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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, 1999

[  ] 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)


                                 (775) 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
27, 2000: 2,500 Shares.

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PART I

ITEM 1.  BUSINESS.

INTRODUCTION

         Eldorado Resorts LLC, a Nevada limited liability company ("Resorts"),
was formed to be the successor to Eldorado Hotel Associates Limited Partnership
(the "Predecessor Partnership") pursuant to an exchange of all of the then
outstanding partnership interests in the Predecessor Partnership for membership
interests in Resorts (the "Reorganization"). The Reorganization was effective on
July 1, 1996. Insofar as they relate to periods prior to the effective date of
the Reorganization, references to Resorts are to the Predecessor Partnership
except to the extent the context requires otherwise. Eldorado Capital Corp., a
Nevada corporation wholly-owned by Resorts ("Capital"), was incorporated with
the sole purpose of serving as co-issuer of $100,000,000 principal amount of 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 Nevada limited liability company which is 96% owned by Resorts
("ELLC"), are collectively referred to as the "Company." Effective June 30,
1997, ELLC completed a recapitalization, converting a note receivable and
accrued interest thereon into equity, increasing Resorts' interest in ELLC from
approximately 77% to approximately 96%.

         The Company owns and operates the Eldorado Hotel & Casino (the
"Eldorado"), a premier hotel/casino and entertainment facility in Reno, Nevada.
The Company has established the Eldorado as a luxury destination resort by
creating a sophisticated, elegant atmosphere and providing unsurpassed personal
service and cuisine, a dynamic gaming environment and a wide variety of
amenities attractive to multiple market segments. The Eldorado is centrally
located in downtown Reno and is easily accessible both to 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 Mandalay Resort Group, formerly Circus Circus
Enterprises, Inc. ("Mandalay") 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 broad experienced management team that includes,
among others, Donald Carano and several members of his immediate family. Donald
Carano, the Chief Executive Officer and a member of the Board of Managers of
Resorts, co-founded the Eldorado in 1973 and has been the driving force behind
its development. In addition to Donald Carano, each of the Company's other seven
senior executives has in excess of 10 years of operating experience in the
gaming industry. Management believes that its family-oriented, hands-on approach
has enabled the Company to operate the Eldorado successfully for over
twenty-five years. In addition to their roles in management of the Company,
members of the Carano family beneficially own 63% of the Company.

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

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

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

         The Eldorado continually monitors its casino operations to react to
changing market conditions and customer demands. The Company targets
premium-play customers as well as the value-conscious gaming patron

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with its state-of-the-art casino featuring the latest in game technology,
electronic displays and customer-convenient features.

         MARKETING TO TARGET GAMING PATRONS. The Company primarily targets its
marketing programs to four segments of the gaming market: the free and
independent traveler, preferred casino customers, local patrons and the
wholesale/specialty groups.

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

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

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

         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 1999 was $3,918,000
compared with $4,383,000 in 1998.

         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 added an
entertainment experience that management believes attracts a larger and broader
audience of entertainment seekers. The showroom features the only nightly
production show of its kind in downtown Reno. In addition, the Company opened a
new VIP Lounge in December 1997, offering a relaxing atmosphere, including a
complimentary full service bar and VIP room registration for preferred casino
customers. In 1998, the Eldorado opened a new slot area across from the
property's microbrewery, THE BREW BROTHERS, and a portion of CHOICES RESTAURANT
was enclosed and remodeled into a 78-seat Asian cuisine restaurant, the GOLDEN
FORTUNE. In December 1999 the Eldorado opened the BUBINGA LOUNGE, a
sophisticated intimate nightclub, featuring live music, dance floor, cigar room
and two themed bars, all presented in an elegant atmosphere. Management believes
that the addition of these unique amenities has enhanced the Eldorado's position
in the Reno market.

         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 vehicular traffic,
the Eldorado is strategically located directly off Interstate 80, the principal
highway linking the Reno market with San Francisco, Sacramento and other cities
in its primary visitor market of northern California. With three 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, 1999, the Eldorado offered approximately 84,000
square feet of gaming space, with approximately 1,880 slot machines, 78 table
games consisting of blackjack, craps, roulette, Pai Gow Poker, Let It Ride(R),
Caribbean stud poker, mini-baccarat, two keno games and a poker room. The
Eldorado's casino includes a mix of slot machines and table games which
management believes makes it attractive to both middle-income and premium-play
customers. Slot machines, which are offered in denominations from 1 cent to
$100, generated approximately 66% of the total gaming revenues for the casino in
1999 and provide consistency in revenues and cash flow. A diverse selection of
table games and a variety of table limits allow play from a wide range of gaming
customers, which management believes makes the Eldorado one of the premier table
games casinos in the Reno market.

         The interior of the hotel is designed to create a European ambiance and
offers 816 finely-appointed rooms and suites, including 18 specialty suites, 93
"Eldorado Player's Spa Suites" with bedside spas and 26 one-bedroom and
two-bedroom penthouse suites. Hotel guests enjoy panoramic views of Reno's
skyline and the majestic Sierra Nevada mountain range. Management believes that
attention to detail, decor and architecture have created an identifiable and
innovative presence in the Reno market for the Eldorado. In 1998 and 1999, the
Eldorado achieved a 92.8% and 91.9% average hotel occupancy rate at an Average
Daily Rate ("ADR") of approximately $60 and $58 in 1998 and 1999, 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

<TABLE>
<CAPTION>
                           SEATING
DINING VENUE               CAPACITY        DESCRIPTION
------------               --------        -----------
<S>                        <C>             <C>
Bistro Roxy                175             A Parisian-style bistro, restaurant and bar offering French country
                                           fare, steak and seafood
                                           Designed by famed restaurant designer Pat Kuleto to feature seven
                                           distinct architectural styles

                                           Voted BEST GOURMET RESTAURANT by CASINO PLAYER magazine 1999
                                           Received "Award of Excellence" from WINE SPECTATOR 1998 and 1999

La Strada                  170             Features northern Italian cuisine in an Italian countryside villa setting
                                           Voted BEST ITALIAN RESTAURANT by CASINO PLAYER magazine 1999
                                           Recipient of the WINE SPECTATOR AWARD OF EXCELLENCE in each of the past
                                           six 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 saloon in NEVADA magazine's Best
                                           of Nevada Poll 1999

                                           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
                                           Named BEST BREWPUB IN AMERICA by NIGHTCLUB AND BAR magazine in 1999

The Grill                  185             A spirited, lively steak and seafood house
                                           Specializes in prime rib 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 cuisines, including a
                                           Mongolian barbecue, omelet 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       185             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

Golden Fortune --          78              Authentic Hong Kong style cuisine offering 90 specialties
He Fu Li                                   A classic Chinese setting atmosphere featuring hand blown and stained
                                           glass imported from China

                                           Awarded the INTERNATIONAL AWARD OF EXCELLENCE by the Restaurant and
                                           Hospitality Rating Bureau in 1999.
</TABLE>

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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, the BUBINGA LOUNGE, which
is an intimate nightclub, and a VIP lounge. 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. The Eldorado has parking facilities for
over 1,000 vehicles including a 652-space self-park garage and a 360-space
valet parking facility.

SILVER LEGACY RESORT CASINO

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

         The Silver Legacy's design is 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 MacKay
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 1,712 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, 1999, the Silver Legacy's casino
featured approximately 88,500 square feet of gaming space and contained 2,269
slot machines and 79 table games, including blackjack, craps, roulette, Pai Gow
Poker, Let It Ride(R), Caribbean stud poker, Baccarat and Pai Gow, three keno
games and a race and sports book. "Club Legacy," the Silver Legacy's slot club,
offers customers exciting special events and tournaments and convenient ways of
earning complimentaries.

         The Silver Legacy's dining options include a 240-seat buffet, a steak
and seafood restaurant, an oyster bar, a 24-hour coffee shop, gourmet coffee
house and a food court. 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, 20 restaurants and enough parking to
accommodate approximately 5,350 vehicles, and as of December 31, 1999,
approximately 5,875 slot machines and 230 table games. The Company's management
believes that the centralized location and critical mass of these three
properties, together with the ease of access between the facilities, provide the
Eldorado with significant advantages over other freestanding hotel/casinos in
the Reno market.

SILVER LEGACY JOINT VENTURE 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. ("Mandalay Sub"). Under the terms of the Joint Venture
Agreement, each of ELLC and Mandalay 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

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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 Mandalay Sub contributed $51.9 million in cash. In addition, pursuant to
the Joint Venture Agreement, Mandalay Sub's parent corporation, Mandalay
Resort Group, 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, Mandalay 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 ($196 million at December 31, 1999) is subject to scheduled reductions
(adjustable ratably for any voluntary permanent reductions) of $4.25 million
quarterly through December 31, 2000 (with the next such reduction being due
on March 31, 2000), $5.5 million quarterly from March 31, 2001 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 Mandalay 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 Mandalay 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, 1999, 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 $174.0 million
(representing the principal amount then outstanding under the Silver Legacy
Credit Agreement) plus accrued interest of $1,334,000.

         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 Mandalay 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 Mandalay 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 when
Mandalay Sub began to receive the priority allocation described below. 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.

         Mandalay Sub is entitled to a priority allocation ("Priority
Allocation") in an amount equal to approximately 11.54% of the average of the
"Adjusted Initial Investment" (as defined) for the period. If, after deducting
equal shares of interest expense, a Partner's share of the Priority Allocation
is less than zero, additional operating income is allocated to that Partner to
bring their allocation to zero. For purposes of determining the amount of the
Priority Allocation for any period, the term "Adjusted Initial Investment" means
$290,000,000 (the "Initial Investment") as adjusted at the end of each year by
subtracting (i) the depreciation on the Initial Investment taken in such year in
accordance with the depreciation schedule agreed to by the Partners and (ii) the
principal payments which would have been made in repayment of the original bank
financing utilized for the development, construction and completion of the
Silver Legacy. Mandalay Sub is entitled to such Priority Allocation, which began
May 1, 1997, for so long as ELLC

                                     6
<PAGE>

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 Mandalay Sub of an amount up to its
Priority Allocation and to ELLC of an amount up to the amount distributed to
Mandalay Sub pursuant to Mandalay 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
Mandalay 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 Mandalay
Sub as the Managing Partner. The current members of the Executive Committee
appointed by the Managing Partner are Steve Greathouse, Yvette Landau and Tom
Robinson; 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 Mandalay 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 Mandalay Sub. The General Manager will
continue to be selected by ELLC so long as Mandalay 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, Mandalay Sub may replace the General
Manager; provided, however, that if Mandalay Sub replaces the General Manager
without ELLC's consent, Mandalay 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 Mandalay for the Construction Financing is in default for over
one year or (iv) unless otherwise agreed to by Mandalay, Donald Carano, an
immediate family member acceptable to Mandalay Sub or one of their respective
affiliates does not control ELLC, or unless otherwise agreed to by ELLC,
Mandalay does not control Mandalay 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

                                     7
<PAGE>

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 $969 million of gaming revenues in 1999.
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, 1999, the Reno market
featured 15,957 hotel rooms which had an estimated 78.8% average hotel
occupancy rate in 1999. According to the Reno Sparks Convention and Visitors
Authority (the "Visitors Authority"), other approved or announced projects
are expected to add up to approximately 5,300 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 third largest city in Nevada, with a population of
approximately 177,000 as of July 1999, 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 2.4 nights in 1999. The Reno area enjoys
relatively mild weather, with abundant sunshine throughout the year and low
humidity. Reno's annual snowfall is modest, although heavier snowfall in the
mountain passes around Reno can obstruct traffic to Reno. Special annual events
in the Reno area include Hot August Nights, the National Championship Air Races,
the Reno Balloon Races and the Reno Rodeo. According to the Visitors Authority,
the greater Reno area attracted an estimated 5.0 million visitors in 1999
compared with 5.1 million in 1998.

         The following table sets forth certain statistical information for the
Reno market for the years 1995 through 1999 as reported by the Visitors
Authority, or the Nevada State Gaming Control Board and Reno/Tahoe International
Airport.

<TABLE>
<CAPTION>
                                                                        THE RENO MARKET

                                              1995            1996           1997            1998            1999
                                              ----            ----           ----            ----            ----
    <S>                                       <C>             <C>            <C>             <C>             <C>
    Gaming Revenues (000's).............   $  889,480     $  885,578      $  901,989    $  929,844       $  968,531
    Gaming Positions(1)(2)..............       31,926         32,164          31,762        30,816           30,526
    Hotel Rooms(1)......................       14,241         15,536          15,773        15,271           15,957

    Average Hotel Occupancy Rate........        86.0%           83.3%          80.3%          79.1%            78.8%
    Airline Passenger Arrivals(3).......    2,911,834      3,450,920       3,503,112     3,427,565        3,115,770
    Convention Attendance(4)............      314,137        196,707         250,170       256,285          194,782

</TABLE>

   (1) As of December 31 for each period shown.
   (2) Calculated from information provided by the Nevada State Gaming Control
       Board.
   (3) Deplaned passengers to Reno/Tahoe International Airport.
   (4) Convention Attendance includes the Bowling Congress tournaments.

         The National Bowling Stadium, located approximately one block from
the Eldorado and Silver Legacy, opened in February 1995 at a reported cost of
approximately $48 million. The state-of-the-art facility, which features 80
bowling lanes, has been selected to host tournaments for the American Bowling
Congress (the "ABC") and the Women's International Bowling Congress (the
"WIBC") through 2009 and is expected to host many other tournaments for other
bowling organizations. The National Bowling Stadium was the site of the
WIBC's National Championship Bowling Tournament in 1997 and has been selected
as the site of that tournament in 2000, 2003, 2006 and 2009. The National
Bowling Stadium was the site of the ABC's National Championship Bowling
Tournament in 1998 and has been selected as the site of that tournament in
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 visitor
profile. The National Bowling Stadium also

                                     8
<PAGE>

features a large-screen movie theater, nightclub and retail space and can be
configured to host special events and conventions.

         In 1999, ten scheduled airlines and a number of other charter airlines
provided non-stop service between Reno and approximately 20 North American
cities, providing outbound available seats for more than 12,834 people daily.
The most frequent users of the airport are American and Southwest Airlines, with
approximately 64 and 78 daily flights, respectively, to or from Reno as of
December 31, 1999. 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 44 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 5,300 rooms will be
added to the Reno market within a 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 68% of its visitors in
1999. Furthermore, since the 1980's, legalized gaming opportunities have
proliferated throughout the United States, and the Company now competes with
parimutuel wagering, state-sponsored lotteries, card clubs, bingo, off-track
betting, riverboat and other forms of legalized gaming.

         Voters in California approved Proposition Five, which was proposed by
California Indian tribes in the November 3, 1998 election. This referendum
sought to legalize gaming operations that numerous tribes operated in
contravention of California and Federal law, which could lead to the expansion
of gaming operations by California Indian tribes and could have a material
adverse effect on our Nevada operations. A legal action was filed in the
California Supreme Court challenging the validity of Proposition Five under the
California constitution. On December 2, 1998, the California Supreme Court
issued an order staying implementation of Proposition Five. On August 23, 1999,
the California Supreme Court issued its decision on Proposition Five, concluding
that Proposition Five is invalid because it violates a state constitutional ban
on Nevada-style casino gambling. Subsequently, nearly 60 Indian tribes and
California's Governor signed tribal-state agreements that would legalize
casino-style gambling in California for Indian tribes. The agreements were
contingent on a constitutional amendment that would give tribes the right to
offer slot machines and a range of house-banked card games. On September 10,
1999, California lawmakers approved the constitutional amendment along with a
separate measure ratifying the tribal-state agreements. On March 7, 2000
California voters approved the constitutional amendment.

         Riverboat, dockside or land-based casino gaming is currently legal in
16 states and casino gaming on Native American-owned land is legal in at least
27 states, including California, Washington, and Oregon. In addition, California
(from which the Reno market drew approximately 51% of its visitors, and whose
residence contributed a significant portion of the Company's revenues, in 1999)
allows other non-casino style gaming, including parimutuel 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

                                     9
<PAGE>

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 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

                                     10
<PAGE>

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 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

                                     11
<PAGE>

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

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

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

THE NATIONAL GAMBLING IMPACT STUDY COMMISSION'S RECOMMENDATIONS

         A National Gambling Impact Study Commission (the "Commission") has
been established by the United States Congress to conduct a comprehensive
study of the social and economic impact of gaming in the United States. On
April 28, 1999, the Commission voted to recommend that the expansion of
gambling be curtailed. In June 1999, the Commission issued a final report of
its findings and conclusions, together with recommendations for legislative
and administrative actions. Below are highlights of some of those
recommendations:

o    Legal gaming should be restricted to those at least 21 years of age;

o    Betting on college and amateur sports should be banned;

o    The introduction of casino-style gambling at parimutuel racing facilities
     for the primary purpose of saving the parimutuel facility financially
     should be prohibited;

o    Internet gaming should be banned within the United States;

o    The types of gaming activities allowed by Indian tribes within a given
     state should not be inconsistent with the gaming activities allowed to
     other persons in that state; and

o    State, local and tribal governments should recognize that casino gaming
     provides economic development, particularly for economically depressed
     areas. The Commission differentiated casino gaming from stand-alone slot
     machines (e.g., in convenience stores), Internet gaming and lotteries
     which the Commission stated do not provide the same economic development.

Any additional regulation of the gaming industry which may result from the
Commission's report may have an adverse effect on the gaming industry,
including operations at the Eldorado and Silver Legacy.

                                     12

f<PAGE>

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 Mandalay 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 Mandalay for Environmental Losses. In all
cases, the Company believes that the contamination arose from activities of
prior owners or occupants, or from offsite sources and not as a result of any
actions or operations conducted by the Company.

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

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

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

         The Company has expended approximately $736,500 in connection with
environmental matters from January 1, 1993 through December 31, 1999, of which
approximately $2,500 was expended during 1999.

EMPLOYEES

         As of December 31, 1999, the Company had 2,395 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.

                                     13
<PAGE>

FACTORS THAT MAY AFFECT THE COMPANY'S FUTURE RESULTS

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

         Certain information included in this Report and other materials filed
or to be filed by the Company with the Securities and Exchange Commission (as
well as information included in oral statements or other written statements made
or to be made by the Company) contains or may contain forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. These statements
can be identified by the fact that they do not relate strictly to historical or
current facts. The Company has based these forward-looking statements on its
current expectations about future events. These forward-looking statements
include statements with respect to the Company's beliefs, plans, objectives,
goals, expectations, anticipations, intentions, financial condition, results of
operations, future performance and business, including:

     -    current and future operations; and

     -    statements that include the words "may," "could," "should," "would,"
          "believe," "expect," "anticipate," "estimate," "intend," "plan" or
          similar expressions.

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

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

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

     -    As described under "Competition," in this Item 1, the Company and the
          joint venture in which it participates operate in a very competitive
          environment. The growth in the number of hotel rooms and/or casino
          capacity in Reno or the spread of legalized gaming in other
          jurisdictions could negatively affect future operating results.

     -    As discussed under "Nevada Regulation and Licensing" in this Item 1,
          the Eldorado's and the Silver Legacy's gaming operations are highly
          regulated by governmental authorities in Nevada.

     -    Changes in applicable laws or regulations could have a significant
          effect on the operations of the Company and the joint venture in which
          it participates. As a result of federal legislation passed in 1996,
          the National Gambling Impact Study Commission conducted a two-year
          study of the gaming industry in the United States and has reported its
          findings and recommendations to Congress. It is possible that this
          report may result in additional regulation and taxation of the gaming
          industry.

     -    The Company's operations and those of the joint venture in which it
          participates are affected by changes in general economic and market
          conditions nationally as well as such conditions in the locations
          where the Company's and its joint venture's operations are conducted
          and where their customers live, including California.

     -    The highway between Reno and Northern California, where a large number
          of the Eldorado's and Silver Legacy's customers reside, experience
          winter weather conditions from time to time that limit the number of
          customers who visit Reno during such periods.

                                     14
<PAGE>

     -    The gaming industry represents a significant source of tax revenues to
          the state, county and local jurisdictions in which gaming is
          conducted. From time to time, various state and federal legislators
          and officials have proposed changes in tax laws, or in the
          administration of the laws, affecting the gaming industry, including a
          federal gaming tax.

     -    The Company believes that its recorded tax balances are adequate.
          However, it is not possible to determine with certainty the likelihood
          of possible changes in the tax laws or their administration. These
          changes, if adopted, could have a material negative effect on the
          Company's operating results and the operating results of the joint
          venture in which it participates.

     -    The interest rate on a significant portion of the Company's debt is
          subject to fluctuation based on changes in short-term interest rates.
          Interest expense could increase as a result of this factor.

     -    Claims have been brought against the Company in various legal
          proceedings, and additional legal and tax claims arise from time to
          time. It is possible that the Company's cash flows and results of
          operations could be affected from time to time by the resolution of
          one or more of these contingencies. The Company believes that the
          ultimate disposition of current matters will not have a material
          impact on its financial condition or results of operations. See the
          further discussion under "Legal Proceedings" in Item 3 of this Form
          10-K.

     -    There is intense competition to attract and retain management and key
          employees in the gaming industry. The Company's business or the
          business of the joint venture in which it participates could be
          adversely affected in the event of the inability to recruit or retain
          key personnel.

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 1999 totaled $655,000. Substantially all of the Company's real
property, including the Eldorado, is subject to encumbrances securing the
repayment of the Company's revolving credit facility (the "Credit Facility").
The amount of credit available pursuant to the Credit Facility reduced to
approximately $34.4 million on December 31, 1999 and, by its terms, the facility
reduces by an additional $1,562,500 at the end of each subsequent quarter until
July 31, 2001, when it terminates and any balance then outstanding becomes due
and payable. At December 31, 1999, the indebtedness outstanding under the Credit
Facility was $26.0 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 interest 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. The Credit Facility is secured by a first deed of trust and security
interest in all real property interests and fixtures relating to the land
located in Verdi, Nevada and the land located at 444 North Center Street.

         The Company owns a 31,000 square foot parcel of property across the
street from and west of the Eldorado, which could be used for expansion of the
Eldorado. As of December 31, 1999, this parcel was subject to an encumbrance
securing the repayment of indebtedness of $2,076,000 in addition to the
aforementioned second deed of trust securing the Company's interest under the
Credit Facility.

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

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

                                     15
<PAGE>

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, 1999. 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 1999 were, and distributions for subsequent years will be,
limited in accordance with the provisions of the Operating Agreement of Eldorado
Resorts LLC dated as of June 28, 1996 (the "Operating Agreement"). The Operating
Agreement provides that the Board of Managers will distribute each year to each
member an amount equal to such member's allocable share of taxable income
multiplied by the highest marginal combined Federal, state, and local income tax
rate applicable to individuals for that year; provided that such distributions
will not be made after any event that causes Resorts to thereafter be taxed
under the Internal Revenue Code of 1986, as amended, as a corporation.
Distributions of Resorts to its members aggregated $11.4 million and $29.6
million for 1998 and 1999, respectively, of which approximately $3.9 million in
1998 and $8.2 million in 1999 was for income taxes.

                                     16
<PAGE>


ITEM 6.  SELECTED FINANCIAL DATA.

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


<TABLE>
<CAPTION>
                                                  1995        1996         1997         1998            1999
                                                  ----        ----         ----         ----            ----
  <S>                                           <C>         <C>          <C>          <C>             <C>
  CONSOLIDATED STATEMENT OF INCOME DATA:
  Operating revenues:
       Casino..............................     $106,737     $104,608       $104,513     $104,441       $112,967
       Food, beverage and entertainment....       33,780       34,483         41,061       44,330         48,125
       Hotel ..............................       17,200       16,784         17,769       18,142         17,824
       Equity in net income (loss) of
        unconsolidated affiliate(1)........       (3,208)       1,758            390        --             2,881
       Other...............................        4,908        7,120          7,093        6,698          6,556
       Less promotional allowances.........      (13,895)     (14,102)       (14,545)     (15,296)       (16,483)
                                               ----------  --------------  ----------  -------------   -------------

               Net revenues................      145,522      150,651        156,281      158,315        171,870

  Operating expenses:
       Casino..............................       42,692       44,557         45,786       47,575         51,153
       Food, beverage and entertainment....       26,363       26,225         30,531       33,017         33,236
       Hotel ..............................        7,536        7,219          7,387        7,611          7,412
       Other...............................        2,043        3,246          3,510        3,881          4,013
       Selling, general and administrative(2)     28,335       29,237         30,566       29,745         31,103
       Depreciation........................        8,166       10,361         12,478       13,718         13,652
       Abandonment loss(3).................        1,862           --             --           --             --
                                               ----------  --------------  ----------  -------------   -------------
               Total Operating expenses....      116,997      120,845        130,258      135,547        140,569
                                               ----------  --------------  ----------  -------------   -------------
  Operating income ........................       28,525       29,806         26,023       22,768         31,301

  Interest expense, net....................       (5,336)     (10,935)       (13,694)     (13,151)       (12,153)
  Other Income.............................           --          --              --          --           1,730
                                               ----------  --------------  ----------  -------------   -------------

  Net income before minority interest......       23,189       18,871         12,329        9,617         20,878
  Minority interest in net (income) loss of
       unconsolidated affiliate(4).........          745         (408)           (91)          --           (110)
                                               ----------  --------------  ----------  -------------   -------------
  Net income(5)............................    $  23,934    $  18,463       $ 12,238     $  9,617      $  20,768
                                               ==========  ==============  ==========  =============   =============
  OTHER DATA:
  EBITDA(6)................................    $  41,761    $  38,409       $ 38,111     $ 36,486      $  42,072
  Net cash provided by (used in):
       Operating activities................       36,345       31,201         22,782       23,122         33,904
       Investing activities................      (62,791)     (22,336)       (15,837)      (5,484)        (7,480)
       Financing activities................       27,208       (9,202)        (6,361)     (15,920)       (25,506)
  Capital expenditures.....................       57,451       24,981         15,957        5,665          7,830

  OPERATING DATA(7):
  Number of hotel rooms(8).................          817          817            815          816            816
  Average hotel occupancy rate.............         93.8%        93.6%          90.1%        92.8%          91.9%
  Casino square footage(8).................       76,500       81,500         81,500       84,000         84,000
  Number of slot machines(8)...............        1,904        1,976          1,858        1,871          1,880
  Number of table games(8).................           84           89             79           79             78
</TABLE>


<TABLE>
<CAPTION>
                                                                         AT DECEMBER 31,
                                           -----------------------------------------------------------------------------
                                               1995            1996            1997            1998            1999
                                               ----            ----            ----            ----            ----
 <S>                                           <C>             <C>             <C>             <C>             <C>
 CONSOLIDATED BALANCE SHEET DATA:

  Cash and cash equivalents................$   6,122        $   5,785       $  6,369         $  8,087      $   9,005
  Total assets.............................  215,592          234,293        238,627          231,258        231,778
  Total debt...............................  123,630          128,503        129,404          124,884        128,978
  Other Comprehensive Income(9)............       --               --             --               --          1,123
  Members' equity (10).....................   74,768           84,031         89,269           87,486         79,777

</TABLE>

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

                                     17
<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 $1.8 million,
        $1.8 million and $1.9 million for the years ended December 31, 1997,
        1998 and 1999, 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, 1997,
        1998 and 1999 of $4.3 million, $3.9 million and $4.7 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
        represented 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. In June 1998, ELLC
        completed a recapitalization, effective June 30, 1997, decreasing
        minority interest in net (income) loss of unconsolidated affiliate to
        approximately 4%.

(5)As a limited liability company, Resorts is not (and its 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
        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, 1999 EBITDA was adjusted to exclude Other
        Income of $1.7 million from the sale of the Company's one-third interest
        in Express Vacations LLC. For the years ended December 31, 1996, 1997
        and 1999 EBITDA was adjusted to exclude ELLC's equity in net income of
        its unconsolidated affiliate of $1.8 million, $0.4 million and $2.9
        million, respectively. 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)Other comprehensive income is the unrealized gain on available for sale
        securities reported at fair value.

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

                                     18
<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' majority 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. In June 1998, ELLC completed a
recapitalization, retroactive to June 30, 1997, converting a note receivable and
accrued interest thereon into equity, increasing Resorts' interest in ELLC from
approximately 77% to approximately 96%. 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 9 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, 1999 COMPARED TO
YEAR ENDED DECEMBER 31, 1998

NET REVENUES

         Net revenues increased by approximately $13.6 million, or 8.6%, to
$171.9 million for the year ended December 31, 1999 compared to $158.3 million
for the year ended December 31, 1998. The increase in net revenues resulted from
increases in casino revenues, food, beverage and entertainment revenues. Net
revenues for the year ended December 31, 1999 include $2.9 million of income
from its unconsolidated affiliate, the Silver Legacy Joint Venture. The Company
did not recognize income (loss) from its unconsolidated affiliate in 1998 as the
result of a priority allocation to Galleon, Inc. pursuant to the Joint Venture
Agreement. See Note 9 of the Notes to the Consolidated Financial Statements
included in this Report.

         Casino revenues increased by 8.2% to $113.0 million for the year ended
December 31, 1999, compared to $104.4 million for the year ended December 31,
1998. The increase in casino revenues was primarily due to increased gaming
volume from table games and slots and an increase in table games hold percentage
as compared to the previous year.

         Food, beverage and entertainment revenues increased by approximately
$3.8 million, or 8.6%, to $48.1 million for the year ended December 31, 1999
compared to $44.3 million during the same period in 1998. The increase is
primarily a result of selective price increases at the Eldorado's restaurants
and an increase in occupancy in the Eldorado Showroom in the 1999 period as
compared to the 1998 period.

         Hotel revenues decreased slightly to $17.8 million for the year ended
December 31, 1999 from $18.1 million for the year ended December 31, 1998, a
decrease of 1.8%. The decrease is primarily a result of a decrease in the
Company's hotel occupancy rate and average daily rate ("ADR") for the year ended
December 31, 1999 compared to the same period in 1998 to approximately 92% and
$58 from approximately 93% and $60, respectively.

         Other revenues decreased slightly to $6.6 million for year ended
December 31, 1999 as compared to $6.7 million in 1998. A slight decrease in
retail revenue and the Arcade, due to construction during the fourth quarter was
partially offset by increased income from the Company's one-third interest in
Express Vacations LLC., which was sold in November 1999.

                                     19
<PAGE>

         Promotional allowances expressed as a percentage of casino revenues
were 14.6% in 1999 as compared to 14.7% in 1998.


OPERATING EXPENSES

         The Company's operating expenses increased by 3.7% to $140.6 million
for the year ended December 31, 1999 from $135.5 million for the year ended
December 31, 1998. This increase is mainly attributable to increased casino and
selling, general and administrative expenses.

         Casino expenses increased by 7.5% to $51.2 million for the year
ended December 31, 1999 from $47.6 million for the year ended December 31,
1998. The increase is attributable to increases in bad debt, slot promotional
and marketing expenditures, in addition to increased expenses related to a
new poker room which opened in May 1998.

         Food, beverage and entertainment expenses increased slightly by
approximately $0.2 million, or 0.7%, to $33.2 million for the year ended
December 31, 1999 from $33.0 million for the year ended December 31, 1998.
Increases in food and beverage cost of sales and payroll expenses were offset by
a decrease in entertainment's professional expenditures.

         Hotel expenses decreased slightly by 2.6% or $0.2 million to $7.4
million for the year ended December 31, 1999 from $7.6 million for the year
ended December 31, 1998 due to an overall decrease in hotel operating
expenses.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES AND MANAGEMENT FEES

         Selling, general and administrative expenses and management fees
increased by 4.6% to $31.1 million for the year ended December 31, 1999 from
$29.7 million during the same period in 1998. The increase was primarily due to
an increase in the employee bonuses for the year ended December 31, 1999 as
compared to the 1998 period.

DEPRECIATION

         Depreciation was comparable at $13.7 million for the years ended
December 31, 1999 and 1998, due to some assets becoming fully depreciated.


INTEREST EXPENSE, NET

         Interest expense, net of capitalized interest and interest income,
decreased 7.6% or $1.0 million to $12.2 million for the year ended December
31, 1999 compared to $13.2 million for the year ended December 31, 1998.
Interest expense decreased as a result of a decrease in the average
outstanding borrowings during 1999 as compared to 1998. The Company
capitalized interest of approximately $36,000 for the year ended December 31,
1999 compared to $72,000 during 1998.

OTHER INCOME

         In November 1999, Travelbyus.com purchased for approximately
$330,000 in cash and approximately $330,000 receivable, paid prior to
December 31, 1999 and approximately $1.1 million of its stock, the Company's
one-third interest in Express Vacations LLC d.b.a. QQuick Escapes. The
Company recognized an approximate $1.7 million gain on the transaction.

NET INCOME

         As a result of the factors described above, net income for the year
ended December 31, 1999 increased by 116.0% to $20.8 million compared to a net
income of $9.6 million in 1998.


YEAR ENDED DECEMBER 31, 1998 COMPARED TO
YEAR ENDED DECEMBER 31, 1997

                                     20
<PAGE>

NET REVENUES

         Net revenues increased by approximately $2.0 million to $158.3 million
for the year ended December 31, 1998 compared to $156.3 million for the year
ended December 31, 1997. The increase in net revenues resulted from increases in
hotel revenues, food, beverage and entertainment revenues. Net revenues
increased notwithstanding the fact that the Company did not recognize income
from its unconsolidated affiliate, the Silver Legacy Joint Venture, as compared
to recognition of $0.4 million of income from the Silver Legacy Joint Venture
for the year ended December 31, 1997, as the result of a priority allocation to
Galleon, Inc. pursuant to the Joint Venture Agreement. See Note 9 of the Notes
to the Consolidated Financial Statements included in this Report.

         Casino revenues remained essentially unchanged at $104.4 million for
the year ended December 31, 1998 compared to $104.5 million in 1997.

         Food, beverage and entertainment revenues were $44.3 million for the
year ended December 31, 1998 compared to $41.1 million in 1997, an increase of
8.0%. The increase was primarily due to the Eldorado's Showroom which had a full
year of operations in 1998 as compared to eight months in 1997, along with a
slight increase in restaurant customer counts and an increase in the average
check.

         Hotel revenues increased slightly to $18.1 million for the year ended
December 31, 1998 from $17.8 million for the year ended December 31, 1997, an
increase of 2.1%. The increase is primarily a result of an increase in the
Company's hotel occupancy rate for the year ended December 31, 1998 to
approximately 93% from 90% in 1997. The Company's average daily rate ("ADR") was
comparable at approximately $60 for the years ended December 31, 1998 and 1997.

         Other revenues decreased by approximately $0.4 million or 5.6%, to $6.7
million for year ended December 31, 1998 as compared to $7.1 million in 1997 as
a result of lower parking and retail revenue.

         Promotional allowances expressed as a percentage of casino revenues
increased to 14.7% in 1998 as compared to 13.9% in 1997. The increase is due to
increased use of complimentaries to all levels of casino patrons and an increase
in promotions related to the Eldorado Showroom.

OPERATING EXPENSES

         The Company's operating expenses increased by 4.1% to $135.5 million
for the year ended December 31, 1998 from $130.3 million for the year ended
December 31, 1997. This increase is mainly attributable to increased casino,
food, beverage and entertainment and depreciation expenses.

         Casino expenses increased by 3.9% to $47.6 million for the year ended
December 31, 1998 from $45.8 million for the year ended December 31, 1997. The
increase is attributable to increased slot, entertainment and bus program
promotional expenses, in addition to increased expenses related to a new poker
room which opened in May 1998.

         Food, beverage and entertainment expenses increased by approximately
$2.5 million, or 8.1% to $33.0 million for the year ended December 31, 1998 from
$30.5 million for the year ended December 31, 1997 primarily due to additional
months of operation of Eldorado's Showroom in 1998 as compared to 1997.

         Hotel expenses increased slightly by 3.0% or $0.2 million to $7.6
million for the year ended December 31, 1998 from $7.4 million for the year
ended December 31, 1997 due to a slight increase in payroll and amenity
expenses.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES AND MANAGEMENT FEES

         Selling, general and administrative expenses and management fees
decreased by 2.7% to $29.7 million for the year ended December 31, 1998 from
$30.6 million during the same period in 1997. The decrease was primarily due to
a decrease in the employee bonuses for the year ended December 31, 1998 as
compared to 1997.

                                     21
<PAGE>

DEPRECIATION

         Depreciation for the year ended December 31, 1998 was $13.7 million
compared to $12.5 million for the year ended December 31, 1997, an increase of
9.9%. The increase was primarily attributable to the opening of the Eldorado
Showroom in May 1997 and casino and hotel refurbishments completed during the
first quarter of 1998.

INTEREST EXPENSE, NET

         Interest expense, net of capitalized interest and interest income,
decreased slightly to $13.2 million for the year ended December 31, 1998
compared to $13.7 million for the year ended December 31, 1997. Interest expense
decreased as a result of a decrease in the average outstanding borrowings during
1998 as compared to 1997. The Company capitalized interest of approximately
$72,000 for the year ended December 31, 1998 compared to $256,000 during 1997.

NET INCOME

         As a result of the factors described above, net income for the year
ended December 31, 1998 declined by 21.4% to $9.6 million compared to a net
income of $12.2 million in 1997.


CORPORATE EXPENSES/MANAGEMENT FEES

         The Company pays management fees to Recreational Enterprises, Inc.
and Hotel Casino Management, Inc., the owners of 55% and 29% of the Company's
equity interests, respectively. The management fees paid to Recreational
Enterprises, Inc. and Hotel Casino Management, Inc. are included in selling,
general and administrative expenses and totaled $1.8 million, $1.8 million
and $1.9 million for the years ended December 31, 1997, 1998 and 1999,
respectively. Historically, the salaries of senior executive officers and
certain other key employees were not directly incurred but were paid from a
portion of the management fees paid to Recreational Enterprises, Inc. As of
July 1, 1996, the aggregate annual salaries of such senior executive officers
and other key employees became payroll obligations of the Company and the
Company entered into a Management Agreement with Recreational Enterprises,
Inc. and Hotel Casino Management, Inc. providing that future management fees
paid to Recreational Enterprises, Inc. and Hotel Casino Management, Inc. will
not exceed 1.5% of the Company's annual net revenues. As a result of the
Management Agreement and the Company's assumption of responsibility for the
salaries of senior executive officers and other key employees previously paid
by Recreational Enterprises, Inc. from its management fee, the Company
incurred such salaries and management fees for the years ended December 31,
1997, 1998 and 1999 of $4.3 million, $3.9 million and $4.7 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 1997, 1998 and 1999. The fourth quarter of 1999 reflects
the November 1999 sale of the Company's one-third interest in Express Vacations
LLC.

<TABLE>
<CAPTION>
                                   1997      1998      1999
                                   ----      ----      ----
  <S>                              <C>       <C>       <C>
  First quarter.................   21.8%     21.3%     21.4%
  Second quarter................   26.3%     26.0%     25.0%
  Third quarter.................   28.3%     27.7%     27.4%
  Fourth quarter................   23.6%     25.0%     26.2%
                                 --------  --------  --------
                                 --------  --------  --------
               Total............  100.0%    100.0%    100.0%
</TABLE>


LIQUIDITY AND CAPITAL RESOURCES

                                     22
<PAGE>

        The Company's primary sources of liquidity and capital resources have
been through cash flow from operations, borrowings under various credit
agreements and the issuance in July 1996 of $100 million in aggregate principal
amount of 10 1/2% Notes. Since 1996, the Company has completed several expansion
and remodeling projects, accounting for a significant use of cash flow from
operations and borrowed funds. The Company's earnings before interest, taxes,
depreciation and amortization as adjusted to exclude equity in net income of its
unconsolidated affiliate was $42.1 million for the year ended December 31, 1999,
as compared to $36.5 million during the same period in 1998. Net cash provided
by operating activities was $33.9 million for the year ended December 31, 1999
compared to $23.1 million for the prior year.

        At December 31, 1999, the Company had $9.0 million of cash and cash
equivalents and $7.4 million available pursuant to its Credit Facility (as
defined below). The net proceeds of the offering by the Company and its
wholly-owned subsidiary, Eldorado Capital Corp., of the 10 1/2% Notes (the
"Offering") were used to repay a portion of the indebtedness under the Loan
Agreement dated as of March 25, 1994, between the Company, the banks named
therein and Bank of America NT&SA, as administrative agent (the "Former Credit
Facility"). The Former Credit Facility was amended concurrently with the closing
of the Offering to provide the Company with a senior secured revolving credit
facility in the original amount of $50 million (as amended, the "Credit
Facility"). The amount of credit available pursuant to the Credit Facility
reduced to approximately $34.4 million on December 31, 1999 and, by its terms,
the facility reduces by an additional $1,562,500 as of the end of each
subsequent quarter until July 31, 2001 when it terminates and any balance then
outstanding becomes due and payable.

         As of December 31, 1999, the Company had outstanding (i) $100 million
in aggregate principal amount of 10 1/2% Notes, (ii) $26 million of borrowings
and an additional $1.0 million of letters of credit under the Credit Facility
and (iii) $1.9 million of other long term debt (net of current portion).

        The Operating Agreement of Resorts dated June 28, 1996 obligates Resorts
to distribute each year for as long as it is not taxed as a corporation to each
of its members an amount equal to such members allocable share of the taxable
income of Resorts multiplied by the highest marginal combined Federal, state and
local income tax rate applicable to individuals for that year. For the year
ended December 1999, Resorts made distributions of $29.6 million to its members
as compared with distributions of $11.4 million during the same period in 1998
of which approximately $3.9 million in 1998 and $8.2 million in 1999 was for
income taxes.

        During the year ended December 31, 1999, the Company's principal uses of
funds, net of distributions, were capital expenditures related to the BUBINGA
LOUNGE ($3.7 million), recurring capital expenditures and debt service. Total
capital expenditures for the year ended December 31, 1999 were $7.8 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 will be for hotel ($2.7 million) and restaurant
($3.0 million) remodeling, recurring capital expenditures and debt service.

YEAR 2000 DISCLOSURE


         In the past, many computer software programs were written using two
digits rather than four to define the applicable year. As a result, information
technology such as date-sensitive computer software ("IT") as well as non-IT
systems such as equipment containing microcontrollers or other embedded
technology might recognize a date using "00" as the year 1900 rather than the
year 2000 (the "Year 2000"). The inability of date-sensitive IT and non-IT
systems and equipment using two digits rather than four to differentiate between
the years 1900 and 2000 might cause such systems and equipment to fail or create
erroneous results at January 1, 2000 (a "Year 2000 Disruption").


         The Company and Silver Legacy implemented comprehensive programs to
avoid a Year 2000 Disruption. These programs were discussed in the Company's
periodic reports beginning with its report on Form 10-K for the year ended
December 1998.

                                     23
<PAGE>


         The cost to the Company of making its systems at the Eldorado
compliant totaled approximately $532,000. The cost to the Silver Legacy for
updating its systems for Year 2000 compliance totaled approximately $351,000.

         As of the date of this report, neither the Company or Silver Legacy has
incurred any material Year 2000 Disruption.


ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

          Not applicable.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

         Reference is made to the Report of Independent Public Accountants
and the consolidated financial statements of Eldorado Resorts LLC appearing
on pages 37 through 52 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.

                                      24
<PAGE>

PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANTS.

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

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

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

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

<TABLE>
<CAPTION>
                              BOARD MEMBERS AND EXECUTIVE OFFICERS
-------------------------------------------------------------------------------------------------------------
         NAME                  AGE                                  POSITION(S)
------------------------    ----------   --------------------------------------------------------------------
<S>                         <C>          <C>
Donald L. Carano               68        Presiding Board Member, Chief Executive Officer and President of
                                         Resorts; President and Director of Capital

Robert M. Jones                57        Chief Financial Officer of Resorts

Gene R. Carano                 44        Vice President and Secretary of Resorts and General Manager of the
                                         Eldorado; Treasurer of Capital

Gregg R. Carano                40        Vice President of Resorts and Director of Customer Development of
                                         the Eldorado; Director of Capital

Gary L. Carano                 47        Board Member--Appointed by Recreational Enterprises, Inc. as its
                                         corporate representative

Raymond J. Poncia, Jr.         66        Board Member--Appointed by Hotel Casino Management, Inc. as its
                                         corporate  representative; Director of Capital

Leslie Stone Heisz             39        Board Member
</TABLE>


<TABLE>
<CAPTION>
                                                                SIGNIFICANT EMPLOYEES
         NAME                  AGE                                  POSITION(S)
------------------------    ----------   --------------------------------------------------------------------
<S>                         <C>          <C>
Robert B. MacKay               52        Director of Administration of the Eldorado

Robert B. Mouchou              44        Vice President of Operations of the Eldorado

Rick W. Murdock                44        Vice President of Sales and Casino Marketing of the Eldorado

Rhonda B. Carano               46        Vice President of Advertising and Public Relations of the Eldorado

</TABLE>
                                      25
<PAGE>

DONALD L. CARANO. Mr. Carano has served as Chief Executive Officer of, and has
owned a controlling interest in, Resorts or its predecessor since 1973.
Previously, he was an attorney with the firm of McDonald Carano Wilson McCune
Bergin Frankovich & Hicks LLP, with which he maintains an "of counsel"
relationship. Mr. Carano has been involved in the gaming industry and has been a
licensed casino operator since 1969. Mr. Carano's commitment to the development
and promotion of tourism in Reno has earned him several awards, including the
Nevada Food and Beverage Directors Association Man-of-the-Year Award, the
American Lung Association 1993 Distinguished Community Service Award and the
1992 Hotelier of the Year Award. Also, since 1984, Mr. Carano has been the Chief
Executive Officer of the Ferrari Carano Winery. He is the father of Gary, Gene,
Glenn, 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 General Manager of the Eldorado since
July 1998 and serviced as Vice President of Resorts or its predecessor since
1993 and has been Secretary of Resorts since June 1996. From 1993 until 1998 he
served as a Co-General Manager of the Eldorado. From 1986 to 1993, Mr. Carano
served as the Eldorado's Director of Gaming. Prior to joining the Eldorado, Mr.
Carano held various positions at another major casino in northern Nevada,
including slot floor supervisor and pit boss. Mr. Carano studied business
management and hotel administration at Utah State University and the University
of Nevada, Las Vegas.

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

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

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

LESLIE STONE HEISZ. Ms. Heisz has been a Board Member since 1996. Since December
1996, she has been a Managing Director of Wasserstein Perella & Co. Inc., where
she has been a director since 1995. Prior thereto, Ms. Heisz was a Vice
President at Salomon Brothers Inc. where she provided capital raising and
financial advisory services to a wide variety of companies. Ms. Heisz received
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 Vice President of Sales and Casino
Marketing of the Eldorado since 1999, previously serving as 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 Vice President of Advertising and
Public Relations of the Eldorado since 1999, previously serving as Director of
Advertising and Public Relations of the Eldorado since 1978. Mrs. Carano is the
Vice President of the Ferrari Carano Winery. She received a Bachelor of Science
degree from the University of Nevada, Reno.

                                      26
<PAGE>

ITEM 11.  EXECUTIVE COMPENSATION.

SUMMARY COMPENSATION TABLES

The following table sets forth all compensation paid by Resorts from January 1,
1997 through December 31, 1999, to the Resort's officers named below (the "Named
Officers").

<TABLE>
<CAPTION>
                                                                     ANNUAL               LONG-TERM
                                                                COMPENSATION(1)          COMPENSATION
                                                                ---------------          ------------
                                                                                          NUMBER OF
                                                                                         APPRECIATION
                                                                                            RIGHTS            ALL OTHER
           NAME AND PRINCIPAL POSITION                       SALARY         BONUS          GRANTED          COMPENSATION
                                                             ------         -----          -------          ------------
<S>                                                          <C>            <C>            <C>              <C>
Donald Carano.....................................  1999     $550,000              0             0               $2,743(2)
  Board Member and Chief Executive                  1998      550,000              0             0                2,851
  Officer of Resorts                                1997      561,000              0             0                2,693

Robert Jones....................................... 1999     $320,000        $55,000             0               $3,523(3)
  Chief Financial Officer of Resorts                1998      320,000              0             0                3,642
                                                    1997      303,000         24,000             0                3,488

Gene Carano.......................................  1999     $300,000        $55,000             0               $3,523(4)
  Vice President of Resorts and General             1998      300,000              0             0                2,632
  Manager of the Eldorado                           1997      306,000         71,500             0                3,000

Gregg Carano......................................  1999     $300,000        $55,000             0               $3,523(5)
  Vice  President  of  Resorts  and  Director  of   1998      300,000              0             0                3,632
  Customer Development of the Eldorado              1997      306,000         72,000             0                3,488

Rob Mouchou.......................................  1999     $300,000        $55,000             0               $2,535(6)
  Vice President of Operations of the Eldorado      1998      300,000              0             0                2,650
                                                    1997      263,000         20,000             0                2,507

</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.

(2)  Includes contributions to the Company's 401(k) Plan (as defined herein) of
     $2,400, payment of term life insurance premiums of $135 and payment of
     health insurance premiums of $208.

(3)  Includes contributions to the Company's 401(k) Plan of $2,400, payment of
     term life insurance premiums of $135 and payment of health insurance
     premiums of $988.

(4)  Includes contributions to the Company's 401(k) Plan of $2,400, payment of
     term life insurance premiums of $135 and payment of health insurance
     premiums of $988.

(5)  Includes contributions to the Company's 401(k) Plan of $2,400, payment of
     term life insurance premiums of $135 and payment of health insurance
     premiums of $988.

(6)  Includes contributions to the Company's 401(k) Plan of $2,400, payment of
     term life insurance premiums of $135.

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

                                      27

<PAGE>

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 pursuant to the
Rights Plan, 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 1999. Nor did any of the Named Officers exercise any appreciation rights
during 1999. No performance rights had been granted under the Rights Plan as of
December 31, 1999. The following table provides certain information with respect
to the appreciation rights held by the Named Officers as of December 31, 1999.

<TABLE>
<CAPTION>
                        NUMBER OF UNEXERCISED         VALUE OF UNEXERCISED
                      APPRECIATION RIGHTS AS OF    APPRECIATION RIGHTS AS OF
                          DECEMBER 31, 1999             DECEMBER 31, 1999
                     ---------------------------    ---------------------------
NAME                 EXERCISABLE   UNEXERCISABLE    EXERCISABLE   UNEXERCISABLE
----                 -----------   -------------    -----------   -------------
<S>                  <C>           <C>              <C>           <C>
Donald Carano.......     --             --               --             --
Robert Jones........    50,000         25,000            $0             $0
Gene Carano.........    62,500         37,500             0              0
Gregg Carano........    62,500         37,500             0              0
Rob Mouchou.........    37,500         12,500             0              0
</TABLE>

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, 1999, 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, including the
Named Officers, pursuant to the Deferred

                                      28
<PAGE>

Compensation Plan represent an unfunded obligation of the Company which, as
of December 31, 1999, totaled $1,481,000.

401(K) RETIREMENT SAVINGS PLAN

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

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

         The Company has historically paid a management fee to each of
Recreational Enterprises, Inc. and Hotel Casino Management, Inc. A portion of
these fees represented compensation for services provided to the Company by
certain members of the Carano family. Effective July 1, 1996, the Company
entered into a new Management Agreement (the "Management Agreement") with
Recreational Enterprises, Inc. and Hotel Casino Management, Inc. which provides
that Recreational Enterprises, Inc. and Hotel Casino Management, Inc.
(collectively, the "Managers") will, among other things, (a) develop strategic
plans for the Company's business, including preparing annual budgets and capital
expenditure plans, (b) provide advice and oversight with respect to financial
matters of the Company, (c) establish and oversee the operation of financial
accounting systems and controls and regularly review the Company's financial
reports, (d) provide planning, design and architectural services to the Company
and (e) furnish advice and recommendations with respect to certain other aspects
of the Company's operations. In consideration for such services, the Company
will pay to the Managers a management fee not to exceed 1.5% of the Company's
annual net revenues. The current term of the Management Agreement continues in
effect until July 1, 2002 and will be automatically renewed for additional
three-year terms until terminated by one of the parties. In 1999, the management
fees paid by the Company to Recreational Enterprises, Inc. and Hotel Casino
Management, Inc. pursuant to the Management Agreement aggregated $1,505,000 and
$360,000, respectively. There can be no assurance that the terms of the
Management Agreement are at least as favorable to the Company as could be
obtained from unaffiliated third parties.

         The Company owns the entire parcel on which the Eldorado is located,
except for approximately 30,000 square feet which is leased by the Company from
C, S and Y Associates, a general partnership of which Donald Carano is a general
partner (the "C, S and Y Lease"). The C, S and Y Lease expires on June 30, 2027.
Annual rent is equal to the greater of (i) $400,000 or (ii) an amount based on a
decreasing percentage of the Eldorado's gross gaming revenues ranging from 3% of
the first $6.5 million of gross gaming revenues to 0.1% of gross gaming revenues
in excess of $75 million. In 1999, the rent paid pursuant to the C, S and Y
Lease, totaled $655,000. In the opinion of the Company's management, the terms
of the C, S and Y Lease are at least as favorable to the Company as could have
been obtained from unaffiliated third parties.

         Donald Carano has been an attorney with the firm of McDonald Carano
Wilson McCune Bergin Frankovich & Hicks LLP ("McDonald Carano") since 1961. Mr.
Carano maintains an "of counsel" relationship with McDonald Carano, but is not
involved in the active practice of law or in the representation of the Company
or any of its affiliates as an attorney. Donald Carano receives no compensation
from McDonald Carano. The Company currently retains McDonald Carano in
connection with a variety of legal matters. In the opinion of the Company's
management, the fees paid 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 from time to time leases an aircraft owned by Recreational
Enterprises, Inc., for use in operating the Company's business. In 1999, lease
payments for the aircraft totaled $333,000. In the opinion of the Company's
management the lease payments are 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 1999 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.


                                  [CHART]


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 (3%), Ludwig J. Corrao (5%), Gary Carano S Corp Trust
(.40%), Glenn Carano S Corp Trust (.40%), Gene Carano S Corp Trust (.40%),
Gregg Carano S Corp Trust (.40%) and Cindy Carano S Corp Trust (.40%) (ii)
the ownership of Hotel Casino Realty Investments, Inc. by Gary Carano S Corp
Trust (10%), Glenn Carano S Corp Trust (10%), Gene Carano S Corp Trust (10%),
Gregg Carano S Corp Trust (10%), Cindy Carano S Corp Trust (10%), Tammy
Poncia S Corp Trust (12.5%), Michelle Poncia Staunton S Corp Trust (12.5%),
Linda Poncia Ybarra S Corp Trust (12.5%) and Cathy Poncia Vigen S Corp Trust
(12.5); (iii) the ownership of Capital by Resorts (100%); (iv) the ownership
of ELLC by Recreational Enterprises, Inc. (2.5428%), Hotel Casino Management,
Inc. (1.2714%) and Resorts (96.1858%); (v) the ownership of Silver Legacy
Joint Venture by ELLC (50%) and Mandalay Sub (50%); and (vi) the ownership of
Mandalay Sub by Mandalay Resort Group (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)....................................       58.0%
            Recreational Enterprises, Inc.(3).........................       55.0%
            Raymond J. Poncia, Jr.(4)(5)..............................       29.0%
            Hotel Casino Management, Inc.(5)(6).......................       29.0%
            Hotel Casino Realty Investments, Inc.(7)..................        6.0%
            Gene R. Carano(2)(7)(8)...................................        6.6%
            Gregg R. Carano(2)(7)(8)..................................        6.6%
            Gary L. Carano(2)(7)(8)...................................        6.6%
            Cindy L. Carano(2)(7)(8)..................................        6.6%
            Glenn T. Carano(2)(7)(8) .................................        6.6%
            Ludwig J. Corrao(9) ......................................        5.0%
            Robert M. Jones ..........................................         --
            Rob B. Mouchou............................................         --
            Leslie Stone Heisz........................................         --
            All Board Members and executive officers as a group ......       95.0%
</TABLE>

----------------
(1)Includes 3.0% owned by Mr. Carano individually, 55.0% owned by Recreational
     Enterprises, Inc., which is owned by members of the Carano family.

(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.

(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 Ybarra-12.572%;
     Michelle L. Poncia Staunton-12.572% and Tammy R. Poncia-12.572%. Cathy,
     Linda, Michelle and Tammy each hold all of their respective interests in
     Hotel Casino Management, Inc. through various trusts.

(7)Hotel Casino Realty Investments, Inc. is beneficially owned by the
     following members of the Carano and Poncia family in the following
     percentages: Gary Carano-10%; Glenn Carano-10%; Gene Carano-10%; Gregg
     Carano-10%; Cindy Carano-10%; Cathy Poncia Vigen-12.5%; Linda Poncia
     Ybarra-12.5%; Michelle Poncia Staunton-12.5% and Tammy Poncia-12.5%. All
     family members hold all of their respective interests in Hotel Casino
     Realty Investments, Inc. through various trusts. The address of Hotel
     Casino Realty Investments, Inc. is P.O. Box 429, Verdi, Nevada 89439.

(8)Membership interest is beneficially owned through such individual's 10.1%
     ownership of Recreational Enterprises, Inc., 10% ownership of Hotel
     Casino Realty Investments, Inc. and 0.4% ownership of Resorts held in
     trust.

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

                                      31
<PAGE>

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

         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 37 through 52 hereof are the following
                    consolidated financial statements of Eldorado Resorts LLC:

                    Report of Independent Public Accountants

                    Consolidated Balance Sheets at December 31, 1999 and
                    December 31, 1998

                    Consolidated Statements of Income for the Years Ended
                    December 31, 1999, 1998 and 1997

                    Consolidated Statements of Members' Equity for the Years
                    Ended December 31, 1999, 1998 and 1997

                    Consolidated Statements of Cash Flows for the Years Ended
                    December 31, 1999, 1998 and 1997

                    Notes to Consolidated Financial Statements

          (a)(2)    Financial Statement Schedules

                    Included on pages 53 through 65 of this report are the
                    following financial statements of Circus and Eldorado
                    Joint Venture:

                    Report of Independent Public Accountants

                    Balance Sheets at December 31, 1999 and December 31, 1998

                    Statements of Operations for the Years Ended December 31,
                    1999, 1998 and 1997

                    Statements of Partners' Equity for the Years Ended
                    December 31, 1999, 1998 and 1997

                    Statements of Cash Flows for the Years Ended December 31,
                    1999, 1998 and 1997

                    Notes to Financial Statements

          (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 4.4 to the Registrants'
          Form S-4 Registration Statement - Securities and Exchange Commission
          File No. 333-11811)

4.4       Amendment No.1 dated as of November 21, 1996, to Loan Agreement
          dated as of July 31, 1996 among Eldorado Resorts LLC, the banks
          named therein and Bank of America National Trust and Savings
          Association, as Administrative Agent.

4.5       Amendment No. 2, dated as of July 23, 1997, to Loan Agreement dated as
          of July 31, 1996 among Eldorado Resorts LLC, the banks named therein
          and Bank of America National Trust and Savings Association, as
          Administrative Agent.

4.6       Amendment No. 3, dated as of December 31, 1999, to Loan Agreement
          dated as of July 31, 1996 among Eldorado Resorts LLC, the banks
          named therein and Bank of America, N.A. (formerly Bank of America
          National Trust and Savings Association), as Administrative Agent.

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. (Mandalay Resort Group) 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)

10.3.1    Management Agreement dated as of June 28, 1996 by and between Eldorado
          Resorts LLC, Recreational Enterprises, Inc. and Hotel-Casino
          Management, Inc. (Incorporated by reference to Exhibit 10.3 to the
          Registrants' Form S-4 Registration Statement - Securities and Exchange
          Commission File No. 333-11811)

10.3.2    Written Consent in Lieu of Meeting of Members of Eldorado Limited
          Liability Company (Incorporated by reference to Exhibit 10 to the
          Registrants' quarterly report on Form 10-Q for the period ended June
          30, 1998)

10.4      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)

                                      34
<PAGE>

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)

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. (Mandalay Resort Group) (Commission File No.
          1-8570.)

21        List of Subsidiaries.

27        Financial Data Schedule

          Significant Subsidiary Financial Statements.

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

          * Constitutes a management contract or compensatory plan or
            arrangement.

          (b)  Reports on Form 8-K

               During the fourth quarter of 1999, 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>



                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

                                                                         PAGE
                                                                         ----
Report of Independent Public Accountants ...............................  37


Consolidated Balance Sheets ............................................  38


Consolidated Statements of Income ......................................  39


Consolidated Statements of Members' Equity .............................  40


Consolidated Statements of Cash Flows...................................  41


Notes to Consolidated Financial Statements .............................  43





                                      36
<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, 1999 and 1998, 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 auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

         In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Eldorado Resorts LLC
as of December 31, 1999 and 1998, and the results of its operations and its cash
flows for the three years then ended in conformity with accounting principles
generally accepted in the United States.

                                                           ARTHUR ANDERSEN LLP

Las Vegas, Nevada
March 7, 2000

                                      37

<PAGE>

                               ELDORADO RESORTS LLC

                            CONSOLIDATED BALANCE SHEETS
                               (DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                                          DECEMBER 31,
                                                                                  -----------------------------
                                                                                      1998            1999
                                                                                  -------------   -------------
                                   A S S E T S
<S>                                                                                <C>            <C>
CURRENT ASSETS:

     Cash and cash equivalents................................................... $   8,087       $   9,005
     Marketable securities.......................................................        --           2,239
     Accounts receivable, net....................................................     3,261           4,573
     Due from members and affiliates.............................................       154              92
     Inventories.................................................................     2,904           3,361
     Prepaid expenses............................................................     1,857           1,760
     Note Receivable.............................................................       377             --
                                                                                  -------------   -------------
          Total current assets...................................................    16,640          21,030


INVESTMENT IN JOINT VENTURE......................................................    46,792          49,673

PROPERTY AND EQUIPMENT, net......................................................   160,058         153,939

OTHER ASSETS, net................................................................     7,768           7,136
                                                                                  -------------   -------------
           Total assets ......................................................... $ 231,258       $ 231,778
                                                                                  =============   =============

            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 .......................................... $   1,136       $     262
     Current portion of capital lease obligations ...............................       749             686
     Accounts payable............................................................     2,737           3,703
     Construction and retention payables.........................................        15           1,588
     Interest payable ...........................................................     3,991           3,961
     Accrued and other liabilities...............................................     5,831           6,772
     Due to members and affiliates...............................................       113             254
                                                                                  -------------   -------------
          Total current liabilities..............................................    14,572          17,226

LONG-TERM DEBT, less current portion.............................................   122,226         127,942

CAPITAL LEASE OBLIGATIONS, less current portion..................................       773              88

OTHER LIABILITIES................................................................     1,047           1,481
                                                                                  -------------   -------------
          Total liabilities......................................................   138,618         146,737
                                                                                  -------------   -------------

MINORITY INTEREST ...............................................................     5,154           5,264

 COMMITMENTS AND CONTINGENCIES (Note 14)

MEMBERS' EQUITY..................................................................    87,486          78,654
OTHER COMPREHENSIVE INCOME (Note 15).............................................       --            1,123
                                                                                  -------------   -------------
          Total Equity...........................................................    87,486          79,777
          Total liabilities and members' equity.................................. $ 231,258       $ 231,778
                                                                                  =============   =============

</TABLE>

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

                                      38
<PAGE>

                              ELDORADO RESORTS LLC

                        CONSOLIDATED STATEMENTS OF INCOME
                             (DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                          FOR THE YEARS ENDED DECEMBER 31,
                                                                   -------------------------------------------------
                                                                        1997              1998            1999
                                                                   ----------------   -------------   --------------
<S>                                                                <C>                <C>             <C>
OPERATING REVENUES:

     Casino......................................................     $104,513           $104,441        $112,967
     Food, beverage and entertainment............................       41,061             44,330          48,125
     Hotel.......................................................       17,769             18,142          17,824
     Equity in net income of unconsolidated affiliate............          390                --            2,881
     Other.......................................................        7,093              6,698           6,556
                                                                   ----------------   -------------   --------------
                                                                       170,826            173,611         188,353
     Less--promotional allowances................................       14,545             15,296          16,483
                                                                   ----------------   -------------    -------------
     Net revenues................................................      156,281            158,315         171,870
                                                                   ----------------   -------------   --------------

OPERATING EXPENSES:

     Casino......................................................       45,786             47,575          51,153
     Food, beverage and entertainment............................       30,531             33,017          33,236
     Hotel.......................................................        7,387              7,611           7,412
     Other.......................................................        3,510              3,881           4,013
     Selling, general and administrative.........................       28,723             27,966          29,238
     Management fees.............................................        1,843              1,779           1,865
     Depreciation................................................       12,478             13,718          13,652
                                                                   ----------------   -------------   --------------
     Total operating expenses....................................      130,258            135,547         140,569
                                                                   ----------------   -------------   --------------

OPERATING INCOME.................................................       26,023             22,768          31,301

INTEREST EXPENSE, net............................................      (13,694)           (13,151)        (12,153)
OTHER INCOME.....................................................           --                 --           1,730
                                                                   ----------------   -------------   --------------


NET INCOME BEFORE MINORITY INTEREST..............................       12,329              9,617          20,878


MINORITY INTEREST IN NET (INCOME)
   OF  UNCONSOLIDATED AFFILIATE .................................          (91)               --             (110)
                                                                   ----------------   -------------    -------------

NET INCOME                                                           $  12,238            $ 9,617        $ 20,768
                                                                   ================   =============   ==============
</TABLE>

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

                                      39
<PAGE>

                              ELDORADO RESORTS LLC

                   CONSOLIDATED STATEMENTS OF MEMBERS' EQUITY
                             (DOLLARS IN THOUSANDS)
<TABLE>
<S>                                                                                                    <C>
BALANCE, December 31, 1996 .........................................................................   $  84,031
                                                                                                     ---------------
     Distributions .................................................................................      (7,000)
     Net Income ....................................................................................      12,238
                                                                                                     ---------------

BALANCE, December 31, 1997..........................................................................      89,269
                                                                                                     ---------------
     Distributions..................................................................................     (11,400)
     Net Income.....................................................................................       9,617
                                                                                                     ---------------

BALANCE, December 31, 1998..........................................................................      87,486
                                                                                                     ---------------
     Distributions..................................................................................     (29,600)
     Net Income.....................................................................................      20,768
     Other Comprehensive Income.....................................................................       1,123
                                                                                                     ---------------

BALANCE, December 31, 1999..........................................................................   $  79,777
                                                                                                     ===============

</TABLE>

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


                                      40
<PAGE>

                              ELDORADO RESORTS LLC

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                                             FOR THE YEARS ENDED DECEMBER 31,
                                                                                           ------------------------------------
                                                                                           1997            1998            1999
                                                                                           ----            ----            ----
<S>                                                                                        <C>             <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES:

     Net income.......................................................................  $  12,238      $    9,617        $  20,768

     Adjustments to reconcile net income to net cash provided by operating
       activities:

        Depreciation..................................................................     12,478          13,718           13,652
        Equity in net (income) of unconsolidated affiliate in excess of distributions.       (390)            --            (2,881)
        Minority interest in net income of
          unconsolidated affiliate....................................................         91             --               110
        (Gain)loss on sale of property and equipment..................................       (103)            204              (53)
        (Increase) Decrease in--
        Accounts receivable, net and due from members and affiliates.................         336             235           (1,250)
        Note receivable...............................................................        135             180              377
        Inventories...................................................................       (411)            (22)            (457)
        Prepaid expenses..............................................................       (444)           (154)              97
        Other assets, net ............................................................        748             410              632
        Marketable securities.........................................................        --              --            (1,116)
        (Decrease) Increase in--
          Notes payable short-term ...................................................        224            (224)            --
        Accounts payable, construction and retention payables, interest payable,accrued
          and other liabilities, due to members and affiliates and other liabilities..     (2,120)           (842)           4,025
                                                                                       -------------   -------------   -------------
     Net cash provided by operating activities........................................     22,782          23,122           33,904
                                                                                       -------------   -------------   -------------

</TABLE>

<TABLE>

<S>                                                                                    <C>             <C>             <C>

CASH FLOWS FROM INVESTING ACTIVITIES:

     Purchases of property and equipment..............................................    (15,957)         (5,665)          (7,830)
     Proceeds from sale of property and equipment.....................................        120             181              350
                                                                                       -------------   -------------   -------------
     Net cash (used in) investing activities..........................................    (15,837)         (5,484)          (7,480)
                                                                                       -------------   -------------   -------------

CASH FLOWS FROM FINANCING ACTIVITIES:

     Proceeds from long-term and other debt...........................................     28,500          21,250           38,000
     Principal payments on long-term and other
        debt .........................................................................    (27,599)        (25,770)         (33,906)
     Bond offering costs .............................................................       (262)            --              --
     Distributions....................................................................     (7,000)        (11,400)         (29,600)
                                                                                       -------------   -------------   -------------

     Net cash (used in) financing activities.......................................... $   (6,361)      $ (15,920)       $ (25,506)
                                                                                       -------------   -------------   -------------



</TABLE>

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

                                      41
<PAGE>

                              ELDORADO RESORTS LLC

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

<TABLE>
<CAPTION>
                                                                FOR THE YEARS ENDED DECEMBER 31,
                                                               -----------------------------------
                                                               1997           1998            1999
                                                               ----           ----            ----
<S>                                                            <C>            <C>             <C>
INCREASE IN CASH AND CASH
   EQUIVALENTS .........................................   $     584       $  1,718        $    918

CASH AND CASH EQUIVALENTS AT
   BEGINNING OF YEAR ...................................       5,785          6,369           8,087
                                                           -------------  --------------  --------------

CASH AND CASH EQUIVALENTS AT END OF
   YEAR ................................................    $  6,369       $  8,087         $ 9,005
                                                           =============  ==============  ==============

SUPPLEMENTAL DISCLOSURE OF CASH FLOW
   INFORMATION:

      Cash paid during year for interest, net of amounts
      capitalized ......................................     $13,668        $12,548         $11,762
                                                           =============  ==============  ==============
</TABLE>


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

                                      42

<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, an 816-room
hotel casino in downtown Reno, Nevada. ELLC owns a 50% interest in the Mandalay
Resort Group and Eldorado Joint Venture that owns the Silver Legacy Resort
Casino, a 1,712 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.
Effective June 30, 1997, ELLC completed a recapitalization by converting a note
receivable and accrued interest thereon into equity, increasing Resorts'
interest to 96.12%.

         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

                                      43
<PAGE>

Legacy Resort Casino. Interest capitalized during the fiscal years ended
December 31, 1997, 1998 and 1999 was approximately $256,000, $72,000 and
$36,000, respectively.

     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,
                                               1997            1998              1999
                                           -------------   --------------    -------------
 <S>                                       <C>             <C>               <C>
 Food, beverage and entertainment ........  $  7,970        $  8,779          $  9,325
 Hotel ...................................     1,521           1,617             1,788
 Other ...................................     1,162           1,030             1,010
                                           -------------   --------------    -------------
                                            $ 10,653        $ 11,426          $ 12,123
                                           =============   ==============    =============
</TABLE>

     ADVERTISING

         Advertising costs are expensed the first time the advertising takes
place. Advertising costs included in selling, general and administrative
expenses were $3,890,000, $4,383,000 and $3,918,000 for the years ended December
31, 1997, 1998 and 1999, 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 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 10 1/2% Senior Subordinated Notes
("Note") approximates their recorded value at December 31, 1998 and 1999. The
fair value of the Company's financial instruments approximates their recorded
value at December 31, 1998 and 1999, the approximate fair market value of
which, based on quoted market

                                      44
<PAGE>

prices, were approximately $110.5 million and $102.0 million, respectively.
The fair values are not necessarily indicative of the amounts the Company
could realize in a current market exchange.

MARKETABLE SECURITIES

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

         Management determines the proper classifications of investments at
the time of purchase and reevaluates such designations as of each balance
sheet date. At December 31, 1999, 1998 and 1997, all marketable securities
were designated as available for sale. Accordingly, these securities are
stated at fair value, with unrealized gains and losses included in the
Consolidated Statements of Members Equity.

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. 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. On September 10, 1999, California lawmakers approved a
constitutional amendment that would give Indian tribes the right to offer
slot machines and a range of house-banked card games. On March 7, 2000
California voters approved the constitutional amendment.

3. OPERATING AGREEMENT OF RESORTS

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

4. MARKETABLE SECURITIES

         The following is a summary of available-for-sale securities:

<TABLE>
<CAPTION>
                                                                  DECEMBER 31,
                                       --------------------------------------------------------------------
                                                1998                                   1999
                                       ----------------------------           -----------------------------
                                       COST            MARKET           COST             MARKET
                                       ----            ------           ----             ------
<S>                                    <C>             <C>              <C>              <C>
Common Stock......................        -                 -           1,116            2,239
</TABLE>

5. ACCOUNTS RECEIVABLE

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

<TABLE>
<CAPTION>
                                                           FOR THE YEARS ENDED
                                                               DECEMBER 31,
                                                      ------------------------------
                                                          1998             1999
                                                      -------------    -------------
   <S>                                                <C>              <C>
   Accounts receivable .........................       $  4,880        $   6,548
   Allowance for doubtful accounts..............         (1,619)          (1,975)
                                                      -------------   --------------
                Total ..........................       $  3,261        $   4,573
                                                      =============    =============
</TABLE>

         The provision for bad debt expense is $1,088,000, $864,000 and
$1,203,000 for the years ended December 31, 1997, 1998 and 1999, respectively.

6. 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.

7. PROPERTY AND EQUIPMENT

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

                                      45
<PAGE>

<TABLE>
<CAPTION>
                                                                               ESTIMATED
                                                                             SERVICE LIFE
                                                                                                      DECEMBER 31,
                                                                                (years)          1998             1999
                                                                                             -------------    --------------
<S>                                                                            <C>           <C>              <C>
Land and improvements.........................................................    --          $  20,692        $  20,644
Buildings and other leasehold improvements....................................   10-33          157,017          159,576
Furniture, fixtures and equipment.............................................    5-15           57,938           60,005
Property held under capital lease (Note 14)...................................    3-15            6,765            6,521
Construction in progress......................................................                      119              432
                                                                                             -------------    --------------
                                                                                                242,531          247,178
Less--Accumulated depreciation................................................                  (82,473)         (93,239)
                                                                                             =============    ==============
     Property and equipment, net..............................................                $ 160,058        $ 153,939
                                                                                             =============    ==============
</TABLE>

          Substantially all property and equipment are pledged as collateral for
long-term debt (see Note 11).

8. OTHER ASSETS

          Other assets include the following amounts (in thousands):

<TABLE>
<CAPTION>
                                                                                                     DECEMBER 31,
                                                                                             -------------------------------
                                                                                                 1998             1999
                                                                                             -------------    --------------
<S>                                                                                          <C>              <C>
Land held for development...................................................................   $  3,104         $  3,104
Loan acquisition costs......................................................................      1,876            1,876
Bond offering costs.........................................................................      4,238            4,238
Other ......................................................................................        803              840
                                                                                             -------------    --------------
                                                                                                 10,021           10,058
Accumulated amortization loan  costs........................................................     (1,250)          (1,492)
Accumulated amortization bond costs.........................................................     (1,003)          (1,430)
                                                                                             -------------    --------------
          Total.............................................................................   $  7,768         $  7,136
                                                                                             =============    ==============
</TABLE>


9. INVESTMENT IN THE SILVER LEGACY RESORT CASINO

         Effective March 1, 1994, ELLC and Galleon, Inc. (a Nevada corporation
owned and controlled by Mandalay Resort Group) 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.

                                      46
<PAGE>

Mandalay Sub is entitled to a priority allocation ("Priority Allocation") in
an amount equal to approximately 11.54% of the average of the "Adjusted
Initial Investment" (as defined) for the period.  If, after deducting equal
shares of interest expense, a Partner's share of the Priority Allocation is
less than zero, additional operating income is allocated to that Partner to
bring their allocation to zero. For purposes of determining the amount of the
Priority Allocation for any period, the term "Adjusted Initial Investment"
means $290,000,000 (the "Initial Investment") as adjusted at the end of each
year by subtracting (i) the depreciation on the Initial Investment taken in
such year in accordance with the depreciation schedule agreed to by the
Partners and (ii) the principal payments which would have been made in
repayment of the original bank financing utilized for the development,
construction and completion of the Silver Legacy.  Mandalay Sub is entitled
to such Priority Allocation, which began May 1, 1997, 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).

         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;
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%. Effective June 30, 1997, ELLC completed a recapitalization, converting
the loan and accrued interest thereon into equity, increasing Resorts' interest
in ELLC from approximately 77% to approximately 96%. For the years ended
December 31,1997 and 1999, ELLC's 50% share of the Silver Legacy Joint Venture's
net income was $390,000 and $2,881,000 respectively. The Company did not
recognize income in 1998 as a result of the priority allocation to Galleon, Inc.
pursuant to the Joint Venture Agreement. The minority interest members'
investment in ELLC was therefore adjusted by $91,000 and $110,000, its
respective share of the income for the years ended 1997 and 1999.

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

<TABLE>
<CAPTION>
                                                                       DECEMBER 31,        DECEMBER 31,
                                                                           1998                1999
                                                                     --------------------------------------
                                                                       (in thousands)       (in thousands)
           <S>                                                       <C>                    <C>
            Beginning balance........................................    $  46,792          $  46,792
            Equity in net income of unconsolidated affiliate.........         --                2,881
                                                                       --------------     ---------------
            Ending balance...........................................    $  46,792          $  49,673
                                                                       ==============     ===============
</TABLE>

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


<TABLE>
<CAPTION>
                                                                                 DECEMBER 31,
                                                                           1998                1999
                                                                       --------------     ---------------
            <S>                                                        <C>                <C>
            Current assets ..........................................  $     18,272       $     22,638
            Property and equipment...................................       313,181            300,258
            Other assets.............................................         1,772              1,315
                                                                       --------------     ---------------
                 Total assets .......................................  $    333,225       $    324,211
                                                                       ==============     ===============

            Current liabilities......................................  $     16,661       $     13,564
            Long-term liabilities....................................       196,000            174,000
            Partners' equity.........................................       120,564            136,647
                                                                       --------------     ---------------
                 Total liabilities and partners' equity..............  $    333,225       $    324,211
                                                                       ==============     ===============
</TABLE>


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

<TABLE>
<CAPTION>
                                                                                    YEAR ENDED DECEMBER 31,
                                                                            ----------------------------------------
                                                                            1997               1998             1999
                                                                            ----               ----             ----
             <S>                                                       <C>                <C>              <C>

             Net Revenues............................................  $   159,810        $   160,318        $  170,348
             Operating Expenses .....................................     (129,054)          (131,732)         (138,092)
                                                                       --------------     ---------------   --------------
             Operating Income .......................................       30,756             28,586            32,256
                                                                       --------------     ---------------   --------------
             Other Expense ..........................................      (21,041)           (18,637)          (16,173)
                                                                       --------------     ---------------   --------------
             Net Income..............................................  $     9,715        $     9,949       $    16,083
                                                                       ==============     ===============   ==============
</TABLE>

                                      47
<PAGE>

The Silver Legacy commenced operations on July 28, 1995.

10. ACCRUED AND OTHER LIABILITIES

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


<TABLE>
<CAPTION>
                                                                     DECEMBER 31,
                                                          ----------------------------------
                                                              1998                1999
                                                          --------------     ---------------
<S>                                                       <C>                <C>
Accrued payroll and benefits............................  $       846        $     1,013
Accrued vacation .......................................          875                898
Accrued medical claims .................................          355                552
Accrued bonuses.........................................          504                528
Accrued taxes...........................................          943              1,027
Unclaimed chips and tokens..............................          525                652
Progressive slot liability .............................        1,124              1,251
Other ..................................................          659                851
                                                          --------------     ---------------
                                                          $     5,831        $     6,772
                                                          ==============     ===============
</TABLE>

                                      48
<PAGE>

11. LONG-TERM DEBT

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

<TABLE>
<CAPTION>
                                                                                     DECEMBER 31,
                                                                            -------------------------------
                                                                                1998              1999
                                                                            --------------    -------------
     <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, 1998 and December 31, 1999 was
         5.06% and 5.83%, respectively, and the Base rate at
         December 31, 1998 and December 31, 1999 was
         7.75% and 8.5%, respectively) due July 31, 2001;
         secured by substantially all real property........................      20,000            26,000


     Notes payable to a corporation, due in a quarterly principal
         installment of $90,000 (including monthly interest at
         prime plus 2%; the rate at December 31, 1998 and July 30,
         1999 was 9.75%, and 10.0%, respectively), to July 30, 1999,
         when principal balance is due; secured by real
         property..........................................................         893               --

     Notes payable to individuals, due in monthly installments of $34,614
         (including monthly interest at 9%), to August 14, 2006,
         when principal balance is due, secured by real  property..........       2,294             2,076

     Notes payable, other..................................................         175               128
                                                                            --------------    -------------
                                                                                123,362           128,204
     Less--Current portion.................................................      (1,136)             (262)
                                                                            --------------    -------------
                                                                               $122,226          $127,942
                                                                            ==============    =============
</TABLE>


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

<TABLE>
 <S>                                                <C>
 2000............................................   $       262
 2001............................................        26,287
 2002............................................           314
 2003............................................           344
 2004............................................           355
 Thereafter......................................       100,642
                                                    --------------
                                                    $   128,204
                                                    ==============
</TABLE>


         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

                                      49
<PAGE>

debt securities of the Issuers ("Registered Notes") with terms identical to
the Notes. The exchange of the Notes for the Registered Notes was completed
on February 26, 1997.

         The Indenture relating to the Notes contains certain covenants which,
among other things, limit the ability of the Issuers and any Restricted
Subsidiaries (as defined in the Indenture) to incur additional indebtedness, pay
dividends or make other distributions, create certain liens, enter into certain
transactions with affiliates, utilize proceeds from asset sales, issue or sell
equity interests of subsidiaries and enter into certain mergers and
consolidations and requires the Company to maintain certain financial
requirements. The Company is in compliance with these covenants at December 31,
1999.

         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 $34.4 million on December 31, 1999 and,
by its terms, the facility reduces by an additional $1,562,500 at the end of
each subsequent quarter until July 31, 2001, 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, 1999, $26.0
million of borrowings were outstanding under the Credit Facility and an
additional $7.4 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, 1999, the Company was in
compliance with all provisions of the Credit Facility. Included in other assets
at December 31, 1999 are $2.8 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.

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 for an employer contribution up to 25 percent of the first 6
percent of each participating employee's contribution. Plan participants can
elect to defer before tax compensation through payroll deductions. These
deferrals are regulated under Section 401(k) of the Internal Revenue Code. The
Company's matching contributions were $255,000, $281,000 and $349,000 for the
fiscal years ended December 31, 1997, 1998 and 1999, 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, 1997, 1998 and 1999, the Company had
accrued obligations of $911,000, $1,047,000 and $1,481,000, 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

                                      50
<PAGE>

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, 1998 or 1999. 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, 1999, no vesting period had been established. The Company value as of
December 31, 1998 and 1999, as calculated, is below the $26.66 Base Rate, and
therefore no accrual is required as of December 31, 1999. 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 11) allows for the issuance of letters
of credit which reduces the available line by the amount pledged. At December
31, 1999, the amount pledged was $1,009,150, inclusive of $61,000 pledged on
behalf of Express Vacations, LLC, a Nevada limited liability company. Until
November 1999, Resorts was a one-third member of Express Vacations, LLC and
in 1999 recognized $597,000 of income from its investment in Express
Vacations, LLC reflected in Other Income.

       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, 1999 (in thousands):

<TABLE>
<CAPTION>
                    <S>                                          <C>
                    2000.......................................      $ 720
                    2001.......................................         90
                    2002.......................................         --
                    2003.......................................         --
                    2004.......................................         --
                    Thereafter.................................         --
                                                               -------------
                    Minimum lease payments.....................        810
                    Less--Amounts representing interest........        (36)
                                                               -------------
                                                                     $ 774
                                                               =============
</TABLE>

       OPERATING LEASES

         The Company leases equipment under operating leases. Future minimum
payments (expiring from 2000 and thereafter) under noncancellable operating
leases with initial terms of one year or more consisted of the following at
December 31, 1999 (in thousands):

<TABLE>
<CAPTION>
                                                        FUTURE MINIMUM
                                                        LEASE PAYMENTS
                    <S>                                 <C>
                    2000 ..............................      $ 276
                    2001...............................        144
                    2002 ..............................        130
                    2003 ..............................        127
                    2004...............................         -
                    Thereafter ........................         -
                                                         -------------
                                                             $ 677
                                                         =============
</TABLE>

                                      51
<PAGE>

        Total rental expense under operating leases was $1,027,000 for the year
ended December 31, 1997, $882,000 for the year ended December 31, 1998 and
$796,000 for the year ended December 31, 1999. Additional rent for land upon
which the Eldorado Hotel Casino resides of $655,000 in 1999 ($668,000 in 1997
and $654,000 in 1998) 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.

15. COMPREHENSIVE INCOME

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

         In accordance with SFAS 115 as described in Footnotes 1, the Company
has recorded the increase in security value as Other Comprehensive Income in
the accompanying financial statements. Comprehensive income is calculated as
follows:

<TABLE>
<CAPTION>
(IN THOUSANDS)
YEARS ENDED DECEMBER 31,                                          1997                  1998                  1999
                                                              -------------         -------------         -------------
<S>                                                           <C>                   <C>                   <C>
Net income...............................................     $ 12,238              $   9,617             $ 20,768
Increase in Security Value...............................            -                     -                 1,123
                                                              -------------         -------------         -------------
Comprehensive income.....................................     $ 12,238              $   9,617             $ 21,891
                                                              =============         =============         =============
</TABLE>

16. 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.

17. RELATED PARTIES

         Resorts pays management fees to two of its corporate Members. Such
fees, included in general and administration and operating department expenses,
were $1,843,000 for 1997, $1,779,000 for 1998 and $1,865,000 for 1999.

         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, 1997, 1998 and 1999
the Company recorded $483,000, $810,000 and $564,000 in casino revenues and
$358,000, $400,000 and $362,000 in casino expenses, respectively.

                                      52
<PAGE>

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

We have audited the accompanying balance sheets of Circus and Eldorado Joint
Venture (doing business as SILVER LEGACY RESORT CASINO, the "Joint Venture") as
of December 31, 1999 and 1998, and the related statements of operations,
partners' equity and cash flows for the years ended December 31, 1999, 1998 and
1997. These financial statements are the responsibility of the Joint Venture's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Circus and Eldorado Joint
Venture (doing business as SILVER LEGACY RESORT CASINO) as of December 31,
1999 and 1998, and the results of its operations and its cash flows for the
years ended December 31, 1999, 1998 and 1997 in conformity with generally
accepted accounting principles generally accepted in the United States.

Arthur Andersen LLP

Las Vegas, Nevada
March 7, 2000



                                     53
<PAGE>

CIRCUS AND ELDORADO JOINT VENTURE (DOING BUSINESS AS SILVER LEGACY RESORT
CASINO)

FINANCIAL STATEMENTS TOGETHER WITH REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS


BALANCE SHEETS
As of December 31, 1999 and 1998
(Amounts in Thousands)

<TABLE>
<CAPTION>
                                                                                        1999              1998
                                                                                    -------------    --------------
<S>                                                                                 <C>              <C>
ASSETS
  Current assets:
   Cash and cash equivalents (Note 1)                                               $      13,339    $       10,642
   Accounts receivable, net of allowance for
      doubtful accounts of $961 and $844                                                    3,792             3,112
   Inventories (Note 1)                                                                     1,987             1,647
   Prepaid expenses                                                                         3,520             2,871
                                                                                    -------------    --------------

       Total current assets                                                                22,638            18,272

Property and equipment, net (Notes 1, 3, and 5)                                           300,258           313,181

Other assets, net (Note 4)                                                                  1,315             1,772
                                                                                    -------------    --------------

       Total assets                                                                 $     324,211    $      333,225
                                                                                    =============    ==============

LIABILITIES AND PARTNERS' EQUITY

 Current liabilities:
   Accounts payable                                                                 $       4,491    $        5,126
   Current portion of long-term debt (Note 5 and 6)                                      -                    2,500
   Accrued interest (Notes 5 and 6)                                                         1,134             1,279
   Accrued and other liabilities                                                            7,717             7,502
   Accrued guarantee fees to related party (Note 6)                                           222               254
                                                                                    -------------    --------------

       Total current liabilities                                                           13,564            16,661

Long-term debt, less current portion (Notes 1, 5 and 6)                                   174,000           196,000
                                                                                    -------------    --------------

       Total liabilities                                                                  187,564           212,661

Commitments and contingencies (Note 8)

Partners' equity                                                                          136,647           120,564
                                                                                    -------------    --------------

       Total liabilities and partners' equity                                       $     324,211    $      333,225
                                                                                    =============    ==============

</TABLE>

The accompanying notes to financial statements are an integral part of these
balance sheets.

                                      54
<PAGE>

CIRCUS AND ELDORADO JOINT VENTURE (DOING BUSINESS AS SILVER LEGACY RESORT
CASINO)

FINANCIAL STATEMENTS TOGETHER WITH REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

STATEMENTS OF OPERATIONS
For the Years Ended December 31, 1999, 1998 and 1997
(Amounts in Thousands)

<TABLE>
<CAPTION>
                                                                       1999             1998              1997
                                                                  --------------    -------------    --------------
<S>                                                               <C>               <C>              <C>
Operating revenues (Note 1):
   Casino                                                         $      105,284    $      97,207    $       99,192
   Rooms                                                                  36,877           36,472            35,008
   Food and beverage                                                      35,632           33,088            32,475
   Other                                                                   7,748            7,380             6,179
                                                                  --------------    -------------    --------------

                                                                         185,541          174,147           172,854
   Less:  promotional allowances (Note 1)                                 15,193           13,829            13,044
                                                                  ---------------   --------------   ---------------

       Net operating revenues                                            170,348          160,318           159,810
                                                                  --------------    -------------    --------------
Operating expenses:

   Casino                                                                 46,724           43,736            43,114
   Rooms                                                                  12,634           12,559            12,582
   Food and beverage                                                      26,101           24,137            23,445
   Other operating expenses                                                6,327            5,944             4,922
   Selling, general and administrative                                    28,482           27,773            27,390
   Depreciation and amortization (Notes 1 and 3)                          17,824           17,583            17,601
                                                                  --------------    -------------    --------------

       Total operating expenses                                          138,092          131,732           129,054
                                                                  --------------    -------------    --------------

Operating income                                                          32,256           28,586            30,756
                                                                  --------------    -------------    --------------

OTHER (INCOME) EXPENSE:

   Interest income                                                          (162)            (149)              (38)
   Interest expense, net (Notes 1, 5 and 6)                               16,334           18,733            21,036
   Loss on sale of assets                                                      1               53                43
                                                                  --------------    -------------    --------------

       Total other (income) expense                                       16,173           18,637            21,041
                                                                  --------------    -------------    --------------

Net income (Note 1)                                               $       16,083    $       9,949    $        9,715
                                                                  ==============    =============    ==============
</TABLE>


THE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS ARE AN INTEGRAL PART OF THESE
STATEMENTS.

                                     55
<PAGE>

CIRCUS AND ELDORADO JOINT VENTURE (DOING BUSINESS AS SILVER LEGACY RESORT
CASINO)

Financial Statements Together with Report of Independent Public Accountants

STATEMENTS OF PARTNERS' EQUITY
For the Years Ended December 31, 1999, 1998 and 1997
(Amounts in Thousands)

<TABLE>
<CAPTION>
                                                                               ELDORADO
                                                                GALLEON      RESORTS, LLC           TOTAL
                                                                -------      ------------           -----
<S>                                                             <C>          <C>                    <C>
Balance December 31, 1996                                     $   50,450     $    50,450       $   100,900
  Net Income                                                       9,324             391             9,715
                                                              ----------     -----------       -----------

Balance December 31, 1997                                     $   59,774     $    50,841       $   110,615
  Net Income                                                       9,949         -                   9,949
                                                              ----------     -----------       -----------

Balance December 31, 1998                                         69,723          50,841           120,564
  Net Income (See Note 9)                                         13,202           2,881            16,083
                                                              ----------     -----------       -----------

Balance December 31, 1999                                     $   82,925     $    53,722       $   136,647
                                                              ==========     ===========       ===========
</TABLE>

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

                                      56
<PAGE>

CIRCUS AND ELDORADO JOINT VENTURE (DOING BUSINESS AS SILVER LEGACY RESORT
CASINO)

Financial Statements Together with Report of Independent Public Accountants

STATEMENTS OF CASH FLOWS
For the Years Ended December 31, 1999, 1998 and 1997
(Amounts in Thousands)

<TABLE>
<CAPTION>
                                                                       1999             1998              1997
                                                                  --------------    -------------    --------------
<S>                                                               <C>               <C>              <C>
Cash flows from operating activities:
   Net income                                                     $       16,083    $       9,949    $        9,715
   Adjustments to reconcile net income to
     net cash provided by operating activities:
    Depreciation and amortization                                         17,824           17,583            17,601
    Loss on sale of assets                                                     1               53                43
    Changes in current assets and current liabilities:
       (Increase) decrease in accounts receivable, net of allowance         (680)             433               (65)
       (Increase) decrease in inventories                                   (340)            (387)              161
       (Increase) decrease in prepaid expenses                              (649)             150              (375)
       (Decrease) increase in accounts payable                              (635)              86                23
       Decrease in accrued guarantee fees to
          related party                                                      (32)            (272)           (1,978)
       Decrease in accrued interest                                         (145)            (374)           (4,762)
       Increase in accrued and other liabilities                             215              782             1,487
                                                                  --------------    -------------    --------------

      Total adjustments                                                   15,559           18,054            12,135
                                                                  --------------    -------------    --------------

      Net cash provided by operating activities                           31,642           28,003            21,850
                                                                  --------------    -------------    --------------

CASH FLOWS FROM INVESTING ACTIVITIES:
    Proceeds from settlement of lawsuit, net                            -                -                      678
    Proceeds from sale of assets                                        -                      29                11
    Decrease in other assets, net                                            457              534               279
    Purchase of property and equipment                                    (4,902)          (4,808)           (4,323)
                                                                  ---------------   --------------   ---------------

      Net cash used in investing activities                               (4,445)          (4,245)           (3,355)
                                                                  ---------------   --------------   ---------------

CASH FLOWS FROM FINANCING ACTIVITIES:
    Proceeds from Bank Credit Facility                                   -               -                   20,200
    Decrease in long-term debt and other debt                            (24,500)         (23,500)          (35,104)
                                                                  ---------------   --------------   ---------------

      Net cash used in financing activities                              (24,500)         (23,500)          (14,904)
                                                                  ---------------   --------------   ---------------
</TABLE>

The accompanying notes to financial statements are an integral part of these
statements

                                      57
<PAGE>

CIRCUS AND ELDORADO JOINT VENTURE (DOING BUSINESS AS SILVER LEGACY RESORT
CASINO)

Financial Statements Together with Report of Independent Public Accountants

STATEMENTS OF CASH FLOWS (CONTINUED)
For the Years Ended December 31, 1999, 1998 and 1997
(Amounts in Thousands)

<TABLE>
<CAPTION>
                                                                       1999             1998              1997
                                                                  --------------    -------------    --------------

   <S>                                                            <C>               <C>              <C>
   Net increase in cash and cash equivalents                      $        2,697    $         258    $        3,591

   Cash and cash equivalents at beginning of year                         10,642           10,384             6,793
                                                                  --------------    -------------    --------------

   Cash and cash equivalents at end of year                       $       13,339    $      10,642    $       10,384
                                                                  ==============    =============    ==============

   Supplemental disclosure of cash flow information:

   Cash paid during year for interest                             $       16,080    $      18,980    $       27,303
                                                                  ==============    =============    ==============
</TABLE>

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

                                     58
<PAGE>

CIRCUS AND ELDORADO JOINT VENTURE (DOING BUSINESS AS SILVER LEGACY RESORT
CASINO)

Financial Statements Together with Report of Independent Public Accountants

NOTES TO FINANCIAL STATEMENTS

1.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         PRINCIPLES OF OPERATIONS

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

         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 disclosure of contingent assets and liabilities at the
         date of the financial statements and the reported amounts of revenues
         and expenses during the reporting period. Actual results could differ
         from these estimates.

         CASH AND CASH EQUIVALENTS

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

         CAPITALIZATION OF INTEREST

         The Joint Venture's policy is to capitalize interest on funds disbursed
         during the active construction and development phases of its facilities
         and other major projects. There was no interest capitalized in 1999 or
         1998.

                                     59
<PAGE>

         INTEREST RATE SWAPS

         The Joint Venture, from time to time, uses interest rate swaps to
         assist in managing interest incurred on its Bank Credit Facility. The
         difference between amounts received and amounts paid under such
         agreements, as well as any costs or fees, is recorded as a reduction
         of, or addition to, interest expense as incurred over the life of the
         swap. The interest rate swaps accounted for additional interest expense
         of $1,113,000, $810,000 and $698,000 in 1999, 1998 and 1997,
         respectively.

         CASINO REVENUE AND PROMOTIONAL ALLOWANCES

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

<TABLE>
<CAPTION>

                                                         YEARS ENDED DECEMBER 31,
                                                      1999         1998          1997
                                                    --------     --------      --------
              <S>                                   <C>          <C>           <C>
              Food and Beverage.................    $  6,521     $  6,005      $  6,127
              Rooms.............................       1,344        1,128         1,032
              Other.............................       1,008        1,064           555
                                                    --------     --------      --------
                                                    $  8,873     $  8,197      $  7,714
                                                    ========     ========      ========

</TABLE>

         ADVERTISING

         Advertising costs are expensed the first time the advertising takes
         place. Advertising costs included in selling, general and
         administrative expenses were $6,088,000, $6,494,000 and $6,439,000 for
         the years ended December 31, 1999, 1997 and 1998, respectively.

         FEDERAL INCOME TAXES

         The Joint Venture is not subject to income taxes; therefore, no
         provision for income taxes has been made, as the Partners include their
         respective share of Joint Venture income (loss) in their income tax
         returns.

         FAIR VALUE OF FINANCIAL INSTRUMENTS

         Management is of the opinion that the fair values of all other
         financial instruments are not materially different from their carrying
         values.

         RECLASSIFICATIONS

         Certain reclassifications have been made to the prior year financial
         statements to conform to current year presentation.

                                     60
<PAGE>

2.       CERTAIN RISKS AND UNCERTAINTIES

         A significant portion of the Joint Venture's revenues and operating
         income are generated from patrons who are residents of northern
         California. A change in general economic conditions or the extent and
         nature of regulations enabling casino gaming in California, Washington
         or Oregon could adversely affect the Joint Venture's operating results.

3.       PROPERTY AND EQUIPMENT

            PROPERTY AND EQUIPMENT AT DECEMBER 31, 1999 AND 1998 CONSISTED OF
            THE FOLLOWING:

<TABLE>
<CAPTION>
                                                                                       ESTIMATED
                                                              1999            1998    SERVICE LIFE
                                                      --------------  --------------- ------------
                                                                                         (Years)
 <S>                                                  <C>             <C>             <C>
 Land and improvements                                $   28,405,000  $    28,405,000          -
 Buildings and other leasehold
   improvements                                          269,711,000      266,747,000      15-45
 Furniture, fixtures, and equipment                       78,932,000       75,386,000       3-15
 Construction in progress                                     98,000        1,735,000          -
                                                      --------------  ---------------

                                                         377,146,000      372,273,000

 Less-accumulated depreciation                           (76,888,000)     (59,092,000)
                                                      --------------- ----------------

 Property and equipment, net                          $  300,258,000  $   313,181,000
                                                      ==============  ===============
</TABLE>

         As part of the initial cost of the land, certain costs related to the
         clean up of environmental remediation were capitalized. In September
         1997, as settlement of a lawsuit over the clean up of this
         environmental remediation, approximately $750,000 was received as
         remuneration from the original responsible party. As this was
         effectively a partial refund on the cost of the land, the book value of
         the land was reduced accordingly. After certain other adjustments, the
         total reduction in the book value of the land was $678,000.

         Substantially all property and equipment of the Joint Venture
         collateralize the Bank Credit Facility (see Note 5).

4.       OTHER ASSETS

         Other assets at December 31, 1999 and 1998 consisted of the following:


<TABLE>
<CAPTION>
                                                                          1999              1998
                                                                     --------------    --------------
<S>                                                                  <C>               <C>
 China, glassware, silverware and linens                             $   280,000       $   301,000
 Gaming chips and tokens                                                  27,000            32,000
 Deferred loan costs                                                   1,008,000         1,439,000
                                                                     -----------       -----------

                                                                     $ 1,315,000       $ 1,772,000
                                                                     ===========       ===========
</TABLE>

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

                                     61

<PAGE>
         Gaming chips and tokens are being amortized over three years.

         Costs incurred to acquire the Bank Credit Facility were capitalized and
         are being amortized to interest expense over the term of the Bank
         Credit Facility agreement. The unamortized balance of $1,008,113 at
         December 31, 1999 will be amortized through June 30, 2003, the
         remaining term of the amended Bank Credit Facility (see Note 5).

5.       LONG-TERM DEBT

         Long-term debt at December 31, 1999 and 1998 consisted of the
         following:

<TABLE>
<CAPTION>
                                                                                   1999                1998
                                                                             ---------------      ------------
         <S>                                                                 <C>                  <C>
         Amounts due under the Bank Credit Facility
         at floating interest rates, weighted average
         of 6.28% and 6.18% during 1999 and 1998,
         respectively; due June 30, 2003.                                    $   174,000,000      $198,500,000
                                                                             ---------------      ------------


         Less-Current portion                                                       -               (2,500,000)
                                                                             ---------------      ------------

                                                                             $   174,000,000      $196,000,000
                                                                             ===============      ============
</TABLE>


         THE LOAN AGREEMENT CONTAINS VARIOUS RESTRICTIVE COVENANTS INCLUDING THE
         MAINTENANCE OF CERTAIN FINANCIAL RATIOS AND LIMITATIONS ON ADDITIONAL
         DEBT, DISTRIBUTIONS, DISPOSITION OF PROPERTY, MERGERS AND SIMILAR
         TRANSACTIONS. AS OF DECEMBER 31, 1999, THE JOINT VENTURE WAS IN
         COMPLIANCE WITH ALL LOAN AGREEMENT PROVISIONS.

         Scheduled maturities of long-term debt are as follows at December 31,
         1999:

<TABLE>
<CAPTION>
                           <S>                          <C>
                           2000                         $             0
                           2001                              17,000,000
                           2002                              22,000,000
                           2003                             135,000,000
                           Thereafter                                 0
                                                        ---------------
                                                        $   174,000,000
</TABLE>


         On May 30, 1995, the Joint Venture entered into a $230,000,000
         reducing, revolving credit facility with a consortium of banks (the
         "Bank Credit Facility"). On September 9, 1996, the Joint Venture
         amended its Bank Credit Facility to $220,000,000. On November 24, 1997,
         the Joint Venture amended its Bank Credit Facility to $230,000,000.
         Quarterly commitment reductions are due beginning March 31, 1998 of
         $4,250,000 per quarter through December 31, 2000; $5,500,000 per
         quarter through December 31, 2002; $6,000,000 on March 31, 2003 and all
         remaining outstanding balances due June 30, 2003. The Joint Venture
         made voluntary payments on the Bank Credit Facility during fiscal years
         1996, 1997 and 1998. The Bank Credit Facility agreement indicates that
         any early reductions may be applied to future obligations. Required
         commitment reductions of $17,000,000 for fiscal year 2000 reduce the
         Bank Credit Facility to $179,000,000 by December 31, 2000. As the
         entire line has not been drawn in fiscal years 1998 and 1999, principal
         payments obligations were reduced by the unused portion of the Bank
         Credit Facility. Accordingly, as the 1999 voluntary payments of
         $24,500,000 exceeded the 1999 obligations of $2,500,000, the current
         portion of the Bank Credit Facility

                                    62
<PAGE>

         for fiscal year 2000 is reduced from the required $17,000,000 to $0
         and the amount due in 2001 is reduced by $5,000,000 to $17,000,000.
         The Joint Venture incurs commitment fees of 0.25% on the unused
         portion of the credit facility. The Bank Credit Facility is secured
         by a deed of trust on the Joint Venture's real property and by
         security interests in other assets of the Joint Venture (see Note 3).

         On November 24, 1997, the Joint Venture used proceeds from the Bank
         Credit Facility to repay the related party note of $35,104,000 (see
         Note 6). No gain or loss was recognized on the early extinguishment of
         this related party note.

         In order to limit its exposure to interest rate movements, the Joint
         Venture has entered into agreements with members of its bank group to
         participate in interest rate swaps. In connection therewith, the Joint
         Venture agreed to pay the banks a fixed interest rate of approximately
         6.4% on a total notional amount of $100,000,000, in return for the
         banks' commitment to pay the Joint Venture a floating interest rate
         equal to the three-month Eurodollar. These agreements expire in October
         2001. The Joint Venture is exposed to credit loss in the event of
         nonperformance by the counterparties. However, the Joint Venture
         considers the risk of nonperformance by the counterparties to be
         minimal because the parties to the swaps are members of the bank group.
         If the Joint Venture had terminated all swaps as of December 31, 1999,
         it would have had to pay approximately $342,000 based on quoted market
         values from the banks holding the swaps.

6.       RELATED PARTIES

         The cost of the Silver Legacy Resort Casino in excess of the equity
         contributions was funded from a combination of cash generated from
         operations, the Bank Credit Facility and a loan from Circus Circus
         Enterprises, Inc. ("CCEI"). The CCEI loan, executed on May 31, 1995,
         was for an amount up to $75,000,000 and carried an annual interest rate
         of 10%. On September 9, 1996, the CCEI loan was amended to change the
         maturity date to 367 days after the Bank Credit Facility is paid in
         full. On November 24, 1997, the entire principal balance of $35,104,000
         was paid out of funds received from the Bank Credit Facility.

         As a condition to the Bank Credit Facility, CCEI guaranteed completion
         of the Silver Legacy Resort Casino and, in addition, entered into a
         make-well agreement whereby it is obligated to make additional
         contributions to Silver Legacy Resort Casino as may be necessary to
         maintain a minimum coverage ratio (as defined). As compensation for the
         make-well agreement, CCEI receives guarantee fees of 1 1/2% of the
         outstanding balance of the Bank Credit Facility. The Joint Venture made
         payments totaling $2,838,000 and $3,430,000 on its guarantee fee
         commitment in 1999 and 1998 leaving an accrued balance of $222,000 and
         $254,000 of guarantee fees for the years ended December 31, 1999 and
         1998, respectively.

         On May 16, 1996, Eldorado Resorts, LLC ("Eldorado"), entered into an
         agreement with the Joint Venture to operate a race and sports book
         (the "Book") located in the Silver Legacy Resort Casino. Eldorado
         supplies the management, employees and equipment associated with the
         operation of the Book. Revenues and expenses are apportioned
         according to a formula included in the race and sports book
         agreement. For the years ended December 31, 1999 and 1998 the Joint
         Venture recorded $727,000 and $779,000 in revenues and $505,000 and
         $475,000 in expenses related to the operations of the Book.
         Effective November 23, 1999, the agreement with the Eldorado was
         terminated and the Joint Venture began operating the Book
         exclusively.

7.       401(K) PLAN

         The Joint Venture instituted a defined contribution 401(k) plan in
         September 1995 which covers all employees who meet certain age and
         length of service requirements and allows an employer contribution up
         to 25 percent of the first six percent of each participating employee's
         compensation. Plan participants can elect to defer before tax
         compensation through payroll deductions. Those deferrals are regulated
         under Section 401(k) of the Internal Revenue Code. The Joint Venture's
         matching contributions were $278,000 and $237,000 for the fiscal years
         ended December 31, 1999 and 1998.

                                     63
<PAGE>

8.       COMMITMENTS AND CONTINGENCIES

         LETTERS OF CREDIT

         The Bank Credit Facility allows for the issuance of letters of credit
         of up to $5,000,000. As of December 31, 1999, the Joint Venture has not
         drawn against these letters of credit.

         OPERATING LEASES

         The Joint Venture leases land and equipment under operating leases.
         Future minimum payments (expiring from 2000 and thereafter) under
         noncancellable operating leases with initial terms of one year or more
         consisted of the following at December 31, 1999:

<TABLE>
                           <S>                            <C>
                           2000                       $   356,000
                           2001                           300,000
                           2002                           114,000
                           Thereafter                           -
                                                      -----------
                                                      $   770,000
</TABLE>


         Total rental expense under operating leases was $376,000, $380,000
         and $578,000 for the years ended December 31, 1999, 1998 and 1997,
         respectively.

                                     64
<PAGE>

         LITIGATION

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

9.       PRIORITY ALLOCATION

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

         As a result of the Priority Allocation, each of the partners
         received 50% of the available allocation through April 30, 1997 and
         Galleon, Inc. received 100% of the available allocation for the
         remaining eight months ending December 31, 1997 and for the twelve
         months ending December 31, 1998. The total allocations to the two
         partners for the years ended December 31, 1999, 1998 and 1997 are
         $2,881,000, $0 and $391,000 to Eldorado Resorts, LLC and
         $13,202,000, $9,949,000 and $9,324,000 to Galleon, Inc.,
         respectively.

                                     65
<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 27, 2000                   By: /S/ Donald L. Carano
                                            -----------------------------------
                                                   Donald L. Carano
                                                   CHIEF EXECUTIVE OFFICER,
                                                   PRESIDENT AND PRESIDING
                                                   MANAGER




                                               ELDORADO CAPITAL CORP.





Date:  March 27, 2000                   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>

Signature                                Title                                            Date
<S>                                      <C>                                              <C>


/S/  DONALD L. CARANO                    Chief Executive Officer, President               March 27, 2000
-------------------------------          and Presiding Manager of the Board
Donald L. Carano                         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   27, 2000
-------------------------------          Eldorado Resorts LLC (Principal
Robert M. Jones                          Financial and Accounting Officer)


</TABLE>

                                      66
<PAGE>



<TABLE>


Signature                                   Title                                                Date
<S>                                         <C>                                                  <C>


/S/  GENE R. CARANO                         Treasurer of Eldorado Capital                        March 27, 2000
-------------------------------             Corp. (Principal Financial and
Gene R. Carano                              Accounting Officer)



/S/  RAYMOND J. PONCIA                      Member of the Board of Managers                      March 27, 2000
-------------------------------             of Eldorado Resorts LLC--
Raymond J. Poncia, Jr.                      appointed by Hotel Casino
                                            Management, Inc. as its corporate
                                            representative and Director of
                                            Eldorado Capital Corp.



/S/  GARY L. CARANO                         Member of the Board of Managers                      March 27, 2000
-------------------------------             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 27, 2000
-------------------------------
Gregg R. Carano



/S/  LESLIE STONE HEISZ                     Member of the Board of Managers                      March 27, 2000
-------------------------------             of Eldorado Resorts LLC
Leslie Stone Heisz

</TABLE>

                                      67
<PAGE>

                                 EXHIBITS INDEX

EXHIBIT
NUMBER                     DESCRIPTION OF EXHIBIT
------                     ----------------------

4.4                        Amendment No. 1 dated as of November 21, 1996,
                           to Loan Agreement dated as of July 31, 1996 among
                           Eldorado Resorts LLC, the banks named therein and
                           Bank of America National Trust and Savings
                           Association, as Administrative Agent.

4.5                        Amendment No. 2 dated as of July 23, 1997, to Loan
                           Agreement dated as of July 31, 1996 among Eldorado
                           Resorts LLC, the banks named therein and Bank of
                           America National Trust and Savings Association as
                           Administrative Agent.

4.6                        Amendment No. 3, dated as of December 31, 1999, to
                           Loan Agreement dated as of July 31, 1996 among
                           Eldorado Resorts LLC, the banks named therein and
                           Bank of America N.A. (formerly Bank of America
                           National Trust and Savings Association), as
                           Administrative Agent.

21                         List of Subsidiaries

27                         Financial Data Schedule