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=============================================================================
                                       
                                 UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                               ---------------
                                       
                                  FORM 10-K

[X]   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934

FOR THE FISCAL YEAR ENDED DECEMBER 31, 1997

[ ]  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                               88-0115550
              NEVADA                               88-0367075
  (STATE OR OTHER JURISDICTION OF                (I.R.S. EMPLOYER
   INCORPORATION OR ORGANIZATION)              IDENTIFICATION NO.)

                                       
                   345 NORTH VIRGINIA STREET, RENO, NEVADA 89501
          (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES, INCLUDING ZIP CODE)
                                       
                                (702) 786-5700
              (REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)

      SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:  NONE

      SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:  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   X     No
                                                     -----      ------
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.[X]

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 12, 1998: 2,500 Shares.

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PART I

ITEM 1.  BUSINESS.

              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 10-1/2% 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 77% 
owned subsidiary of Resorts and Nevada limited liability company ("ELLC"), 
are collectively referred to as the "Company."  The remaining 23% of ELLC is 
owned by the principal equityholders of Resorts.

     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 unique in the Reno 
market 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 vehicle 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 with a subsidiary 
of Circus Circus Enterprises, Inc. ("Circus Circus") which owns the Silver 
Legacy Resort Casino (the "Silver Legacy"), a major themed hotel/casino 
located adjacent to the Eldorado.

BUSINESS STRATEGY

     The Company has a very broad and 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 two decades. In addition to their roles in 
management of the Company, members of the Carano family beneficially own 63% 
of the Company.

     The Company's business strategy draws upon its extensive gaming 
management experience gained from operating the Eldorado successfully for 
nearly two decades. 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 is nationally recognized. 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 and enhances its casino operations to 
react to changing market conditions and customer demands. For example, the 
Company has shifted its slots mix towards $1 and higher denominated machines 
in response to the increased popularity of higher-end slot machines, which 
the Company believes appeal to 


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its growing base of higher-income gaming clientele. 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, unique 
electronic displays and customer-convenient features.

     EFFECTIVE 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 from such 
customers, who often increase their level of play over time.

     The Company has established an aggressive marketing program directed 
toward the local gaming market segment, consisting of frequent radio, 
television and newspaper advertising, a variety of promotions and other 
programs specifically tailored for the local customer.  The Eldorado's 
reputation for exceptional quality restaurants and an excellent 
price-to-value relationship is particularly appealing to the local gaming 
patron, as dining is a primary motivation for casino visits by many local 
residents.

     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 room base during the calendar year.

     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 immediate 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 1997 was $3,890,000 
compared with $3,192,000 in 1996.

     STRATEGIC EXPANSION AND IMPROVEMENTS. Since opening the Eldorado in 1973,
the Company has employed a strategy of continual expansion and improvement in
order to maintain and enhance its position as a leader in the Reno market.
Continuing its successful expansion strategy, the Eldorado opened a state-of-
the-art 566-seat showroom in May 1997.  The showroom adds 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
February 1998, the Eldorado opened a new slot area with 97 slot machines across
from THE BREW BROTHERS.   Management believes that the addition of these unique
amenities will further enhance the Eldorado's position as a leading hotel in
the Reno market. Furthermore, 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.

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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 vehicle 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 
golden 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, 1997, the Eldorado offered approximately 81,500 
square feet of gaming space, with approximately 1,858 slot machines, 79 table 
games consisting of blackjack, craps, roulette, Pai Gow Poker, Let It 
Ride-Registered Trademark-, Caribbean stud poker, mini-baccarat, three keno 
games and a race and sports book.  The Eldorado also operates a satellite 
race and sports book at the Silver Legacy.  The Eldorado's casino includes a 
mix of slot machines and table games which management believes makes it 
attractive to both middle-income and premium-play customers. A relatively 
high proportion of slot machines, which are offered in denominations from 5 
cents to $100, generated approximately 68% of the total gaming revenues for 
the casino in 1997 and provides consistency in revenues and cash flow. A 
diverse selection of table games and a variety of table limits allow play 
from a wide variety 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 unique European 
ambiance and offers 815 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 1996 and 1997, the Eldorado achieved a 93.6% and 90.1% average 
hotel occupancy rate and an Average Daily Rate ("ADR") of approximately $55 
and $60, 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 a detail of 
the awards and distinctions each has received.


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                             ELDORADO RESTAURANTS

                   SEATING
DINING VENUE       CAPACITY               DESCRIPTION
------------       --------               -----------
Bistro Roxy           175  .   A Parisian-style bistro, bar and restaurant 
                               offering French country fare, steak and seafood
                           .   Designed by famed restaurant designer Pat Kuleto
                               to feature seven distinct architectural styles
                           .   Awarded the Golden Cup Award by Specialty Coffee
                               Association of America in 1997

LaStrada              170  .   Features northern Italian cuisine in an Italian
                               countryside villa setting
                           .   Recognized as one of the country's top 10 Italian
                               restaurants in the 1994 BEST OF THE BEST ACADEMY
                               AWARDS OF THE RESTAURANT INDUSTRY
                           .   Recipient of the WINE SPECTATOR AWARD OF 
                               EXCELLENCE in each of the past five years
                           .   Hailed in the March 1993 issue of BON APPETIT  
                               magazine as a "sure thing in Reno" for food 
                               lovers

The Brew Brothers     225  .   The first microbrewery located in a hotel/casino.
                               Features a variety of handcrafted beers and live
                               nightly entertainment
                           .   Named as the area's best microbrewery in the RENO
                               GAZETTE-JOURNAL  in 1996
                           .   Offers eight microbrewed beers, including Lady 
                               Luck Lager, Eldorado Extra Pale Honey Ale, 
                               Redhead Amber Ale, Wild Card Wheat Ale, Big Dog 
                               Ale, Gold Dollar Pale Ale, Double Down Stout 
                               and a rotating seasonal brew

The Grill             185  .   A spirited, lively steak and seafood house
                           .   Specializes in rotisserie and grilled entrees at
                               affordable prices
                           .   Offers top quality USDA cuts of beef and fresh 
                               seafood, a "never-ending" salad and fruit bar 
                               with homemade soups

Chefs' Buffet         525  .   A 220-foot buffet offering a wide variety of 
(formerly-Chefs'               cuisines, including a Mongolian barbecue, omelet
Pavilion)                      station and a salad, fruit, ice cream and
                               dessert bar
                           .   Features an open exhibition kitchen where 
                               customers can observe meals being prepared

Tivoli Gardens        210  .   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  220  .   A food court offering a diverse selection of
                               cuisines, including an Asian noodle kitchen,
                               a delicatessen, a gelato shop where 24 flavors 
                               are made fresh each day, a salad bar, a bakery
                               and an espresso bar

Seafood Buffet        425  .   Offered each Friday and Saturday night
                           .   Named one of the top 25 seafood restaurants in 
                               the country in the 1994 BEST OF THE BEST ACADEMY
                               AWARDS OF THE RESTAURANT INDUSTRY


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     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 
include THE BREW BROTHERS  microbrewed beers and wines from the Ferrari 
Carano Winery.

     The Eldorado features a 566-seat showroom/theater and other features 
include a 652-space parking garage, a 360-space valet parking facility and 
126 surface parking spaces. Other amenities offered by the Eldorado include 
several specialty 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.

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 Circus Circus, who jointly recognized the potential 
synergies of constructing a new hotel/casino in between the Eldorado and 
Circus Circus-Reno properties.

     The Silver Legacy's design is based upon Nevada's silver mining heritage 
and the legend of Sam Fairchild, a fictitious silver baron who "struck it 
rich" on the site of the hotel/casino. Accordingly, the opulent interior of 
the Silver Legacy showcases a variety of antique silver pieces from the 
Mackey silver collection and a casino built around Sam Fairchild's legendary 
120-foot tall mining rig. The mining rig appears to transform ore into silver 
coins that cascade into slot machines located at the mining rig's base. The 
mining rig is enclosed within a 75,000 square foot dome, the interior of 
which is painted to resemble the sky and features three dynamic sound and 
light shows which are continuously updated so that visitors are provided with 
a unique experience each time they enter the hotel. The exterior of the dome 
serves as a distinctive landmark on the Reno skyline. 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 1,711 guest rooms 
and suites, many of which 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, 1997, the Silver 
Legacy's casino featured approximately 88,500 square feet of gaming space and 
contained over 2,295 slot machines and 83 table games including blackjack, 
craps, roulette, Pai Gow Poker, Let It Ride-Registered Trademark-, Caribbean 
stud poker, mini-baccarat and Pai Gow and three keno games.  The Eldorado 
operates a satellite race and sports book located on the Silver Legacy casino 
floor.  "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 restaurant offerings include a 240-seat buffet, a 
delicatessen, a steak and seafood restaurant, an oyster bar, a 24-hour coffee 
shop and a gourmet coffee house. 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 over 4,100 rooms, approximately 5,900 
slot machines and 240 table games, 20 restaurants and enough parking to 
accommodate approximately 6,600 vehicles. The Company's management believes 
that 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.

     As of December 31, 1997, 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 $222 million.

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SILVER LEGACY JOINT VENTURE AGREEMENT

     The Silver Legacy was developed by the Silver Legacy Joint Venture 
formed pursuant to the Agreement of Joint Venture of Circus and Eldorado 
Joint Venture (the "Joint Venture Agreement") dated as of March 1, 1994, 
between ELLC and Galleon, Inc. ("Circus Sub").  Under the terms of the Joint 
Venture Agreement, each of ELLC and Circus Sub (together the "Partners") owns 
a 50% interest in the Silver Legacy Joint Venture (each Partner's "Percentage 
Interest").  Each Partner was obligated to contribute cash or property to the 
Silver Legacy Joint Venture with a value equal to 15% of the total budgeted 
cost for developing and constructing the Silver Legacy.  To satisfy their 
respective contribution obligations, ELLC contributed real property worth 
$25.0 million on which to build the Silver Legacy and $26.9 million in cash 
and Circus Sub contributed $51.9 million in cash.  In addition, pursuant to 
the Joint Venture Agreement, Circus Sub's parent corporation, Circus Circus, 
provided certain loans to the Silver Legacy Joint Venture for the costs of 
developing and constructing the Silver Legacy 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 development and construction 
costs (such loans and financing are collectively referred to herein as the 
"Construction Financing").  In return, Circus Circus receives from the Silver 
Legacy Joint Venture an annual fee equal to 1.5% of the average outstanding 
principal balance of such financing. The Original Silver Legacy Credit 
Agreement, as amended and restated, most recently on November 24, 1997 (the 
"Silver Legacy Credit Agreement") is secured by a deed of trust on the Silver 
Legacy and by security interests in other assets of the Silver Legacy Joint 
Venture.  Under the terms of the Silver Legacy Credit Agreement, the 
borrowing limit thereunder (currently $230 million) is subject to scheduled 
reductions (adjustable ratably for any voluntary permanent reductions) of 
$4.25 million on March 31, 1998 and quarterly thereafter through December 31, 
2000, $5.5 million on March 31, 2001 and quarterly thereafter through 
December 31, 2002, $6 million on March 31, 2003, and the balance on June 30, 
2003 when any indebtedness then outstanding thereunder will become due and 
payable.  Each of ELLC's and Circus Sub's ability to participate in cash 
flows generated by the Silver Legacy is limited by the terms of the Joint 
Venture Agreement and the Silver Legacy Credit Agreement. On November 24, 
1997, in connection with the most recent amendment and restatement of the 
Silver Legacy Credit Agreement, the Silver Legacy Joint Venture repaid its 
indebtedness to Circus Circus in the amount of $35.1 million and funded the 
repayment by an additional advance under the Silver Legacy Credit Agreement.  
As of December 31, 1997, 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 $222 million 
(representing the principal amount then outstanding under the Silver Legacy 
Credit Agreement) plus accrued interest of $1,652,691.
     
          Additional capital contributions in proportion to each Partner's 
Percentage Interest may be required by the Managing Partner (as defined in 
the Joint Venture Agreement) to defray any net loss (not including 
depreciation and amortization expenses) incurred by the Silver Legacy Joint 
Venture. If either Partner fails to make such additional capital 
contributions, the non-defaulting Partner may (i) contribute the amount of 
the additional capital contribution that the defaulting Partner has failed to 
pay to the Silver Legacy Joint Venture on behalf of the defaulting Partner, 
which amount will be considered a loan to the defaulting Partner from the 
non-defaulting Partner (an "Additional Capital Contribution Loan") and must 
be repaid by the defaulting Partner from the cash distributions it receives 
pursuant to the Joint Venture Agreement or (ii) loan the amount of the 
additional capital contribution that the defaulting Partner has failed to pay 
to the Silver Legacy Joint Venture, which loan must be repaid from Net Cash 
from Operations (as defined herein).

     PROFIT ALLOCATION. 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 
currently 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 Circus Sub 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 Circus Sub'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 less interest expense 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. Under the terms of the 
Joint Venture Agreement, such Profits were allocated to the Partners in 
proportion to their respective Percentage Interests prior to May 1, 1997.  
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.

     Circus Sub is entitled to a priority allocation ("Priority Allocation") 
of pretax operating income equal to 7.5% of the "Initial Investment," defined 
as the total cost of construction of the Silver Legacy up to a maximum of 
$290 


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<PAGE>

million. The Initial Investment is decreased each year by the amount of 
depreciation expense recorded on the Silver Legacy in such year and by any 
principal payments made to repay the Construction Financing in such year. 
Circus Sub is entitled to such Priority Allocation beginning May 1, 1997 and 
for so long as ELLC selects the General Manager (as defined in the Joint 
Venture Agreement) of the Silver Legacy (as provided for in the Joint Venture 
Agreement).

     DISTRIBUTIONS OF CASH FROM OPERATIONS. The Joint Venture Agreement 
provides 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 Construction Financing, other than 
indebtedness owed Partners or affiliates as provided for in the Joint Venture 
Agreement) is to be distributed quarterly to the Partners in proportion to 
their Percentage Interests 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, 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 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 Circus Sub of an amount up to its Priority 
Allocation and to ELLC of an amount up to the amount distributed to Circus 
Sub pursuant to Circus Sub's Priority Allocation, (vii) 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 (viii) the 
payment of the balance of the portion of the Construction Financing provided 
by Circus Circus until such loans are paid in full or refinanced. In 
addition, any withdrawal from the Silver Legacy Joint Venture by either party 
results in a reduction of distributions to such withdrawing Partner to 75% of 
amounts otherwise payable to such Partner.

     MANAGEMENT. The Silver Legacy Joint Venture is managed by an Executive 
Committee, a Managing Partner and a General Manager. The Executive Committee 
consults with, reviews, monitors and oversees the performance of the Managing 
Partner and the General Manager, thus functioning in a capacity similar to a 
corporation's board of directors. The Executive Committee may act only upon 
the approval of a majority of its members. The Executive Committee has five 
members, three of whom are appointed by the Managing Partner and the other 
two of whom are appointed by the other Partner. The Joint Venture Agreement 
names Circus Sub as the Managing Partner. The current members of the 
Executive Committee appointed by the Managing Partner are Steve Greathouse, 
Yvette Landau and Scott Beeman; the current  members appointed by ELLC are 
Donald Carano and Robert Jones.

     The Managing Partner is generally responsible for overseeing the 
management and the business affairs of the Silver Legacy Joint Venture and 
may be replaced only: (i) upon the unanimous agreement of the Partners or 
(ii) by the other Partner if the Silver Legacy Joint Venture's net operating 
results for any four consecutive quarters are less than 80% of the amount 
projected in the Silver Legacy Joint Venture's annual business plan, upon 
which such other Partner will become the Managing Partner; provided, however, 
that as long as ELLC appoints the General Manager, ELLC may not require 
Circus Sub to resign as Managing Partner.

     The General Manager is responsible for the oversight and management of 
the day-to-day operations of the Silver Legacy and other business of the 
Silver Legacy Joint Venture. The General Manager, currently Gary Carano, is 
appointed by ELLC subject to the approval of Circus Sub. The General Manager 
will continue to be selected by ELLC so long as Circus Sub is allocated its 
Priority Allocation or so long as the Silver Legacy Joint Venture's net 
operating results are not less than 80% of the amount projected in the Silver 
Legacy Joint Venture's annual business plan. If the General Manager fails to 
meet such performance requirements, Circus Sub may replace the General 
Manager; provided, however, that if Circus Sub replaces the General Manager 
without ELLC's consent, Circus Sub will not receive its Priority Allocation.

     TRANSFERS OF PARTNERSHIP INTERESTS. After the Silver Legacy has been in 
operation for at least 10 years and the initial Construction Financing has 
been paid in full, either Partner may, so long as such Partner is not in 
default of any of the provisions of the Joint Venture Agreement, offer to 
purchase the entire interest of the other Partner. If either Partner makes 
such an offer, the other Partner is required to either sell its interest or 
purchase the interest of the offering Partner at the price proposed by the 
offering Partner, subject to a pro rata adjustment if the interests are not 
equal at the time of the offer. In addition, in the event that (i) a Partner 
is in default at any time on any two required additional capital 
contributions, (ii) an Additional Capital Contribution Loan is not repaid 
within two years, (iii) any deed of trust for the benefit of Circus Circus 
for the Construction Financing is in default for over one year or (iv) unless 
otherwise agreed to by Circus Circus, Donald Carano, an immediate family 
member acceptable to Circus Sub or one of their respective affiliates does 
not control ELLC, or unless otherwise agreed to by ELLC, Circus Circus does 
not 

                                       7
<PAGE>

control Circus Sub, then the non-defaulting Partner may purchase the 
defaulting Partner's interest. The purchase price will be equal to the net 
equity of the defaulting Partner's interest, decreased by any amount that the 
non-defaulting Partner contributed as a capital contribution on behalf of the 
defaulting Partner (which amount is considered a loan to the defaulting 
Partner pursuant to the Joint Venture Agreement). Any such purchase and sale 
is subject to the approval of the Nevada Gaming Authorities.

RENO MARKET

     The Reno market is one of the larger gaming markets in the United States 
which generated approximately $902 million of gaming revenues in 1997. The 
opening of the Silver Legacy in 1995 marked Reno's first opening of a newly 
constructed major hotel/casino since 1978 and its first themed mega-resort, 
representing 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, 1997, the Reno market featured 15,773 hotel rooms 
which had an 80.3% average hotel occupancy rate in 1997. According to the 
Reno Sparks Convention and Visitors Authority (the "Visitors Authority"), 
other approved or announced projects are expected to add up to 5,500  rooms 
to the Reno market within a decade, although the Company can not predict how 
many rooms will actually be completed and placed into service.

     Reno is the second largest city in Nevada, with a population of 
approximately 165,000 as of July 1997, and is located at the base of the 
Sierra Nevada mountains along Interstate 80, approximately 140 miles east of 
Sacramento, California and 225 miles east of San Francisco, California. Reno 
is a destination resort market which attracts 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 outdoor activities of all types. According to the Visitors Authority, 
visitors to the Reno market stayed an average of 2.5 nights in 1997. The Reno 
area enjoys relatively mild weather, with abundant sunshine throughout the 
year, low humidity and modest annual snowfall. Special annual events in the 
Reno area include Hot August Nights, the National Championship Air Races, the 
Reno Balloon Races and the Reno Rodeo. According to the Visitors Authority, 
the greater Reno area attracted 5.1 million visitors in 1997,  compared with 
5.2 million in 1996.

     The following table sets forth certain statistical information for the 
Reno market for the years 1993 through 1997, as reported by the Visitors 
Authority or the Nevada State Gaming Control Board.

<TABLE>
<CAPTION>
                                                                                THE RENO MARKET
                                                           1993         1994            1995           1996           1997
                                                       ----------    ----------      ----------     ----------     ----------
 <S>                                                    <C>           <C>             <C>            <C>            <C>
 Gaming Revenues (000's)...........................    $  811,227    $  826,174      $  889,480     $  885,578     $  901,989
 Gaming Positions(1)(2)............................        29,228        29,943          31,926         32,164         31,762
 Hotel Rooms(1)....................................        12,566        12,582          14,241         15,536         15,773
 Average Hotel Occupancy Rate......................          85.2%         84.4%           86.0%          83.3%          80.3%
 Airline Passenger Arrivals(3).....................     2,374,244     2,670,969       2,911,834      3,450,920      3,523,410
 Convention Attendance.............................       177,925       203,389         314,137        196,707        250,170

</TABLE>

 (1)  As of December 31 for each period shown.
 (2)  Calculated from information provided by the Nevada State Gaming 
      Control Board.
 (3)  Arrivals to Reno/Tahoe International Airport.


     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") over the next 12 years and is expected to host many other 
tournaments for other bowling organizations. The National Bowling Stadium 
held the WIBC's National Championship Bowling Tournament in 1997 and has 
scheduled the 2000, 2003, 2006 and 2009 tournaments and the ABC's National 
Championship Bowling Tournament for 1998, 2001, 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 

                                       8
<PAGE>

visitor profile. The National Bowling Stadium also features a large-screen 
movie theater  and retail space and can be configured to host special events 
and conventions.

     Passenger traffic at the Reno/Tahoe International Airport has increased 
steadily from 1.5 million airline passenger arrivals in 1990 to 3.5 million 
in 1997.  In 1997, eleven scheduled airlines and a number of other charter 
airlines provided service between Reno and approximately 22 North American 
cities, providing available seats for more than 16,500 people daily both 
inbound and outbound. The most frequent users of the airport are Reno Air 
and Southwest Airlines, with approximately 115 and 85 daily flights, 
respectively, to or from Reno as of December 31, 1997.  The Eldorado and 
Silver Legacy are within a 10-minute drive of the airport, making them easily 
accessible to visitors traveling to Reno by air.

COMPETITION

     The Company competes for customers primarily on the basis of location, 
range and pricing of amenities and overall atmosphere. Of the 46 casinos 
currently operating in the Reno market, the Company competes principally with 
the eight other hotel/casinos that each generate over $36 million in annual 
gaming revenues, including Circus Circus-Reno and the Silver Legacy. The 
Visitors Authority estimates that up to approximately 5,500 rooms will be 
added to the Reno market by the end of the decade. The Company expects that 
any additional rooms added in the Reno market will increase competition for 
visitor revenue.  To a lesser extent, the Company also competes with 
hotel/casino operations located in Las Vegas and Laughlin, Nevada and in the 
Lake Tahoe area. A substantial number of customers travel to both Reno and 
the Lake Tahoe market during their visits. Consequently, the Company believes 
that its success is influenced to some degree by the success of the Lake 
Tahoe market. Environmental restrictions place limitations on the expansion 
of hotels and casinos in the Lake Tahoe market. Additionally, the Company 
competes with casino gaming on Native American-owned lands throughout 
California, Washington and Oregon, from where it is estimated the Reno market 
drew in excess of 67% of its visitors in 1997. Furthermore, since the 1980's, 
legalized gaming opportunities have proliferated throughout the United 
States, and the Company now competes with pari-mutuel wagering, 
state-sponsored lotteries, card clubs, bingo, off-track betting, riverboat 
and other forms of legalized gaming.

     Riverboat, dockside or land-based gaming is currently legal in 14 states 
and gaming on Native America-owned land is legal in at least 24 states, 
including California, Washington, and Oregon.  In addition, California (from 
which the Reno market drew approximately 50% of its visitors in 1997) allows 
other non-casino style gaming, including pari-mutuel wagering, 
state-sponsored lottery, card clubs, bingo, and off-track betting.  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 the Company's operations.  Furthermore, while the 
Company believes that the continued spread of legalized gaming may in the 
future present the Company with opportunities for expansion (subject to 
available financing), increased legalized gaming in other states, 
particularly in areas close to Nevada, such as California, Washington, and 
Oregon, could adversely affect the Company's operations.

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 there under 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 is 
registered by the Nevada Commission as a publicly traded corporation (a 
"Registered Corporation").  Registered Corporations are required periodically 
to 

                                       9
<PAGE>

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.

     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 10-1/2% 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.

     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 


                                       10
<PAGE>

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, 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.


                                       11
<PAGE>

     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.

NATIONAL GAMBLING COMMISSION

     A National Gambling Impact Study Commission (the "National Commission") 
has been established by the United States Congress to conduct a comprehensive 
legal and factual study of the social and economic impact of gaming in the 
United States.  The National Commission is required by the enabling 
legislation to issue a comprehensive report containing its findings and 
conclusions, together with any recommendations of the National Commission for 
legislation and administrative actions, within two years after the date on 
which it held its first meeting, which occurred on June 20, 1997.  Any 
recommendations which may be made by the National Commission could result in 
the enactment of new laws and/or the adoption of new regulations which could 
adversely impact the gaming industry in general and the Company in 
particular.  The Company is unable at this time to determine what 
recommendations, if any, the National Commission will make, or the ultimate 
disposition of any recommendations the National Commission may make.

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 
has agreed jointly and severally with Circus Circus to indemnify, defend and 
hold harmless the agents and lenders under the Silver Legacy Joint Venture's 
bank credit facility 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, 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 
Circus Circus 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.

       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 


                                       12
<PAGE>

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 was 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 $725,123 in connection with 
environmental matters from January 1, 1993 through December 31, 1997, of 
which approximately $30,473 was expended during 1997.

EMPLOYEES

     As of December 31, 1997, the Company had 2,372 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.

FORWARD LOOKING INFORMATION

     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 written statements made or 
to be made by the Company) contains statements that are forward-looking 
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.  Such 
statements include information relating to plans for future expansion and 
other business development activities as well as other capital spending, 
financing sources and the effects of regulation (including gaming and tax 
regulation) and competition.  Such forward-looking information involves 
important risk and uncertainties that could significantly affect anticipated 
results in the future and, accordingly, such results may differ from those 
expressed in any forward-looking statements made by or on behalf of the 
Company.  These risk and uncertainties include, but are not limited to, those 
relating to development and construction activities, dependence on existing 
management, leverage and debt service (including sensitivity to fluctuations 
in interest rates), domestic or global economic conditions, changes in 
Federal or state tax laws or the administration of such laws, changes in 
gaming laws or regulations (including the legalization of gaming in certain 
jurisdictions) and applications for licenses and approvals under applicable 
laws and regulations (including gaming laws and regulations).

ITEM 2.  PROPERTIES.

     The Company's executive offices reside inside the Eldorado, which is 
located 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 1997 totaled $667,788.  Substantially all 
of the Company's real property, including the Eldorado, is subject to 
encumbrances securing the repayment of the Company's $50 million revolving 
credit facility (the "Credit Facility").  The amount of 

                                       13
<PAGE>

credit available pursuant to the Credit Facility reduced to approximately 
$46.9 million on December 31, 1997 and, by its terms, the facility reduces by 
an additional $1,562,500 at the end of each subsequent quarter until March 
25, 2000, when it terminates and any balance then outstanding becomes due and 
payable.  At December 31, 1997, the indebtedness outstanding under the Credit 
Facility was $23.25 million. The Credit Facility is 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 located across the street from the 
Eldorado, all related personal property, substantially all other assets of 
the Company and a pledge of the Company's interests in ELLC. In addition, 
Capital has guaranteed the Company's obligations under the 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.  At December 31, 1997, the land located in Verdi, Nevada was 
subject to encumbrances securing the repayment of indebtedness of $83,609. At 
such date, the land located at 444 North Center Street was subject to no such 
encumbrances.

     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, 1997, this parcel was subject to an 
encumbrance securing the repayment of indebtedness of $2,493,428.

     The Company and Circus Circus each own a one-half interest in a 63,000 
square foot parcel of land across the street from the Silver Legacy.  At 
December 31, 1997, this parcel was subject to an encumbrance securing the 
repayment of indebtedness of  $1,143,800.  Circus Circus reimburses the 
Eldorado on a quarterly basis for one half the total principal and interest 
payments.

     The Company's 77% 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 
heading "Silver Legacy Resort Casino" 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.

PART II

ITEM 5.   MARKET FOR REGISTRANTS' COMMON EQUITY AND RELATED STOCKHOLDER 
          MATTERS.

     There is no established public trading market for the Company's 
outstanding membership interests which were owned of record by three entities 
and two individuals as of December 31, 1997.  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 1997 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 

                                       14
<PAGE>

amended, as a corporation.  Distributions of Resorts and the Predecessor 
Partnership to their members and partners aggregated $9,200,000 and 
$7,000,000 for 1996 and 1997, respectively.


                                       15

<PAGE>

ITEM 6.  SELECTED FINANCIAL DATA.


                     SELECTED CONSOLIDATED FINANCIAL DATA
                            (DOLLARS IN THOUSANDS)
                           YEARS ENDED DECEMBER 31,
                           ------------------------


<TABLE>
<CAPTION>
                                                      1993            1994            1995            1996            1997
                                                      ----            ----            ----            ----            ----
<S>                                                 <C>             <C>             <C>             <C>             <C>
CONSOLIDATED STATEMENT OF INCOME DATA:
Operating revenues:
    Casino . . . . . . . . . . . . . . . . . . .    $ 95,261        $ 97,809        $106,737        $104,608        $104,513
    Food, beverage and entertainment . . . . . .      31,436          31,718          33,780          34,483          41,061
    Hotel. . . . . . . . . . . . . . . . . . . .      16,518          16,837          17,200          16,784          17,769
    Equity in net income (loss) of
    unconsolidated affiliate(1). . . . . . . . .          --              --          (3,208)          1,758             390
    Other. . . . . . . . . . . . . . . . . . . .       5,328           4,316           4,908           7,120           7,093
    Less promotional allowances. . . . . . . . .     (11,486)        (12,482)        (13,895)        (14,102)        (14,545)
                                                    ---------       ---------       ---------       ---------       ---------

        Net revenues . . . . . . . . . . . . . .     137,057         138,198         145,522         150,651         156,281

Operating expenses:
    Casino . . . . . . . . . . . . . . . . . . .      34,573          37,554          42,692          44,557          45,786
    Food, beverage and entertainment . . . . . .      23,772          23,006          26,363          26,225          30,531
    Hotel. . . . . . . . . . . . . . . . . . . .       5,882           6,554           7,536           7,219           7,387
    Other. . . . . . . . . . . . . . . . . . . .       2,799           2,361           2,043           3,246           3,510
    Selling, general and administrative(2) . . .      27,316          27,509          28,335          29,237          30,566
    Depreciation . . . . . . . . . . . . . . . .       7,241           7,325           8,166          10,361          12,478
    Abandonment loss(3). . . . . . . . . . . . .          --              --           1,862              --              --
                                                   ---------       ---------       ---------       ---------       ---------
        Total Operating expenses . . . . . . . .     101,583         104,309         116,997         120,845         130,258
                                                   ---------       ---------       ---------       ---------       ---------
Operating income . . . . . . . . . . . . . . . .      35,474          33,889          28,525          29,806          26,023
Interest expense, net. . . . . . . . . . . . . .      (5,181)         (3,254)         (5,336)        (10,935)        (13,694)
                                                   ---------       ---------       ---------       ---------       ---------
Net income before minority interest. . . . . . .      30,293          30,635          23,189          18,871          12,329
Minority interest in net (income) loss of
   unconsolidated affiliate(4) . . . . . . . . .          --              --             745            (408)            (91)
                                                   ---------       ---------       ---------       ---------       ---------
Net income(5). . . . . . . . . . . . . . . . . .    $ 30,293        $ 30,635        $ 23,934        $ 18,463        $ 12,238
                                                   ---------       ---------       ---------       ---------       ---------
                                                   ---------       ---------       ---------       ---------       ---------
OTHER DATA:
EBITDA(6). . . . . . . . . . . . . . . . . . . .    $ 42,715        $ 41,214        $ 41,761        $ 38,409        $ 38,111
Net cash provided by (used in):
    Operating activities . . . . . . . . . . . .      32,002          38,786          36,345          31,201          22,782
    Investing activities . . . . . . . . . . . .     (10,478)        (37,045)        (62,791)        (22,336)        (15,837)
    Financing activities . . . . . . . . . . . .     (21,876)         (1,205)         27,208          (9,202)         (6,361)
Capital expenditures . . . . . . . . . . . . . .      10,562          12,053          57,451          24,981          15,957

OPERATING DATA(7):
Number of hotel rooms(8) . . . . . . . . . . . .         783             783             817             817             815
Average hotel occupancy rate . . . . . . . . . .        93.0%           93.7%           93.8%           93.6%           90.1%
Casino square footage(8) . . . . . . . . . . . .      61,500          61,500          76,500          81,500          81,500
Number of slot machines(8) . . . . . . . . . . .       1,568           1,597           1,904           1,976           1,858
Number of table games(8) . . . . . . . . . . . .          77              71              84              89              79
</TABLE>

<TABLE>
<CAPTION>
                                                                                  AT DECEMBER 31,
                                                   -------------------------------------------------------------------------
                                                      1993            1994            1995            1996            1997
                                                      ----            ----            ----            ----            ----
<S>                                                 <C>             <C>             <C>             <C>             <C>

CONSOLIDATED BALANCE SHEET DATA:
Cash and cash equivalents. . . . . . . . . . . .    $  4,824        $  5,360        $  6,122        $  5,785        $  6,369
Total assets . . . . . . . . . . . . . . . . . .     129,645         160,384         215,592         234,293         238,627
Total debt . . . . . . . . . . . . . . . . . . .      61,469          79,064         123,630         128,503         129,404
Members' equity (9). . . . . . . . . . . . . . .      57,799          69,634          74,768          84,031          89,269
</TABLE>

SEE FOOTNOTES TO SELECTED CONSOLIDATED FINANCIAL DATA WHICH APPEAR ON THE NEXT 
PAGE.

                                     16

<PAGE>

              FOOTNOTES TO SELECTED CONSOLIDATED FINANCIAL DATA


(1)  Equity in net income (loss) of unconsolidated affiliate represents ELLC's 
     50% joint venture interest in the Silver Legacy Joint Venture.  The 
     equity in net income (loss) of unconsolidated affiliate for the year 
     ended December 31, 1995, includes the impact of ELLC's share of the $9.9 
     million of pre-opening expenses that were incurred by the Silver Legacy 
     Joint Venture.

(2)  Resorts pays management fees to Recreational Enterprises, Inc. and Hotel 
     Casino Management, Inc.,  the owners of 55% and 29% of Resorts' 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 $4.3 million, 
     $2.9 million and $1.8 million for the years ended December 31, 1995, 
     1996 and 1997, 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.  Resorts has entered into a Management Agreement 
     with Recreational Enterprises, Inc. and Hotel Casino Management, Inc. 
     providing that future management fees paid to Recreation Enterprises, 
     Inc. and Hotel Casino Management, Inc. will not exceed 1.5% of Resorts 
     annual net revenues.  As a result of the Management Agreement and 
     Resorts' assumption of responsibility for the salaries of senior 
     executive officers and other key employees previously paid by 
     Recreational Enterprises, Inc. from its management fee, Resorts incurred 
     such salaries and management fees for the years ended December 31, 1996 
     and 1997 of $4.6 million and $4.3 million,  respectively.

(3)  Abandonment loss equals the net book value of property disposed of as a 
     result of the expansion of the Eldorado and represents the undepreciated 
     value of such property.

(4)  Minority interest in net (income) loss of unconsolidated affiliate 
     represents the 23% minority interest partners' share of ELLC's 50% joint 
     venture interest in the Silver Legacy Joint Venture.  The minority 
     interest in  ELLC is owned by Resorts' equityholders.

(5)  The Predecessor Partnership was not subject to U.S. Federal income 
     taxes, as the Partners included their respective shares of partnership 
     taxable income in their income tax returns. For each period shown, the 
     Predecessor Partnership made distributions to its Partners, a portion of 
     which was to reimburse the Partners for such tax liability. As a 
     limited-liability company, Resorts is not subject to income tax 
     liability. Therefore, holders of membership interests will include their 
     respective share of the Resorts' taxable income in their income tax 
     returns and Resorts will continue to make distributions for such tax 
     liabilities.

(6)  EBITDA is defined as earnings before interest, taxes, depreciation and 
     amortization. For the year ended December 31, 1995, EBITDA was adjusted 
     to exclude ELLC's equity in net income (loss) of its unconsolidated 
     affiliate of ($3.2) million and abandonment loss of $1.9 million. For 
     the year ended December 31, 1996, EBITDA was adjusted to exclude ELLC's 
     equity in net income of its unconsolidated affiliate of $1.8 million.  
     For the year  ended December 31, 1997, EBITDA was adjusted to exclude 
     ELLC's equity in net income of its unconsolidated affiliate of $0.4 
     million.  EBITDA as presented may not be comparable to EBITDA of other 
     entities as other entities may not calculate EBITDA in the same manner. 
     EBITDA should not be construed as an alternative to operating income or 
     net income (as determined in accordance with generally accepted 
     accounting principles) as an indicator of the Company's operating 
     performance, or as an alternative to cash flows generated by operating, 
     investing and financing activities (as determined in accordance with 
     generally accepted accounting principles) as an indicator of cash flows 
     or a measure of liquidity. EBITDA is presented solely as supplemental 
     disclosure because management believes that it is a widely used measure 
     of operating performance in the gaming industry.

(7)  Excludes the operating data of the Silver Legacy.

(8)  As of the end of each period presented.

(9)  Effective upon consummation of the Reorganization, partners' equity was
     reclassified as members' equity.

                                     17

<PAGE>

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' 77% 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.  The remaining 23% interest in 
ELLC is owned by the principal equityholders of Resorts.  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
utilizing the equity method of accounting.  The Company's consolidated net
income includes its proportional share of the Silver Legacy Joint Venture's net
income (loss) before taxes as determined in accordance with the terms of the
Silver Legacy Joint Venture's joint venture agreement (the "Joint Venture
Agreement"). See Note 8 of the Notes to the Consolidated Financial Statements
included in this Report.

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


YEAR ENDED DECEMBER 31, 1997 COMPARED TO
YEAR ENDED DECEMBER 31, 1996

NET REVENUES.

     Net revenues were $156.3 million for the year ended December 31, 1997, 
compared to $150.7 million in 1996, an increase of 3.7%, despite a January 
1997 flood in Reno, which negatively impacted traffic during the month. The 
increase in net revenues resulted from increased hotel revenues and food, 
beverage and entertainment revenues, due in part to an influx of visitors in 
the Reno market attending the WIBC National Championship Bowling Tournament 
held from March through July 1997.  Net revenues increased notwithstanding 
the fact that the Company only recognized income from its unconsolidated 
affiliate, the Silver Legacy Joint Venture, during the first quarter of 1997, 
as the result of a priority allocation to Galleon, Inc. pursuant to the Joint 
Venture Agreement. See Note 8 of the Notes to the Consolidated Financial 
Statements included in this Report. The Company recognized income from its 
unconsolidated affiliate from January 1, 1997 through May 1, 1997, after 
clarification of the Joint Venture Agreement. Net revenues for the year ended 
December 31, 1997 include $0.4 million of income from its unconsolidated 
affiliate as compared to $1.8 million for the year ended December 31, 1996.

     Casino revenues remained essentially unchanged at $104.5 million for the
year ended December 31, 1997 compared to $104.6 million in 1996.

     Food, beverage and entertainment revenues were $41.1 million for the year
ended December 31, 1997 compared to $34.5 million in 1996, an increase of
19.1%.  The increase in food, beverage and entertainment revenues was due
primarily to the opening of THE BISTRO ROXY in December 1996 and the ELDORADO
SHOWROOM which opened in May 1997.

     Hotel revenues increased to $17.8 million for the year ended December 31,
1997 from $16.8 million for the year ended December 31, 1996, an increase of
5.9%, despite a decrease in the Company's hotel occupancy rate for the year
ended December 31, 1997 to approximately 90.1% from 93.6% in 1996. Such
decrease in the hotel occupancy rate was due primarily to the flood in January
1997.  The revenue increase is a result of an increase in the Company's
average daily rate ("ADR") by approximately $5 in 1997 compared with 1996.
The influx of visitors attending the WIBC National Championship Bowling
Tournament was a factor contributing to this increase in ADR.

     Other revenues for the year ended December 31, 1997 and 1996 were
comparable at $7.1 million.  Included in  the 1996 amount is a $0.5 million
gain on the sale of land during the second quarter of 1996, which was primarily
offset by increased revenues in the Company's retail shops in 1997.

                                     18

<PAGE>

     Promotional allowances, expressed as a percentage of casino revenues,
increased to 13.9% in 1997 as compared to 13.5% in 1996.  The increase is due
to increased use of complimentaries to all levels of  casino patrons including
those participating in the WIBC National Championship Bowling Tournament.


OPERATING EXPENSES.

     The Company's operating expenses increased by 7.8% to $130.3 million for
the year ended December 31, 1997 from $120.8 million for the year ended
December 31, 1996.  This increase is attributable to increased expenses in the
casino, food, beverage and entertainment departments, depreciation and an
increase in selling, general and administrative expenses.

     Casino expenses increased by 2.8% to $45.8 million for the year ended
December 31, 1997 from $44.6 million for the year ended December 31, 1996.  The
increase was due to the opening, during the second quarter of 1996, of a
satellite race and sports book operated by the Eldorado at the Silver Legacy,
in addition to increased promotional expense related to the WIBC bowling
tournament and bus programs.

     Food, beverage and entertainment expenses increased 16.4% to $30.5 million
for the year ended December 31, 1997 from $26.2 million for the year ended
December 31, 1996.  The increase is due primarily to the addition of THE BISTRO
ROXY which opened in December 1996 and the ELDORADO SHOWROOM which opened in
May 1997.

     Hotel expenses increased slightly to $7.4 million for the year ended
December 31, 1997 from $7.2 million for the year ended December 31, 1996, an
increase of 2.3%, reflecting a slight increase in payroll and marketing
expenditures despite a decrease in hotel occupancy.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES.

     Selling, general and administrative expenses increased by 4.6% for the 
year ended December 31, 1997 to $30.6 million from $29.2 million for the year 
ended December 31, 1996.  The increase was partially attributable to 
increased expenditures in advertising, property maintenance and public area 
housekeeping in 1997. 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., 
Resorts' controlling member.  As of July 1, 1996, the aggregate annual 
salaries of such senior executive officers and other key employees became 
payroll obligations of the Company.  These obligations and the aforementioned 
management fees are included within selling, general and administrative 
expenses.

DEPRECIATION.

     Depreciation for the year ended December 31, 1997 was $12.5 million
compared to $10.4 million for the year ended December 31, 1996, an increase of
20.4%.  The increase was attributable to the depreciation of THE BISTRO ROXY
and the ELDORADO SHOWROOM, which were not in service in the prior period, and
the DANIEL'S MOTOR LODGE, which was in service for only a portion of the prior
period.


INTEREST EXPENSE, NET.

     Interest expense, net of capitalized interest and interest income, for the
years ended December 31, 1997 and 1996 was $13.7 million and $10.9 million,
respectively, an increase of 25.2%.  Interest expense increased as a result of
an increase in the average outstanding borrowings in 1997, as compared to 1996,
and as a result of an increase in the Company's cost of capital in 1997.  This
increase in average outstanding borrowings is attributable to costs incurred in
connection with the Company's expansion activities in 1996 and 1997.  The
Company's increase in cost of capital is due to the issuance in July 1996 of
$100 million principal amount of 10 1/2% Notes, the net proceeds of which were
used to repay approximately $96.5 million of borrowings outstanding under the
Company's Credit Facility (as defined below), which as of July 31, 1996 bore
interest at an average annual rate of 7.5%.  The Company capitalized interest
of $0.3 million for the year ended December 31, 1997 related to construction
costs, as compared to $0.4 million  for the year ended December 31, 1996.

                                     19


<PAGE>

NET INCOME.

     As a result of the factors described above, net income after minority 
interest in net income of its unconsolidated affiliate for the year ended 
December 31, 1997, declined by 33.7% to $12.2 million compared to $18.5 
million for the year ended December 31, 1996.

YEAR ENDED DECEMBER 31, 1996 COMPARED TO
YEAR ENDED DECEMBER 31, 1995

NET REVENUES.

     Net revenues were $150.7 million for the year ended December 31, 1996, 
compared to $145.5 million for the same period  in 1995, an increase of 3.5%. 
Net revenues in 1996 included $1.8 million in equity in net income of 
unconsolidated affiliate while the comparable period in 1995 included $3.2 
million in equity in net loss of unconsolidated affiliate.  The Company 
generated strong net revenues during the first half of 1995, due primarily to 
the influx of visitors attending the American Bowling Congress National 
Championship Bowling Tournament held from February through June 1995 and the 
opening of the Silver Legacy in July 1995.  Despite the absence of a major 
bowling tournament in 1996, the Company's net revenues for the year ended 
December 31, 1996 exceeded the results of the prior year as a result of the 
expansion and addition of food and beverage facilities, including THE BREW 
BROTHERS in July 1995, CHEF'S PAVILION in October 1995, the mezzanine casino 
bar in March 1996, and the addition of a video arcade and three new specialty 
shops in July 1995.

     Casino revenues declined by 2.0% to $104.6 million for the year ended 
December 31, 1996, compared to $106.7 million for the year ended December 31, 
1995.  Casino revenues declined in 1996, despite the opening of the mezzanine 
casino in March 1996, primarily due to decreased revenue in slots and games 
as a result of competition from increased gaming capacity in the Reno area 
due to the opening of the Silver Legacy.  In addition, certain factors were 
in existence in 1996 that were not present in 1995, such as poor weather in 
the first quarter and December 1996, which negatively impacted weekend 
traffic, and the lack of a major bowling tournament.

     Food and beverage revenues were $34.5 million for the year ended 
December 31, 1996, compared to $33.8 million for the year ended December 31, 
1995, an increase of 2.1%.  The increase in food and beverage revenues was 
due primarily to the opening of THE BREW BROTHERS in July 1995 and the CHEF'S 
PAVILION in October 1995, in addition to changes in menu mix and increases to 
certain menu items in selected restaurants.  These increases were somewhat 
offset by the closing of THE VINTAGE restaurant in January 1996 to make room 
for the new mezzanine casino and the temporary closing of CHOICE'S EXPRESS 
CAFE restaurant during the first quarter of 1996 to remodel and redesign the 
restaurant for the addition of an Asian noodle kitchen.

     Hotel revenues declined by 2.4% to $16.8 million for the year ended 
December 31, 1996, from $17.2 million for the same period in 1995.  The 
Company's ADR decreased to $55 for the year ended December 31, 1996, from $60 
for the year ended December 31, 1995, and hotel occupancy over these periods 
remained constant at approximately 94%. The decrease in ADR was caused 
primarily by competition resulting from increased room capacity in the Reno 
area due to the opening of the Silver Legacy and other properties in the 
second half of 1995.  The Company was able to partially offset the decrease 
in hotel revenues caused by the decline in ADR through increased utilization 
of improved room amenities, such as in-room movies and telephone usage.

     Other revenues in 1996 were $7.1 million compared to $4.9 million in 
1995, an increase of 45.1%.  This increase was attributable primarily to 
added retail capacity with the opening of three new specialty shops in July 
1995 and an increase in revenue from the video arcade.  Other revenues 
included a $0.5 million gain on the sale of land during the second quarter of 
1996 and revenue from the DANIEL'S MOTOR LODGE during the second half of 
1996.  The DANIEL'S MOTOR LODGE, an 82-room motel located adjacent to the 
Eldorado parking garage, began operations as part of the Eldorado in August 
1996.

     Promotional allowances expressed as a percentage of casino revenues for 
the year ended December 31, 1996 increased to 13.5% as compared to 13.0% in 
1995.  The increase is due to an increased use of complimentaries to all 
levels of casino patrons and a marketing program targeting wholesale 
travelers.


                                       20
<PAGE>

OPERATING EXPENSES.

     The Company's operating expenses increased by 3.3% to $120.8 million for 
the year ended December 31, 1996, from $117.0 million in 1995.  This increase 
is attributable to increased expenses in the casino, other departments which 
include retail and the DANIEL'S MOTOR LODGE, increased depreciation and an 
increase in selling, general and administrative expenses.  The increase in 
expenses was partially offset by improved operating margins in the hotel and 
the food and beverage departments.

     Casino expenses increased by 4.4% to $44.6 million for the year end 
December 31, 1996, from $42.7 million   in 1995.  The increase was due to the 
cost of servicing the larger casino floor with the opening of the mezzanine 
casino in March 1996, in addition to increased bad debt expense due to the 
increased credit play in 1995 and the first half of 1996 and discounts 
offered to certain of the Company's premium customers.

     Food and beverage expenses for the year ended December 31, 1996 
decreased slightly to $26.2 million from $26.4 million in 1995. Despite an 
increase in support personnel and the costs associated with the expanded 
facilities, the Company was able to offset these increases by more cost 
effective purchasing  and adjustments to the restaurant menu mix and 
management's concerted effort to contain and economize entertainment 
expenditures.

     Hotel expenses declined for the year ended December 31, 1996 to $7.2 
million a decrease of 4.2% from $7.5 million in 1995.  The decline was 
primarily due to promotional expense decreases in the hotel sales department 
in the first six months of 1996, compared to the same period in 1995 because 
of the absence of a major bowling tournament in 1996.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES AND MANAGEMENT FEES.

     Selling, general and administrative expenses and management fees 
increased by 3.2% for the year ended December 31, 1996, to $29.2 million from 
$28.3 million in 1995.  The increase was due in part to increased advertising 
expenditures to promote the expansions and upgraded amenities to the property 
and to increased property maintenance expenditures as a result of these 
expansions.  Historically, the salaries of senior executive officers and 
certain other key employees of the Company were not directly incurred by the 
Company 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.  These obligations are included within 
selling, general and administrative expenses.

DEPRECIATION.

     Depreciation for the year ended December 31, 1996 was $10.4 million 
compared to $8.2 million in 1995.  The increase was attributed to the 
depreciation of assets that were not in service in the prior periods.  These 
assets include the addition of 36 suites, the CHEF'S PAVILION, the mezzanine 
casino, the GRAND PLAZA and the skyway corridor, which includes THE BREW 
BROTHERS and added retail space.

INTEREST EXPENSE, NET.

     Interest expense, net of capitalized interest and interest income in 
1996 and 1995 was $10.9 million and $5.3 million, respectively, an increase 
of 104.9%.  Interest expense increased as a result of an increase in the 
average outstanding borrowings for 1996, as compared to 1995 and as a result 
of an increase in the Company's cost of capital.  This increase in average 
outstanding borrowings is attributable to costs incurred in connection with 
the Company's expansion activities in 1995 and 1996.  The Company's increase 
in cost of capital is due to the issuance of the 10-1/2% Notes, the net 
proceeds of which were used to repay approximately $96.5 million of 
borrowings outstanding under the Company's Credit Facility (as defined 
below), which as of July 31, 1996 bore interest at an approximate average 
annual rate of 7.5%.  The Company capitalized interest of $0.4 million in  
1996, as compared to $2.7 million in 1995.

                                       21
<PAGE>

NET INCOME.

     As a result of the factors described above, net income for the year 
ended December 31, 1996, declined by 22.9% to $18.5 million compared to $23.9 
million in 1995.

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 $4.3 million, $2.9 million 
and $1.8 million for the years ended December 31, 1995, 1996 and 1997, 
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 have become 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, 1996 and 1997 of $4.6 million and $4.3 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 1995, 1996 and 1997.

<TABLE>
<CAPTION>

                                      1995           1996           1997
                                     ------         ------         ------
<S>                                  <C>            <C>            <C>
 First quarter                        21.6%          21.8%          21.8%
 Second quarter                       24.9%          25.4%          26.3%
 Third quarter                        28.8%          29.0%          28.3%
 Fourth quarter                       24.7%          23.8%          23.6%
                                     ------         ------         ------
   Total                             100.0%         100.0%         100.0%
</TABLE>

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, including the Former Credit Facility (as defined below) and the 
issuance in July 1996 of the 10-1/2% Notes.  The Company has completed several 
expansion and remodeling projects, accounting for a significant use of cash 
flow from operations and borrowings under the Former Credit Facility.  The 
Company's earnings before interest, taxes, depreciation and amortization for 
the years ended December 31, 1997 and 1996, as adjusted to exclude equity in 
net income (loss) of its unconsolidated affiliate was $38.1 million for the
year ended December 31, 1997 as compared to $38.4 million in 1996.

     At December 31, 1997, the Company had $6.4 million of cash and cash 
equivalents and $23.65 million available pursuant to its Credit Facility (as 
defined below).  The net proceeds of the July 1996 offering (the "Offering") 
by the Company and its wholly owned subsidiary, Eldorado Capital Corp., of 
the 10-1/2% Notes were used to repay a portion of the Former Credit Facility.  
The Loan Agreement dated as of March 25, 1994, (the "Former Credit 
Facility"), between the Company, the banks named therein and Bank of America 
NT&SA, as administrative agent, 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").  The amount of credit available pursuant to the Credit Facility 
reduced to approximately $46.9 million on December 31, 1997 and, by its 
terms, the facility reduces by an additional $1,562,500 at the end of each 
subsequent quarter until March 25, 2000, when it 

                                       22
<PAGE>

terminates and any balance then outstanding becomes due and payable.  As of 
December 31, 1997, the Company had $100 million in aggregate principal amount 
of 10-1/2% Notes outstanding, $23.25 million outstanding under the Credit 
Facility and approximately $3.4 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 years ended December 31, 1996 and 1997, Resorts made 
distributions to its members of $9.2 and $7.0 million, respectively.

     As the result of computer programs being written using two digits rather 
than four to define the applicable year, systems failures and disruptions to 
operations may occur at January 1, 2000 (the "Year 2000 Situation").  The 
Company has made a preliminary assessment of its exposure to the Year 2000 
Situation and is in the process of  remediating its systems to avoid systems' 
failures and disruptions as a result the Year 2000 Situation.  This 
remediation plan includes continuing to assess the Company's inventory of 
issues associated with the Year 2000 Situation, contacting the suppliers of 
certain of their systems to determine the timing of applicable upgrades, and 
implementing the currently available upgrades to address the Year 2000 
Situation.  The Company will continue to evaluate its  vulnerability in the 
case of suppliers' failure to remediate their own exposure to the Year 2000 
Situation.  The Company's failure to successfully conclude its remediation 
efforts by January 1, 2000 could have a material adverse effect on the 
Company. Expenditures to address the Year 2000 Situation were approximately 
$35,000 in 1997 and are currently estimated to be $500,000 and $470,000 in 
1998 and 1999, respectively.

     The Company's unconsolidated affiliate, Silver Legacy Joint Venture, is 
in the process of assessing its exposure to the Year 2000 Situation.  The 
Silver Legacy remediation plan is encompassed within the remediation plan of 
Circus Circus Enterprises, Inc. The failure to successfully conclude the 
remediation effort relating to the Silver Legacy by January 1, 2000 could 
have a material adverse effect on the Silver Legacy Joint Venture and the 
Company.

     During the year ended December 31, 1997, the Company's principal uses of 
funds were capital expenditures  related to progress payments on the 
Company's hotel refurbishment ($1.8 million) and construction of the ELDORADO 
SHOWROOM ($8.5 million). Total capital expenditures for the year ended 
December 31, 1997 were approximately  $16.0 million.

     The Company's future sources of liquidity are anticipated to be from its 
operating cash flow, funds available from the Credit Facility and capital 
lease financing for certain of its fixed asset purchases.  The Company's 
anticipated uses of cash in the near term include approximately $3.2 million 
for the completion of the Company's current casino and hotel refurbishment 
program, which was expanded to cover substantially all of the Eldorado hotel 
rooms and is anticipated to be completed during the first half of 1998.

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 appearing on pages 39 through 56 of 
this Report, 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.


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 Abraham 
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. A 
corporation which is a Board Member may change its representative 


                                       23
<PAGE>

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 
persons 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 person who is a director or officer of Capital.

               BOARD MEMBERS AND EXECUTIVE OFFICERS

     NAME              AGE                  POSITION(S)
     ----              ---                  ----------
Donald L. Carano        66  Presiding Board Member, Chief Executive Officer
                            and President of Resorts; President and Director
                            of Capital
Robert M. Jones         55  Chief Financial Officer of Resorts
Gene R. Carano          42  Vice President and Secretary of Resorts and 
                            Co-General Manager of the Eldorado; Treasurer of 
                            Capital
Gregg R. Carano         38  Vice President of Resorts and Co-General Manager
                            of the Eldorado; Director of Capital
Gary L. Carano          45  Board Member--Appointed by Recreational Enterprises,
                            Inc. as its corporate representative
Raymond J. Poncia, Jr.  64  Board Member--Appointed by Hotel Casino Management,
                            Inc. as its corporate representative; Director of 
                            Capital
Leslie Stone Abraham    37  Board Member

                        SIGNIFICANT EMPLOYEES


     NAME              AGE                  POSITION(S)
     ----              ---                  -----------
Robert B. MacKay        50  Director of Administration of the Eldorado
Robert B. Mouchou       42  Vice President of Operations of the Eldorado
Rick W. Murdock         42  Director of Casino Marketing of the Eldorado
Rhonda B. Carano        44  Director 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 


                                       24
<PAGE>

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, Gregg and Cindy 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.

GENE R. CARANO. Mr. Carano has served as Vice President of Resorts or its 
predecessor and Co-General Manager of the Eldorado since 1993 and has been 
Secretary of Resorts since June 1996. 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 and as the Co-General Manager of the Eldorado since 1994.  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 is the General Manager of the Silver Legacy. 
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 ABRAHAM. Ms. Abraham has been a Board Member since 1996. Since 
December 1996 she has been a Managing Director of Wasserstein Perella & Co. 
Inc., where she has been a director since 1995. Prior thereto, Ms. Abraham 
was a Vice President at Salomon Brothers Inc where she provided capital 
raising and financial advisory services to a wide variety of companies. Ms. 
Abraham received an 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 the Director of  Casino Marketing of 
the Eldorado since 1995. 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 Director of Advertising and Public 
Relations of the Eldorado since 1978. Mrs. Carano previously worked as a 
management trainee at the Eldorado from 1976 to 1978 where she learned the 
hotel/casino business. Mrs. Carano is the Vice President of the Ferrari 
Carano Winery. She received a Bachelor of Science degree from the University 
of Nevada, Reno.

ITEM 11.  EXECUTIVE COMPENSATION.


                                       25
<PAGE>

SUMMARY COMPENSATION TABLES

The following table sets forth all compensation paid by the Predecessor 
Partnership during 1995 and from January 1, 1996 through June 30, 1996, and 
by Resorts from July 1, 1996 through December 31, 1997, to the Resort's 
officers named below (the "Named Officers").

<TABLE>
<CAPTION>

                                                                  ANNUAL                  LONG-TERM
                                                               COMPENSATION(1)           COMPENSATION
                                                           ------------------------     -------------
                                                                                          NUMBER OF
                                                                                         APPRECIATION
                                                                                            RIGHTS
NAME AND PRINCIPAL POSITION                                  SALARY          BONUS          GRANTED   COMPENSATION
                                                            --------       --------      -----------  ------------
<S>                                              <C>        <C>            <C>           <C>          <C>
Donald Carano..............................      1997       $561,000              0              0         $2,693(2)
  Board Member and Chief                         1996        550,000              0              0          2,564
  Officer of Resorts                             1995        450,000         50,000              0          1,501

Robert Jones...............................      1997        303,000         24,000              0          3,488(3)
  Chief Financial Officer of Resorts             1996        270,000         24,000              0          3,344
                                                 1995        255,000         30,000         75,000          2,807

Gene Carano................................      1997        306,000         71,500              0          3,000(4)
  Vice President of Resorts and Co-General       1996        300,000         48,000              0          3,235
  Manager of the Eldorado                        1995        300,000         72,000        100,000          3,080

Gregg Carano...............................      1997        306,000         72,000              0          3,488(5)
  Vice President of Resorts and Co-General       1996        300,000         48,000              0          3,344
  Manager of the Eldorado                        1995        300,000         72,000        100,000          3,276

Rhonda Carano..............................      1997        229,000         36,000              0            936(6)
  Director of Advertising and Public Relations   1996        225,000         36,000              0          1,151
                                                 1995        225,000         36,000              0          1,267

</TABLE>

(1) Salary includes for each Named Officer any amount he or she elected to 
    defer the receipt of pursuant to the Company's Deferred Compensation Plan.
    Prior to July 1, 1996, the salaries of the Named Officers were not 
    directly incurred by the Company but were paid from a portion of the 
    management fees paid to Recreational Enterprises, Inc. Certain of such 
    Named Officers also perform services for Recreational Enterprises, Inc. 
    unrelated to the business of the Company for which they receive salaries 
    from Recreational Enterprises, Inc. As of July 1, 1996, the aggregate 
    annual salaries of such Named Officers and certain other key employees 
    became payroll obligations of the Company. The Company has been informed 
    by Recreational Enterprises, Inc. that the salaries and bonuses 
    (including deferred compensation) shown for the periods prior to July 1996
    are attributable to services provided by the Named Officers to the Company.

(2) Includes contributions to the Company's 401(k) Plan (as defined herein) 
    of $2,375, payment of term life insurance premiums of $132 and payment of 
    health insurance premiums of $186.

(3) Includes contributions to the Company's 401(k) Plan of $2,375, payment of 
    term life insurance premiums of $132 and payment of health insurance 
    premiums of $981.

(4) Includes contributions to the Company's 401(k) Plan of  $1,887, payment 
    of term life insurance premiums of $132 and payment of health insurance 
    premiums of $981.

(5) Includes contributions to the Company's 401(k) Plan of $2,375, payment of 
    term life insurance premiums of $132 and payment of health insurance 
    premiums of $981.

(6) Includes contributions to the Company's 401(k) Plan of $618, payment of 
    term life insurance premiums of $132 and payment of health insurance 
    premiums of $186.


                                       26
<PAGE>


1995 PERFORMANCE AND APPRECIATION RIGHTS PLAN

     The Eldorado Hotel Associates Limited Partnership 1995 Performance and 
Appreciation Rights Plan (the "Rights Plan"), which was adopted effective 
January 1, 1995, provides certain executives and other key employees of the 
Company who have substantial responsibility for its management and growth 
with incentives and rewards. The Rights Plan is administered by a Committee 
comprised of Donald Carano and two other individuals selected by the members 
of the Company (the "Rights Committee"). The Rights Committee has sole and 
complete authority to select eligible employees, to grant performance and 
appreciation rights up to a maximum of 1,000,000 each in the aggregate, to 
determine the date on which each performance right or appreciation right will 
vest and to impose restrictions and conditions on performance and 
appreciation rights. An employee is eligible to be granted performance and 
appreciation rights if, on the proposed grant date, such employee is an 
executive or other key employee of the Company or an affiliate of the 
Company, as determined by 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. No performance or appreciation rights may be 
granted after June 1, 2000.

     A performance right allows an employee to receive upon exercise 
compensation equal to a percentage of the total distributions to the members 
of the Company for the prior fiscal quarter between the date that the right 
was granted and the date of exercise. 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. The combination of one 
performance right and one appreciation right is intended to represent the 
economic equivalent of ownership of .00001% of one membership interest in the 
Company. Performance and appreciation rights do not, however, entitle holders 
thereof to any rights in or to own or control any membership interests in the 
Company.

     Performance rights and 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. Performance rights and 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 performance and appreciation rights, such as 
transfers during the lifetime of an employee to the spouse and children of 
the employee.

     The Company did not grant any appreciation rights to the Named Officers 
in 1997.  Nor did any of the Named Officers exercise any appreciation rights 
during 1997.  The following table provides certain information with respect 
to the appreciation rights held by the Named Officers as of December 31, 1997.

<TABLE>
<CAPTION>
                                                 NUMBER OF  UNEXERCISED       VALUE OF  UNEXERCISED
                                                APPRECIATION RIGHTS AS OF     APPRECIATION RIGHTS AS OF
                                                    DECEMBER 31, 1997              DECEMBER 31, 1997
                                                ---------------------------   ---------------------------
   NAME                                         EXERCISABLE   UNEXERCISABLE   EXERCISABLE   UNEXERCISABLE
   ----                                         -----------   -------------   -----------   --------------
<S>                                             <C>           <C>             <C>           <C>

Donald Carano...........................            --             --              --             --
Robert Jones............................          31,250         43,750            $0             $0
Gene Carano.............................          37,500         62,500             0              0
Gregg Carano............................          37,500         62,500             0              0
Rhonda Carano...........................            --             --              --             --

</TABLE>

                                                   27

<PAGE>


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, 1997, four 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 prior years 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. Amounts the Company is 
obligated to distribute to participants pursuant to the Deferred Compensation 
Plan represent an unfunded obligation of the Company which, as of December 
31, 1997, totaled $910,726.


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, 1999 and will be automatically renewed for additional three 
year terms until terminated by one of the parties. In 1997, the management 
fees paid by the Company to Recreational Enterprises, Inc. and Hotel Casino 
Management, Inc. pursuant to the Management Agreement aggregated $1,443,342 
and $399,487, 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. Rent in 1997 
totaled $667,788. 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.

     In addition, the Company leases certain real property from G & G 
Associates, a general partnership of which Gary Carano is a general partner. 
Lease payments in 1997 totaled approximately $24,975.  In the opinion of the 
Company's management, the terms of this 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 

                                       28
<PAGE>

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

     Donald Carano and Recreational Enterprises, Inc., which is owned by 
members of the Carano family, collectively own a 50% equity interest in the 
Pioneer Inn Hotel Casino, a small hotel/casino located in downtown Reno.

     The Company pays insurance premiums for and from time to time leases an 
aircraft owned by Recreational Enterprises, Inc. and a yacht owned by Hotel 
Casino Realty Investments, Inc. for use in operating the Company's business. 
In 1997, (i) insurance premiums and lease payments for the aircraft totaled 
$205,286, and (ii) insurance premiums and lease payments for the yacht 
totaled $87,170. In the opinion of the Company's management, each of these 
premiums and lease payments is at least as favorable to the Company 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 1997 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.



                                       29


<PAGE>

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.













Description of the Chart:           The chart illustrates the following
relationships:  (i) the ownership of Resorts by Recreational Enterprises, Inc.
(55%), Hotel Casino Realty Investments, Inc. (6%), Hotel Casino Management,
Inc. (29%), Donald L. Carano (5%) and Ludwig J. Corrao (5%); (ii) the ownership
of Hotel Casino Realty Investments, Inc. by Recreational Enterprises, Inc.
(50%) and Hotel Casino Management, Inc. (50%); (iii) the ownership of Capital
by Resorts (100%); (iv) the ownership of ELLC by Recreational Enterprises, Inc.
(15.4902%), Hotel Casino Management, Inc. (7.7451%) and Resorts (76.7647%); (v)
the ownership of Silver Legacy Joint Venture by ELLC (50%) and Circus Sub
(50%); and (vi) the ownership of Circus Sub by Circus Circus (100%).








                                     30

<PAGE>

      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.


<TABLE>
<CAPTION>
                                                                  MEMBERSHIP
             NAME AND ADDRESS OF BENEFICIAL OWNER                 INTEREST %
             ------------------------------------                 ----------
       <S>                                                            <C>
       Donald L. Carano(1)(2). . . . . . . . . . . . . . . . .        63.0%
       Recreational Enterprises, Inc.(3) . . . . . . . . . . .        55.0%
       Raymond J. Poncia, Jr.(4)(5). . . . . . . . . . . . . .        32.0%
       Hotel Casino Management, Inc.(5)(6) . . . . . . . . . .        29.0%
       Hotel Casino Realty Investments, Inc.(7). . . . . . . .         6.0%
       Gene R. Carano(2)(8). . . . . . . . . . . . . . . . . .         5.6%
       Gregg R. Carano(2)(8) . . . . . . . . . . . . . . . . .         5.6%
       Gary L. Carano(2)(8). . . . . . . . . . . . . . . . . .         5.6%
       Cindy L. Carano(2)(8) . . . . . . . . . . . . . . . . .         5.6%
       Glenn T. Carano(2)(8) . . . . . . . . . . . . . . . . .         5.6%
       Ludwig J. Corrao(9) . . . . . . . . . . . . . . . . . .         5.0%
       Robert M. Jones . . . . . . . . . . . . . . . . . . . .          --
       Leslie Stone Abraham. . . . . . . . . . . . . . . . . .          --
       All Board Members and executive officers as a group . .        95.0%
</TABLE>
-----------------
(1)  Includes 5.0% owned by Mr. Carano individually, 55.0% owned by Recreational
     Enterprises, Inc., which is owned by members of the Carano family, and 
     3.0% beneficially owned by Mr. Carano through Recreational Enterprises,
     Inc.'s 50.0% ownership of Hotel Casino Realty Investments, Inc.

(2)  The address of Donald L. Carano, Gene R. Carano, Gregg R. Carano and Cindy
     L. Carano is c/o Eldorado Resorts LLC, P.O. Box 3399, Reno, Nevada 89505. 
     The address of Gary L. Carano and Glenn T. Carano is c/o Silver Legacy 
     Resort Casino, 407 N. Virginia Street, Reno, Nevada 89501.

(3)  Recreational Enterprises, Inc. is beneficially owned by the following 
     members of the Carano family in the following percentages: Donald L. 
     Carano-49.5%; Gene R. Carano-10.1%; Gregg R. Carano-10.1%; Gary L. 
     Carano-10.1%; Cindy L. Carano-10.1% and Glenn T. Carano-10.1%. Gary 
     holds 7.185% of his interest in Recreational Enterprises, Inc. through 
     various trusts. Gene, Gregg, Cindy and Glenn each hold all of their 
     respective interests in Recreational Enterprises, Inc. through various 
     trusts. The address of Recreational Enterprises, Inc. is P.O. Box 2540, 
     Reno, Nevada 89505.

(4)  Includes 29.0% owned by Hotel Casino Management, Inc., which is owned by
     members of the Poncia family, and 3.0% beneficially owned by Mr. Poncia
     through Hotel Casino Management, Inc.'s 50.0% ownership of Hotel Casino
     Realty Investments, Inc.

(5)  The address of Raymond J. Poncia, Jr. and Hotel Casino Management, Inc. is
     P.O. Box 429, Verdi, Nevada 89439.

(6)  Hotel Casino Management, Inc. is beneficially owned by the following 
     members of the Poncia family in the following percentages: Raymond J. 
     Poncia, Jr.-49.712%; Cathy L. Poncia-Vigen-12.572%; Linda R. 
     Poncia-12.572%; Michele L. Poncia-12.572% and Tammy R. Poncia-12.572%. 
     Cathy, Linda, Michele and Tammy each hold all of their respective 
     interests in Hotel Casino Management, Inc. through various trusts.

(7)  Recreational Enterprises, Inc. and Hotel Casino Management, Inc. each 
     own 50% of the outstanding shares of capital stock of Hotel Casino 
     Realty Investments, Inc. The address of Hotel Casino Realty Investments, 
     Inc. is P.O. Box 429, Verdi, Nevada 89439.

(8)  All of such membership interest is beneficially owned through such
     individual's 10.1% ownership of Recreational Enterprises, Inc.

(9)  The address of Ludwig J. Corrao is P.O. Box 12907, Reno, Nevada 89510.

                                     31

<PAGE>

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

     Resorts' approximately 77% owned subsidiary, ELLC, holds a 50% interest in
the Silver Legacy Joint Venture, which owns and operates the Silver Legacy. In
connection with ELLC's entering into the Silver Legacy Joint Venture, Resorts
loaned $23.0 million to ELLC, and ELLC contributed the $23.0 million to the
Silver Legacy Joint Venture as a portion of its equity investment. Resorts
intends to enter into an agreement with ELLC and the other members of ELLC
pursuant to which Resorts will (i) contribute to the capital of ELLC all or a
substantial portion of the promissory note which evidences ELLC's $23.0 million
obligation to Resorts and (ii) assume certain other obligations of the
other ELLC members in exchange for an increased equity interest in ELLC.
Following these transactions, Resorts anticipates that its ownership interest
in ELLC will increase from approximately 77% to in excess of 90%.

     On May 16, 1996, the Company entered into an agreement with the Silver 
Legacy Joint Venture to operate a race and sports book located in the Silver 
Legacy (the "Legacy Book"). The Company supplies the management, employees, 
and equipment associated with the operation of the Legacy Book and records a 
proportionate share of revenue and expenses included in casino revenue and 
casino expense according to a formula included in the race and sports book 
agreement. For the year ended December 31, 1997 the Company recorded $483,000 
in casino revenues and $358,000 in casino expenes. Silver Legacy Joint Venture 
is owned approximately 15.5% and 7.7%, respectively, by entities which are 
beneficially owned by members of the Carano family and the Poncia family. See 
Item 12 of the Report.

     A 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.








                                     32

<PAGE>

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 39 through 56 hereof:

                       Consolidated Balance Sheets at December 31, 1997 and
                       December 31, 1996

                       Consolidated Statements of Income for the Years Ended
                       December 31, 1997, 1996 and 1995

                       Consolidated Statements of Members' Equity for the Years
                       Ended December 31, 1997, 1996 and 1995

                       Consolidated Statements of Cash Flows for the Years Ended
                       December 31, 1997, 1996 and 1995

                       Notes to Consolidated Financial Statements

               (a)(2)  Financial Statement  Schedules

                       Schedule I - Condensed Financial Information of 
                       Registrants

               (a)(3)  Exhibits:

                       The following exhibits are filed as part of this Report 
                       or incorporated herein by reference:

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)

                                     33

<PAGE>

3.4            Bylaws of Eldorado Capital Corp.  (Incorporated by reference to
               Exhibit 3.4 to the Registrants' Form S-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            Amended and Restated Loan Agreement dated as of July 31, 1996
               among Eldorado Resorts LLC and Bank of America National Trust
               and Savings Association, as sole initial Bank, Issuing Bank and
               Administrative Agent.  (Incorporated by reference to Exhibit 4.3
               to the Registrants' Form S-4 Registration Statement  -
               Securities and Exchange Commission File No. 333-11811)

4.4            Amendment No. 1, dated as of July 31, 1997, to Loan Agreement
               dated as of July 31, 1996 among Eldorado Resorts LLC and Bank of
               America National Trust and Savings Association, as
               Administrative Agent.  (Incorporated by reference to Exhibit 4
               to the Registrants' Quarterly Report on Form 10-Q for the period
               ended June 30, 1997)

10.1           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)

10.2           Environmental Indemnity entered into as of May 30, 1995 by
               Circus Circus Enterprises, Inc. and Eldorado Hotel Associates
               Limited Partnership.  (Incorporated by reference to Exhibit 10.2
               to the Registrants' Form S-4 Registration Statement  -
               Securities and Exchange Commission File No. 333-11811)

10.3           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)

10.4           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)

10.5           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)

10.6.1         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)

10.6.2         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)

                                     34

<PAGE>

10.6.3         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)

10.6.4         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)

10.6.5         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)

10.7*          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)

10.8*          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)

10.9*          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)

10.10          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.  (Commission
               File No. 1-8570.)

21             List of Subsidiaries.  (Incorporated by reference to Exhibit 21
               to the Registrants' Form S-4 Registration Statement  -
               Securities and Exchange Commission File No. 333-11811)


27             Financial Data Schedule

               

               * Constitutes a management contract or compensatory plan or
                 arrangement.

               (b)  Reports on Form 8-K

                    During the fourth quarter of 1997, the Registrants filed no
                    Current Report on Form 8-K.

               (c)  The exhibits required by Item 601 of Regulation S-K filed
                    as part of this Report or incorporated herein by reference
                    are listed in Item 14 (a)(3) above, and the exhibits filed
                    herewith are listed on the Index to Exhibits which
                    accompanies this Report.

               (d)  See Item 14 (a)(2) of this Report.

                                     35


<PAGE>

                                 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 23, 1998                           By: /s/ DONALD L. CARANO
                                                    ------------------------
                                                    Donald L. Carano
                                                    CHIEF EXECUTIVE OFFICER,
                                                    PRESIDENT AND
                                                    PRESIDING MANAGER




                                                   ELDORADO CAPITAL CORP.




Date:  March 23, 1998                           By: /s/ DONALD L. CARANO
                                                    -------------------------
                                                    Donald L. Carano
                                                    PRESIDENT


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


<TABLE>
<CAPTION>
Signature                Title                                   Date

<S>                      <C>                                     <C>

/s/ DONALD L. CARANO
---------------------    Chief Executive Officer, President      March 23, 1998
Donald L. Carano         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.


/s/ ROBERT M. JONES      Chief Financial Officer of              March 23, 1998
---------------------    Eldorado Resorts LLC (Principal
Robert M. Jones          Financial and Accounting Officer)
</TABLE>




                                     36

<PAGE>

<TABLE>
<CAPTION>
Signature                   Title                                Date

<S>                         <C>                                  <C>

/s/ GENE R. CARANO          Treasurer of Eldorado Capital        March 23, 1998
-------------------------   Corp. (Principal Financial and
Gene R. Carano              Accounting Officer)


/s/ RAYMOND J. PONCIA, JR.  Member of the Board of Managers      March 23, 1998
-------------------------   of Eldorado Resorts LLC--
Raymond J. Poncia, Jr.      appointed by Hotel Casino
                            Management, Inc. as it corporate
                            representative and Director of
                            Eldorado Capital Corp.


/s/ GARY L. CARANO          Member of the Board of Managers      March 23, 1998
-------------------------   of Eldorado Resorts LLC--
Gary L. Carano              appointed by Recreational
                            Enterprises, Inc. as its corporate
                            representative



/s/ GREGG R. CARANO         Director of Eldorado Capital Corp.   March 23, 1998
-------------------------
Gregg R. Carano



/s/  LESLIE S. ABRAHAM      Member of the Board of Managers      March 23, 1998
--------------------------  of Eldorado Resorts LLC
Leslie S. Abraham
</TABLE>
                                     37

<PAGE>
                                       
                      INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
                                                                          PAGE
                                                                          ----
<S>                                                                       <C>
Report of Independent Public Accountants.................................  39

Consolidated Balance Sheets..............................................  40

Consolidated Statements of Income........................................  41

Consolidated Statements of Members' Equity...............................  42

Consolidated Statements of Cash Flows....................................  43

Notes to Consolidated Financial Statements................................ 45

</TABLE>

                                       38
<PAGE>

                     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  (the "Company"), as of 
December 31, 1997 and 1996, and the related consolidated statements of 
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 generally accepted auditing 
standards. Those standards require that we plan and perform the audit to 
obtain reasonable assurance about whether the financial statements are free 
of material misstatement. An audit includes examining, on a test basis, 
evidence supporting the amounts and disclosures in the financial statements. 
An audit also includes assessing the accounting principles used and 
significant estimates made by management, as well as evaluating the overall 
financial statement presentation. We believe that our audits provide a 
reasonable basis for our opinion.

     In our opinion, the financial statements referred to above present 
fairly, in all material respects, the financial position of Eldorado Resorts 
LLC as of December 31, 1997 and 1996, and the results of its operations and 
its cash flows for the years then ended in conformity with generally accepted 
accounting principles.

                                   ARTHUR ANDERSEN LLP

Las Vegas, Nevada
February 17, 1998


                                       39
<PAGE>

                              ELDORADO RESORTS LLC

                           CONSOLIDATED BALANCE SHEETS
                             (DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
                                                               DECEMBER 31,
                                                         -----------------------
                                                           1996           1997
                                                         --------       --------
<S>                                                      <C>            <C>
                            A S S E T S
CURRENT ASSETS:
  Cash and cash equivalents                              $  5,785       $  6,369
  Accounts receivable, net                                  3,847          3,456
  Due from partners and affiliates                            139            194
  Inventories                                               2,471          2,882
  Prepaid expenses                                          1,259          1,703
                                                         --------       --------
    Total current assets                                   13,501         14,604

NOTE RECEIVABLE                                               692            557

INVESTMENT IN JOINT VENTURE                                46,402         46,792

PROPERTY AND EQUIPMENT, net                               159,981        163,443

OTHER ASSETS, net                                          13,717         13,231
                                                         --------       --------
  Total assets                                           $234,293       $238,627
                                                         --------       --------
                                                         --------       --------

                L I A B I L I T I E S  A N D   M E M B E R S'  E Q U I T Y

CURRENT LIABILITIES:
  Current portion of long-term debt                      $    782       $    556
  Current portion of capital lease obligations                654            713
  Accounts payable                                          3,748          3,710
  Construction and retention payables                       1,881            319
  Interest payable                                          4,446          3,950
  Accrued and other liabilities                             5,766          5,571
  Notes payable short-term                                     --            224
  Due to partners and affiliates                               93            115
                                                         --------       --------
    Total current liabilities                              17,370         15,158

LONG-TERM DEBT, less current portion                      124,833        126,613

CAPITAL LEASE OBLIGATIONS, less current portion             2,234          1,522

OTHER LIABILITIES                                             762            911
                                                         --------       --------
    Total liabilities                                     145,199        144,204
                                                         --------       --------

MINORITY INTEREST                                           5,063          5,154

COMMITMENTS AND CONTINGENCIES (Note 14)

MEMBERS' EQUITY                                            84,031         89,269
                                                         --------       --------
    Total liabilities and members' equity                $234,293       $238,627
                                                         --------       --------
                                                         --------       --------

</TABLE>

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


                                       40
<PAGE>

                               ELDORADO RESORTS LLC

                        CONSOLIDATED STATEMENTS OF INCOME
                               (DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
                                                               FOR THE YEARS ENDED DECEMBER 31,
                                                              1995            1996           1997
                                                           ---------       ---------       --------
<S>                                                        <C>             <C>             <C>
OPERATING REVENUES:
  Casino                                                    $106,737        $104,608       $104,513
  Food, beverage and entertainment                            33,780          34,483         41,061
  Hotel                                                       17,200          16,784         17,769
  Equity in net income (loss) of unconsolidated affiliate     (3,208)          1,758            390
  Other                                                        4,908           7,120          7,093
                                                            --------        --------       --------
                                                             159,417         164,753        170,826
  Less--promotional allowances                               (13,895)        (14,102)       (14,545)
                                                            --------        --------       --------
  Net revenues                                               145,522         150,651        156,281
                                                            --------        --------       --------
OPERATING EXPENSES:
  Casino                                                      42,692          44,557         45,786
  Food, beverage and entertainment                            26,363          26,225         30,531
  Hotel                                                        7,536           7,219          7,387
  Other                                                        2,043           3,246          3,510
  Selling, general and administrative                         24,047          26,293         28,723
  Management fees                                              4,288           2,944          1,843
  Depreciation                                                 8,166          10,361         12,478
  Abandonment loss                                             1,862             --         --
                                                            --------        --------       --------
  Total operating expenses                                   116,997         120,845        130,258
                                                            --------        --------       --------
OPERATING INCOME                                              28,525          29,806         26,023

INTEREST EXPENSE, net                                         (5,336)        (10,935)       (13,694)
                                                            --------        --------       --------
NET INCOME BEFORE MINORITY INTEREST                           23,189          18,871         12,329

MINORITY INTEREST IN NET (INCOME) LOSS
 OF  UNCONSOLIDATED AFFILIATE                                    745            (408)           (91)
                                                            --------        --------       --------
NET INCOME                                                 $  23,934       $  18,463      $  12,238
                                                            --------        --------       --------
                                                            --------        --------       --------
</TABLE>
  The accompanying notes are an integral part of these consolidated statements.


                                       41


<PAGE>
                                       
                               ELDORADO RESORTS LLC

                     CONSOLIDATED STATEMENTS OF MEMBERS' EQUITY
                                 (DOLLARS IN THOUSANDS)

<TABLE>
<S>                                                    <C>
BALANCE, December 31, 1994...........................  $  69,634
  Distributions......................................    (18,800)
  Net income.........................................     23,934
                                                       ---------
BALANCE, December 31, 1995...........................     74,768
                                                       ---------
  Distributions......................................     (9,200)
  Net income.........................................     18,463
                                                       ---------
BALANCE, December 31, 1996...........................     84,031
                                                       ---------
  Distributions......................................     (7,000)
  Net income.........................................     12,238
                                                       ---------
BALANCE, December 31, 1997...........................  $  89,269
                                                       ---------
                                                       ---------
</TABLE>

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


                                       42
<PAGE>

                               ELDORADO RESORTS LLC

                       CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>

                                                            FOR THE YEARS ENDED DECEMBER 31,
                                                        ---------------------------------------
                                                          1995            1996           1997
                                                        ---------       ---------     ---------
<S>                                                     <C>             <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income........................................... $23,934         $18,463        $12,238
  Adjustments to reconcile net income to net cash
   provided by operating activities:
    Depreciation........................................  8,166          10,361         12,478
    Equity in net (income) loss of unconsolidated 
      affiliate.........................................  3,208          (1,758)          (390)
    Minority interest in net income (loss) of
      unconsolidated affiliate..........................   (745)            408             91
  (Gain)loss on sale of property and equipment..........  1,761            (450)          (103)
  (Increase) Decrease in--
  Accounts receivable, net and due from members and
    affiliates.......................................... (1,287)            (38)           336
  Note receivable.......................................     --              90            135
  Inventories...........................................   (783)           (479)          (411)
  Prepaid expenses......................................   (402)            269           (444)
  Other assets, net.....................................    140             178            748
  (Decrease) Increase in--
  Notes payable short-term..............................    224              --            224
  Accounts payable, retention payable, interest 
   payable, accrued and other liabilities and
   due to members and affiliates........................  2,129           4,157         (2,120)
                                                        ---------       ---------     ---------
  Net cash provided by operating activities............. 36,345          31,201         22,782
                                                        ---------       ---------     ---------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchases of property and equipment.................. (57,451)        (24,981)       (15,957)
  Investment in joint venture..........................  (5,623)             --             --
  Proceeds from sale of property and equipment.........     283           2,645            120
                                                        ---------       ---------     ---------
  Net cash used in investing activities................ (62,791)        (22,336)       (15,837)
                                                        ---------       ---------     ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from long-term and other debt...............  53,000         142,072         28,500
  Principal payments on long-term and other
   debt...............................................  (10,892)       (138,255)       (27,599)
  Bond offering costs.................................       --          (3,819)          (262)
  Contributions by minority interest member...........    3,900              --             --
  Distributions.......................................  (18,800)         (9,200)        (7,000)
                                                        ---------       ---------     ---------
  Net cash (used in) provided by financing
   activities......................................... $ 27,208       $  (9,202)      $ (6,361)
                                                        ---------       ---------     ---------
</TABLE>

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

                                       43

<PAGE>

                               ELDORADO RESORTS LLC
                 CONSOLIDATED STATEMENTS OF CASH FLOWS--(CONTINUED)
                              (DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>

                                                            FOR THE YEARS ENDED DECEMBER 31,
                                                            --------------------------------
                                                           1995            1996         1997
                                                           ----            ----         ----
<S>                                                      <C>             <C>          <C>
(DECREASE)/INCREASE IN CASH AND CASH
 EQUIVALENTS...........................................  $   762         $   (337)    $    584

CASH AND CASH EQUIVALENTS AT
 BEGINNING OF YEAR.....................................    5,360            6,122        5,785
                                                         -------         --------     --------
CASH AND CASH EQUIVALENTS AT END OF
 YEAR..................................................  $ 6,122         $  5,785     $  6,369
                                                         -------         --------     --------
                                                         -------         --------     --------

SUPPLEMENTAL DISCLOSURE OF CASH FLOW
 INFORMATION:
  Cash paid during year for interest, net of amounts
  capitalized..........................................  $ 6,639         $  7,182     $ 13,668
                                                         -------         --------     --------
</TABLE>


SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES:


    During the years ended December 31, 1995 and 1996 the Company entered 
into capital lease obligations totaling $2,458,000 and $1,056,000 for slot 
machines and other equipment, respectively.

    During the year ended December 31, 1996, the Company accepted a $782,000 
note receivable in partial payment for the sale of land.

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


                                       44
<PAGE>

                             ELDORADO RESORTS LLC

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

   PRINCIPLES OF CONSOLIDATION/OPERATIONS

     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 owns and operates the Eldorado Hotel & Casino, a 815-room
hotel casino in downtown Reno, Nevada. ELLC owns a 50% interest in the Circus
and Eldorado Joint Venture that owns the Silver Legacy Resort Casino, a 1,711
room hotel casino that opened July 28, 1995 and is located contiguous to the
Eldorado Hotel & Casino.

     ELLC was organized as a Nevada limited-liability company on March 1, 
1994. During 1994, the Predecessor Partnership contributed land and received 
an initial 88.75% interest in ELLC. During 1995, the Predecessor 
Partnership's interest was reduced to 76.76% as a result of other members' 
contributions.

     Resorts was formed on July 1, 1996, to be the successor to the 
Predecessor Partnership pursuant to an exchange of all the then currently 
outstanding partnership interests in the Predecessor Partnership for 
membership interests in Resorts (the "Reorganization"), which was effective 
July 1, 1996.  Eldorado Capital Corp. was incorporated with the sole purpose 
of serving as co-issuer of the 10-1/2% Senior Subordinated Notes due 2006 
(the "Notes") in order to facilitate the offering thereof.

   USE OF ESTIMATES

     The preparation of financial statements in conformity with generally 
accepted accounting principles requires management to make estimates and 
assumptions that affect the reported amounts of assets and liabilities and 
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

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

   INVENTORIES

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

   PROPERTY AND EQUIPMENT

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

   CAPITALIZATION OF INTEREST

     The Company capitalizes interest on funds disbursed during the active 
construction and development phases of its facilities and other major 
projects. This includes interest capitalized on the Company's investment in 
the Silver Legacy Resort Casino. Interest capitalized during the fiscal years 
ended December 31, 1995, 1996 and 1997 was approximately  $2,742,000, 
$365,000 and $256,000,  respectively.

                                     45

<PAGE>

   INVESTMENT IN THE SILVER LEGACY RESORT CASINO

     ELLC accounts for its 50% joint venture interest in the Silver Legacy
Joint Venture (as defined herein) under the equity method of accounting.

   CASINO REVENUE AND PROMOTIONAL ALLOWANCES

     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):

<TABLE>
<CAPTION>
                                                   FOR THE YEARS ENDED
                                                      DECEMBER 31,
                                                       ------------
                                             1995          1996          1997
                                             ----          ----          ----
   <S>                                   <C>            <C>            <C>
   Food and beverage . . . . . . . .     $ 7,716        $ 7,695        $ 7,970
   Hotel . . . . . . . . . . . . . .       1,222          1,474          1,521
   Other . . . . . . . . . . . . . .       1,033          1,098          1,162
                                         -------        -------        -------
                                         $ 9,971        $10,267        $10,653
                                         -------        -------        -------
                                         -------        -------        -------
</TABLE>

   ADVERTISING

     Advertising costs are expensed the first time the advertising takes place.
Advertising costs included in selling, general and administrative expenses were
$2,581,000,  $3,192,000 and $3,890,000  for the years ended December 31, 1995,
1996 and 1997, respectively.


   MEMBERS' EQUITY

     Effective upon consummation of the Reorganization, partners' equity was
reclassified as members' equity.


   FEDERAL INCOME TAXES

     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 the
Resorts' taxable income in their income tax returns and Resorts will continue
to make distributions for such tax liabilities.

     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.


   FAIR VALUE OF FINANCIAL INSTRUMENTS

     The fair value of the Company's financial instruments approximates their
recorded value at December 31, 1996 and 1997.  The fair value of long term debt
is based on the present value of expected future cash flows discounted by the
Company's estimated incremental borrowing rate.

                                     46

<PAGE>

   RECLASSIFICATIONS

     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. 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.



3. ACCOUNTS RECEIVABLE

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

<TABLE>
<CAPTION>
                                                     FOR THE YEARS ENDED
                                                         DECEMBER 31,
                                                         ------------
                                                     1996           1997
                                                     ----           ----
       <S>                                          <C>            <C>
       Accounts receivable. . . . . . . . .         $ 4,959        $ 4,952
       Allowance for doubtful accounts. . .          (1,112)        (1,496)
                                                    -------        -------
                  Total . . . . . . . . . .         $ 3,847        $ 3,456
                                                    -------        -------
                                                    -------        -------

</TABLE>

    The provision for bad debt expense is $760,000, $1,320,000 and $1,088,000
for the years ended December 31, 1995, 1996 and 1997, respectively.

4. NOTE RECEIVABLE

     Note receivable consists of a partial payment for the sale of land to
Galleon, Inc., a 50% interest holder in the Silver Legacy Joint Venture.

        The note receivable bears interest at the Wells Fargo Prime Rate plus 
2%.  The Eldorado makes quarterly payments of $90,000 and is reimbursed 
quarterly by Circus in the amount of $45,000.  The note matures on July 31, 
1999.

5. CERTAIN RISK 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.

                                     47

<PAGE>

6. PROPERTY AND EQUIPMENT

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

<TABLE>
<CAPTION>                                             ESTIMATED
                                                       SERVICE
                                                         LIFE             DECEMBER 31,
                                                       (years)         1996           1997
                                                                       ----           ----
<S>                                                    <C>           <C>            <C>
Land and improvements . . . . . . . . . . . . . . .         --       $ 15,751       $ 15,773
Buildings and other leasehold improvements. . . . .      10-33        142,446        157,697
Furniture, fixtures, and equipment. . . . . . . . .       5-15         50,985         54,351
Property held under capital lease (Note 14) . . . .       3-15          6,765          6,765
Construction in progress. . . . . . . . . . . . . .                     4,503          1,654
                                                                     --------       --------
                                                                      220,450        236,240
Less--Accumulated depreciation. . . . . . . . . . .                   (60,469)       (72,797)
                                                                     --------       --------
  Property and equipment, net . . . . . . . . . . .                  $159,981       $163,443
                                                                     --------       --------
                                                                     --------       --------

</TABLE>

    Substantially all property and equipment are pledged as collateral for long-
term debt (see Note 10).

7.   OTHER ASSETS

     Other assets include the following amounts (in thousands):

<TABLE>
<CAPTION>
                                                                DECEMBER 31,
                                                                ------------
                                                            1996           1997
                                                            ----           ----
<S>                                                       <C>             <C>
Land held for development. . . . . . . . . . . . . . .    $ 8,157         $ 8,157
Loan acquisition costs . . . . . . . . . . . . . . . .      1,859           1,876
Bond offering costs. . . . . . . . . . . . . . . . . .      3,976           4,238
Other. . . . . . . . . . . . . . . . . . . . . . . . .        526             541
                                                          -------         -------
                                                           14,518          14,812
Accumulated amortization loan  costs . . . . . . . . .      ( 644)         (1,007)
Accumulated amortization bond costs. . . . . . . . . .      ( 157)          ( 574)
                                                          -------          -------
      Total. . . . . . . . . . . . . . . . . . . . . .    $13,717         $13,231
                                                          -------         -------
                                                          -------         -------
</TABLE>

8. INVESTMENT IN THE SILVER LEGACY RESORT CASINO

     Effective March 1, 1994, ELLC and Galleon, Inc. (a Nevada corporation
owned and controlled by Circus Circus Enterprises, Inc.) entered into the
Silver Legacy Joint Venture pursuant to a joint venture agreement (the "Joint
Venture Agreement") to develop 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 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. Each partner owns a 50% interest in
the Silver Legacy Joint Venture. Galleon, Inc. contributed cash of $51,900,000
to the Silver Legacy Joint Venture. Galleon, Inc. is entitled to receive a
priority allocation of operating income, up to an amount equal to 7.5% of the
initial $290,000,000 investment, adjusted for taxes, and reduced for
depreciation and principal payments, starting May 1997, as defined in the Joint
Venture Agreement.

     During 1994, the Predecessor Partnership contributed land with a fair
value of $22,185,000 (cost of $15,715,000) to ELLC; the minority interest
member of ELLC contributed land with a fair value of $2,815,000 (cost of
$1,500,000) to ELLC. Based upon these contributions, the Predecessor
Partnership had an 88.75% interest in ELLC as of December 31, 1994. In
addition, during 1994, the Company loaned $23,000,000 to ELLC to contribute to
the Silver Legacy Joint Venture; this note receivable from ELLC is eliminated
in consolidation. During 1995, the minority interest member contributed cash of
$3,900,000 to ELLC; as a result, the Predecessor Partnership's interest in ELLC
was reduced to 76.76%. For the years ended December 31, 1995, 1996, and 1997,
ELLC's 50% share of the Silver

                                     48

<PAGE>

Legacy Joint Venture's net income (loss) was ($3,208,000), $1,758,000 and 
$390,000, respectively. The minority interest members' investment in ELLC was 
therefore adjusted by ($745,000), $408,000, and $91,000,  its respective 
share of the income (loss) for the years ended 1995, 1996, and 1997.



                                      49

<PAGE>

<TABLE>
<CAPTION>
                                                            DECEMBER 31,            DECEMBER 31,
                                                               1996                     1997
                                                            ------------            ------------
                                                           (in thousands)          (in thousands)
    <S>                                                     <C>                     <C>
    Beginning balance.....................................  $     44,644            $     46,402
    Equity in net income of unconsolidated affiliate......         1,758                     390
                                                            ------------            ------------
    Ending balance........................................  $     46,402            $     46,792
                                                            ------------            ------------
                                                            ------------            ------------

</TABLE>

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

<TABLE>
<CAPTION>

                                                                        December 31,
                                                               1996                     1997
                                                            ------------            ------------
    <S>                                                     <C>                     <C>
    Current assets.......................................   $     14,360            $     18,230
    Property and equipment...............................        340,028                 326,018
    Other assets.........................................          2,585                   2,306
                                                            ------------            ------------
     Total assets........................................   $    356,973            $    346,554
                                                            ------------            ------------
                                                            ------------            ------------

    Current liabilities..................................   $     19,169            $     22,939
    Long-term liabilities................................        236,904                 213,000
    Partners' equity.....................................        100,900                 110,615
                                                            ------------            ------------
     Total liabilities and partners' equity..............   $    356,973            $    346,554
                                                            ------------            ------------
                                                            ------------            ------------

</TABLE>

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

<TABLE>
<CAPTION>

                                             FOR THE PERIOD OF
                                                 INCEPTION              YEAR ENDED          YEAR ENDED
                                             (MARCH 1, 1994) TO         DECEMBER 31,        DECEMBER 31,
                                              December 31, 1995            1996                 1997
                                             ------------------            ----                 ----
    <S>                                       <C>                      <C>                 <C>
    Net Revenues...........................   $  66,013                $  147,121          $  159,810
    Operating Expenses.....................     (63,052)                 (122,268)           (129,054)
                                              ----------               -----------         -----------
    Operating Income.......................       2,961                    24,853              30,756
                                              ----------               -----------         -----------
    Other Expense..........................      (9,377)                  (21,337)            (21,041)
                                              ----------               -----------         -----------
    Net Income (Loss)......................   $  (6,416)               $    3,516          $    9,715
                                              ----------               -----------         -----------
                                              ----------               -----------         -----------

</TABLE>

The Silver Legacy commenced operations on July 28, 1995.

                                       50

<PAGE>


9. ACCRUED AND OTHER LIABILITIES

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

<TABLE>
<CAPTION>
                                                                        December 31,
                                                               1996                     1997
                                                            ------------            ------------
    <S>                                                     <C>                     <C>

    Accrued payroll and benefits..........................  $      1,602            $      1,089
    Accrued vacation......................................           856                   1,059
    Accrued medical claims................................           570                     282
    Progressive slot liability............................           629                     827
    Related party rent and management fees................            87                     109
    Other.................................................         2,022                   2,205
                                                            ------------            ------------
                                                            $      5,766            $      5,571
                                                            ------------            ------------
                                                            ------------            ------------

</TABLE>

                                       51

<PAGE>

10. LONG-TERM DEBT

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

<TABLE>
<CAPTION>
                                                                        December 31,
                                                               1996                     1997
                                                            ------------            ------------
    <S>                                                     <C>                     <C>

    10 1/2% Senior Subordinated Notes; semi-annual
     payments of interest only, in arrears on February 15
     and August 15 of each year, commencing on
     February 15, 1997, maturing August 15, 2006........... $    100,000            $    100,000

    Outstanding portion of reducing revolver and the
     revolving credit line due in quarterly installments
     of principal (plus interest calculated using either
     the Base rate or Eurodollar rate; the Eurodollar rate
     at December 31, 1996 and December 31, 1997 was
     5.56% and 5.88%, respectively, and the Base rate at
     December 31, 1996 and December 31, 1997 was 8.25%
     and 8.5%, respectively) due July 31, 2001;
     secured by substantially all real property............       21,000                  23,250

    Notes payable to a corporation due in quarterly
     principal installments of $97,500 and $90,000,
     respectively (including monthly interest at prime 
     plus 2%; the rate at December 31, 1996 and 
     December 31, 1997 was 10.25% and 10.5%, respectively),
     to June 30, 1997 and July  30, 1999, respectively, when
     principal balance is due; secured by  real property...        1,550                   1,144

    Notes Payable, Other...................................        3,065                   2,775
                                                            ------------            ------------
                                                                 125,615                 127,169
    Less--Current portion..................................         (782)                   (556)
                                                            ------------            ------------
                                                            $    124,833            $    126,613
                                                            ------------            ------------
                                                            ------------            ------------
</TABLE>

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

<TABLE>
<CAPTION> 
                      <S>                   <C>
                      1998..................      556
                      1999..................    1,138
                      2000..................      266
                      2001..................   23,541
                      2002..................      319
                      Thereafter............  101,349
                                             --------
                                             $127,169
                                             --------
                                             --------

</TABLE>
                                       52

<PAGE>

     On July 31, 1996, Resorts and Capital (the "Issuers"), sold $100,000,000 
in aggregate principal amount of 10 1/2% 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 10 1/2% 
per annum, payable semi-annually in arrears on February 15 and August 15 of 
each year, commencing 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 net proceeds from the issuance of the Notes of approximately $96.5 
million were used by the Company to repay a portion of its existing debt. 
Concurrent with this repayment, the Company amended its $130 million existing 
bank credit facility, which was scheduled to mature March 25, 2000. The 
amended credit facility (the "Credit Facility") provides for a senior secured 
revolving Credit Facility of $50 million. The amount of credit available 
pursuant to the Credit Facility reduced to approximately $46.9 million on 
December 31, 1997 and, by its terms, the facility reduces by an additional 
$1,562,500 at the end of each subsequent quarter until March 25, 2000, when 
it terminates and any balance then outstanding becomes due and payable.  
Borrowings bear interest, at the Company's option, at either (i) the greater 
of (a) the reference rate publicly announced by Bank of America and (b) the 
Federal Funds Rate plus .50% plus an applicable percentage or (ii) the 
Eurodollar rate plus an applicable percentage. The Credit Facility will 
mature July 31, 2001. As of December 31, 1997, $23.25 million of borrowings 
were outstanding under the Credit Facility and an additional  $23.65  million 
of borrowing capacity was available thereunder.

     The Credit Facility is secured by substantially all of the Company's 
real property. The 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 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 
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, 
1997, the Company was in compliance with all provisions of the Credit 
Facility.  Included in other assets at December 31, 1997 are $4.5 million of 
debt offering costs related to the Indenture and the amendment to the Credit 
Facility which are being amortized over the life of the applicable agreements.

11. ABANDONMENT LOSS

     During fiscal year 1995, the Company abandoned certain real property 
with a net book value of $1,862,000 related to the expansion of the existing 
casino.

12. 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 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 $252,000,  $224,000 and $255,000 
for the fiscal years ended December 31, 1995, 1996 and 1997, respectively.

13. 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, 1995, 1996 and

                                       53

<PAGE>

1997, the Company had accrued obligations of $629,000, $762,000 and $911,000, 
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. A person shall be eligible to be 
granted performance and/or appreciation rights only if on the proposed grant 
date, such person is an executive or other key employee of the Company or an 
affiliate of the Company. The performance right allows the key employee the 
right to receive an amount equal to a percentage of income from the grant 
date, as defined, through the date of exercise. The appreciation right allows 
the key employee 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 had been 
granted. No additional rights were granted in 1997. The maximum amount of 
performance rights and appreciation rights which may be granted shall not 
exceed 1,000,000 each.

     The Plan's committee shall determine the date on which each performance 
right or appreciation right shall vest and become exercisable; as of December 
31, 1997, no vesting period had been established. The Company value as of 
December 31, 1996 and 1997, as calculated, is below the $26.66 Base Rate, and 
therefore no accrual is required as of December 31, 1997. Except as defined 
in the Plan agreement, the Company has no duty or obligation to fund or 
secure the benefits payable to key executives.

14. COMMITMENTS AND CONTINGENCIES

      LETTERS OF CREDIT

     The Credit Facility (see Note 10) allows for the issuance of letters of 
credit which reduces the available line by the amount pledged. At December 
31, 1997 the amount pledged was $1,053,150.

      CAPITAL LEASES

     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, 1997 (in thousands):

<TABLE>
<CAPTION>
                           <S>                                     <C>
                           1998..................................  $    881
                           1999..................................       856
                           2000..................................       720
                           2001..................................        90
                           2002..................................        --
                           Thereafter............................        --
                                                                   --------
                           Minimum lease payments................     2,547
                           Less--Amounts representing interest...      (312)
                                                                   --------
                                                                   $  2,235
                                                                   --------
                                                                   --------

</TABLE>

                                       54

<PAGE>

OPERATING LEASES

     The Company leases equipment under operating leases.  Future minimum 
payments (expiring from 1998 and thereafter) under noncancellable operating 
leases with initial terms of one year or more consisted of the following at 
December 31, 1997 (in thousands):

<TABLE>
<CAPTION>

                                               FUTURE MINIMUM
                                               LEASE PAYMENTS
                                               --------------
                         <S>                      <C>
                         1998....................  $    276
                         1999....................        88
                         2000....................        88
                         2001....................        88
                         2002....................        88
                         Thereafter..............         0
                                                   --------
                                                   $    628
                                                   --------
                                                   --------

</TABLE>

     Total rental expense under operating leases was $751,000 for the year 
ended December 31, 1995, $1,210,000 for the year ended December 31, 1996 and 
$1,027,000 for the year ended December 31, 1997. Additional rent for land upon 
which the Eldorado Hotel Casino resides of $668,000 in 1997 ($649,000 in 1995 
and $646,000 in 1996) was paid to a related party based on gross gaming 
receipts. This rental agreement expires June 30, 2027.

   LEGAL MATTERS

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

                                       55

<PAGE>

15. CORPORATE EXPENSES/MANAGEMENT FEES

     Resorts  pays  management fees to Recreation 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.

16. RELATED PARTIES

     Resorts pays management fees to two of its corporate Members. Such fees, 
included in general and administration and operating department expenses, 
were $4,287,556 for 1995,  $2,944,000 for 1996 and $1,842,829 for 1997.

     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 
sports book located in the Silver Legacy, (the "Legacy Book").  The Company 
supplies the management, employees, and equipment associated with the 
operation of the Legacy Book and records a proportionate share of revenue and 
expenses included in casino revenue and casino expense according to a formula 
included in the race and sports book agreement.  For the years ended December 
31, 1996 and 1997 the Company recorded $243,000 and $483,000 in casino 
revenues and $205,000 and $358,000 in casino expenses, respectively.

                                       56

<PAGE>

                                EXHIBITS INDEX
<TABLE>
<CAPTION>

                   EXHIBIT
                   NUMBER                    DESCRIPTION OF EXHIBIT
                   ------                    ----------------------
                   <S>                       <C>
                   27                        Financial Data Schedule

</TABLE>


                                       57