $241,000.

Substantially
all property and equipment are pledged as collateral for long-term debt (see Note 9).

6.    Other Assets

Other assets include the following amounts (in thousands):

December 31,2001

2000Land held for development

$
4,662

$
4,662Loan acquisition costs (original credit facility)


1,876


1,876Loan acquisition costs (New Credit Facility)


306


Bond offering costs


4,028


4,238Other


809


83811,681


11,614Accumulated amortization loan costs (original credit facility)


(1,876
)

(1,734
)Accumulated amortization loan costs (New Credit Facility)


(26
)

Accumulated amortization bond costs


(2,276
)

(1,853
)Total

$
7,503

$
8,027


Amortization
of bond and loan costs are computed using the straight-line method, which approximates the effective interest method, over the term of the bonds or loans,
respectively.

Included
in other assets at December 31, 2001 and 2000 are $2.0 million and $2.5 million, respectively, of debt offering costs related to the Indenture and the
amendment to the New Credit Facility which are being amortized over the life of the applicable agreements.

7.    Investment in Joint Ventures

Effective March 1, 1994, ELLC and Galleon, Inc. (a Nevada corporation owned and controlled by Mandalay Resort Group) entered into a joint venture
(the "Silver Legacy Joint Venture") pursuant to a joint venture agreement (the "Joint Venture Agreement") to develop the Silver Legacy Resort Casino (the "Silver Legacy"). The Silver Legacy consists
of a casino and hotel located in Reno, Nevada, which began operations on July 28, 1995. During 1994, ELLC contributed land to the Silver Legacy Joint

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Venture with a fair value of $25,000,000 (a book value of $17,215,000) and cash of $23,000,000. Additional cash contributions of $3,900,000 were made in 1995, for a total equity investment of
$51,900,000. Galleon, Inc. contributed cash of $51,900,000 to the Silver Legacy Joint Venture. Each partner owns a 50% interest in the Silver Legacy Joint Venture.

Under
the terms of the Joint Venture Agreement, Profits of the Silver Legacy Joint Venture (defined as the Silver Legacy Joint Venture's taxable income with certain adjustments) in each
fiscal year are allocated to the Partners pursuant to the following formula: (i) the net operating income of the Silver Legacy Joint Venture for financial reporting purposes (determined in
accordance with generally accepted accounting principles) for such fiscal year, exclusive of interest expense, is credited to Galleon, Inc. up to the amount of its Priority Allocation (as
defined below) for such fiscal year, any balance is credited to ELLC up to the amount of Galleon, Inc.'s Priority Allocation for such fiscal year and any remaining balance is credited to the
Partners in proportion to their Percentage Interests, (ii) interest expense of the Silver Legacy Joint Venture for such fiscal year is charged to the Partners in proportion to their Percentage
Interests and (iii) the difference between net operating income for such fiscal year less interest expense for such fiscal year and Profits for such fiscal year is credited (or charged) to the
Partners in proportion to their Percentage Interests. If this formula causes a Partner to be charged with a loss in any fiscal year, such Partner will be allocated zero Profits for such year and the
other Partner will be allocated all of the Profits for such year. In addition, losses of the Silver Legacy Joint Venture (defined as the Silver Legacy Joint Venture's taxable loss with certain
adjustments) in any fiscal year are allocated to the Partners in proportion to their Percentage Interests.

For
so long as ELLC selects the General Manager of the Silver Legacy, as provided in the Joint Venture Agreement, Galleon, Inc. is entitled annually on a
non-cumulative basis, commencing with the seven-month period ending December 31, 1997 and for each subsequent 12-month period, to a priority allocation of the Silver
Legacy Joint Venture's operating income (the "Priority Allocation") in an amount equal to approximately 11.54% of the average of the "Adjusted Initial Investment" (as defined) at the beginning of the
period for which the determination is being made and at the end of such period. For purposes of determining the amount of the Priority Allocation for any period, the term "Adjusted Initial Investment"
means $290,000,000 (the "Initial Investment") as adjusted at the end of each year by subtracting (i) the depreciation on the Initial Investment taken in such year in accordance with the
depreciation schedule agreed to by the Partners and (ii) the principal payments which would have been made in repayment of the original bank financing utilized for the development, construction
and completion of the Silver Legacy.

The
Joint Venture Agreement provides, subject to limitations on distributions to Partners in other agreements to which the Silver Legacy Joint Venture is a party, including its credit
agreement, that Net Cash from Operations (defined as the gross cash proceeds from all Silver Legacy Joint Venture operations, less cash operating expenses and certain other expenses and obligations,
including interest and principal payments on indebtedness including the financing required for the development, construction and completion of the Silver Legacy (the "Construction Financing"), other
than indebtedness owed Partners or affiliates as provided for in the Joint Venture Agreement, and reasonable reserves deemed necessary to meet anticipated future obligations and liabilities of the
Silver Legacy Joint Venture) is to be distributed quarterly to the Partners in proportion to their Percentage Interests in the Silver Legacy Joint Venture after satisfaction of certain other
obligations as follows: (i) at the end of the first year of operation only, the distribution to each Partner of an amount equal to its tax liability attributable to the Silver Legacy Joint
Venture, (ii) the payment of interest and principal on all loans to the Silver Legacy Joint Venture from Partners and affiliates (excluding payment of principal on the Construction Financing),
(iii) the payment of principal and interest on any Additional Capital Contribution Loan (as defined) of a Partner, plus the distribution to the non-defaulting Partner who provided
such Additional Capital Contribution Loan of an amount equal to the amount of such Additional Capital Contribution Loan, (iv) the payment of certain construction cost overruns, (v) at
the

60

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end of the first year of operation only, the payment of the balance of the principal of the Construction Financing not including cost overruns, (vi) to the extent earned and available, the
distribution to Galleon, Inc. of an amount up to the Priority Allocation, (vii) to the extent earned and available, the distribution to ELLC of an amount up to the amount distributed to
Galleon, Inc. pursuant to the Priority Allocation, (viii) after the first year of operation, the distribution to each Partner of an amount equal to its tax liability attributable to the
Silver Legacy Joint Venture and (ix) the payment of the balance of the portion of the Construction Financing provided by Galleon, Inc. or Mandalay Resort Group until such loans are paid
in full or refinanced. Any withdrawal from the Silver Legacy Joint Venture by either Partner results in a reduction of distributions to such withdrawing Partner to 75% of amounts otherwise payable to
such Partner.

For
the years ended December 31, 2001, 2000 and 1999, ELLC's 50% share of the Silver Legacy Joint Venture's net income was $10,560,000, $11,935,000 and $2,881,000, respectively.
The minority interest members' investment in ELLC was therefore adjusted by $229,000, $455,000 and $110,000, its respective share of the income for the years ended 2001, 2000 and 1999, respectively.
Included in the Company's retained earnings is $19,752,000 of cumulative undistributed earnings in the Joint Venture (See Note 15).

Summarized
information for the Company's equity in the Silver Legacy Joint Venture is as follows (in thousands):

December 31,
2001

December 31,
2000Beginning balance

$
61,608

$
49,673Partners' Distribution


(4,565
)

Equity in net income of unconsolidated affiliate


10,560


11,935Ending balance

$
67,603

$
61,608


Summarized
balance sheet information for the Silver Legacy Joint Venture is as follows (in thousands):

December 31,2001

2000Current assets

$
21,619

$
21,951Property and equipment, net


280,975


288,883Other assets, net


575


1,010Total assets

$
303,169

$
311,844Current liabilities

$
22,762

$
21,427Long-term liabilities


135,000


157,000Partners' equity


145,407


133,417Total liabilities and partners' equity

$
303,169

$
311,844


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Summarized
results of operations for the Silver Legacy Joint Venture are as follows (in thousands):

Year Ended December 31,2001

2000

1999Net Revenues

$
164,677

$
177,489

$
170,348Operating Expenses


(130,595
)

(140,246
)

(138,093
)Operating Income


34,082


37,243


32,255Other Expense


(12,962
)

(15,473
)

(16,172
)Net Income

$
21,120

$
21,770

$
16,083


Effective
December 13, 2000, Resorts entered into an agreement to form Tamarack Crossings, LLC and Tamarack Partners, LLC, each a Nevada limited liability company (collectively
the "Tamarack Entities"), to develop, own and operate Tamarack Junction ("Tamarack"), a small casino then being constructed in south Reno, Nevada. In May 2001, the Tamarack Entities consummated
a plan of merger with Tamarack Crossings, LLC being the surviving entity. In June 2001, Resorts entered into an
agreement with the Robert and Nana Sullivan Family Trust (the "Trust"), an unaffiliated entity, to reduce Resorts' percentage interest in Tamarack Crossings, LLC to 21.25% from 42.5%. Donald Carano
owns a 5% interest in Tamarack (See Note 15). The business and affairs of the Tamarack are managed by four members of Tamarack Crossings, LLC, including Resorts, which has been designated
"Chief Executive Manager" and is responsible for overseeing the day-to-day operations of the Tamarack. Resorts has designated Gene Carano as its representative. At
December 31, 2001, Resorts' financial investment in Tamarack Crossings, LLC was $3.4 million of which $3.0 million was invested in 2001. Resorts' capital contribution to Tamarack
Crossings, LLC represents its proportionate share of the total capital contributions of the members. Additional capital contributions of the members, including Resorts, may be required for certain
purposes, including the payment of operating costs and capital expenditures or the repayment of loans, to the extent such costs are not funded by prior capital contributions and earnings. The
Company's investment in Tamarack is accounted for using the equity method of accounting. Equity in net loss related to Tamarack for the year ended December 31, 2001, of $148,000 is included as
a component of operating income. The Tamarack purchased products prior to its opening and has continued purchasing various products, such as meat and bakery items, from or through the Eldorado which
totaled $331,000 in 2001. The Tamarack purchased these products at the Company's cost.

Effective
July 1, 2000, Resorts and Avereon Research LTD. ("ARL") entered into an agreement to form MindPlay, LLC (the "MindPlay Entity"), for the purpose of
developing, owning and marketing a sophisticated system which, if successfully completed, will permit the tracking and surveillance of pit gaming operations ("MindPlay"). MindPlay is in the
developmental stage and there is no assurance that the system will ever be successfully developed and marketed. The MindPlay Entity, in which Resorts owns a 19% interest, is managed by a Board of
Managers, which consist of three Managers designated by ARL and two Managers designated by Resorts. Other investors in the MindPlay Entity include Robert Jones, Gene Carano, Gary Carano, Glenn Carano,
Gregg Carano, Rhonda Carano, Rob Mouchou, Rick Murdock and Robert B. MacKay, each an affiliate or executive of Resorts, each of whom owns an individual interest in MindPlay, which in the aggregate is
11.3%. These individuals acquired their interest in MindPlay under the same terms and conditions as those of Resorts. At December 31, 2001, Resorts' financial investment in the MindPlay Entity
was $1.4 million of which $1.1 million was invested in 2001 (See Note 15). The Company's investment in MindPlay is accounted for using the equity method of accounting. Equity in
net loss related to MindPlay for the year ended December 31, 2001 of $207,000 is included as a component of non-operating income.

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8.    Accrued and Other Liabilities

Accrued and other liabilities consist of the following (in thousands):

December 31,2001

2000Accrued payroll and benefits

$
1,155

$
1,495Accrued vacation


993


996Accrued medical claims


608


578Accrued bonuses


10


275Accrued taxes


732


1,246Unclaimed chips and tokens


1,053


704Progressive slot liability


1,520


1,417Note payable to affiliate





1,450Other


568


898$
6,639

$
9,059


9.    Long-Term Debt

Long-term debt consists of the following (in thousands):

December 31,2001

2000101/2% Senior Subordinated Notes

$
89,850

$
100,000Outstanding portion of reducing revolver and the revolving credit line (the original credit facility)





15,000Outstanding portion of reducing revolver and the revolving credit line (the New Credit Facility)


21,750


Notes payable to individuals


1,578


1,839Notes payable, other


78


104113,256


116,943LessCurrent portion


(315
)

(15,287
)$
112,941

$
101,656


Scheduled
maturities of long-term debt are as follows for the years ended December 31, (in thousands):

2002

$
3152003


3452004


3562005


1,3732006


110,867Thereafter


0$
113,256


On
July 31, 1996, Resorts and Capital (the "Issuers"), sold $100,000,000 in aggregate principal amount of 101/2% Senior Subordinated Notes due 2006, (the "Notes").
The Notes are joint and several obligations of the Issuers. The Notes mature on August 15, 2006 and bear interest at the rate of 101/2% per annum, payable
semi-annually in arrears on February 15 and August 15 of each year, commencing

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on February 15, 1997. Pursuant to a Registration Rights Agreement dated as of July 31, 1996, among the Issuers and the Initial Purchasers party thereto, the Issuers filed a registration
statement under the Securities Act of 1933, as amended (the "1933 Act") with respect to an offer to exchange the Notes, which were issued in reliance on an exemption from registration under the 1933
Act, for registered debt securities of the Issuers ("Registered Notes") with terms identical to the Notes. The exchange of the Notes for the Registered Notes was completed on February 26, 1997.

The
Indenture relating to the Notes contains certain covenants which, among other things, limit the ability of the Issuers and any Restricted Subsidiaries (as defined in the Indenture)
to incur additional indebtedness, pay dividends or make other distributions, create certain liens, enter into certain transactions with affiliates, utilize proceeds from asset sales, issue or sell
equity interests of subsidiaries and enter into certain mergers and consolidations and requires the Company to maintain certain financial requirements. The Company is in compliance with these
covenants at December 31, 2001 and 2000.

In
October 2001, the Company purchased $10.2 million principal amount of its 101/2% Notes on the open market. The Company borrowed $9.7 million under
its New Credit Facility to facilitate the purchase. The Notes were purchased at a discount resulting in an extraordinary gain of $343,000 after writing off unamortized fees relating to the bond
offering.

The
original credit facility (the "Original Credit Facility") provided for a senior secured revolving credit facility of $50 million. The Original Credit Facility was replaced on
July 17, 2001 by a $40 million senior secured revolving credit facility (the "New Credit Facility"). Amounts due under the Original Credit Facility were due in installments of principal
plus interest calculated using either the Base rate or Eurodollar rate. The Eurodollar rate was 6.5% as of December 31, 2000. The weighted average interest rate was 8.35% as of
December 31, 2000. The Original Credit Facility was secured by substantially all real property. The restrictions and other covenants of the Original Credit Facility and the New Credit Facility
are substantially the same.

The
New Credit Facility provides for a senior secured revolving credit facility of $40 million. The amount of credit available pursuant to the New Credit Facility reduces by
$1.6 million on March 31, 2003 and at the end of each subsequent quarter until March 31, 2006, when the facility terminates and any balance then outstanding becomes due and
payable. Borrowings under the New Credit Facility bear interest, at the Company's option, at either (i) the greater of (a) the rate publicly announced from time to time by Bank of
America as its "Prime Rate" or (b) the Federal Funds Rate plus .50% ("Base Rate") or (ii) a Eurodollar rate determined in accordance with the New Credit Facility. The Eurodollar rate was
4.13% and the Base rate was 4.75% as of December 31, 2001. The effective rate of interest on borrowings under the New Credit Facility was 4.42% per annum as of December 31, 2001. As of
December 31, 2001, $21.8 million of borrowings were outstanding under the New Credit Facility and an additional $17.6 million of borrowing capacity was available thereunder.

The
New Credit Facility is secured by substantially all of the Company's real property. The New Credit Facility includes various restrictions and other covenants including:
(i) restrictions on the disposition of property, (ii) restrictions on investments and acquisitions, (iii) restrictions on distributions to members of Resorts,
(iv) restrictions on the incurrence of liens and negative pledges, (v) restrictions on the incurrence of indebtedness and the issuance of guarantees, (vi) restrictions on
transactions with affiliates and, (vii) restrictions on annual capital expenditures including capital leases. The New Credit Facility also contains financial covenants including a maximum total
debt to EBITDA ratio, a maximum senior debt to EBITDA ratio, a minimum fixed charge coverage ratio and a minimum equity requirement. The Company received a waiver as of September 30, 2001 for a
covenant violation on the maximum total debt to EBITDA ratio. The Company entered into an agreement to amend the New Credit Facility effective December 31, 2001 which increased the maximum
total debt to EBITDA ratio. As of December 31, 2001, the Company was in compliance with all provisions of the New Credit Facility.

64

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The
notes payable to individuals are due in monthly installments of $34,614, including monthly interest at 9%, to August 14, 2006, when the principal balance is due. The notes are
secured by real property.

10.  Employee Benefit Plans

On May 1, 1990, the Company established a voluntary, qualified, defined contribution plan covering all full-time employees of the Company who
have completed six months and 1,000 hours of service and are age twenty-one or older. The plan allows for an employer contribution up to 25 percent of the first
6 percent of each participating employee's contribution. Plan participants can elect to defer before tax compensation through payroll deductions. These deferrals are regulated under
Section 401(k) of the Internal Revenue Code. The Company's matching contributions were $358,000, $387,000 and $349,000 for the fiscal years ended December 31, 2001, 2000 and 1999,
respectively.

11.  Executive Deferred Compensation Plans

Effective January 1, 1990, the Company established a Deferred Compensation Plan for the benefit of a select group of management or highly compensated
employees. As of December 31, 2001, six employees of the Company were eligible to participate. Under the Deferred Compensation Plan as presently administered, eligible employees may elect each
year to defer the receipt of a portion of their compensation from the Company. A participating employee is 100% vested with respect to any amount deferred pursuant to his or her deferral election.
Amounts deferred in years prior to 1991, which were determined in the sole discretion of Resorts' Chief Executive Officer, Donald Carano, vest 20% per year so that, they become vested over a
five-year period. A participating employee becomes 100% vested in all amounts credited to such employee's account upon retirement, death, permanent disability or termination of employment
with the Company for any reason other than fraud, or upon a sale of substantially all of the Company's assets or if the Carano family ceases to have majority ownership or control of the Company.
Participating employees are entitled to receive annual distributions commencing upon the earliest of the second month after death, permanent disability, retirement or, if employment is terminated for
reasons other than death or disability prior to attainment of age 60, attainment of age 60. However, Resorts' Chief Executive Officer may in his sole discretion elect to make a distribution to a
terminated employee prior to such terminated employee attaining age 60. In addition, such Chief Executive Officer may in his sole discretion elect to distribute an employee's benefits in the form of a
lump sum distribution and may elect to distribute benefits to an employee over a shorter period of time than that provided for in the Deferred Compensation Plan. As of December 31, 2001, 2000
and 1999, the Company had accrued obligations of $1,417,000, $1,314,000 and $1,181,000, respectively, related to this deferred compensation agreement, which represents an unfunded obligation of the
Company.

The
Company instituted the Eldorado Performance and Appreciation Rights Plan (the "Plan") for the benefit of certain of its key executives and other key employees of the Company and its
general partners, effective for the fiscal year commencing January 1, 1995. To be eligible to be granted performance and/or appreciation rights, which could only be granted until June 1,
2000, a person was required to be an executive or other key employee of the Company or an affiliate of the Company on the proposed grant date. No performance rights were ever granted under the Plan.
An appreciation right allows the recipient to receive compensation based upon the difference between the value of the Company, as defined, as of January 1, 1995 (the "Base Rate") and the future
value of the Company. One Company Unit (1% of the Company) is equivalent to the combination of 100,000 performance rights and 100,000 appreciation rights. The Base Rate for each appreciation right is
$26.66 as of January 1, 1995. The Company value is calculated as a factor of eight (8) times trailing twelve months operating income (adjusted for certain items to approximate EBITDA)
less funded indebtedness and adjusted for certain additional items, as defined. The rights are not ownership interests in the Company. As of December 31, 1996, 860,000 appreciation rights were
granted. No additional rights were granted after 1996.

65

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The
Plan's committee shall determine the date on which each appreciation right shall vest and become exercisable; as of December 31, 2001, no vesting period had been established.
The Company value as of December 31, 2001 and 2000, as calculated, is below the $26.66 Base Rate, and therefore no accrual is required as of December 31, 2001 and 2000. Except as defined
in the Plan agreement, the Company has no duty or obligation to fund or secure the benefits payable to key executives.

12.  Commitments and Contingencies



The New Credit Facility (see Note 9) allows for the issuance of letters of credit which reduces the available line by the amount pledged. At
December 31, 2001 the amount pledged to Washoe County for the Verdi property development was $685,000.



The Company leases certain equipment under agreements classified as capital leases. The future minimum lease payments by year under these leases, together with
the present value of the minimum lease payments consisted of the following at December 31, 2001 (in thousands):

2002

$
1012003


1022004


53Thereafter


Minimum lease payments


256LessAmounts representing interest


(30
)$
226




The Company leases equipment under operating leases. Future minimum payments (expiring from 2002 and thereafter) under noncancellable operating leases with
initial terms of one year or more consisted of the following at December 31, 2001 (in thousands):

Future Minimum
Lease Payments2002

$
4292003


2172004


1002005


89Thereafter


$
835


Total
rental expense under operating leases was $593,000 for the year ended December 31, 2001, $733,000 for the year ended December 31, 2000 and $796,000 for the year ended
December 31, 1999.
Additional rent for land upon which the Eldorado Hotel Casino resides of $642,000 in 2001 ($655,000 in 1999 and $659,000 in 2000) was paid to C, S and Y Associates, a general partnership
of which Donald Carano is a general partner, based on gross gaming receipts. This rental agreement expires June 30, 2027.



The Company is a litigant in legal matters arising in the normal course of business. In the opinion of management, all pending legal matters are either adequately
covered by insurance or, if not insured,

66

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will not have a material adverse effect on the financial position or results of operations of the Company.

13.  Management Fees

Resorts pays management fees to Recreational Enterprises, Inc. and Hotel Casino Management, Inc., the owners of 55% and 29% of Resorts' equity
interests, respectively. Historically, the salaries of senior executive officers and certain other key employees of the Predecessor Partnership were not directly incurred by the Predecessor
Partnership, but were paid from a portion of the management fees paid to Recreational Enterprises, Inc. As of July 1, 1996, the aggregate annual salaries of such senior executive
officers and other key employees became payroll obligations of Resorts. In connection with the consummation of the offering of the Notes, Resorts entered into a Management Agreement with Recreational
Enterprises, Inc. and Hotel Casino Management, Inc. providing that future management fees paid to Recreational Enterprises, Inc. and Hotel Casino Management, Inc. will not
exceed 1.5% of Resorts' annual net revenues in effect until July 1, 2002 and will automatically renew for additional three-year terms until terminated by one of the Parties.

Management
fees paid were $1,201,000 for 2001, $1,790,000 for 2000 and $1,865,000 for 1999.

14.  Related Parties

On May 16, 1996, the Company entered into an agreement with the Circus and Eldorado Joint Venture, (the "Silver Legacy") to operate a race and sportsbook
located in the Silver Legacy, (the "Legacy Book"). The Company supplied the management, employees and equipment associated with the operation of the Legacy Book and recorded a proportionate share of
revenue and expenses included in casino revenue and casino expense according to a formula included in the race and sportsbook agreement. For the year ended December 31, 1999 the Company
recorded $564,000 in casino revenues
and $362,000 and in casino expenses. Effective November 23, 1999, the agreement was terminated and the Joint Venture began operating the Legacy Book exclusively.

The
Company owns the entire parcel on which the Eldorado is located, except for approximately 30,000 square feet which is leased by the Company from C, S and Y Associates, a general
partnership of which Donald Carano is a general partner (the "C, S and Y Lease"). The C, S and Y Lease expires on June 30, 2027. Annual rent is equal to the greater of (i) $400,000 or
(ii) an amount based on a decreasing percentage of the Eldorado's gross gaming revenues ranging from 3% of the first $6.5 million of gross gaming revenues to 0.1% of gross gaming
revenues in excess of $75 million. In 2001, the rent paid pursuant to the C, S and Y Lease, totaled approximately $642,000. In the opinion of the Company's management, the terms of the C, S and
Y Lease are at least as favorable to the Company as could have been obtained from unaffiliated third parties.

The
Company from time to time leases an aircraft owned by Recreational Enterprises, Inc., which owns 55% of Resorts, for use in operating the Company's business. In 2001, 2000 and
1999, lease payments for the aircraft totaled $313,000, $350,000 and $333,000, respectively. In the opinion of Resorts' management the lease payments are at least as favorable to Resorts as could have
been obtained from an unaffiliated third party.

Resorts
owns a 21.25% interest in Tamarack Junction, a small casino located in south Reno, Nevada, in which Donald Carano owned a 5% interest at December 31, 2001 (See
Note 15). The Tamarack purchased products prior to its opening and has continued purchasing various products, such as meat and bakery items, from or through the Eldorado which totaled $331,000
in 2001. The Tamarack purchased these products at the Company's cost.

In
1998, the Eldorado began purchasing advertising posters, banners and other material from Lexicon Design, Inc., a corporation which is wholly-owned by the wife of Glenn Carano,
son of Donald Carano. For such purchases, the Eldorado paid Lexicon Design, Inc. $207,000, $129,000 and $68,000 in 2001, 2000 and 1999, respectively.

67

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15.  Subsequent Events



The Silver Legacy Joint Venture and Silver Legacy Capital Corp. issued $160 million principal amount of 101/8% Mortgage Notes ("Joint
Venture Notes") on March 5, 2002. The offering was made to qualified investors pursuant to Rule 144A of the Securities Act of 1933. Within 60 days after the issue date of the
Joint Venture Notes, the Silver Legacy Joint Venture and Silver Legacy Capital Corp. are obligated to file a registration statement enabling holders to exchange their privately placed notes for
publicly registered notes with identical terms. The Joint Venture Notes are senior secured obligations which will rank equally to all of the Joint Venture's outstanding senior debt and senior to all
of the Joint Venture's subordinated debt. Concurrent with the offering of the Joint Venture Notes, the Joint Venture entered into a new senior secured credit facility comprised of a $20 million
revolving credit facility and a $20 million amortizing term loan. The net proceeds from the Joint Venture Notes, together with $26 million of borrowings under the new senior secured
credit facility were used to repay amounts outstanding under the Joint Venture's prior bank credit facility and to fund a distribution to ELLC of $10 million and Galleon Inc. of
$20 million. The Joint Venture Notes are secured by a security interest and pledge of partnership interests in ELLC and Galleon Inc.



Subsequent to year-end, the Joint Venture made a fourth quarter 2001 tax distribution to ELLC and Galleon of $1.2 million each. Prior to the issuance of
the Joint Venture Notes, the Joint Venture made distributions to ELLC and Galleon Inc. of (i) $5.2 million representing fiscal year 2000 tax distributions and
(ii) $2.1 million representing the remaining Priority Allocation payment to Mandalay Resort Group was made from borrowings under the existing credit facility.



The Joint Venture Partners negotiated an Amended and Restated Joint Venture Agreement executed on March 5, 2002. This Amended and Restated Joint Venture
Agreement provides for, among other items, profits and losses to be allocated to the Partners in proportion to their percentage interests, separate capital accounts to be maintained for each Partner
and provisions for management of the Joint Venture, payment of distributions and bankruptcy and/or dissolution of the Joint Venture. The Priority Allocation provisions included in the original Joint
Venture Agreement have been eliminated from the Amended and Restated Joint Venture Agreement and will not apply in future periods. The Managing Partner, currently Galleon Inc., is given the ability to
appoint the General Manager.

The
New Joint Venture Agreement may be amended by the written agreement of both Partners. The Partners have engaged in discussions regarding potential amendments to the New Joint Venture
Agreement that would alter the relative levels of control that the Partners are able to exercise over the
operations of the Silver Legacy Joint Venture. We anticipate that the overall impact of any such amendments would be to enhance ELLC's roll relative to that of Galleon Inc. We cannot be certain if or
when any such amendments will be agreed upon by the Partners.



In January 2002, the Company guaranteed 54.28% of a working capital line for the MindPlay Entity in the amount of $1.0 million. This line of credit
shall be available for draw down for a period of two years. Each draw on the line of credit must be approved by the president of MindPlay and Robert Jones, Chief Financial Officer of Resorts.



Donald Carano, who owns a 5% interest in Tamarack, exercised an option effective February 19, 2002 to purchase from the Robert and Nana Sullivan Family
Trust, an unaffiliated entity, an additional 21.25% thus increasing his total interest to 26.25%, subject to approval of the Nevada Gaming Commission. Resorts has a nontransferable option to purchase
from Donald Carano, at a purchase price equal to his cost plus any undistributed income attributable thereto, an additional 10% interest in Tamarack Crossings, LLC which is exercisable, in whole or in
part, until June 30, 2010.

68

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CIRCUS AND ELDORADO JOINT VENTURE  (doing business as Silver Legacy Resort Casino)        INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

|                                         |  | Page
|---------------------------------------- |  | ----
|Report of Independent Public Accountants |  | 70  
|Balance Sheets                           |  | 71  
|Statements of Operations                 |  | 72  
|Statements of Partner's Equity           |  | 73  
|Statements of Cash Flows                 |  | 74  
|Notes to Financial Statements            |  | 75  

69

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REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Partners of
Circus and Eldorado Joint Venture
(doing business as Silver Legacy Resort Casino):

We
have audited the accompanying consolidated balance sheets of Circus and Eldorado Joint Venture (doing business as SILVER LEGACY RESORT CASINO) and subsidiary (the "Joint Venture") as of
December 31, 2001 and 2000, and the related consolidated statements of income, partners' equity and cash flows for each of the three years in the period ended December 31, 2001. These
financial statements are the responsibility of the Joint Venture'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. Those standards require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.

In
our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Circus and Eldorado Joint Venture (doing business as SILVER LEGACY RESORT
CASINO) and subsidiary as of December 31, 2001 and 2000, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2001, in
conformity with accounting principles generally accepted in the United States.

ARTHUR
ANDERSEN LLP

Las
Vegas, Nevada
February 8, 2002

70

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CIRCUS AND ELDORADO JOINT VENTURE  (doing business as Silver Legacy Resort Casino)

Consolidated Balance Sheets        As of December 31, 2001 and 2000        (Amounts in Thousands)

|                                     |                                         | 2001 |                                        | 2000  
|------------------------------------ | --------------------------------------- | ---- | -------------------------------------- | ------
|Assets                              
|Current assets:                      |                                         |      |                                        |       
|                                     | Cash and cash equivalents               |      | $                                      | 12,256
|                                     | Accounts receivable, net                |      |                                        | 4,300 
|                                     | Inventories                             |      |                                        | 1,877 
|                                     | Prepaid expenses                        |      |                                        | 3,186 
|                                     |                                         |      |                                        |       
|                                     |                                         |      | Total current assets                   |       
|Property and equipment, net          |                                         |      | 280,975                                |       
|Other assets, net                    |                                         |      | 575                                    |       
|                                     |                                         |      |                                        |       
|                                     |                                         |      | Total assets                           |       
|                                     |                                         |      |                                        |       
|Liabilities and Partners' Equity    
|Current liabilities:                 |                                         |      |                                        |       
|                                     | Accounts payable                        |      | $                                      | 3,797 
|                                     | Current portion of long-term debt       |      |                                        | 10,000
|                                     | Accrued interest                        |      |                                        | 130   
|                                     | Accrued and other liabilities           |      |                                        | 8,650 
|                                     | Accrued guarantee fees to related party |      |                                        | 185   
|                                     |                                         |      |                                        |       
|                                     |                                         |      | Total current liabilities              |       
|Long-term debt, less current portion |                                         |      | 135,000                                |       
|                                     |                                         |      |                                        |       
|                                     |                                         |      | Total liabilities                      |       
|Commitments and contingencies        |                                         |      |                                        |       
|Partners' equity                     |                                         |      | 145,407                                |       
|                                     |                                         |      |                                        |       
|                                     |                                         |      | Total liabilities and partners' equity |       
|                                     |                                         |      |                                        |       

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

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CIRCUS AND ELDORADO JOINT VENTURE  (doing business as Silver Legacy Resort Casino)

Consolidated Statements of Income        For the Years Ended December 31, 2001, 2000 and 1999        (Amounts in Thousands)

|                                                                  |                                     | 2001 |                              | 2000   |   | 1999    |        
|----------------------------------------------------------------- | ----------------------------------- | ---- | ---------------------------- | ------ | - | ------- | -------
|Operating revenues:                                               |                                     |      |                              |        |   |         |        
|                                                                  | Casino                              |      | $                            | 98,374 |   | $       | 109,641
|                                                                  | Rooms                               |      |                              | 37,835 |   |         | 37,936 
|                                                                  | Food and beverage                   |      |                              | 35,558 |   |         | 36,832 
|                                                                  | Other                               |      |                              | 7,508  |   |         | 8,786  
|                                                                  |                                     |      |                              |        |   |         |        
|                                                                  |                                     |      | 179,275                      |        |   | 193,195 |        
|Less: Promotional allowances                                      |                                     |      | (14,598                      | )      |   | (15,706 | )      
|                                                                  |                                     |      |                              |        |   |         |        
|                                                                  |                                     |      | Net operating revenues       |        |   | 164,677 |        
|                                                                  |                                     |      |                              |        |   |         |        
|Operating expenses:                                               |                                     |      |                              |        |   |         |        
|                                                                  | Casino                              |      |                              | 45,820 |   |         | 48,723 
|                                                                  | Rooms                               |      |                              | 12,166 |   |         | 12,867 
|                                                                  | Food and beverage                   |      |                              | 25,019 |   |         | 26,188 
|                                                                  | Other operating expenses            |      |                              | 5,927  |   |         | 7,248  
|                                                                  | Selling, general and administrative |      |                              | 29,207 |   |         | 29,719 
|                                                                  | Depreciation and amortization       |      |                              | 12,082 |   |         | 15,500 
|                                                                  | Write-off of debt issuance costs    |      |                              | 370    |   |         |       
|                                                                  | Loss on sale of assets              |      |                              | 4      |   |         | 1      
|                                                                  |                                     |      |                              |        |   |         |        
|                                                                  |                                     |      | Total operating expenses     |        |   | 130,595 |        
|                                                                  |                                     |      |                              |        |   |         |        
|Operating income                                                  |                                     |      | 34,082                       |        |   | 37,243  |        
|                                                                  |                                     |      |                              |        |   |         |        
|Other (income) expense:                                           |                                     |      |                              |        |   |         |        
|                                                                  | Insurance settlement proceeds       |      |                              | (225   | ) |         |       
|                                                                  | Interest income                     |      |                              | (112   | ) |         | (248   
|                                                                  | Interest expense, net               |      |                              | 13,299 |   |         | 15,721 
|                                                                  | Interest rate swap, income          |      |                              | (327   | ) |         |       
|                                                                  |                                     |      |                              |        |   |         |        
|                                                                  |                                     |      | Total other (income) expense |        |   | 12,635  |        
|                                                                  |                                     |      |                              |        |   |         |        
|Income before cumulative effect of change in accounting principle |                                     |      | 21,447                       |        |   | 21,770  |        
|Cumulative effect of change in accounting principle               |                                     |      | (327                         | )      |   |        |        
|                                                                  |                                     |      |                              |        |   |         |        
|                                                                  |                                     |      | Net income                   |        | $ | 21,120  |        
|                                                                  |                                     |      |                              |        |   |         |        

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

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CIRCUS AND ELDORADO JOINT VENTURE  (doing business as Silver Legacy Resort Casino)

Consolidated Statements of Partners' Equity        For the Years Ended December 31, 2001, 2000 and 1999        (Amounts in Thousands)

|                          |                        | Galleon, Inc. |        | Eldorado
Resorts, LLC |   | Total  |       
|------------------------- | ---------------------- | ------------- | ------ | --------------------- | - | ------ | ------
|Balance December 31,1998  |                        | $             | 69,723 |                       | $ | 50,841 |       
|                          | Net income             |               |        | 13,202                |   |        | 2,881 
|                          |                        |               |        |                       |   |        |       
|Balance December 31,1999  |                        |               | 82,925 |                       |   | 53,722 |       
|                          | Partners' distribution |               |        | (25,000               | ) |        |      
|                          | Net income             |               |        | 9,835                 |   |        | 11,935
|                          |                        |               |        |                       |   |        |       
|Balance December 31, 2000 |                        |               | 67,760 |                       |   | 65,657 |       
|                          | Partners' distribution |               |        | (4,565                | ) |        | (4,565
|                          | Net income             |               |        | 10,560                |   |        | 10,560
|                          |                        |               |        |                       |   |        |       
|Balance December 31, 2001 |                        | $             | 73,755 |                       | $ | 71,652 |       
|                          |                        |               |        |                       |   |        |       

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

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CIRCUS AND ELDORADO JOINT VENTURE  (doing business as Silver Legacy Resort Casino)

Consolidated Statements of Cash Flows        For the Years Ended December 31, 2001, 2000 and 1999        (Amounts in Thousands)

|                                                     |                                                                                   | 2001 |                                                              | 2000                                      |   | 1999   |        
|---------------------------------------------------- | --------------------------------------------------------------------------------- | ---- | ------------------------------------------------------------ | ----------------------------------------- | - | ------ | -------
|Cash flows from operating activities:                |                                                                                   |      |                                                              |                                           |   |        |        
|                                                     | Net income                                                                        |      | $                                                            | 21,120                                    |   | $      | 21,770 
|                                                     | Adjustments to reconcile net income to net cash provided by operating activities: |      |                                                              |                                           |   |        |        
|                                                     |                                                                                   |      | Depreciation and amortization                                |                                           |   | 12,082 |        
|                                                     |                                                                                   |      | Write-off of debt issuance costs                             |                                           |   | 370    |        
|                                                     |                                                                                   |      | Amortization of deferred loan costs                          |                                           |   | 403    |        
|                                                     |                                                                                   |      | Insurance settlement proceeds                                |                                           |   | (225   | )      
|                                                     |                                                                                   |      | Loss on sale of assets                                       |                                           |   | 4      |        
|                                                     | Changes in current assets and current liabilities:                                |      |                                                              |                                           |   |        |        
|                                                     |                                                                                   |      | Increase (decrease) in accounts receivable, net of allowance |                                           |   | 487    |        
|                                                     |                                                                                   |      | (Increase) decrease in inventories                           |                                           |   | (154   | )      
|                                                     |                                                                                   |      | Increase (decrease) in prepaid expenses                      |                                           |   | 1,126  |        
|                                                     |                                                                                   |      | (Decrease) increase in accounts payable                      |                                           |   | (788   | )      
|                                                     |                                                                                   |      | (Decrease) in accrued guarantee fees to related party        |                                           |   | (24    | )      
|                                                     |                                                                                   |      | (Decrease) increase in accrued interest                      |                                           |   | (1,259 | )      
|                                                     |                                                                                   |      | (Decrease) increase in accrued and other liabilities         |                                           |   | (94    | )      
|                                                     |                                                                                   |      |                                                              |                                           |   |        |        
|                                                     | Total adjustments                                                                 |      |                                                              | 11,928                                    |   |        | 15,740 
|                                                     |                                                                                   |      |                                                              |                                           |   |        |        
|                                                     |                                                                                   |      |                                                              | Net cash provided by operating activities |   |        | 33,048 
|Cash flows from investing activities:                |                                                                                   |      |                                                              |                                           |   |        |        
|                                                     | Proceeds from sale of assets                                                      |      |                                                              | 6                                         |   |        | 32     
|                                                     | Decrease (increase) in other assets                                               |      |                                                              | 32                                        |   |        | (98    
|                                                     | Insurance settlement proceeds                                                     |      |                                                              | 225                                       |   |        |       
|                                                     | Purchase of property and equipment                                                |      |                                                              | (4,180                                    | ) |        | (4,158 
|                                                     |                                                                                   |      |                                                              |                                           |   |        |        
|                                                     |                                                                                   |      |                                                              | Net cash used in investing activities     |   |        | (3,917 
|                                                     |                                                                                   |      |                                                              |                                           |   |        |        
|Cash flows from financing activities:                |                                                                                   |      |                                                              |                                           |   |        |        
|                                                     | Proceeds from Bank Credit Facility                                                |      |                                                              | 3,000                                     |   |        | 25,000 
|                                                     | Partners' distribution                                                            |      |                                                              | (9,130                                    | ) |        | (25,000
|                                                     | Debt issuance costs                                                               |      |                                                              | (370                                      | ) |        |       
|                                                     | Payments on Bank Credit Facility                                                  |      |                                                              | (21,500                                   | ) |        | (35,500
|                                                     |                                                                                   |      |                                                              |                                           |   |        |        
|                                                     |                                                                                   |      |                                                              | Net cash used in financing activities     |   |        | (28,000
|                                                     |                                                                                   |      |                                                              |                                           |   |        |        
|Net increase (decrease) in cash and cash equivalents |                                                                                   |      | 1,131                                                        |                                           |   | (2,214 | )      
|Cash and cash equivalents at beginning of year       |                                                                                   |      | 11,125                                                       |                                           |   | 13,339 |        
|                                                     |                                                                                   |      |                                                              |                                           |   |        |        
|Cash and cash equivalents at end of year             |                                                                                   | $    | 12,256                                                       |                                           | $ | 11,125 |        
|                                                     |                                                                                   |      |                                                              |                                           |   |        |        
|Supplemental disclosure of cash flow information:    |                                                                                   |      |                                                              |                                           |   |        |        
|                                                     | Cash paid during year for interest                                                |      | $                                                            | 14,179                                    |   | $      | 15,075 
|                                                     |                                                                                   |      |                                                              |                                           |   |        |        

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

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CIRCUS AND ELDORADO JOINT VENTURE  (doing business as Silver Legacy Resort Casino)        Notes to Consolidated Financial Statements

1.    Summary of Significant Accounting Policies



Effective March 1,1994, Eldorado Limited Liability Company (a Nevada limited liability company owned and controlled by Eldorado Resorts, LLC) and
Galleon, Inc. (a Nevada corporation owned and controlled by Mandalay Resort Group formerly known as Circus Circus Enterprises, Inc.) (collectively, the "Partners"), entered into a joint
venture agreement to establish the Silver Legacy Resort Casino (the "Joint Venture" or "Silver Legacy"), a Nevada general partnership. The Joint Venture consists of a casino and hotel located in Reno,
Nevada, which began operations on July 28, 1995. The Eldorado Limited Liability Company contributed land to the Joint Venture with a fair value of $25,000,000 and cash of $26,900,000 for a
total equity investment of $51,900,000. Galleon, Inc. contributed cash to the Joint Venture of $51,900,000 to comprise their total equity investment. Each partner has a 50% interest in the
partnership.

The
consolidated financial statements include the accounts of Silver Legacy and its wholly-owned subsidiary, Silver Legacy Capital Corp. ("Capital"). All significant intercompany
accounts and transactions have been eliminated in consolidation.



In June 1998, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards ("SFAS") No.133, "Accounting for
Derivative Instruments and Hedging Activities." SFAS No.133 requires that entities record all derivatives as assets or liabilities measured at fair value, with the change in fair value recognized in
earnings or in other comprehensive income, depending on the use of the derivative and whether it qualifies for hedge accounting. SFAS No.133 amends or supersedes several current accounting statements.
In July 1999, the FASB issued SFAS No.137 which delayed the effective date of SFAS No.133 from fiscal year 2000 to fiscal year 2001. During June 2000, the FASB issued SFAS No.138 which
amends certain sections of SFAS No.133. As of January 1, 2001, the Joint Venture changed its method of accounting for interest rate swaps to comply with SFAS No.133, and accordingly, changes to
fair value of the interest rate swaps are recognized in earnings. On January 1, 2001, the Joint Venture recorded a liability of $327,000 for the fair value of its interest rate swaps at that
date, with a corresponding cumulative effect adjustment in the statement of income. The interest rate swaps expired on October 29, 2001; accordingly, the Joint Venture recognized $327,000 as
interest rate swap income for the year ended December 31, 2001.



The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ from these estimates.



Cash and cash equivalents include investments purchased with an original maturity of 90 days or less.

75

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Inventories are stated at the lower of cost, using a first-in, first-out basis, or market value.



Property and equipment are stated at cost. Depreciation is computed using the straight-line method over the estimated useful life of the asset. Costs
of major improvements are capitalized, while costs of normal repairs and maintenance are charged to expense as incurred.



The Joint Venture's policy is to capitalize interest on funds disbursed during the active construction and development phases of its facilities and other major
projects. There was no interest capitalized in 2001, 2000 or 1999.



The Joint Venture, from time to time, uses interest rate swaps to assist in managing interest incurred on its Bank Credit Facility. The interest rate swaps
expired on October 29, 2001. The difference between amounts received and amounts paid under such agreements, as well as any costs or fees, is recorded as a reduction of, or addition to,
interest expense as incurred over the life of the swaps. The interest rate swaps accounted for additional interest expense of $1,375,000 in 2001 and interest income of $(34,059) in 2000 and expense of
$1,113,000 in 1999.



In accordance with industry practice, the Joint Venture recognizes as casino revenue the net win from gaming activities, which is the difference between gaming
wins and losses. The retail value of food, beverage, rooms and other services furnished to customers on a complimentary basis is included in gross revenues and then deducted as promotional allowances.
The estimated costs of providing such promotional allowances are included in casino costs and expenses and consist of the following:

Years ended December 31,2001

2000

1999(in thousands)Food and Beverage

$
6,589

$
6,889

$
6,521Rooms


1,263


1,285


1,344Other


867


1,230


1,008$
8,719

$
9,404

$
8,873




Advertising costs are expensed the first time the advertising takes place. Advertising costs included in selling, general and administrative expenses were
$6,191,000, $6,748,000 and $6,088,000 for the years ended December 31, 2001, 2000, and 1999, respectively.



The Joint Venture is not subject to income taxes; therefore, no provision for income taxes has been made, as the Partners include their respective share of Joint
Venture income in their income tax returns. The Joint Venture Agreement provides for the Joint Venture to make distributions to the Partners in an amount equal to the maximum marginal federal income
tax rate applicable to any Partner multiplied by the income of the Joint Venture for the applicable period (see Note 13).

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The
reported amounts of the Joint Venture's assets and liabilities exceeded the net tax basis by $44,151,000 and $43,494,000, at December 31, 2001 and 2000, respectively.



Management is of the opinion that the fair values of all its financial instruments are not materially different from their carrying values. The fair value of the
interest rate swaps at December 31, 2001 and 2000 were $0 and $327,000, respectively.



Certain reclassifications have been made to the prior year financial statements to conform to current year presentation which have no effect on net income.

2.    Certain Risks and Uncertainties

A significant portion of the Joint Venture's revenues and operating income are generated from patrons who are residents of Northern California. A change in
general economic conditions or the extent and nature of casino gaming in California, Washington or Oregon could adversely affect the Joint Venture's operating results. On September 10, 1999,
California lawmakers approved a constitutional amendment that would give Indian tribes the right to offer slot machines and a range of house-banked card games. On March 7, 2000, California
voters approved the constitutional amendment which legalized "Nevada-style" gaming on Native American reservations.

3.    Accounts Receivable

Components of accounts receivable, net are as follows:

2000

2001(in thousands)Casino receivables

$
3,654

$
3,846Hotel receivables


1,783


1,888Other receivables


167


1305,604


5,864Less-allowance for bad debts


(1,304
)

(1,077
)Accounts receivable, net

$
4,300

$
4,787


The
provision for bad debt expense for the years ended December 31, 2001, 2000 and 1999, was $864,000, $596,000, and $508,000, respectively.

Included
in Other receivables is $95,000 and $36,000 due from Eldorado Hotel & Casino and $59,000 and $78,000 due from Circus Circus Hotel and Casino-Reno as of
December 31, 2001 and 2000, respectively.

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4.    Property and Equipment

Property and equipment at December 31, 2001 and 2000 consisted of the following:

2001

2000

Estimated
Service Life(in thousands)

(years)Land and improvements

$
28,405

$
28,405

Buildings and other leasehold improvements


271,517


270,576

15-45Furniture, fixtures, and equipment


84,260


81,716

3-15Construction in progress


38


16

384,220


380,713Less-accumulated depreciation


(103,245
)

(91,830
)Property and equipment, net

$
280,975

$
288,883


Substantially
all property and equipment of the Joint Venture collateralize the Bank Credit Facility (see Note 7).

5.    Other Assets

Other assets, net at December 31, 2001 and 2000 consisted of the following:

2001

2000(in thousands)China, glassware, silverware and linens

$
289

$
246Gaming chips and tokens


46


49Deferred loan costs


202


605Other


38


110$
575

$
1,010


The
initial inventory of china, glassware and silverware is being amortized to 50% of cost with the balance kept as base stock. Subsequent purchases of china, glassware and silverware
are expensed as used.

Gaming
chips and tokens are being amortized over three years.

Costs
incurred to acquire the Bank Credit Facility were capitalized and are being amortized to interest expense over the term of the Bank Credit Facility agreement. The unamortized
balance of $202,000 at December 31, 2001 will be amortized through June 30, 2003, the remaining term of the Bank Credit Facility (see Notes 7 and 13).

Costs
incurred in connection with the Notes Offering in the amount of $370,000 have been written-off due to the postponement of the offering for greater than 90 days
(see Note 13).

6.    Accrued and Other Liabilities

Accrued and other liabilities consist of the following (in thousands):

2001

2000Accrued payroll and related

$
1,825

$
1,854Accrued vacation


1,512


1,465Other


5,313


5,425Accrued and other liabilities

$
8,650

$
8,744


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7.    Long-Term Debt

Long-term debt at December 31, 2001 and 2000 consisted of the following:

2001

2000(in thousands)Amounts due under the Bank Credit Facility at floating interest rates, weighted average of 5.93% and 7.51% during 2001 and 2000, respectively; due June 30, 2003

$
145,000

$
163,500Less-current portion


(10,000
)

(6,500
)$
135,000

$
157,000


The
Bank Credit Facility contains various restrictive covenants including the maintenance of certain financial ratios and limitations on additional debt, distributions, disposition of
property, mergers and similar transactions. As of December 31, 2001, the Joint Venture was in compliance with all loan agreement provisions.

Scheduled
maturities of long-term debt are as follows at December 31, 2001 (in thousands):

2002

$
10,0002003


135,000Thereafter


$
145,000


On
May 30,1995, the Joint Venture entered into a $230,000,000 reducing, revolving credit facility with a consortium of banks (the "Bank Credit Facility"). On September 9,
1996, the Joint Venture amended its Bank Credit Facility to $220,000,000 and on November 24, 1997, amended the Bank Credit Facility to $230,000,000. Quarterly commitment reductions of
$4,250,000 per quarter are due beginning March 31, 1998 through December 31, 2000; $5,500,000 per quarter beginning January 1, 2001 through December 31, 2002; $6,000,000 on
March 31, 2003 and all remaining outstanding balances are due June 30, 2003. Required commitment reductions of $10,000,000 for fiscal year 2002 will reduce availability under the Bank
Credit Facility to $135,000,000 as of December 31, 2002. The Joint Venture incurs commitment fees of 0.25% on the unused portion of the credit facility. The Bank Credit Facility is secured by a
deed of trust on the Joint Venture's real property and by security interests in other assets of the Joint Venture (see Note 4).

In
order to limit its exposure to interest rate movements, the Joint Venture entered into agreements with members of its bank group to participate in interest rate swaps. In connection
therewith, the Joint Venture agreed to pay the institutions a fixed interest rate of approximately 6.4% on a total notional amount of $100,000,000, in return for the institutions' commitment to pay
the Joint Venture a floating interest rate equal to the three-month Eurodollar rate. These agreements expired on October 29, 2001.

8.    Related Parties

Silver Legacy is owned by our Partners, each of which operates a casino attached and adjacent to Silver Legacy. Our Partners may be deemed to be in a conflict of
interest position with respect to decisions they make relating to the Joint Venture, the Eldorado Hotel & Casino and Circus Circus Hotel & CasinoReno.

The
cost of the Silver Legacy, in excess of the equity contributions, was funded from a combination of cash generated from operations, the Bank Credit Facility and a loan from Mandalay
Resort Group ("MRG"). The MRG loan, executed on May 31, 1995, was for an amount up to

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$75,000,000 and carried an annual interest rate of 10%. On September 9, 1996, the MRG loan was amended to change the maturity date to 367 days after the Bank Credit Facility is paid in
full. On November 24, 1997, the entire principal balance of $35,104,000 was paid out of funds received from the Bank Credit Facility.

As
a condition to the Bank Credit Facility, MRG guaranteed completion of the Silver Legacy and, in addition, entered into a make-well agreement whereby it is obligated to
make additional contributions to Silver Legacy as may be necessary to maintain a minimum coverage ratio (as defined). As compensation for the make-well agreement, MRG receives guarantee
fees of 11/2% of the outstanding balance of the Bank Credit Facility. The Joint Venture made payments totaling $2,311,000, $2,523,000, and $2,838,000 on its guarantee fee commitment in
2001, 2000 and 1999 leaving an accrued balance of $185,000 and $209,000 of guarantee fees for the years ended December 31, 2001 and 2000, respectively.

On
May 16, 1996, Eldorado Resorts, LLC ("Eldorado"), entered into an agreement with the Joint Venture to operate a race and sports book (the "Book") located in the Silver Legacy.
Eldorado supplied the management, employees and equipment associated with the operation of the Book. Revenues and expenses were apportioned according to a formula included in the race and sports book
agreement. For the year ended December 31, 1999, the Joint Venture recorded $727,000 in revenues and $505,000 in expenses related to the operations of the Book. Effective November 23,
1999, the agreement with the Eldorado was terminated and the Joint Venture began operating the Book exclusively.

Silver
Legacy has utilized a King Air jet owned by Recreational Enterprises, Inc. ("REI") for the purpose of providing air service to select customers. During 2001, 2000 and 1999,
the Joint Venture paid $31,000, $17,000 and $2,000, respectively. Although there is no agreement obligating the Joint Venture to utilize the plane or entitling it to do so, it is anticipated that the
Joint Venture will continue to utilize this service from time to time in the future on terms mutually acceptable to the parties. REI, which owns 55% of Eldorado is owned by various members of the
Carano family, including Gary L. Carano, Silver Legacy's General Manager, Glenn T. Carano, Silver Legacy's Executive Director of
Marketing, and Gene R. Carano, a member of the Joint Venture's Executive Committee, each of whom owns an approximate 10.1% beneficial interest in REI, and Donald L. Carano, the father of Gary, Glenn
and Gene Carano, who owns an approximate 49.5% interest in REI.

Silver
Legacy's marketing and sales departments have utilized a yacht owned by Sierra Adventure Equipment Leasing, Inc. ("Sierra Leasing") at a flat rate per trip of $2,500 for
various promotional events. The payments made by the Joint Venture to Sierra Leasing for the use of the yacht totaled $21,000, $31,000 and $63,000 during 2001, 2000 and 1999, respectively. Although
there is no agreement obligating the Joint Venture to utilize the yacht or entitling it to do so, it is anticipated that the Joint Venture will continue to utilize this service from time to time in
the future on terms mutually acceptable to the parties. Sierra Leasing is owned by Donald L. Carano, the father of Gary L. Carano, Silver Legacy's General Manager, Glenn T. Carano, Silver Legacy's
Executive Director of Marketing, and Gene R. Carano, a member of the Joint Venture's executive committee.

In
1998, the Joint Venture began purchasing advertising materials from Lexicon Design, Inc., a corporation which is wholly-owned by the wife of Silver Legacy's Executive Director
of Marketing. The payments made by the Joint Venture to Lexicon Design, Inc. were $428,000, $364,000 and $217,000 for the years ended December 31, 2001, 2000 and 1999, respectively.

In
April 2001, the Joint Venture began utilizing 235 spaces in the parking garage at Circus Circus Hotel and Casino-Reno. The spaces are utilized to provide parking
for employees of Silver Legacy. In consideration for its use of the spaces, the Joint Venture pays Circus Circus Hotel and Casino-Reno rent in the amount of $5,000 per month. Although
there is no agreement obligating the Joint Venture

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to continue utilizing the spaces or entitling it to do so, it is anticipated that the Joint Venture will continue this agreement for the foreseeable future.

9.    401(k) Plan

The Joint Venture instituted a defined contribution 401(k) Plan in September 1995 which covers all employees who meet certain age and length of service
requirements and allows an employer contribution up to 25 percent of the first six percent of each participating employee's compensation. Plan participants can elect to defer before tax
compensation through payroll deductions. Those deferrals are regulated under Section 401(k) of the Internal Revenue Code. The Joint Venture's matching contributions were $318,000, $320,000, and
$278,000 for the fiscal years ended December 31, 2001, 2000 and 1999, respectively.

10.  Supplemental Executive Retirement Plan

The Joint Venture anticipates adopting a Supplemental Executive Retirement Plan ("SERP") for a select group of management and highly compensated employees. The
SERP will be effective January 1, 2002 and will provide for a lifetime benefit at age 65, based on a formula which takes into account a participants' highest annual compensation, years of
service, and executive level. The SERP will also provide an early retirement benefit at age 55 with at least four years of service, a disability provision, and a lump sum death benefit. The obligation
is expected to be funded through life insurance contracts on the participants. There were neither accrued amounts nor a required deposit as of December 31, 2001. The Joint Venture anticipates
that its required deposit upon inception of the plan will be approximately $700,000, its periodic pension cost for the year ended December 31, 2002 will be approximately $600,000 and the
accumulated benefit obligation at inception of the Plan will be approximately $1,234,000.

11.  Commitments and Contingencies



The Bank Credit Facility allows for the issuance of letters of credit of up to $5,000,000. As of December 31, 2001 and 2000, the Joint Venture had not
drawn against these letters of credit.



The Joint Venture leases land and equipment under operating leases. Future minimum payments (expiring from 2002 and thereafter) under noncancellable operating
leases with initial terms of one year or more consisted of the following at December 31, 2001:

2002

$
167,0002003


23,000Thereafter


$
190,000


Total
rental expense under operating leases was $548,000, $482,000, and $376,000 for the years ended December 31, 2001, 2000 and 1999, respectively.



The Joint Venture is party to various litigation arising in the normal course of business. Management is of the opinion that the ultimate resolution of these
matters will not have a material effect on the financial position or the results of operations of the Joint Venture.

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12.  Priority Allocation

For so long as Eldorado Resorts LLC has the right to select the General Manager of the Silver Legacy, as provided in the Joint Venture Agreement,
Galleon, Inc. is entitled annually on a non-cumulative basis, commencing with the eight-month period ending December 31, 1997 and for each subsequent 12-month
period, to a priority allocation of the Joint Venture's operating income (the "Priority Allocation") in an amount equal to approximately 11.54% of the average of the "Adjusted Initial Investment" (as
defined) for the period. If, after deducting equal shares of interest expense, a Partner's share of the priority allocation is less than zero, additional operating income is allocated to that Partner
to bring their allocation to zero. For purposes of determining the amount of the Priority Allocation for any period, the term "Adjusted Initial Investment" means $290,000,000 (the "Initial
Investment") as adjusted at the end of each year by subtracting (i) the depreciation on the Initial Investment taken in such year in accordance with the depreciation schedule agreed to by the
Partners and (ii) the principal payments which would have been made in repayment of the original bank financing utilized for the development, construction and completion of the Silver Legacy.

As
a result of the Priority Allocation, each of the Partners received 50% of the operating income through April 30, 1997 and Galleon, Inc. received 100% of the operating
income for the remaining eight months ending December 31, 1997 and for the twelve months ending December 31, 1998. The total allocations to the two Partners for the years ended
December 31, 2001, 2000 and 1999, are $10,560,000, $11,935,000,and $2,881,000 to Eldorado Resorts, LLC and $10,560,000, $9,835,000, and $13,202,000 to Galleon, Inc., respectively. The
allocation to Eldorado Resorts, LLC for the year ended December 31, 2000 includes $1,050,000 to adjust for an excess allocation in the same amount to Galleon, Inc. for the year ended
December 31, 1999.

13.  Subsequent Events



The Joint Venture and Capital are negotiating a proposed offering of Mortgage Notes ("Notes") (the "Notes Offering") with a principal amount of
$160 million. The Notes Offering will be made to qualified investors pursuant to Rule 144A of the Securities Act of 1933. Within 60 days after the issue date of the Notes, a
registration statement enabling holders to exchange their privately placed notes for publicly registered notes with identical terms, will be filed. The Notes will be senior secured obligations which
will rank equally to all of the Joint Ventures' outstanding senior debt and senior to all of the Joint Venture's subordinated debt. Concurrent with the Notes Offering, the Joint Venture will enter
into a new senior secured credit facility. The proceeds from the Notes, together with borrowings under the new senior secured credit facility for $40 million, will be used to repay amounts
outstanding under the existing Bank Credit Facility, fund a distribution to the Partners and pay related fees and expenses of the transactions. Deferred loan costs of approximately $200,000 related to
the existing Bank Credit Facility will be written-off, as an extraordinary item, upon repayment in full of the existing Bank Credit Facility.



The Joint Venture Partners are negotiating an Amended and Restated Joint Venture Agreement to be effective upon the closing of the proposed Notes Offering. This
Amended and Restated Joint Venture Agreement provides for, among other items, profits and losses to be allocated to the Partners in proportion to their percentage interests, separate capital accounts
to be maintained for each Partner and provisions for management of the Joint Venture, payment of distributions and bankruptcy and/or dissolution of the Joint Venture. The Priority Allocation
provisions included in the original Joint Venture Agreement have been eliminated from the Amended and Restated Joint Venture Agreement

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and will not apply in future periods. The Managing Partner, currently Mandalay Resort Group, will be given the ability to appoint the General Manager.



Subsequent to year-end, the Joint Venture made a fourth quarter 2001 tax distribution to ELLC and Galleon of $1.2 million each, utilizing
$0.9 million of cash from operations and $1.5 million borrowed under the existing credit facility. Prior to the issuance of the Notes Offering, the Joint Venture expects to make
distributions to ELLC and Galleon of (i) $5.2 million representing fiscal year 2000 tax distributions and (ii) $2.1 million representing the remaining Priority Allocation
payment to Mandalay Resort Group to be made from borrowings under the existing credit facility.

Concurrent
with the Notes Offering, the Joint Venture will make additional distributions to ELLC and Galleon of $10.0 million and $20.0 million, respectively.

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EXHIBITS INDEX

|EXHIBIT
NUMBER |  | DESCRIPTION OF EXHIBIT                                                                                                                                                                                                                
|-------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.1.2         |  | Amended and Restated Agreement of Joint Venture of Circus and Eldorado Joint Venture by and between Eldorado Limited Liability Company and Galleon, Inc.                                                                              
|10.9.2         |  | Second Amended and Restated Credit Agreement, dated as of March 5, 2002, among Circus and Eldorado Joint Venture, the banks referred to therein and Bank of America, N.A., as administrative agent.                                   
|10.9.3         |  | Guaranty dated as of March 5, 2002, made by Silver Legacy Capital Corp., in favor of Bank of America, N.A. as administrative agent.                                                                                                   
|10.9.4         |  | Second Amended and Restated Security Agreement, dated as of March 5, 2002, by and between Circus and Eldorado Joint Venture and Bank of America, N.A. as administrative agent.                                                        
|10.9.5         |  | Guarantor Security Agreement, dated as of March 5, 2002, by and between Silver Legacy Capital Corp. and Bank of America, N.A., as administrative agent.                                                                               
|10.9.6         |  | Second Amended and Restated Deed of Trust, dated as of February 26, 2002, but effective March 5, 2002, by and among Circus and Eldorado Joint Venture and Bank of America, N.A., as administrative agent.                             
|10.9.7         |  | Second Amended and Restated Assignment of Rent and Revenues entered into as of February 26, 2002, but effective as of March 5, 2002, by and between Circus and Eldorado Joint Venture and Bank of America, N.A., administrative
agent.
|10.9.8         |  | Second Amended and Restated Collateral Account Agreement, dated March 5, 2002, by and between Circus and Eldorado Joint Venture and Bank of America, N.A., as administrative agent.                                                   
|10.9.9         |  | Intercreditor Agreement, dated as of March 5, 2002, by and among Bank of America, N.A., as administrative agent, The Bank of New York, as trustee, Circus and Eldorado Joint Venture and Silver Legacy Capital Corp.                  
|10.10.1        |  | Indenture, dated as of March 5, 2002, among Circus and Eldorado Joint Venture, Silver Legacy Capital Corp., and The Bank of New York, as trustee.                                                                                     
|10.10.2        |  | Deed of Trust, dated as of February 26, 2002, by Circus and Eldorado Joint Venture, to First American Title Company of Nevada for the benefit of the Bank of New York.                                                                
|10.10.3        |  | Security Agreement, dated as of March 5, 2002, by and between Circus and Eldorado Joint Venture and Silver Legacy Corp. for the benefit of The Bank of New York, as trustee.                                                          
|10.10.4        |  | Assignment of Rent and Revenues entered into as of February 26, 2002, by and between Circus and Eldorado Joint Venture and The Bank of New York, as trustee.                                                                          
|10.10.5        |  | Collateral Account Agreement, dated as March 5, 2002, by and among Circus and Eldorado Joint Venture, Silver Legacy Capital Corp., and The Bank of New York, as trustee.                                                              
|10.10.6        |  | Environment Indemnity Agreement entered into as of March 5, 2002, by Circus and Eldorado Joint Venture and Silver Legacy Capital Corp.                                                                                                
|21             |  | List of Subsidiaries.                                                                                                                                                                                                                 
|99             |  | Letter re: Representations of Independent Public Accountants                                                                                                                                                                          

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