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, 2001

                                       OR

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

            For the transition period from ___________ to ___________

                            Commission File #0-26922

                               COAST RESORTS, INC.
       (Exact name of registrant as specified in its charter)

                NEVADA                                88-0345704
    (State or other jurisdiction of    (I.R.S. Employer Identification No.)
     Incorporation or organization)


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

        Registrant's Telephone Number, Including Area Code: (702)365-7000

        Securities Registered Pursuant To Section 12(B) of The Act: None

       Securities Registered Pursuant To Section 12(G) of The Act: Common
                             Stock, $ .01 Par Value

                                (Title of class)

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

     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 registrant's  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]

     The number of shares of the  Registrant's  Common Stock  outstanding  as of
March 29, 2002 was 1,461,177.94.  The aggregate market value of the Common Stock
held by non-affiliates of the Registrant was $56,864,820 as of March 29, 2002.


<PAGE>




                               COAST RESORTS, INC.

                                Table of Contents

                           Annual Report on Form 10-K
                   For the Fiscal Year Ended December 31, 2001

                                                                       PAGE
                                                                       ----
                                    PART I

Item 1.  Business ...................................................    1

Item 2.  Properties .................................................   11

Item 3.  Legal Proceedings ..........................................   12

Item 4.  Submission of Matters to a Vote of Security Holders ........   12

                                    PART II

Item 5.  Market for Registrant's Common Equity and Related
         Stockholder Matters ........................................   13

Item 6.  Selected Historical Financial Data .........................   14

Item 7.  Management's Discussion and Analysis of Financial Condition
         and Results of Operations ..................................   16

Item 7A. Quantitative and Qualitative Disclosures about Market Risk..   26

Item 8.  Financial Statements and Supplementary Data ................   26

Item 9.  Changes in and Disagreements with Accountants on Accounting
         and Financial Disclosure ...................................   26

                                    PART III

Item 10  Directors and Executive Officers of the Registrant .........   27

Item 11. Executive Compensation .....................................   27

Item 12. Security Ownership of Certain Beneficial Owners and
         Management .................................................   27

Item 13. Certain Relationships and Related Transactions .............   27

                                    PART IV

Item 14. Exhibits, Financial Statement Schedules and Reports on Form
         8-K ........................................................   28


<PAGE>


                               PART I

Item 1. Business

The Company

     Coast  Resorts,  Inc.  ("the  Company"  or  "Coast  Resorts")  is a  Nevada
corporation. Through our wholly owned subsidiary, Coast Hotels and Casinos, Inc.
("Coast Hotels"), we own and operate four Las Vegas hotel-casinos:

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

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

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

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

     The following chart provides certain information about our properties as of
December 31, 2001:

                         Casino   Slots and
                Hotel    Square     Video    Gaming
   Property     Rooms    Footage    Poker    Tables
-------------   -----   -------   ---------  ------
The Orleans..    840    105,000     2,428      64
Gold Coast...    712     82,000     1,864      44
Suncoast.....    419     82,000     2,313      50
Barbary Coast    197     30,000       609      36

     Our principal  executive office is located at 4500 West Tropicana Road, Las
Vegas, Nevada 89103. The telephone number is (702) 365-7000.

Business and Marketing Strategy

     Our business and marketing  strategy is to attract gaming  customers to our
casinos by offering consistently high quality gaming,  hotel,  entertainment and
dining experiences at affordable  prices. We emphasize  attracting and retaining
repeat customers.  Our primary target market for The Orleans, the Gold Coast and
the Suncoast consists of value-oriented local middle-market customers who gamble
frequently.  The Barbary Coast's customer base is primarily composed of visitors
to the Las Vegas area.

     While a significant portion of our customers are local residents,  the same
factors  that  appeal to local  residents  also appeal to visitors to Las Vegas,
including  better odds on slot and video poker  machines and lower minimum wager
limits on our table games than those  traditionally  found at Strip casinos.  In
addition to the growing local resident  market,  Las Vegas is one of the fastest
growing entertainment markets in the United States.


                                       1
<PAGE>

Item 1. Business (continued)

Business and Marketing Strategy (continued)

     We believe that the most important  factors in  successfully  operating our
casinos are convenient  locations  with easy access,  a friendly  atmosphere,  a
value-oriented   approach  and  high  quality   entertainment   and   amenities.
Additionally,   we  offer  Las  Vegas  visitors  spacious,   well-appointed  and
competitively priced guest rooms.

o    Convenient,  Strategic Locations. The Orleans and the Gold Coast are easily
     accessible and offer ample parking, providing our customers with convenient
     alternatives  to the  congestion on the Strip.  The Suncoast has a suburban
     location  conveniently  located  adjacent  to  the  fast-growing  Summerlin
     master-planned community. The Barbary Coast is located on the corner of the
     Strip and Flamingo Road.

o    Friendly  Atmosphere.  A key element of our strategy is to provide  patrons
     with friendly, personal service that is designed to foster customer loyalty
     and generate repeat business.  Locals appreciate a friendly,  casual gaming
     environment where employees make them feel at home.

o    Value.  We offer value to our gaming  patrons by  providing  slot and video
     poker  machines  with better odds than those  traditionally  found at Strip
     casinos.  Locals'  perception of value is also influenced by such things as
     slot clubs  that  reward  frequent  play.  We also offer  value in our many
     restaurants and bars, where patrons are served their favorite beverages and
     generous portions of quality food at attractive prices.

o    Entertainment,   Movie  Theaters  and  Amenities.  We  believe  we  compete
     effectively with other  locals-oriented  casinos by offering  amenities and
     entertainment  that our customers demand and that accentuate the perception
     of value for our customers. Our properties offer a number of amenities that
     generate  significant  foot traffic  through our casinos,  including  movie
     theaters,  bowling  centers,  quality  restaurants and a variety of musical
     entertainment.

o    Tourist  Customers.  Las Vegas is one of the fastest growing  entertainment
     markets  in the  United  States.  The same  factors  that  appeal  to local
     residents also appeal to visitors to Las Vegas,  including  better odds and
     lower minimum wager limits than those traditionally found at Strip casinos.
     Additionally,  our casinos are  strategically  situated to benefit from the
     growing  visitor  market,  with the Gold Coast and The Orleans each located
     within two miles of the Strip and the Barbary  Coast  located at one of the
     busiest corners on the Strip.


                                       2
<PAGE>

Item 1. Business (continued)

Casino Properties

     The Orleans.  The Orleans is strategically  located on Tropicana  Avenue, a
short distance from the Las Vegas Strip and McCarran  International Airport. The
Orleans  provides an upscale,  off-Strip  experience  in an exciting New Orleans
French Quarter-themed environment.

     The Orleans features an approximately 105,000 square foot casino, including
approximately 2,428 slot machines, 64 table games, a keno lounge, a poker parlor
and race and sports books. The Orleans has 840 hotel rooms, 18 "stadium seating"
first-run movie theaters, a 70-lane bowling center,  approximately 40,000 square
feet of banquet and meeting facilities, including an approximately 17,000 square
foot grand ballroom,  six full-service  restaurants and a multi-station  buffet,
specialty  themed bars, a swimming  pool, a barber shop, a beauty salon, a child
care  facility,  a video arcade and  approximately  6,000  parking  spaces.  The
Orleans also includes an 850-seat showroom that features headliner entertainment
and other  special  events,  allowing  us to  attract  more  tourists  who would
otherwise gamble at Strip casinos.

     In January 2001, we commenced an approximately  $150.0 million expansion of
The Orleans.  The project is expected to be paid for with  operating  cash flows
and borrowings  under our senior  secured credit  facility and is expected to be
completed  in  phases  through  the  second  quarter  of 2003.  Featured  in the
expansion  are an  additional  40,000  square feet of new gaming area and public
space, a multi-purpose  special-events  arena, an  approximately  600-room hotel
tower,  a  2,600-car  parking  garage,   six  additional  movie  theaters,   two
restaurants  and  an  Irish  pub.  Through  December  31,  2001,  we  had  spent
approximately  $51.0 million and had opened the two restaurants,  the Irish pub,
the movie theaters and a substantial  portion of the parking garage. On March 8,
2002, we opened the additional  40,000 square feet of new gaming area and public
space.

     Gold Coast.  The Gold Coast is located on West Flamingo Road  approximately
one mile west of the Las Vegas Strip and one-quarter mile west of Interstate 15,
the major  highway  linking Las Vegas and  Southern  California.  Its  strategic
location offers easy access from all four directions in the Las Vegas valley.

     The Gold  Coast  features  an  approximately  82,000  square  foot  casino,
including  approximately  1,864 slot machines,  44 table games, a keno lounge, a
160-seat  race and sports book and a 700-seat  bingo  parlor.  Our  eleven-story
tower includes 712 hotel rooms and suites,  a swimming pool and fitness  center.
The Gold Coast features four full-service  restaurants,  a multi-station  buffet
restaurant,  a  fast-food  restaurant,  a  snack  bar and an ice  cream  parlor.
Entertainment  amenities include a 70-lane bowling center,  approximately 16,000
square feet of banquet  and  meeting  facilities,  four bars,  an  entertainment
lounge and a  showroom/dance  hall featuring live musical  entertainment.  Other
amenities  include a gift shop, a liquor  store,  a travel  agency,  an American
Express office,  a Western Union office,  a beauty salon, a barber shop, a child
care facility and approximately 3,000 parking spaces.

     In the fourth quarter of 2000, we commenced an approximately  $60.0 million
expansion and remodel of the Gold Coast.  The project is expected to be paid for
with  operating  cash  flows and  borrowings  under our  senior  secured  credit
facility and is expected to be completed in phases  through the third quarter of
2002.  The  expansion  features  a  multi-station   buffet,  a  sports  bar,  an
Asian-themed  restaurant,  an Italian restaurant,  a parking garage and expanded
porte-cochere,  16,000 square feet of additional  meeting  space,  20,000 square
feet of new gaming area, a new bingo  parlor,  the  conversion  of our old bingo
parlor into a ballroom, the renovation of our standard hotel guest rooms and the
redesign of most of the Gold Coast's public areas. Through December 31, 2001, we
had spent approximately  $31.0 million and had opened the multi-station  buffet,
the sports bar, the two restaurants, 6,000-square feet of the 16,000 square feet
of additional  meeting space and we had substantially  completed the redesign of
the public areas.


                                       3
<PAGE>

Item 1. Business (continued)

Casino Properties (continued)

     Suncoast.  The Suncoast  serves one of the fastest growing areas of the Las
Vegas  valley and is  located on  approximately  50 acres in  Peccole  Ranch,  a
master-planned  community  adjacent to Summerlin.  The Suncoast is strategically
located  at the  intersection  of  Rampart  Boulevard  and Alta  Drive,  readily
accessible   from  most   major   points  in  Las  Vegas,   including   downtown
(approximately eight miles) and the Strip (approximately nine miles).

     The Suncoast is a  Mediterranean-themed  facility  featuring  approximately
82,000 square feet of casino space, including approximately 2,313 slot machines,
50 table games, a 150-seat race and sports book and a 600-seat bingo parlor. The
Suncoast has 419, including 216 rooms constructed in 2001,  spacious hotel rooms
and suites,  approximately 25,000 square feet of banquet and meeting facilities,
16  "stadium  seating"  movie  theaters,   four  full-service   restaurants,   a
multi-station  buffet restaurant,  a 64-lane bowling center, a swimming pool and
approximately  6,000  parking  spaces.  In 2001,  we spent  approximately  $15.5
million to add 216 new hotel rooms and a swimming  pool and to expand the buffet
restaurant.

     Barbary Coast. The Barbary Coast is located at the intersection of Flamingo
Road and Las Vegas  Boulevard,  one of the busiest  intersections  on the Strip,
along with Caesars  Palace,  Bally's Las Vegas and Bellagio.  Historically,  the
Barbary  Coast  has  relied  on  foot  traffic  on the  Las  Vegas  Strip  for a
significant  amount of its revenues.  As a result,  the Barbary  Coast's primary
customer  base is visitors to the Las Vegas area.  In addition to its  favorable
location  on the  Strip,  the  Barbary  Coast has also  benefited  from its more
intimate gaming  atmosphere,  allowing it to develop a loyal base of table games
and slot customers.

     The Barbary  Coast  features an  approximately  30,000  square foot casino,
including  approximately  609 slot  machines,  36 table games, a race and sports
book and other amenities.  Our eight-story tower includes 197 spacious rooms and
suites.   The  Barbary   Coast  is  furnished   and   decorated  in  an  elegant
turn-of-the-century   Victorian   theme  and  includes   three  bars  and  three
restaurants:  Michael's gourmet  restaurant,  Drai's on the Strip (leased to and
operated by a third party) and the Victorian Room.

Gaming Security

     Each of our casinos employs extensive supervision and accounting procedures
to control  the  handling of cash in their  gaming  operations.  These  measures
include security personnel,  closed-circuit  television  observation of critical
areas of the casino,  locked cash boxes,  independent  auditors  and  observers,
strict sign-in and sign-out  procedures which ensure, to the extent practicable,
that gaming chips issued by, and  returned  to, the casino  cashier's  cages are
accurately  accounted for, and procedures for the regular  observation of gaming
employees.  The  accounting  departments  of each of our  casinos,  which employ
persons  who have no  involvement  in the gaming  operations,  review on a daily
basis records  compiled by gaming  employees  pertaining to cash flow and credit
extension.  Moreover,  regular  periodic  analysis  of the results of our gaming
operations,  including  analyses of our  compliance  with the  internal  control
standards  established  by the Nevada  State Gaming  Control  Board (the "Nevada
Board"),  are performed by us and our independent auditors to detect significant
deviations  from  industry  standards.  Based on the results of these  analyses,
management  believes  that its  procedures  are in  compliance  in all  material
respects with the requirements  established by the Nevada Gaming Commission (the
"Nevada Commission") and the Nevada Board.


                                       4
<PAGE>

Item 1. Business (continued)

Potential Future Developments

     From time to time in our  ordinary  course of business we review  proposals
for new developments, joint ventures and other strategic transactions. We cannot
assure you that any such new  developments,  ventures  or  transactions  will be
pursued or, if pursued, will be successful.

Competition

     There is intense  competition  among companies in the gaming industry.  The
Orleans,  the Gold  Coast  and the  Suncoast  compete  primarily  with Las Vegas
hotel-casinos and non-hotel gaming facilities that target local residents.  Some
of  these  competitors  have  recently  completed  expansions  or new  projects,
including  a  hotel-casino   recently   opened   adjacent  to  the  Gold  Coast.
Furthermore,  there are several undeveloped properties in the immediate vicinity
of The Orleans,  the Gold Coast and the Suncoast on which new gaming  facilities
could  be  built.  The  construction  of new  properties  and the  expansion  or
enhancement of existing  properties near our hotel-casinos could have a negative
impact on our business.

     In contrast to our other casinos,  the Barbary Coast competes for customers
primarily with the  hotel-casinos  located on the Strip. The construction of new
properties and the expansion or enhancement of existing  properties on the Strip
by  competitors  could  materially  adversely  affect  business  and  results of
operations of the Barbary Coast.

     In addition,  each of our properties competes, to a lesser extent, with all
other casinos and hotels in the Las Vegas area. A number of new hotel-casinos or
expansions have opened in Las Vegas over the last several years, and several new
hotel-casino   projects  and  expansions   have  been  announced  or  are  under
construction in Las Vegas.  This additional  gaming and room capacity may have a
negative impact on our business.

     We also compete with other legalized forms of gaming and gaming  operations
in other  parts of the  state of  Nevada  and  elsewhere.  Certain  states  have
recently  legalized,   and  several  other  states  are  currently   considering
legalizing,  casino gaming in designated  areas. We also face  competition  from
casinos located on Native American reservations. We believe that the development
by Native Americans and other casino properties similar to those in Las Vegas in
areas  close to  Nevada,  particularly  California  and  Arizona,  could  have a
material  adverse effect on our business and results of  operations.  California
law  permits  limited Las  Vegas-style  gaming  activities  to be  conducted  by
California  Native American tribes.  The governor has entered into compacts with
nearly 60 tribes that allow the tribes to operate slot and video poker machines,
banked card games and lotteries.  An increase in gaming in California could have
a material adverse effect on our business and results of operations.

Employees

     At December 31, 2001, we had  approximately  7,147  employees.  We have not
experienced any  significant  work stoppages and believe our labor relations are
good.  The Las Vegas job market for  qualified  employees  is very  competitive.
Approximately  350  employees  at the Barbary  Coast are covered by a collective
bargaining  agreement;  none of our other  employees are covered by a collective
bargaining agreement.


                                       5
<PAGE>

Item 1. Business (continued)

Nevada Regulation and Licensing

     The  ownership  and  operation of casino  gaming  facilities  in Nevada are
subject to (i) the Nevada  Gaming  Control Act and the  regulations  promulgated
thereunder (collectively, the "Nevada Act"), and (ii) various local regulations.
Our gaming operations are subject to the licensing and regulatory control of the
Nevada  Commission,  the  Nevada  Board and the Clark  County  Liquor and Gaming
Licensing Board (the "Clark County Board").  The Nevada  Commission,  the Nevada
Board and the Clark  County  Board are  collectively  referred to as the "Nevada
Gaming Authorities."

     The laws,  regulations  and  supervisory  procedures  of the Nevada  Gaming
Authorities  are based upon  declarations  of public policy which seek to, among
other things,  (i) prevent unsavory or unsuitable persons from having any direct
or  indirect  involvement  with  gaming  at any  time or in any  capacity,  (ii)
establish and maintain responsible  accounting  practices and procedures,  (iii)
maintain effective control over the financial practices of licensees,  including
establishing minimum procedures for internal fiscal affairs and the safeguarding
of assets and  revenues,  providing  reliable  record  keeping 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 our gaming operations.

     Through our wholly owned subsidiary, we operate the Gold Coast, the Barbary
Coast,  The  Orleans and the  Suncoast,  and are  licensed by the Nevada  Gaming
Authorities.  The gaming licenses require the periodic payment of fees and taxes
and are not transferable. Coast Resorts is registered with the Nevada Commission
as a publicly traded corporation (a "Registered Corporation") and has been found
suitable  to own the  stock of Coast  Hotels.  Coast  Resorts,  as a  Registered
Corporation,   and  Coast  Hotels,  as  a  Corporate   Licensee,   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 stockholder of, or receive any percentage of the
profits from,  Coast Hotels without first obtaining  licenses and approvals from
the Nevada Gaming Authorities. Coast Hotels and Coast Resorts have obtained from
the Nevada Gaming Authorities the various registrations,  approvals, permits and
licenses required in order to engage in gaming activities at its hotel-casinos.

     The Nevada Gaming  Authorities  may  investigate  any  individual who has a
material  relationship to, or material  involvement  with, Coast Hotels or Coast
Resorts in order to determine  whether such  individual is suitable or should be
licensed  as a  business  associate  of a  Corporate  Licensee  or a  Registered
Corporation.  Officers, directors and certain key employees of Coast Hotels must
file applications  with the Nevada Gaming  Authorities and may be required to be
licensed or found suitable by the Nevada Gaming Authorities. Officers, directors
and key  employees of Coast  Hotels who are  actively  and directly  involved in
gaming activities 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.


                                       6
<PAGE>

Item 1. Business (continued)

Nevada Regulation and Licensing (continued)

     If the Nevada Gaming  Authorities were to find an officer,  director or key
employee of Coast Hotels or Coast Resorts unsuitable for licensing or unsuitable
to continue having a relationship  with Coast Hotels or Coast Resorts,  we would
have to sever all  relationships  with such  person.  In  addition,  the  Nevada
Commission  may require the Company and Coast Hotels 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.

     Coast Hotels and Coast  Resorts are 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 Coast
Hotels must be reported to, or approved by, the Nevada Commission.

     If it were determined that the Nevada Act was violated by Coast Hotels, the
gaming  licenses it holds could be limited,  conditioned,  suspended or revoked,
subject to compliance  with certain  statutory  and  regulatory  procedures.  In
addition,  Coast Hotels, Coast Resorts 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  our gaming  properties  and,  under  certain
circumstances,  earnings generated during the supervisor's  appointment  (except
for the reasonable rental value of our 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 our gaming operations.

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

     The Nevada Act  requires any person who  acquires  beneficial  ownership of
more than 5% of a  Registered  Corporation's  voting  securities  to report  the
acquisition to the Nevada  Commission.  The Nevada Act requires that  beneficial
owners of more than 10% of a Registered Corporation's voting securities apply to
the  Nevada  Commission  for a finding of  suitability  within 30 days after the
Chairman of the Nevada  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 stockholders; (ii) making


                                       7
<PAGE>

Item 1.    Business (continued)

Nevada Regulation and Licensing (continued)

financial  and  other  inquiries  of  management  of the type  normally  made by
securities analysts for informational  purposes and not to cause a change in its
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 if the owner,  after  request,  fails to  identify  the
beneficial  owner. Any stockholder  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.  Coast  Hotels is  subject to
disciplinary  action if, after it receives notice that a person is unsuitable to
be a stockholder  or to have any other  relationship  with Coast Hotels or Coast
Resorts,  we (i) pay that person any dividend or interest upon voting securities
of our company, (ii) allow that person to exercise,  directly or indirectly, any
voting  right  conferred  through  securities  held by that  person,  (iii)  pay
remuneration in any form to that person for services  rendered or otherwise,  or
(iv) fail 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.

     The Nevada  Commission  may, at its  discretion,  require the holder of any
debt  security  of a  Corporate  Licensee or a  Registered  Corporation  to file
applications, be investigated and be found suitable to own the debt security. If
the  Nevada  Commission  determines  that a  person  is  unsuitable  to own such
security,  then  pursuant  to the Nevada  Act,  the  Corporate  Licensee  or the
Registered Corporation 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.

     Coast  Hotels 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.  Coast Hotels is also required to render  maximum
assistance  in  determining  the identity of the  beneficial  owner.  The Nevada
Commission  has the power to  require  our stock  certificates  to bear a legend
indicating that the securities are subject to the Nevada Act.

     Licensed Corporations and Registered  Corporations such as Coast Hotels and
Coast Resorts may not make public offering of their 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 require or extend  obligations  incurred for such  purposes.  The
Nevada  Commission has previously  granted  exemptions  from this prior approval
process for certain public offerings by Coast Hotels and Coast Resorts. Approval
of a public offering, if given, will 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.


                                       8
<PAGE>

Item 1.  Business (continued)

Nevada Regulation and Licensing (continued)

     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  stockholders,  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 Licensed  Corporations,  and Registered  Corporations that are
affiliated  with those  operations,  may be injurious  to stable and  productive
corporate  gaming.  The Nevada Commission has established a regulatory scheme to
ameliorate the  potentially  adverse  effects of these  business  practices upon
Nevada's  gaming  industry  and to  further  Nevada's  policy to: (i) assure the
financial  stability of corporate  gaming operators and their  affiliates;  (ii)
preserve the beneficial  aspects of conducting  business in the corporate  form;
and (iii) promote a neutral  environment for the orderly governance of corporate
affairs.  Approvals  are,  in certain  circumstances,  required  from the Nevada
Commission before a Registered  Corporation can make exceptional  repurchases of
voting  securities above the current market price thereof and before a corporate
acquisition  opposed  by  management  can 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  stockholders 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 persons  (collectively,
"Licensees"), and who proposes to become involved in a gaming venture outside of
Nevada is required to deposit with the Nevada Board, and thereafter  maintain, a
revolving fund in the amount of $10,000 to pay the expenses of  investigation of
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 on the grounds of personal unsuitability.


                                       9
<PAGE>

Item 1. Business (continued)

Nevada Regulation and Licensing (continued)

     Coast Hotels may pursue  development  opportunities in other  jurisdictions
and expects that if it does so it will be subject to similar rigorous regulatory
standards  in each  other  jurisdiction  in which it  seeks  to  conduct  gaming
operations. There can be no assurance that regulations adopted, permits required
or taxes imposed,  by other  jurisdictions will permit profitable  operations by
Coast Hotels in those jurisdictions.

Certain Forward-Looking Statements

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

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

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

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

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

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

o    uncertainties related to the economy;

o    the impact on the travel and leisure industry, and Las Vegas in particular,
     of the September 11, 2001 terrorist attacks and the United States' response
     to the attacks; and

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

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


                                       10
<PAGE>

Item 2. Properties

     The Orleans occupies a portion of an approximately  80-acre site located on
West Tropicana Avenue,  approximately one mile south of the Gold Coast. We lease
the real  property  under a ground  lease  entered  into by Coast Hotels and the
Tiberti  Company,  a Nevada  general  partnership  of which J. Tito  Tiberti,  a
director  of Coast  Hotels,  is  managing  partner.  The lease had an  effective
commencement  date of October 1, 1995, an initial term of 50 years, and includes
an option,  exercisable  by us, to extend the initial term for an  additional 25
years.  The lease  provides  for monthly  rental  payments of $200,000 per month
through February 2002, $225,000 per month during the 48-month period thereafter,
and $250,000 per month during the  60-month  period  thereafter.  In March 2011,
annual rental  payments  will increase on a compounding  basis at a rate of 3.0%
per annum.  In  addition,  we have been  granted an option to purchase  the real
property  during the two-year  period  commencing  in February  2016.  The lease
provides  that the  purchase  price  will be the fair  market  value of the real
property at the time we exercise the option,  provided  that the purchase  price
will not be less than 10 times,  nor more  than 12  times,  annual  rent at such
time.

     We own the  approximately  26 acres  that the Gold Coast  occupies  on West
Flamingo  Road.  We also own an  8.33-acre  site across the street from the Gold
Coast that contains an approximately  100,000 square foot warehouse.  We use the
warehouse primarily as a storage facility.

     The Suncoast occupies the approximately  50-acre site located at the corner
of Rampart Boulevard and Alta Drive in the west end of the Las Vegas valley that
we lease pursuant to a Ground Lease  Agreement dated as of October 28, 1994. The
initial term of the lease expires on December 31, 2055. The lease contains three
options,  exercisable  by us, to extend the term of the lease for 10 years each.
The lease  provided for monthly  rental  payments of $166,667 for the year ended
December  31,  1995.  Thereafter,  the monthly  rent  increases by the amount of
$5,000 in  January of each year.  The  landlord  has the option to require us to
purchase the property at the end of 2014, 2015, 2016, 2017 and 2018, at the fair
market value of the real property at the time the landlord exercises the option,
provided that the purchase price will not be less than 10 times nor more than 15
times  the  annual  rent at such  time.  Based on the  terms of the  lease,  the
potential purchase price commitment ranges from  approximately  $31.0 million to
approximately  $51.0  million in the years 2014 through 2018. We have a right of
first refusal in the event the landlord desires to sell the property at any time
during the lease term.

     The Barbary Coast occupies  approximately  1.8 acres at the intersection of
Flamingo Road and the Strip and occupies real property that we lease pursuant to
a lease dated May 1, 1993.  The lease  provides for rental  payments of $175,000
per year during the initial  term of the lease that  expires on May 1, 2003.  We
have given notice to the landlord of our  intention to exercise the first of two
30-year options, with rental payments increasing to $190,000 per year during the
first ten years of the renewal period.  We have an option to purchase the leased
property at any time during the six month period prior to the  expiration of the
initial  term of the lease,  provided  that  certain  conditions  are met,  at a
purchase price equal to the greater of $3.5 million or the then appraised  value
of the real  property.  Should  the  landlord  desire to sell the real  property
during the initial term of the lease, we have a right of first refusal.  We also
lease  approximately  2.5 additional  acres of real property located adjacent to
the Barbary  Coast.  The lease expires on December 31, 2003.  The lease provides
for rental  payments of $125,000 per annum.  We use the  2.5-acre  property as a
parking lot for our employees and for valet parking.  The landlord has the right
to terminate the lease upon six months prior notice to us if it requires the use
of the  property  for its own  business  purposes  (which  excludes  leaving the
property vacant or leasing it to third parties prior to January 1, 2003).


                                       11
<PAGE>

Item 3. Legal Proceedings

     We are currently, and are from time to time, involved in litigation arising
in the ordinary course of our business.  We are currently subject to lawsuits in
which the  plaintiffs  have sought  punitive  damages.  We intend to continue to
defend  the  lawsuits  vigorously.  We do  not  believe  that  such  litigation,
including the foregoing  proceedings,  will,  individually  or in the aggregate,
have a material adverse effect on our financial position,  results of operations
or cash flows.

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

     No matters were  submitted  to our  shareholders  during the quarter  ended
December 31, 2001.


                                       12
<PAGE>

                               PART II

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

     No equity  securities  of Coast Resorts are being,  or have been,  publicly
offered by us and there is no public trading market for our common stock.  As of
March 29, 2002, Coast Resorts had 77 shareholders.

     Coast Resorts was formed in September 1995 and has not declared or paid any
dividends. We intend to retain future earnings for use in the development of our
business and do not  anticipate  paying any cash  dividends  in the  foreseeable
future.  The payment of all dividends  will be at the discretion of our Board of
Directors and will depend upon, among other things, future earnings, operations,
capital  requirements,  our general  financial  condition  and general  business
conditions.  As a holding  company,  we are reliant upon the operations of Coast
Hotels for cash flow.  The  indenture  under which our 9.5% senior  subordinated
notes were issued and our senior  secured  credit  facility  (see  "Management's
Discussion  and  Analysis of  Financial  Condition  and Results of  Operations -
Liquidity and Capital Resources" in Item 7) restrict the ability of Coast Hotels
to pay  dividends  or make other  distributions  to us. (See note 6 of "Notes to
Consolidated Financial Statements.")


                                       13
<PAGE>

Item 6. Selected Historical Financial Data

     The  following  Selected  Historical  Financial  Data  should  be  read  in
conjunction with  "Management's  Discussion and Analysis of Financial  Condition
and Results of Operations" and the consolidated  financial  statements and notes
thereto included  elsewhere in this Form 10-K. The balance sheets and statements
of  operations  data as of and for each of the five  years in the  period  ended
December 31, 2001 are derived from our audited consolidated financial statements
(except as indicated in footnote 1 to the  following  table).  Our  consolidated
financial  statements as of December 31, 2000 and 2001 and for each of the three
years in the period ended  December 31, 2001 are included in this report on Form
10-K. The historical  results are not  necessarily  indicative of the results of
operations to be expected in the future.

                                          Year Ended December 31,
                              -----------------------------------------------
                               1997(1)   1998(1)   1999(1)   2000(1)   2001(2)
                              --------- --------- --------- --------- ---------
                                         (dollars in thousands)
STATEMENTS OF OPERATIONS
  DATA:
Net revenues.................  $292,360  $328,824  $358,324  $408,925  $517,984
Departmental operating
  expenses(3)................   195,677   205,610   216,082   237,796   295,036
General and administrative
  expenses...................    52,526    54,926    60,480    69,443    91,558
Pre-opening expenses.........        --        --       235     6,161        --
Land leases..................     4,220     4,280     3,770     3,396     5,060
Deferred rent................     4,078     4,018     2,918     2,538     3,538
Depreciation and
  amortization...............    18,278    20,607    21,613    25,375    36,549
                              --------- --------- --------- --------- ---------
Operating income.............    17,581    39,383    53,226    64,216    86,243
Interest expense, net(4).....   (25,225)  (26,570)  (21,441)  (22,973)  (29,182)
Other income (expense).......       919       168      (192)      (60)   (1,815)
                              --------- --------- --------- --------- ---------
Income (loss) before
  income taxes and
  extraordinary item.........    (6,725)   12,981    31,593    41,183    55,246
Provision for income taxes
  (benefit)..................    (2,115)    4,994    10,371    14,405    18,815
                              --------- --------- --------- --------- ---------
Income (loss) before
  extraordinary item.........    (4,610)    7,987    21,222    26,778    36,431
Extraordinary item - loss on
  early retirement of debt,
  net of applicable income tax
  benefit ($14,543)..........        --        --   (27,007)       --        --
                              --------- --------- --------- --------- ---------
Net income (loss)............ $  (4,610) $  7,987  $ (5,785) $ 26,778  $ 36,431
                              ========= ========= ========= ========= =========
Basic income (loss) per
  share of common stock before
  extraordinary item........   $  (3.08) $   5.34  $  14.35  $  18.20  $  24.91
                              ========= ========= ========= ========= =========
Diluted income (loss) per
  share of common stock before
  extraordinary item.........  $  (3.08) $   5.34  $  14.35  $  17.92  $  24.32
                              ========= ========= ========= ========= =========
Basic net income (loss) per
  share of common stock......  $  (3.08) $   5.34  $  (3.91) $  18.20  $  24.91
                              ========= ========= ========= ========= =========
Diluted net income (loss)
  per share of common stock..  $  (3.08) $   5.34  $  (3.91) $  17.92  $  24.32
                              ========= ========= ========= ========= =========
Basic weighted average
  common shares outstanding.. 1,494,353 1,494,353 1,478,978 1,471,208 1,462,366
                              ========= ========= ========= ========= =========
Diluted weighted average
  common shares outstanding.. 1,494,353 1,494,353 1,478,978 1,494,066 1,497,781
                              ========= ========= ========= ========= =========

See Footnotes to Selected Historical Financial Data.


                                       14
<PAGE>

Item 6. Selected Historical Financial Data (continued)

                                          As of December 31,
                            ------------------------------------------------
                              1997      1998      1999     2000(1)    2001
                            --------  --------  --------  --------  --------
                                         (dollars in thousands)
Balance Sheet Data:
Cash and cash
  equivalents.............  $ 29,430  $ 41,598  $ 38,629  $ 43,560  $ 43,350
Total assets..............  $366,619  $366,827  $406,119  $567,199  $657,412
Total debt................  $215,249  $207,859  $237,239  $355,767  $369,524
Stockholder's equity......  $ 94,439  $102,426  $ 95,103  $120,301  $156,517


See Footnotes to Selected Historical Financial Data.

Footnotes to Selected Historical Financial Data

(1)  Financial data for 1997,  1998,  1999 and 2000 has been restated to reflect
     the  reclassification  of certain cash incentives of (dollars in thousands)
     $1,523,  $3,539, $4,207 and $10,602,  respectively,  in connection with the
     adoption of Emerging  Issues Task Force  Issue 00-22  ("EITF  00-22").  The
     adoption  of EITF  00-22  had no  effect  on net  income.  See  "Item  14 -
     Exhibits, Financial Statement Schedules and Reports on Form 8-K - Financial
     Statements Index - Notes to Financial Statements - Note 1 - Background
     Information and Basis of Presentation - Basis of Presentation".

(2)  The Suncoast opened September 2000.

(3)  Includes casino, food and beverage, hotel and other expenses.

(4)  Includes interest income of (dollars in thousands) $98 (1997), $695 (1998),
     $450 (1999), $470 (2000) and $405 (2001) and capitalized interest of $1,016
     (1997), $58 (1998), $612 (1999), $4,511 (2000) and $1,048 (2001).


                                       15
<PAGE>

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

Critical Accounting Policies and Estimates

     We have identified the following critical  accounting  policies that affect
our more  significant  judgments and estimates  used in the  preparation  of our
financial statements.  The preparation of our financial statements in conformity
with accounting  principles  generally  accepted in the United States of America
requires that we make estimates and judgments  that affect the reported  amounts
of assets and  liabilities,  revenues and expenses,  and related  disclosures of
contingent  assets and  liabilities.  On an on-going  basis,  we evaluate  those
estimates,  including  those  related  to asset  impairment,  accruals  for slot
marketing points,  self-insurance,  compensation and related  benefits,  revenue
recognition,  allowance for doubtful  accounts,  contingencies,  and litigation.
These estimates are based on the information  that is currently  available to us
and on various  other  assumptions  that we believe to be  reasonable  under the
circumstances.  Actual results could vary from those  estimates  under different
assumptions or conditions.

     We  believe  that  the  following  critical   accounting   policies  affect
significant  judgments and estimates  used in the  preparation  of our financial
statements:

o    We recognize revenue as net wins and losses occur in our casinos,  upon the
     occupancy of our hotel rooms, upon the delivery of food, beverage and other
     services, and upon performance for entertainment  revenue.  Wagers received
     on all sporting  events are recorded as a liability until the final outcome
     of the event when the payoffs, if any, can be determined. Effective January
     1, 2001,  we adopted  Emerging  Issues Task Force Issue 00-22 (the "Issue")
     which requires cash discounts and certain other cash incentives  related to
     gaming play be recorded as a reduction to gross casino revenues.  The Issue
     requires that prior periods be restated.  We previously recorded incentives
     as an operating expense and have reclassified prior period amounts.

o    We maintain  an  allowance  for  doubtful  accounts  for  estimated  losses
     resulting  from the inability of our  customers to make required  payments,
     which  results in bad debt  expense.  We  determine  the  adequacy  of this
     allowance  by  continually   evaluating  individual  customer  receivables,
     considering the customer's financial condition,  credit history and current
     economic  conditions.  If the  financial  condition  of  customers  were to
     deteriorate,  resulting in an impairment of their ability to make payments,
     additional allowances may be required.

o    We maintain accruals for health and workers compensation self-insurance and
     slot club point redemption,  which are classified as accrued liabilities in
     the  balance  sheets.  We  determine  the  adequacy  of these  accruals  by
     periodically  evaluating  the historical  experience  and projected  trends
     related to these accruals.  If such information indicates that the accruals
     are overstated or understated,  we will adjust the assumptions  utilized in
     the  methodologies  and  reduce  or  provide  for  additional  accruals  as
     appropriate.

o    We are subject to various  claims and legal actions in the ordinary  course
     of business.  Some of these matters include personal  injuries to customers
     and damage to  customers'  personal  assets.  We estimate  guest claims and
     accrue  for  such  liability  based on  historical  experience  in  accrued
     liabilities in the balance sheets.

o    Effective January 1, 1999, pre-opening costs related to the construction of
     new  projects are expensed as  incurred.  Pre-opening  costs were  expensed
     during  the  years  ended  December  31,  1999 and 2000,  respectively,  in
     connection with the development of the Suncoast.  There were no pre-opening
     costs during the year ended December 31, 2001.


                                       16
<PAGE>

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

Critical Accounting Policies and Estimates (continued)

o    We have entered into lease agreements where the rental payments increase on
     either a monthly or annual basis.  We recognize the related rent expense on
     the straight-line method over the term of the agreements.  Deferred rent is
     recorded to reflect the excess of rent expense over cash payments since the
     inception of the leases.

Results of Operations

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

                                         Year Ended December 31,
                                       1999       2000       2001
                                     ---------  ---------  ---------
                                         (dollars in thousands)
Net operating revenues.............  $ 358,324  $ 408,925  $ 517,984
Operating expenses.................    305,098    344,709    431,741
                                     ---------  ---------  ---------
Operating income...................  $  53,266  $  64,216  $  86,243
                                     =========  =========  =========
Net income (loss)..................  $  (5,785) $  26,778  $  36,431
                                     =========  =========  =========
EBITDA (1).........................  $  77,992  $  98,290  $ 126,330
                                     =========  =========  =========
Cash provided by operating
  activities.......................  $  64,491  $  64,837  $  88,902
                                     =========  =========  =========
Cash used in investing activities..  $ (48,805) $(176,854) $(101,725)
                                     =========  =========  =========
Cash provided by (used in)
  financing  activities............  $ (18,655) $ 116,948  $  12,613
                                     =========  =========  =========

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


                                       17
<PAGE>


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

Fiscal 2001 Compared to 2000

     Net revenues and operating  income increased in the year ended December 31,
2001 due primarily to the strong  performance  of the Suncoast,  which opened in
September  2000.  Construction  disruption at the Gold Coast and The Orleans,  a
slowdown  in  tourist  visitation  to Las Vegas  after the  September  11,  2001
terrorist  attacks,  recessionary  economic  trends  and  competition  from  new
locals-oriented  hotel-casinos  resulted in decreases in revenues and  operating
income at The  Orleans,  the Gold  Coast and the  Barbary  Coast.  Combined  net
revenues in 2001 were $518.0  million  compared  to $408.9  million in 2000,  an
increase of 26.7%.  Operating income was $86.2 million in 2001 compared to $64.2
million in 2000, an increase of 34.3%.  Operating  expenses  increased by 25.3%,
primarily as a result of the full year of operations at the Suncoast compared to
only three and one-half  months of Suncoast  operations  in 2000.  Net income in
2001 increased  36.0% to $36.4 million  compared to $26.8 million in 2000 due to
the full-year results of the Suncoast.

     Casino.  Casino  revenues were $387.5 million in 2001, an increase of 29.9%
over 2000 casino revenues of $298.4  million.  The increase was primarily due to
the first  full year of  operations  of the  Suncoast.  Construction  disruption
during a remodeling project  contributed to a 2.7% decline in gaming revenues at
the  Gold  Coast  and  the  general  slowdown  in  tourism  after  September  11
contributed  to flat casino  revenues  at The Orleans and a 2.8%  decline at the
Barbary  Coast.  Casino  expenses  increased by 27.0%  primarily  because of the
Suncoast,  resulting in a casino  operating  margin of 55.0% in 2001 compared to
54.0% in 2000.

     Food and  Beverage.  For the year ended  December 31, 2001,  gross food and
beverage revenues were $106.9 million, an increase of $22.1 million (26.1%) over
2000 revenues of $84.8 million,  primarily due to the full year of operations at
the Suncoast,  which was only open for three and one-half  months in 2000.  Food
and beverage expenses increased $15.7 million (25.3%), in line with the increase
in revenues.

     Hotel. Gross hotel room revenues were $38.4 million in 2001, an increase of
$4.7 million (14.0%) over 2000 room revenues of $33.7 million.  The increase was
due to a full year of operations of the Suncoast,  which was only open for three
and  one-half  months  in 2000,  and the  expansion  of  available  rooms at the
Suncoast in September  2001 from 232 to 419.  This more than offset a decline in
occupancy at all four  properties  after the terrorist  attacks on September 11.
The average daily room rate  increased to $59.05 in 2001 from $58.56 in 2000 due
to the higher room rates  achieved by the  Suncoast  and  increases  at both The
Orleans and Gold Coast.  Guest room occupancy levels declined from 93.0% in 2000
to 89.0% in 2001 as a result of the events of September 11 and  generally  lower
occupancy levels at the Gold Coast. Hotel expenses increased 9.3%, primarily due
to the full year of Suncoast operations.

     Other.  Other revenues increased 17.8% in 2001 to $36.7 million compared to
$31.2 million in 2000, due to the full year of operations at the Suncoast. Costs
related to the other revenues increased by 12.9% for the same reason.

     General and Administrative.  General and administrative expenses were $91.6
million in 2001  compared  to $69.4  million in 2000,  an  increase of 31.9% due
primarily  to  the  full  year  of  operations  at  the  Suncoast.  General  and
administrative  expenses at the other properties  increased $5.2 million or 8.8%
partly due to increased utility costs of $2.4 million.


                                       18
<PAGE>

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

Fiscal 2001 Compared to 2000 (continued)

     Pre-opening,  Rent and Depreciation.  There were no pre-opening expenses in
2001  compared  to $6.2  million in 2000 due to the  opening of the  Suncoast in
September  2000.  Land lease expense and the related  deferred rent expense were
both higher in 2001 because the rent on the Suncoast land was capitalized during
construction   until  it  opened  on  September  12,  2000.   Depreciation   and
amortization  expense  was  higher  in  2001  due  primarily  to a full  year of
operations at the Suncoast.

     Other  Expenses.  Other expenses were $31.0 million in 2001, an increase of
34.6% over 2000 other expenses of $23.0 million, due primarily to higher average
debt levels and lower capitalized interest in 2001.

Fiscal 2000 Compared to 1999

     Net revenues and operating  income increased in the year ended December 31,
2000,  primarily due to improved slot revenues at The Orleans and the opening in
September  2000 of the  Suncoast.  Net  revenues  in 2000  were  $408.9  million
compared to $358.3 million in 1999, an increase of 14.1%.  Operating  income was
$64.2  million in 2000  compared to $53.2 million in 1999, an increase of 20.6%.
Operating expenses increased by 13.0%, in line with the increased revenues.

     Net income in 2000 was $26.8 million compared to a net loss in 1999 of $5.8
million.  The net loss in the prior year was primarily due to a one-time  charge
of $27.0 million, net of income tax benefit, as a result of the early retirement
of debt in March 1999.  Despite increased  long-term debt due to construction of
the Suncoast,  net interest  expense  increased by only $1.5 million (7.2%) as a
result of $4.5 million of interest being  capitalized  and in 2000.  Capitalized
interest was $612,000 in 1999.

     Casino.  Casino  revenues were $298.4 million in 2000, an increase of 14.1%
over 1999 casino revenues of $261.5  million.  The increase was primarily due to
improved slot  revenues at The Orleans and the opening in September  2000 of the
Suncoast.  Because of the  improvement  in  high-margin  slot  revenues,  casino
expenses increased only 7.9% contributing to an improved casino operating margin
of 54.0% in 2000 compared to 51.4% in 1999.

     Food and  Beverage.  For the year ended  December 31, 2000,  gross food and
beverage revenues were $84.8 million,  an increase of $12.1 million (16.6%) over
1999  revenues of $72.7  million.  The increase was  primarily  due to increased
customer  volume  at The  Orleans  and the  opening  of the  Suncoast.  Food and
beverage  expenses  increased  $11.1  million,  in line  with  the  increase  in
revenues.

     Hotel. Gross hotel room revenues were $33.7 million in 2000, an increase of
$3.4 million (11.3%) over 1999 room revenues of $30.3 million.  The increase was
primarily  due to the  opening of the  Suncoast  and an  increase in the average
daily  room  rate from  $52.87  in 1999 to  $58.56 in 2000 that was  offset by a
slight  decrease  in room  occupancy  percentage  from 94.2% in 1999 to 93.0% in
2000.  The  increase in hotel  expenses  was  commensurate  with the increase in
revenues.

     Other.  Other revenues  increased 7.1% in 2000 to $31.2 million compared to
$29.1  million in 1999,  primarily  due to the  opening of the  Suncoast.  Costs
related to the other revenues decreased slightly (1.2%).

     General and Administrative.  General and administrative expenses were $69.4
million in 2000  compared  to $60.5  million in 1999,  an  increase of 14.8% due
primarily to related expenses of the Suncoast.


                                       19
<PAGE>

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

Fiscal 2000 Compared to 1999 (continued)

     Pre-opening, Rent and Depreciation.  Pre-opening expenses were $6.2 million
in 2000  compared to $235,000 in 1999 due to the opening of the  Suncoast.  Land
lease  expense and the related  deferred  rent  expense  were both lower in 2000
because the rent on the Suncoast land was  capitalized  during the  construction
period,  July 1, 1999 to  September  12,  2000.  Depreciation  and  amortization
expense was higher in 2000 because of the opening of the Suncoast.

Aggregate Indebtedness and Fixed Payment Obligations

     Our total long-term  indebtedness and fixed payment obligations on the land
leases are summarized by year below:

<TABLE>
<CAPTION>
                                     2002      2003      2004      2005      2006   Thereafter
                                   --------  --------  --------  --------  --------  --------
                                                     (dollars in thousands)
<S>                                <C>       <C>       <C>       <C>       <C>       <C>
Long-Term Indebtedness
  Senior subordinated notes(1)...  $     --  $     --  $     --  $     --  $     --  $225,000
  Bank credit facility(1)........        --    25,000   119,000        --        --        --
  Other..........................       148       162       177         3         3        31

Fixed Payment Obligations
  for Land Leases
  Barbary Coast - land lease.....       175       185       190       190       190     5,303
  Barbary Coast - parking lot....       125       125        --        --        --        --
  The Orleans - land lease.......     2,650     2,700     2,700     2,700     2,950   195,811
  Suncoast - land lease..........     2,420     2,480     2,540     2,600     2,660   203,840
                                   --------  --------  --------  --------  --------  --------
Total Indebtedness and Fixed
Payment Obligations..............  $  5,518  $ 30,652  $124,607  $  5,493  $  5,803  $629,985
                                   ========  ========  ========  ========  ========  ========
<FN>


(1)  This excludes the March 19, 2002 issuance of an additional  $100.0  million
     of senior subordinated notes and related repayment of $103.0 million on our
     bank credit facility.
</FN>
</TABLE>

     During the year ended December 31, 2001 our wholly owned subsidiary,  Coast
Hotels made principal  payments of $32.0 million net of borrowings on the senior
secured  credit  facility  and  $4.2  million  in  principal  payments  on other
long-term debt. Coast Hotels has debt service payments due aggregating  $148,000
in 2002 on other long-term debt obligations.

     Coast Hotels also has fixed  payments  obligations  due during 2002 of $5.4
million.  Total  remaining  fixed  payment  obligations  under  leases is $432.5
million.  The fixed payment  obligations  represent payments due under operating
lease  agreements  primarily  for land on  which  three  of our  properties  are
located.


                                       20
<PAGE>

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

Aggregate Indebtedness and Fixed Payment Obligations (continued)

     The Orleans occupies a portion of an approximately  80-acre site located on
West Tropicana Avenue,  approximately one mile south of the Gold Coast. We lease
the real  property  under a ground  lease  entered  into by Coast Hotels and the
Tiberti  Company,  a Nevada  general  partnership  of which J. Tito  Tiberti,  a
director  of Coast  Hotels,  is  managing  partner.  The lease had an  effective
commencement  date of October 1, 1995, an initial term of 50 years, and includes
an option,  exercisable  by us, to extend the initial term for an  additional 25
years.  The lease  provides  for monthly  rental  payments of $200,000 per month
through February 2002, $225,000 per month during the 48-month period thereafter,
and $250,000 per month during the  60-month  period  thereafter.  In March 2011,
annual rental  payments  will increase on a compounding  basis at a rate of 3.0%
per annum.  In  addition,  we have been  granted an option to purchase  the real
property  during the two-year  period  commencing  in February  2016.  The lease
provides  that the  purchase  price  will be the fair  market  value of the real
property at the time we exercise the option,  provided  that the purchase  price
will not be less than 10 times,  nor more  than 12  times,  annual  rent at such
time. See also Item 2, "Properties" for a discussion of our properties.

     The Suncoast occupies the approximately  50-acre site located at the corner
of Rampart Boulevard and Alta Drive in the west end of the Las Vegas valley that
we lease pursuant to a Ground Lease  Agreement dated as of October 28, 1994. The
initial term of the lease expires on December 31, 2055. The lease contains three
options,  exercisable  by us, to extend the term of the lease for 10 years each.
The lease  provided for monthly  rental  payments of $166,667 for the year ended
December  31,  1995.  Thereafter,  the monthly  rent  increases by the amount of
$5,000 in  January of each year.  The  landlord  has the option to require us to
purchase the property at the end of 2014, 2015, 2016, 2017 and 2018, at the fair
market value of the real property at the time the landlord exercises the option,
provided that the purchase price will not be less than 10 times nor more than 15
times  the  annual  rent at such  time.  Based on the  terms of the  lease,  the
potential purchase price commitment ranges from  approximately  $31.0 million to
approximately  $51.0  million in the years 2014 through 2018. We have a right of
first refusal in the event the landlord desires to sell the property at any time
during the lease term.

     The Barbary Coast occupies  approximately  1.8 acres at the intersection of
Flamingo Road and the Strip and occupies real property that we lease pursuant to
a lease dated May 1, 1993.  The lease  provides for rental  payments of $175,000
per year during the initial  term of the lease that  expires on May 1, 2003.  We
have given notice to the landlord of our  intention to exercise the first of two
30-year options, with rental payments increasing to $190,000 per year during the
first ten years of the renewal period.  We have an option to purchase the leased
property at any time during the six month period prior to the  expiration of the
initial  term of the lease,  provided  that  certain  conditions  are met,  at a
purchase price equal to the greater of $3.5 million or the then appraised  value
of the real  property.  Should  the  landlord  desire to sell the real  property
during the initial term of the lease, we have a right of first refusal.  We also
lease  approximately  2.5 additional  acres of real property located adjacent to
the Barbary  Coast.  The lease expires on December 31, 2003.  The lease provides
for rental  payments of $125,000 per annum.  We use the  2.5-acre  property as a
parking lot for our employees and for valet parking.  The landlord has the right
to terminate the lease upon six months prior notice to us if it requires the use
of the  property  for its own  business  purposes  (which  excludes  leaving the
property vacant or leasing it to third parties prior to January 1, 2003).


                                       21
<PAGE>

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

Liquidity and Capital Resources

     Our  principal  sources of liquidity  have  consisted  of cash  provided by
operating  activities and debt financing.  Cash provided by operating activities
was $88.9 million in the year ended December 31, 2001, compared to $64.8 million
in 2000 and $64.5 million in 1999.

     Cash used in investing  activities in each of the years ended  December 31,
1999,  2000 and 2001 was primarily for capital  expenditures.  During 2001,  our
capital  expenditures  were  $141.6  million,  including  construction  accounts
payable of $34.1 million. $30.9 million was used in the expansion and remodel of
the Gold Coast,  approximately  $51.0  million was used in the  expansion of The
Orleans,  approximately  $7.4 million was used in other  projects at The Orleans
and $15.5 million was used at the Suncoast to add 216 hotel rooms and a swimming
pool and to complete other various projects.  $11.9 million was used to purchase
three  contiguous  parcels of land totaling  approximately 55 acres for possible
future development. The remaining $24.9 million was used for maintenance capital
expenditures.

     Cash provided by financing  activities was $12.6 million in 2001.  Proceeds
from the issuance in February 2001 of $50.0 million  principal  amount of senior
subordinated  notes and from borrowings under our senior secured credit facility
were  partially  offset by  reductions of amounts  outstanding  under the credit
facility with cash flows from operations and approximately  $49.1 million of net
proceeds from the senior subordinated notes issuance. Cash provided by financing
activities  was $116.9  million in 2000,  primarily  from  borrowings  under our
senior secured credit facility,  and cash used in financing activities was $18.7
million in 1999  primarily as a result of the  refinancing of our debt. In March
1999,  we issued $175.0  million  principal  amount of 9.5% senior  subordinated
notes and entered into a $75.0 million senior  secured credit  facility due 2004
to facilitate the refinancing.  The senior secured credit facility was increased
to $200.0 million in September 1999 to finance the construction of the Suncoast.

     In 1999, with the proceeds from our $175.0 million principal amount of 9.5%
senior  subordinated  notes and  borrowings  under  the  senior  secured  credit
facility,  we  repurchased  substantially  all of the $175.0  million  principal
amount  outstanding of 13% first mortgage notes and all $16.8 million  principal
amount of 10-7/8%  first  mortgage  notes.  In  December  2000 we  redeemed  the
remaining 13% first mortgage  notes.  In connection  with the 1999 repurchase of
the 13% notes and the 10-7/8% notes,  we incurred  repurchase  premiums of $31.0
million  and  $2.1  million,  respectively.  The  repurchase  premiums  and  the
write-offs  of  unamortized  debt  issuance  costs and original  issue  discount
resulted in an  extraordinary  loss in 1999 of $27.0 million,  net of applicable
income tax benefit of $14.5 million.

     On February 2, 2001 Coast Hotels issued $50.0 million additional  principal
amount of senior  subordinated  notes. The net proceeds of  approximately  $49.1
million were used to reduce borrowings under its senior secured credit facility.
On March 19, 2002 we issued $100.0 million  additional  principal  amount of our
senior  subordinated  notes.  The notes  were  issued  at a premium  and the net
proceeds of  approximately  $103.0 million were used to reduce  borrowings under
our senior secured credit facility. As a result we have additional  availability
under the credit facility to complete  certain capital  improvement  projects as
further described below. The notes that were issued in 2001 and 2002 were issued
under the same  indenture  and have the same terms,  interest  rate and maturity
date as our outstanding  $225.0 million principal amount of senior  subordinated
notes. We have entered into an interest rate swap agreement with a member of our
bank group such that $100.0 million  principal amount of our fixed rate debt has
been converted to a floating rate based upon LIBOR.


                                       22
<PAGE>

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

Liquidity and Capital Resources (continued)

     The  availability  under the senior secured credit  facility was reduced by
$6.0  million to $194.0  million on  September  30, 2001 and by $6.0  million to
$188.0  million on December 31, 2001 and will be reduced by an  additional  $6.0
million on each of March 31, 2002 and June 30,  2002.  The  quarterly  reduction
will increase to $8.5 million on each of September 30, 2002,  December 31, 2002,
March 31, 2003 and June 30, 2003;  and to $11.5 million on each of September 30,
2003,  December 31, 2003,  March 31, 2004 and June 30, 2004.  Advances under the
facility  may be used for  working  capital,  general  corporate  purposes,  and
certain  improvements to our existing  properties.  As of March 19, 2002,  after
completion  of the $100.0  million  offering  and use of  proceeds to repay debt
outstanding  under the senior  secured  credit  facility,  we had $49.0  million
outstanding  under the senior  secured  credit  facility.  Borrowings  under the
senior secured credit facility bear interest,  at our option,  at a premium over
the one-, two-, three- or six-month London Interbank Offered Rate ("LIBOR"). The
premium  varies,  depending  on our ratio of total  debt to EBITDA  and can vary
between 125 and 250 basis  points.  As of December  31,  2001,  the premium over
LIBOR was 2.0% (200 basis points) and the interest rate was 3.93%.  The weighted
average interest rate on the senior secured credit facility was 6.09% in 2001.

     The loan agreement  governing the senior secured credit  facility  contains
covenants that,  among other things,  limit our ability to pay dividends or make
advances  to Coast  Resorts,  to make  certain  capital  expenditures,  to repay
certain  existing  indebtedness,  to incur  additional  indebtedness  or to sell
material  assets.  Additionally,  the loan  agreement  requires that we maintain
certain financial ratios with respect to its leverage and fixed charge coverage.
We are also subject to certain covenants associated with the indenture governing
our  senior  subordinated  notes,  including,  in part,  limitations  on certain
restricted payments, the incurrence of additional  indebtedness and asset sales.
The  agreement  was amended in December  2001 and in March 2002 to increase  the
limitations on certain  capital  expenditures.  At December 31, 2001, we were in
compliance with all covenants and required ratios.

Capital Improvement Projects

     In January 2001 we  commenced an expansion of The Orleans.  The project has
an  estimated  cost of  $150.0  million  and is  expected  to be paid  for  with
operating  cash flows and borrowings  under our senior secured credit  facility.
The  expansion  includes a  special-events  arena,  a 600-room  hotel  tower,  a
2,600-car  parking garage,  six additional movie theaters,  two restaurants,  an
Irish pub and  approximately  40,000  square  feet of new gaming area and public
space. Through March 28, 2002, we had completed the movie theaters,  the parking
garage, the restaurants, Irish pub and the additional gaming and public area. We
anticipate that 2002 cash outlays for the project will total approximately $80.0
million.

     In the fourth quarter of 2000, we commenced an approximately  $60.0 million
expansion and remodel of the Gold Coast. The project was originally  designed to
include  a new,  expanded  buffet  restaurant,  a sports  bar,  an  Asian-themed
restaurant,  an Italian  restaurant,  10,000 square feet of  additional  meeting
space,  the  refurbishing  of our standard hotel guest rooms and the redesign of
most of the Gold  Coast's  public  areas.  In 2001 we expanded  the scope of the
project to include an  additional  approximately  20,000 square feet of slot and
table games area, a new bingo room, an expanded porte-cochere,  a parking garage
and a moving walkway. We expect to complete the project by the fourth quarter of
2002 and to spend approximately $29.0 million in 2002.


                                       23
<PAGE>

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


Capital Improvement Projects (continued)

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

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

o    change orders and plan or specification modifications;

o    changes and concessions required by governmental or regulatory authorities;

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

o    disruption  of  our  operations  at  our   hotel-casinos   by  construction
     activities.

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

      ...
Other Matters

     In June 1998, the Financial Accounting Standards Board adopted Statement of
Financial  Accounting  Standards No. 133 ("SFAS 133") entitled  "Accounting  for
Derivative Instruments and Hedging Activities", which establishes accounting and
reporting standards for derivative  instruments and for hedging  activities.  It
requires  that  an  entity   recognize  all  derivatives  as  either  assets  or
liabilities in the statement of financial position and measure those instruments
at fair value. If specific  conditions are met, a derivative may be specifically
designated  as a hedge of  specific  financial  exposures.  The  accounting  for
changes in the fair value of a  derivative  depends on the  intended  use of the
derivative  and, if used in hedging  activities,  its  effective use as a hedge.
SFAS 133, as  amended,  is  effective  for all fiscal  quarters of fiscal  years
beginning after December 31, 2000. SFAS 133 should not be applied  retroactively
to financial  statements  for prior  periods.  We adopted SFAS 133 on January 1,
2001 as required.

     In July 2001, the Financial Accounting Standards Board issued Statement No.
141,  "Business  Combinations"  and  Statement  No.  142,  "Goodwill  and  Other
Intangible  Assets".   SFAS  141  is  effective  as  follows:  (a)  use  of  the
pooling-of-interests  method is prohibited for business  combinations  initiated
after  June 30,  2001;  and (b) the  provisions  of SFAS  141 also  apply to all
business  combinations  accounted for by the purchase  method that are completed
after June 30, 2001. There are also transition provisions that apply to business
combinations  completed  before  July 1, 2001  which were  accounted  for by the
purchase method. SFAS 142 is effective for fiscal years beginning after December
15, 2001 and applies to all goodwill and other intangible  assets  recognized in
an entity's  statement of financial  position at that date,  regardless  of when
those assets were initially recognized.


                                       24
<PAGE>

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

Other Matters (continued)

     In August 2001, the Financial  Accounting  Standards Board issued Statement
No.  143,  "Accounting  for  Obligations   Associated  with  the  Retirement  of
Long-Lived  Assets".  The  objectives  of SFAS 143 are to  establish  accounting
standards for the recognition and measurement of an asset retirement  obligation
and its associated asset retirement cost. SFAS 143 is effective for fiscal years
beginning after June 15, 2002.

     In October 2001, the Financial  Accounting Standards Board issued Statement
No. 144,  "Accounting for the Impairment or Disposal of Long-Lived Assets." SFAS
144 addresses financial  accounting and reporting for the impairment or disposal
of long-lived  assets.  SFAS 144 is effective for fiscal years  beginning  after
December 15, 2001 and, generally, is to be applied prospectively.

     We are currently  evaluating the provisions of SFAS 141, SFAS 142, SFAS 143
and SFAS 144 and we do not  anticipate  that the effects of these  changes  will
have an impact on our financial position or results of operations.

Impact of Inflation and Other Economic Factors

     Absent changes in competitive and economic conditions or in specific prices
affecting the industry,  we do not expect that inflation will have a significant
impact  on  our  operations.  Change  in  specific  prices,  such  as  fuel  and
transportation  prices,  relative to the general  rate of  inflation  may have a
material  adverse  effect on the hotel and casino  industry.  We depend upon Las
Vegas and  Southern  California  for a majority of our  customers.  Any economic
downturn in those areas could materially adversely affect our business and
results of operations and our ability to pay interest and principal on our debt.

Regulation and Taxes

     Coast  Hotels is  subject to  extensive  regulation  by the  Nevada  Gaming
Authorities.  Changes in applicable laws or regulations could have a significant
impact on our operations.

     The  gaming  industry  represents  a  significant  source of tax  revenues,
particularly  to the State of Nevada and its counties and  municipalities.  From
time to time, various state and federal  legislators and officials have proposed
changes in tax law, or in the  administration of such law,  affecting the gaming
industry.  Proposals  in recent  years  that have not been  enacted  included  a
federal gaming tax and increases in state or local taxes.

     We believe that our recorded tax balances are adequate.  However, it is not
possible to determine with  certainty the likelihood of possible  changes in tax
law or in the administration of such law. Such changes, if adopted, could have a
material adverse effect on our operating results.


                                       25
<PAGE>

Item 7A. Quantitative and Qualitative Disclosures about Market Risk

Market Risk

     Market  risk is the risk of loss  arising  from  adverse  changes in market
rates and prices,  such as interest rates,  foreign currency  exchange rates and
commodity  prices.  Our primary  exposure  to market risk is interest  rate risk
associated with our long-term debt. We attempt to limit our exposure to interest
rate  risk  by  managing  the mix of our  long-term  fixed-rate  borrowings  and
short-term borrowings under our bank credit facility. Through December 31, 2001,
we  had  not  invested  in  derivative-  or  foreign  currency-based   financial
instruments.

     The table below provides  information about our financial  instruments that
are  sensitive to changes in interest  rates.  For debt  obligations,  the table
presents  notional  amounts and weighted  average  interest rates by contractual
maturity dates:

<TABLE>
<CAPTION>
                                                                                            Fair
                       2002      2003      2004      2005      2006   Thereafter   Total   Value(1)
                     --------  --------  --------  --------  --------  --------  --------  --------
                                                 (dollars in thousands)
LIABILITIES
Short-term debt
<S>                  <C>       <C>       <C>       <C>      <C>       <C>       <C>       <C>
  Fixed rate.......  $    148  $     --  $     --  $    --  $     --  $     --  $    148  $    148
  Average interest
    rate(2)........      9.50%       --        --       --        --        --      9.50%

Long-term debt
  Fixed rate.......  $     --  $    162  $    177  $     3  $      3  $225,031  $225,376  $216,129
  Average interest
    rate(2)........        --      9.50%     9.50%    9.50%     9.50%     9.50%     9.50%

  Variable rate....  $     --  $ 25,000  $119,000   $   --  $     --  $     --  $144,000  $144,000
  Average interest
    rate(2)........        --      3.93%     3.93%      --        --        --      3.93%

<FN>
(1)  The fair values are based on the  borrowing  rate  currently  available for
     debt  instruments  with similar terms and maturities,  and market quotes of
     our publicly traded debt.

(2)  Based upon contractual  interest rates for fixed  indebtedness or the LIBOR
     rate at December 31, 2001 for variable rate indebtedness.

     See also  "Item 7 -  Management's  Discussion  and  Analysis  of  Financial
     Condition and Results of Operations  -Liquidity and Capital  Resources" and
     see "Item 14 - Exhibits,  Financial Statement Schedules and Reports on Form
     8-K - Financial Statements Index - Notes to Financial Statements - Note 6 -
     Long-Term Debt".
</FN>
</TABLE>

Item 8. Financial Statements and Supplementary Data

     The report of independent  accountants,  financial statements and financial
statement  schedule listed in the  accompanying  index are filed as part of this
report. See "Item 14 - Exhibits,  Financial  Statement  Schedules and Reports on
Form 8-K - Financial Statements, Financial Statement Schedules, and Exhibits".

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

   None.


                                       26
<PAGE>

                              PART III

Item 10. Directors and Executive Officers of the Registrant

     Information  in response to Item 10 is  incorporated  by reference from our
definitive  proxy  statement  to be filed  in  connection  with our 2002  Annual
Meeting of Stockholders pursuant to Instruction G(3) of Form 10-K.

Item 11. Executive Compensation

     Information  in response to Item 11 is  incorporated  by reference from our
definitive proxy statement to be filed in connection with our 2002 Annual
Meeting of Stockholders pursuant to Instruction G(3) of Form 10-K.

Item 12. Security Ownership of Certain Beneficial Owners and Management

     Information  in response to Item 12 is  incorporated  by reference from our
definitive  proxy  statement  to be filed  in  connection  with our 2002  Annual
Meeting of Stockholders pursuant to Instruction G(3) of Form 10-K.

Item 13. Certain Relationships and Related Transactions

     Information  in response to Item 13 is  incorporated  by reference from our
definitive  proxy  statement  to be filed  in  connection  with our 2002  Annual
Meeting of Stockholders pursuant to Instruction G(3) of Form 10-K.


                                       27
<PAGE>

                                PART IV

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

(a)  Financial Statements, Financial Statement Schedules and Exhibits

                                                                PAGE
                                                                ----

1.  Financial Statements Index................................. F-1

2.  Financial Statement Schedule Index:
    Schedule I - Condensed Financial Information of Coast
    Resorts, Inc. (Parent Company Only)........................ F-26
    Schedule II - Valuation and Qualifying Accounts............ F-30


                                       28
<PAGE>

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

                                  Exhibit Index

Exhibit
Number                       Description of Exhibit
--------------------------------------------------------------------------
  3.1    Amended Articles of Incorporation of Coast Hotels and Casinos,
         Inc. (5)

  3.2    First Amended Bylaws of Coast Hotels and Casinos, Inc. (5)

  3.3    Articles of Incorporation of Coast Resorts, Inc. (1)

  3.4    First Amended Bylaws of Coast Resorts, Inc. (1)

  4.1    Indenture dated as of March 23, 1999 among Coast Hotels and
         Casinos, Inc., as issuer of 9-1/2% Senior Subordinated Notes
         due 2009, Coast Resorts, Inc., as guarantor, and Firstar Bank
         of Minnesota, N.A., as trustee (8)

  4.2    First Supplemental Indenture dated as of November 20, 2000
         among Coast Hotels and Casinos, Inc., as issuer, Coast
         Resorts, Inc., as guarantor, and Firstar Bank of Minnesota,
         N.A., as trustee (11)

  4.3    Second Supplemental Indenture dated as of February 2, 2001,
         among Coast Hotels and Casinos, Inc., as issuer, Coast
         Resorts, Inc., as guarantor, and Firstar Bank of Minnesota,
         N.A., as trustee (11)

  4.4    Third Supplemental Indenture dated as of March 19, 2002, among
         Coast Hotels and Casinos, Inc., as issuer, Coast Resorts,
         Inc., as guarantor, and U.S. Bank, N.A., as trustee (12)

  4.5    Form of 9-1/2% Note (included in Exhibit 4.1) (10)

  10.1   Tax Sharing Agreement dated as of January 30, 1996 by and
         among Coast Resorts, Inc., Coast Hotels and Casinos, Inc., and
         Coast West, Inc. (4)

  10.2   Ground Lease dated as of October 1, 1995,  between The Tiberti Company,
         a Nevada general  partnership,  and Coast Hotels and Casinos,  Inc. (as
         successor of Gold Coast Hotel and Casino, a Nevada limited partnership)
         (3)

  10.3   Lease Agreement dated May 1, 1992, by and between Empey Enterprises,  a
         Nevada general  partnership,  as lessor,  and the Barbary Coast Hotel &
         Casino, a Nevada general partnership, as lessee (1)

  10.4   Ground Lease  Agreement  dated  October 28, 1994 by and among 21 Stars,
         Ltd., a Nevada limited liability  company,  as landlord,  Barbary Coast
         Hotel & Casino, a Nevada general partnership, as tenant, Wanda Peccole,
         as successor  trustee of the Peccole 1982 Trust dated February 15, 1982
         ("Trust),  and The William Peter and Wanda Ruth Peccole  Family Limited
         Partnership,  a  Nevada  limited  partnership   ("Partnership"),   and,
         together with Trust, as owner, as amended (1)

  10.5   Form of Subordination Agreement between Coast Hotels and
         Casinos, Inc. and certain former Gold Coast partners holding
         Subordinated Notes (4)

  10.6   Lease  dated as of  November  1,  1982,  by and  between  Nevada  Power
         Company, a Nevada Corporation as landlord,  and Barbary Coast Hotel and
         Casino, a Nevada general partnership (1)

  10.7   Leasehold  Deed of Trust,  Assignment  of Rents and Security  Agreement
         dated  February  13, 1991,  by and between the Barbary  Coast Hotel and
         Casino, a Nevada general  partnership,  First American Title Company of
         Nevada, and Exber, Inc., a Nevada corporation (1)

  10.8   Amended and Restated Loan Agreement dated as of September 16,
         1999 among Coast Hotels and Casinos, Inc. as Borrower, the
         Lenders referred to therein, and Bank of America National
         Trust and Savings Association as Administrative Agent (9)

  10.9   Security Agreement dated as of March 18, 1999 by Coast Hotels
         and Casinos, Inc. in favor of Bank of American National Trust
         and Savings Association as Administrative Agent (10)



                                       29
<PAGE>

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

                            Exhibit Index (continued)

 10.10   Security Agreement dated as of March 18, 1999 by Coast Resorts,
         Inc. in favor of Bank of America National Trust and Savings
         Association as Administrative Agent (10)

 10.11   Pledge Agreement dated as of September 1999 by Coast Resorts,
         Inc. in favor of Bank of America National Trust and Savings
         Association as Administrative Agent (10)

 10.12   Leasehold Deed of Trust, Assignment of Rents and Fixture Filing
         dated as of March 18, 1999 by Coast Hotels and Casinos, Inc. in
         favor of Bank of America National Trust and Savings Association
         as Administrative Agent (The Orleans Hotel and Casino) (10)

 10.13   Leasehold Deed of Trust, Assignment of Rents and Fixture Filing
         dated as of March 18, 1999 by Coast Hotels and Casinos, Inc. in
         favor of Bank of America National Trust and Savings Association
         as Administrative Agent (The Gold Coast Hotel and Casino) (10)

 10.14   Leasehold Deed of Trust, Assignment of Rents and Fixture Filing
         dated as of March 18, 1999 by Coast Hotels and Casinos, Inc. in
         favor of Bank of America National Trust and Savings Association
         as Administrative Agent (The Suncoast) (10)

 10.15   Guaranty dated March 18, 1999 by Coast Resorts, Inc. in favor
         of Bank of America National Trust and Savings Association as
         Administrative Agent

 10.16   Trademark Security Interest Assignment dated as of March 18,
         1999 by Coast Hotels and Casinos, Inc. and Coast Resorts, Inc.
         in favor of Bank of America National Trust and Savings
         Association as Administrative Agent (10)

 10.17   Registration Rights Agreement dated as of February 2, 2001,
         among Coast Hotels and Casinos, Inc. as issuer, Coast Resorts,
         Inc., as guarantor, and Banc of America Securities, LLC, as
         Representative of the Placement Agents (11)

 10.18   Registration Rights Agreement dated as of March 19, 2002, among
         Coast Hotels and Casinos, Inc. as issuer, Coast Resorts, Inc.,
         as guarantor, and Banc of America Securities, LLC, as
         Representative of the Placement Agents (12)

 10.19   Placement Agreement dated as of January 23, 2001, by and among
         Coast Hotels and Casinos, Inc., Coast Resorts, Inc., Banc of
         America Securities LLC and Morgan Stanley & Co. Incorporated
         (11)

 10.20   Placement Agreement dated as of March 11, 2002, by and among
         Coast Hotels and Casinos, Inc., Coast Resorts, Inc., Banc of
         America Securities LLC and Morgan Stanley & Co. Incorporated
         (12)

 10.21   Amendment No. 1 to the Amended and Restated Loan Agreement
         dated as of December 1, 2001.

 10.22   Amendment No. 2 to the Amended and Restated Loan Agreement
         dated as of March 8, 2002.

   21    List of Subsidiary of Coast Resorts, Inc. (8)

-------
(1)  Previously filed with the Securities and Exchange  Commission as an exhibit
     to Coast  Resorts,  Inc.'s General Form for  Registration  of Securities on
     Form 10 and incorporated herein by reference.

(2)  Previously filed with the Securities and Exchange  Commission as an exhibit
     to Coast Resorts,  Inc.'s  Amendment No. 1 to General Form for Registration
     of Securities on Form 10 and incorporated herein by reference.

(3)  Previously filed with the Securities and Exchange  Commission as an exhibit
     to Coast Resorts,  Inc.'s  Amendment No. 2 to General Form for Registration
     of Securities on Form 10 and incorporated herein by reference.

(4)  Previously filed with the Securities and Exchange  Commission as an exhibit
     to Coast  Resorts,  Inc.'s  Annual Report on Form 10-K for the period ended
     December 31, 1995 and incorporated herein by reference.


                                       30
<PAGE>


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

                            Exhibit Index (continued)

(5)  Previously filed with the Securities and Exchange  Commission as an exhibit
     to Coast Resorts,  Inc.'s  Registration  Statement on Form S-4 filed May 2,
     1996 and incorporated herein by reference.

(6)  Previously filed with the Securities and Exchange  Commission as an exhibit
     to Coast  Resorts,  Inc.'s  Annual Report on Form 10-K for the period ended
     December 31, 1997 and incorporated herein by reference.

(7)  Previously filed with the Securities and Exchange  Commission as an exhibit
     to Coast  Resorts,  Inc.'s  Annual Report on Form 10-K for the period ended
     December 31, 1998 and incorporated herein by reference.

(8)  Previously filed with the Securities and Exchange  Commission as an exhibit
     to Coast  Hotels and  Casinos,  Inc.'s  Registration  Statement on Form S-4
     (File  no.  333-79657)  dated  May 28,  1999  and  incorporated  herein  by
     reference.

(9)  Previously filed with the Securities and Exchange  Commission as an exhibit
     to Coast  Resorts,  Inc.'s  Quarterly  Report on Form 10-Q for the  quarter
     ended September 30, 1999 and incorporated herein by reference.

(10) Previously filed with the Securities and Exchange  Commission as an exhibit
     to Coast  Hotels and  Casinos,  Inc.'s  Annual  Report on Form 10-K for the
     period ended December 31, 1999 and incorporated herein by reference.

(11) Previously filed with the Securities and Exchange  Commission as an exhibit
     to Coast  Hotels and  Casinos,  Inc.'s  Registration  Statement on Form S-4
     (File no.  333-55170)  dated  February 7, 2001 and  incorporated  herein by
     reference.

(12) Previously filed with the Securities and Exchange  Commission as an exhibit
     to Coast Hotels and  Casinos,  Inc.'s Form 8-K (File no.  333-04356)  dated
     March 21, 2002 and incorporated herein by reference.

(b)  Reports on Form 8-K

          On October 6, 2001, the Company filed a Form 8-K dated October 5, 2001
     under Item 5, Other Events, with respect to the its participation in a live
     audio webcast to discuss the effects of the  September  11, 2001  terrorist
     attacks.


                                       31
<PAGE>

                                   SIGNATURES

          Pursuant  to the  requirements  of Section 13 or Section  15(d) of the
     Securities Exchange Act of 1934, the Registrant has duly caused this Annual
     Report  on  Form  10-K  to be  signed  on its  behalf  by the  undersigned,
     thereunto duly authorized,  in the City of Las Vegas,  State of Nevada,  on
     March 29, 2002.

                                   COAST RESORTS, INC.

                                   By: /s/  MICHAEL J. GAUGHAN
                                       ---------------------------------------
                                       Michael J. Gaughan,
                                       Chief Executive Officer

          Pursuant to the  requirements of the Securities  Exchange Act of 1934,
     this Annual Report on Form 10-K has been signed by the following persons on
     behalf of the Registrant and in the capacities and on the dates indicated.

       Signature                         Title                       Date
------------------------  ------------------------------------  --------------

/s/ MICHAEL J. GAUGHAN    Chairman of the Board of Directors    April 1, 2002
------------------------  and Chief Executive Officer           -------------
Michael J. Gaughan        (Principal Executive Officer)
                          and Director

/s/ GAGE PARRISH          Director and Chief Financial Officer  April 1, 2002
------------------------ (Principal Financial and               -------------
Gage Parrish              Accounting Officer)

/s/ HARLAN D. BRAATEN     Director                              April 1, 2002
------------------------                                        -------------
Harlan D. Braaten

/s/ JERRY HERBST          Director                              April 1, 2002
------------------------                                        -------------
Jerry Herbst

/s/ J. TITO TIBERTI       Director                              April 1, 2002
------------------------                                        -------------
J. Tito Tiberti

/s/ CHARLES SILVERMAN     Director                              April 1, 2002
------------------------                                        -------------
Charles Silverman

/s/ F. MICHAEL CORRIGAN   Director                              April 1, 2002
------------------------                                        -------------
F. Michael Corrigan

/s/ JOSEPH A. BLASCO      Director                              April 1, 2002
------------------------                                        -------------
Joseph A. Blasco

/s/ FRANKLIN TOTI         Director                              April 1, 2002
------------------------                                        -------------
Franklin Toti


                                       32
<PAGE>

                   Index to Consolidated Financial Statements

                       COAST RESORTS, INC. AND SUBSIDIARY

                                                                         PAGE
                                                                         -----

Report of Independent Accountants........................................ F-2

Consolidated Balance Sheets of Coast Resorts, Inc. and Subsidiary
  as of December 31, 2000 and 2001....................................... F-3

Consolidated Statements of Operations of Coast Resorts, Inc. and
  Subsidiary for the years ended December 31, 1999, 2000 and 2001........ F-4

Consolidated Statements of Stockholders' Equity of Coast Resorts, Inc.
   and Subsidiary for the years ended December 31, 1999, 2000 and 2001... F-5

Consolidated Statements of Cash Flows of Coast Resorts, Inc. and
   Subsidiary for the years ended December 31, 1999, 2000 and 2001....... F-6

Notes to Consolidated Financial Statements...........................     F-7


                                      F-1
<PAGE>

                        REPORT OF INDEPENDENT ACCOUNTANTS

To the Directors and Stockholders of Coast Resorts, Inc. and Subsidiary

In our opinion,  the  accompanying  consolidated  balance sheets and the related
consolidated  statements  of  operations,  stockholders'  equity  and cash flows
present  fairly,  in all  material  respects,  the  financial  position of Coast
Resorts,  Inc. and  Subsidiary as of December 31, 2001 and 2000, and the results
of their  operations  and their  cash  flows for each of the three  years in the
period  ended  December  31,  2001  in  conformity  with  accounting  principles
generally accepted in the United States of America.  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 of these  statements in accordance with auditing  standards
generally  accepted in the United States of America,  which 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,  assessing the accounting  principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP

Las Vegas, Nevada
February 5, 2002, except for Note 6
  as to which the date is March 19, 2002


                                      F-2
<PAGE>

                       COAST RESORTS, INC. AND SUBSIDIARY

                           CONSOLIDATED BALANCE SHEETS

                           December 31, 2000 and 2001
                    (dollars in thousands, except share data)

                                                        2000       2001
                                                      --------  --------
                    ASSETS
   CURRENT ASSETS:
  Cash and cash equivalents.........................  $ 43,560  $ 43,350
  Accounts receivable, less allowance for doubtful
    accounts $713 (2000) and $873 (2001)............     5,658     6,371
  Inventories.......................................     7,220     7,327
  Prepaid expenses..................................     7,526     7,305
  Other current assets..............................     9,538     5,707
                                                      --------  --------
    TOTAL CURRENT ASSETS............................    73,502    70,060
 PROPERTY AND EQUIPMENT, net........................   485,925   579,545
 OTHER ASSETS.......................................     7,772     7,807
                                                      --------  --------
                                                      $567,199  $657,412
                                                      ========  ========
                LIABILITIES AND
             STOCKHOLDERS' EQUITY

   CURRENT LIABILITIES:
  Accounts payable..................................  $ 16,308  $ 13,138
  Accrued liabilities...............................    38,208    41,061
  Construction accounts payable.....................     4,868    34,053
  Current portion of long-term debt.................     2,430       148
                                                      --------  --------
    TOTAL CURRENT LIABILITIES.......................    61,814    88,400
LONG-TERM DEBT, less current portion................   353,337   369,376
DEFERRED INCOME TAXES...............................    11,417    19,251
DEFERRED RENT.......................................    20,330    23,868
                                                      --------  --------
    TOTAL LIABILITIES...............................   446,898   500,895
                                                      --------  --------

COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
  Preferred stock, $.01 par value, 500,000 shares
    authorized, none issued and outstanding.........        --        --
  Common stock, $.01 par value, 2,000,000 shares
    authorized, 1,463,178 (2000) and 1,461,178 (2001)
    shares issued and outstanding...................        15        15
  Treasury stock....................................    (3,118)   (3,333)
  Additional paid-in capital........................    95,398    95,398
  Retained earnings.................................    28,006    64,437
                                                      --------  --------
       TOTAL STOCKHOLDERS' EQUITY............          120,301   156,517
                                                      --------  --------
                                                      $567,199  $657,412
                                                      ========  ========

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


                                      F-3
<PAGE>

                       COAST RESORTS, INC. AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF OPERATIONS

        For The Years Ended December 31, 1999, 2000 and 2001 (dollars in
                          thousands, except share data)

                                                  1999       2000       2001
                                                ---------  ---------  ---------
OPERATING REVENUES:
     Casino...................................  $ 261,546  $ 298,421  $ 387,513
     Food and beverage........................     72,697     84,752    106,898
     Hotel....................................     30,296     33,711     38,446
     Other....................................     29,110     31,183     36,740
                                                ---------  ---------  ---------
        GROSS OPERATING REVENUES..............    393,649    448,067    569,597
     Less: promotional allowances.............    (35,325)   (39,142)   (51,613)
                                                ---------  ---------  ---------
        NET OPERATING REVENUES................    358,324    408,925    517,984
                                                ---------  ---------  ---------

OPERATING EXPENSES:
     Casino...................................    127,195    137,195    174,236
     Food and beverage........................     50,923     62,063     77,785
     Hotel....................................     12,923     13,788     15,071
     Other....................................     25,041     24,750     27,944
     General and administrative...............     60,480     69,443     91,558
     Pre-opening expenses.....................        235      6,161         --
     Land leases..............................      3,770      3,396      5,060
     Deferred rent............................      2,918      2,538      3,538
     Depreciation and amortization............     21,613     25,375     36,549
                                                ---------  ---------  ---------
        TOTAL OPERATING EXPENSES..............    305,098    344,709    431,741
                                                ---------  ---------  ---------
        OPERATING INCOME......................     53,226     64,216     86,243
                                                ---------  ---------  ---------

OTHER INCOME (EXPENSES):
     Interest expense.........................    (22,503)   (27,954)   (30,635)
     Interest income..........................        450        470        405
     Interest capitalized.....................        612      4,511      1,048
     Loss on disposal of assets...............       (192)       (60)    (1,815)
                                                ---------  ---------  ---------
        TOTAL OTHER INCOME (EXPENSES).........    (21,633)   (23,033)   (30,997)
                                                ---------  ---------  ---------
INCOME BEFORE INCOME TAXES AND
  EXTRAORDINARY ITEM..........................     31,593     41,183     55,246
PROVISION FOR INCOME TAXES....................     10,371     14,405     18,815
                                                ---------  ---------  ---------
INCOME BEFORE EXTRAORDINARY ITEM..............     21,222     26,778     36,431
EXTRAORDINARY ITEM - loss on early
  retirement of debt, net of applicable
  income tax benefit ($14,543)................    (27,007)        --         --
                                                ---------  ---------  ---------
NET INCOME (LOSS) ............................  $  (5,785) $  26,778  $  36,431
                                                =========  =========  =========
Basic income per share of common stock
  before extraordinary item...................  $   14.35  $   18.20  $   24.91
                                                =========  =========  =========
Diluted income per share of common stock
  before extraordinary item...................  $   14.35  $   17.92  $   24.32
                                                =========  =========  =========
Basic net income (loss) per share of
  common stock................................  $   (3.91) $   18.20  $   24.91
                                                =========  =========  =========
Diluted net income (loss) per share of
  common stock................................  $   (3.91) $   17.92  $   24.32
                                                =========  =========  =========
Basic weighted average shares outstanding.....  1,478,978  1,471,208  1,462,366
                                                =========  =========  =========
Diluted weighted average shares outstanding...  1,478,978  1,494,066  1,497,781
                                                =========  =========  =========

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


                                      F-4
<PAGE>

<TABLE>
<CAPTION>
                       COAST RESORTS, INC. AND SUBSIDIARY
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

              For The Years Ended December 31, 1999, 2000 and 2001
                             (dollars in thousands)

                                    Common Stock
                                   --------------- Additional  Treasury  Retained
                                   Shares   Amount Paid-In Cap   Stock   Earnings   Total
                                  --------- ------ ----------- --------- -------- --------
<S>                               <C>        <C>    <C>         <C>       <C>     <C>
Balances at December 31, 1998...  1,494,353  $ 15   $ 95,398    $  7,013  $   --  $102,426
  Repurchase of common stock....    (15,375)   --         --          --  (1,538)   (1,538)
  Net loss......................         --    --         --      (5,785)     --    (5,785)
                                  --------- ------ ----------- --------- -------- --------
Balances at December 31, 1999...  1,478,978    15     95,398       1,228  (1,538)   95,103
  Repurchase of common stock....    (15,800)   --         --          --  (1,580)   (1,580)
  Net income....................         --    --         --      26,778      --    26,778
                                  --------- ------ ----------- --------- -------- --------
Balances at December 31, 2000...  1,463,178    15     95,398      28,006  (3,118)  120,301
  Repurchase of common stock....     (2,000)   --         --          --    (215)     (215)
  Net income........... ........         --    --         --      36,431      --    36,431
                                  --------- ------ ----------- --------- -------- --------
Balances at December 31, 2001...  1,461,178  $ 15   $ 95,398    $ 64,437 $(3,333) $156,517
                                  ========= ====== =========== ========= ======== ========

<FN>
The accompanying notes are an integral part of these consolidated financial
statements.
</FN>
</TABLE>


                                      F-5
<PAGE>

                        COAST RESORTS, INC AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

              For The Years Ended December 31, 1999, 2000 and 2001
                             (dollars in thousands)

                                                     1999      2000      2001
                                                   --------  --------  --------
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income (loss)..............................  $ (5,785) $ 26,778  $ 36,431
                                                   --------  --------  --------
ADJUSTMENTS TO RECONCILE NET INCOME (LOSS) TO
  NET CASH PROVIDED BY OPERATING ACTIVITIES:
    Depreciation and amortization................    21,613    25,375    36,549
    Provision for bad debts......................       248       129      (160)
    Loss on early retirement of debt.............    41,550        --        --
    Loss on disposal of equipment................       192        60     1,815
    Deferred rent................................     3,708     3,598     3,538
    Deferred income taxes........................    (3,099)    7,543     7,389
    Amortization of debt offering costs..........       124     1,053     1,226
    (Increase) decrease in operating assets:
      Accounts receivable........................      (159)   (1,317)     (873)
      Refundable income taxes....................      (870)   (5,005)    3,831
      Inventories................................      (569)   (1,739)     (107)
      Prepaid expenses and other assets..........      (117)   (1,635)     (420)
    Increase (decrease) in operating liabilities:
      Accounts payable...........................     1,850     4,570    (3,170)
      Accrued liabilities........................     5,805     5,427     2,853
                                                   --------  --------  --------
        TOTAL ADJUSTMENTS........................    70,276    38,059    52,471
                                                   --------  --------  --------
        NET CASH PROVIDED BY OPERATING
          ACTIVITIES.............................    64,491    64,837    88,902
                                                   --------  --------  --------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Capital expenditures, net of amounts in
    accounts payable.............................   (49,242) (176,956) (112,178)
  Proceeds from sale of assets...................       437       102    10,453
                                                   --------  --------  --------
        NET CASH USED IN INVESTING ACTIVITIES....   (48,805) (176,854) (101,725)
                                                   --------  --------  --------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from issuance of long-term debt,
    net of issuance costs........................   167,808        --    49,071
  Early retirement of debt.......................  (223,017)       --        --
  Principal payments on long-term debt...........   (15,545)   (2,472)   (4,243)
  Repurchase of common stock.....................    (1,538)   (1,580)     (215)
  Proceeds from borrowings under bank line of
     credit, net of financing costs..............    67,637   131,600    36,000
  Repayments of borrowings under bank
     line of credit..............................   (14,000)  (10,600)  (68,000)
                                                   --------  --------  --------
        NET CASH PROVIDED BY (USED IN)
          FINANCING ACTIVITIES...................   (18,655)  116,948    12,613
                                                   --------  --------  --------
NET INCREASE (DECREASE) IN CASH AND CASH
  EQUIVALENTS....................................    (2,969)    4,931      (210)
CASH AND CASH EQUIVALENTS, at beginning of year..    41,598    38,629    43,560
                                                   --------  --------  --------
CASH AND CASH EQUIVALENTS, at end of year........  $ 38,629  $ 43,560  $ 43,350
                                                   ========  ========  ========

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


                                      F-6
<PAGE>

                       COAST RESORTS, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 -- Background Information and Basis of Presentation

Background Information

     Coast  Resorts,  Inc.  (the  "Company"  or  "Coast  Resorts")  is a  Nevada
corporation and serves as a holding  company for Coast Hotels and Casinos,  Inc.
("Coast  Hotels"),   also  a  Nevada  corporation.   Through  its  wholly  owned
subsidiary,   Coast  Hotels,   the  Company  owns  and  operates  the  following
hotel-casinos in Las Vegas, Nevada:

o    The Orleans Hotel and Casino, which is located  approximately one mile west
     of the Las Vegas Strip on Tropicana Avenue.

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

o    The  Suncoast  Hotel and Casino,  which is located in the western Las Vegas
     valley. The Suncoast opened September 12, 2000.

o    Barbary Coast Hotel and Casino, which is located on the Las Vegas Strip.

     On July 21, 1998, the Company  contributed  the capital stock of Coast West
to  Coast  Hotels,  as a result  of  which  Coast  West  became  a wholly  owned
subsidiary  of Coast  Hotels.  In March  1999,  Coast West was merged into Coast
Hotels.

Basis of Presentation

     The consolidated  financial  statements include the accounts of the Company
and its  subsidiaries  through March 23, 1999,  the date on which Coast West was
contributed to Coast Hotels.  The financial  statements  include the accounts of
the Company and Coast Hotels and, from July 21, 1998 through March 23, 1999, its
subsidiary,  Coast West. All intercompany  balances and  transactions  have been
eliminated for all periods presented.

     Effective  January 1, 2001, the Company adopted  Emerging Issues Task Force
Issue 00-22 (the "Issue")  which  requires cash discounts and certain other cash
incentives  related to gaming play be recorded  as a reduction  to gross  casino
revenues.  The Issue  requires  that prior  periods  be  restated.  The  Company
previously  recorded  incentives  as an operating  expense and has  reclassified
prior period amounts of $4,207,000  (1999) and $10,602,000  (2000).  There is no
effect on previously reported net income.


                                      F-7
<PAGE>

                       COAST RESORTS, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2 -- Summary of Significant Accounting Policies

Inventories

     Inventories,  which consist  primarily of food and beverage,  liquor store,
and gift shop  merchandise,  are  valued  at the  lower of cost or market  value
(which is determined using the first-in, first-out and the average cost methods)
except for the base  stocks of bar  glassware  and  restaurant  china  which are
stated at original cost with subsequent replacements charged to expense.

Original Issue Discount and Debt Issue Costs

     Original  issue  discount  is  amortized  over  the  life  of  the  related
indebtedness  using the effective  interest  method.  Costs  associated with the
issuance  of debt are  deferred  and  amortized  over  the  life of the  related
indebtedness also using the effective interest method.

Property, Equipment and Depreciation

     Property and  equipment  are stated at cost.  Expenditures  for  additions,
renewals and betterments are  capitalized,  and expenditures for maintenance and
repairs  are  charged to expense as  incurred.  Upon  retirement  or disposal of
assets,  the cost and accumulated  depreciation are eliminated from the accounts
and the resulting gain or loss is included in income.  Depreciation  is computed
by the  straight-line  method over the  estimated  useful  lives of property and
equipment,  which range from 5 to 15 years for  equipment and 25 to 40 years for
buildings and improvements.

     During construction,  the Company capitalizes interest and other direct and
indirect  development  costs.  Interest is  capitalized  monthly by applying the
effective  interest  rate  on  certain  borrowings  to the  average  balance  of
expenditures.  The interest that was capitalized was $612,000 (1999), $4,511,000
(2000) and $1,048,000 (2001).

Pre-opening and Related Promotional Expense

     Prior  to  January  1,  1999,  costs  associated  with the  opening  of new
hotel-casinos  or  major  additions  to  an  existing  hotel-casino,   including
personnel,  training,  certain  marketing and other costs,  were capitalized and
charged to expense over management's  estimate of the period of economic benefit
associated with such costs.  Management  believes that such period, with respect
to major  hotel-casinos,  is within one fiscal  quarter of the date of  opening.
Effective  January  1,  1999,   pre-opening  costs  are  expensed  as  incurred.
Pre-opening  costs of $235,000 and  $6,161,000  were  expensed  during the years
ended  December  31,  1999  and  2000,  respectively,  in  connection  with  the
development  of the Suncoast.  There were no  pre-opening  costs during the year
ended December 31, 2001.


                                      F-8
<PAGE>

                       COAST RESORTS, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2 -- Summary of Significant Accounting Policies (continued)

Impairment of Long-Lived Assets

     Long-lived assets and certain identifiable intangibles held and used by the
Company are reviewed for impairment  whenever events or changes in circumstances
warrant such a review. The carrying value of a long-lived or intangible asset is
considered impaired when the anticipated  undiscounted cash flow from such asset
is separately identifiable and is less than its carrying value. In that event, a
loss is recognized  based on the amount by which the carrying  value exceeds the
fair  value  of  the  asset.  Fair  value  is  determined  primarily  using  the
anticipated cash flows discounted at a rate commensurate with the risk involved.
Losses  on  long-lived  assets to be  disposed  of are  determined  in a similar
manner, except that fair values are reduced for the cost to dispose.

Advertising Costs

     Costs  for  advertising   are  expensed  as  incurred,   except  costs  for
direct-response advertising, which are capitalized and amortized over the period
of the  related  program  which  normally  does not exceed two to three  months.
Direct-response  advertising costs consist primarily of mailing costs associated
with direct mail  programs.  Capitalized  advertising  costs were  immaterial at
December 31, 1999, 2000 and 2001.  Advertising  expense was  approximately  $5.4
million,  $6.5 million and $8.3  million for the years ended  December 31, 1999,
2000 and 2001, respectively.

Casino Revenue

     In accordance  with common  industry  practice,  the Company  recognizes as
casino  revenue  the net win from  gaming  activities  which  is the  difference
between amounts wagered and amounts paid to winning patrons.

Deferred Revenue

     Wagers  received on all sporting  events are recorded as a liability  until
the final outcome of the event when the payoffs, if any, can be determined.

Progressive Jackpot Payouts

     The Company has a number of progressive  slot machines,  progressive  poker
games and a progressive  keno game. As coins are played on the progressive  slot
machines,  the  amount  available  to win  increases,  to be paid  out  when the
appropriate  jackpot is hit. The keno game and poker game payouts also increases
with the amount of play,  to be paid out when hit.  In  accordance  with  common
industry  practice,  the  Company  has  recorded  the  progressive  jackpot as a
liability with a corresponding charge against casino revenue.


                                      F-9
<PAGE>

                 COAST RESORTS, INC. AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2 -- Summary of Significant Accounting Policies (continued)

Promotional Allowances

     The  retail  value of hotel  accommodations  and  food and  beverage  items
provided to  customers  without  charge is included in gross  revenues  and then
deducted as promotional allowances,  to arrive at net revenues. The following is
a breakdown of these  complimentary  revenues  for the years ended  December 31,
1999, 2000 and 2001:

                                        December 31,
                                ----------------------------
                                  1999      2000      2001
                                --------  --------  --------
 Complimentary revenues:               (in thousands)
   Food and beverage..........  $ 29,369  $ 32,242  $ 42,294
   Hotel......................     4,736     5,157     6,657
   Other......................     1,220     1,743     2,662
                                --------  --------  --------
     Promotional allowances...  $ 35,325  $ 39,142  $ 51,613
                                ========  ========  ========


     The estimated cost of providing these complimentary  services is as follows
for the years ended December 31, 1999, 2000 and 2001:

                                        December 31,
                                ----------------------------
                                  1999      2000      2001
                                --------  --------  --------
                                       (in thousands)
Hotel.........................  $  2,167  $  2,199  $  2,789
Food and beverage.............    28,593    32,044    43,348
                                --------  --------  --------
                                $ 30,760  $ 34,243  $ 46,137
                                ========  ========  ========

     The cost of promotional allowances has been allocated to expense as follows
for the years ended December 31, 1999, 2000 and 2001:

                                         December 31,
                                ----------------------------
                                  1999      2000      2001
                                --------  --------  --------
                                       (in thousands)
Casino.......................   $ 28,106  $ 32,052  $ 43,834
Other........................      2,654     2,191     2,303
                                --------  --------  --------
                                $ 30,760  $ 34,243  $ 46,137
                                ========  ========  ========

Slot Club Promotion

     Coast Resorts has established  promotional  slot clubs to encourage  repeat
business  from  frequent  and active slot  customers.  Members in the clubs earn
points based on slot activity accumulated in the members' account. Points can be
redeemed for certain consumer products (typically household appliances), travel,
food and beverage and cash. The Company accrues for slot club points expected to
be redeemed  in the future  based on the  average  cost of items  expected to be
redeemed.


                                      F-10
<PAGE>

                       COAST RESORTS, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2 -- Summary of Significant Accounting Policies (continued)

Income Taxes

     Coast  Resorts  accounts for income taxes in accordance  with  Statement of
Financial  Accounting  Standards  No. 109  "Accounting  for Income Taxes" ("SFAS
109"). Under SFAS 109 deferred tax assets and liabilities are recognized for the
expected  future  tax  consequences  attributable  to  differences  between  the
financial  statement  carrying  amounts of existing  assets and  liabilities and
their  respective tax bases.  Deferred tax assets and  liabilities  are measured
using  enacted  tax rates  expected  to apply to taxable  income in the years in
which those temporary differences are expected to be recovered or settled. Under
SFAS 109, the effect on deferred tax assets and  liabilities  of a change in tax
rates is recognized in income in the period that includes the enactment date.

Cash and Cash Equivalents

     Coast  Resorts  considers all highly  liquid  investments  with a remaining
maturity at acquisition of three months or less to be cash equivalents.  Cash in
excess of daily  requirements  is typically  invested in U.S.  Government-backed
repurchase  agreements with maturities of 30 days or less. Such  investments are
generally made with major financial institutions having a high credit rating. At
times,  the Company's cash deposited in financial  institutions may be in excess
of  federally  insured  limits.  These  instruments  are  stated at cost,  which
approximates fair value because of their short maturity.

Net Income (Loss) Per Common Share

     Basic  earnings  per share is  computed  based on weighted  average  shares
outstanding  while diluted  earnings per share reflects the additional  dilution
for all potential dilutive securities, such as stock options and warrants.

Short-term Investments

     Short-term  investments  purchased with an original  maturity of over three
months but less than one year are stated at cost, which  approximates fair value
because  of their  short  maturity.  There  were no  short-term  investments  at
December 31, 2000 or 2001.

Concentration of Credit Risk

     The  Company  extends  credit  to  patrons  after  background   checks  and
investigations of creditworthiness and does not require collateral.  The Company
has a  concentration  of credit risk in  Southern  Nevada.  The Company  records
provisions  for  potential  credit  losses  and such  losses  have  been  within
management's expectations.  Management believes that as of December 31, 2001, no
significant  concentration  of credit risk exists for which an allowance has not
already been determined and recorded.


                                      F-11
<PAGE>

                       COAST RESORTS, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2 -- Summary of Significant Accounting Policies (continued)

Use of Estimates in the Preparation of Financial Statements

     The  preparation  of financial  statements  in  conformity  with  generally
accepted  accounting  principles  requires  the  Company's  management  to  make
estimates  and  judgments  that  affect  the  reported  amounts  of  assets  and
liabilities, revenues and expenses, and related disclosures of contingent assets
and  liabilities.  On an on-going basis,  management  evaluates those estimates,
including those related to asset impairment, accruals for slot marketing points,
self-insurance,   compensation  and  related  benefits,   revenue   recognition,
allowance for doubtful  accounts,  contingencies,  and  litigation.  The Company
bases its estimates on historical  experience  and on various other  assumptions
that are believed to be reasonable under the circumstances, the results of which
form the basis for  making  judgments  about the  carrying  values of assets and
liabilities that are not readily apparent from other sources. Actual results may
differ from these estimates under different assumptions or conditions.

Stock Options

     The  Financial  Accounting  Standards  Board has issued  Statement No. 123,
"Accounting  for  Stock-Based  Compensation"  ("SFAS No. 123").  This  Statement
defines a fair value based method of accounting  for an employee stock option in
which  companies  account  for stock  options by  recognizing,  as  compensation
expense in the statement of operations,  the fair value of stock options granted
over the vesting period of the option.  The statement also permits  companies to
continue accounting for stock options under Accounting  Principles Board Opinion
No. 25,  "Accounting for Stock Issued to Employees"  ("APB No. 25"). The Company
has elected to account for stock  options  under APB No. 25 and to disclose  the
pro forma  impact on net income and earning per share as if the Company had used
the fair value method recommended by SFAS No. 123.

Reclassifications

     Certain  amounts  in the 1999  and  2000  financial  statements  have  been
reclassified to conform with the 2001 presentation.

Accounting for Derivative Instruments and Hedging Activity

     In June 1998, the Financial Accounting Standards Board adopted Statement of
Financial  Accounting  Standards No. 133 ("SFAS 133") entitled  "Accounting  for
Derivative Instruments and Hedging Activities", which establishes accounting and
reporting standards for derivative  instruments and for hedging  activities.  It
requires  that  an  entity   recognize  all  derivatives  as  either  assets  or
liabilities in the statement of financial position and measure those instruments
at fair value. If specific  conditions are met, a derivative may be specifically
designated  as a hedge of  specific  financial  exposures.  The  accounting  for
changes in the fair value of a  derivative  depends on the  intended  use of the
derivative  and, if used in hedging  activities,  its  effective use as a hedge.
SFAS 133 as  amended  is  effective  for all  fiscal  quarters  of fiscal  years
beginning  after  December 31, 2000.  SFAS 133 is not applied  retroactively  to
financial  statements for prior periods. The Company adopted SFAS 133 on January
1, 2001 as required.


                                      F-12
<PAGE>

                       COAST RESORTS, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2 -- Summary of Significant Accounting Policies (continued)

New Accounting Pronouncements

     In July 2001, the Financial Accounting Standards Board issued Statement No.
141,  "Business  Combinations"  and  Statement  No.  142,  "Goodwill  and  Other
Intangible  Assets".   SFAS  141  is  effective  as  follows:  (a)  use  of  the
pooling-of-interests  method is prohibited for business  combinations  initiated
after  June 30,  2001;  and (b) the  provisions  of SFAS  141 also  apply to all
business  combinations  accounted for by the purchase  method that are completed
after June 30, 2001. There are also transition provisions that apply to business
combinations  completed  before  July 1,  2001 that  were  accounted  for by the
purchase method. SFAS 142 is effective for fiscal years beginning after December
15, 2001 and applies to all goodwill and other intangible  assets  recognized in
an entity's  statement of financial  position at that date,  regardless  of when
those assets were initially recognized.

     In August 2001, the Financial  Accounting  Standards Board issued Statement
No.  143,  "Accounting  for  Obligations   Associated  with  the  Retirement  of
Long-Lived  Assets".  The  objectives  of SFAS 143 are to  establish  accounting
standards for the recognition and measurement of an asset retirement  obligation
and its associated asset retirement cost. SFAS 143 is effective for fiscal years
beginning after June 15, 2002.

     In October 2001, the Financial  Accounting Standards Board issued Statement
No. 144,  "Accounting for the Impairment or Disposal of Long-Lived Assets." SFAS
144 addresses financial  accounting and reporting for the impairment or disposal
of long-lived  assets.  SFAS 144 is effective for fiscal years  beginning  after
December 15, 2001 and, generally, is to be applied prospectively.

     The Company is currently  evaluating  the provisions of SFAS 141, SFAS 142,
SFAS 143 and SFAS 144,  and it does not  anticipate  that the  effects  of these
changes will have an impact on its financial position or results of operations.

NOTE 3 -- Property and Equipment

     Major  classes of property  and  equipment  consist of the  following as of
December 31, 2000 and 2001:

                                      December 31,
                                    2000      2001
                                  --------  --------
                                    (in thousands)
Building........................  $371,142  $401,325
Furniture and fixtures..........   231,643   267,847
                                  --------  --------
                                   602,785   669,172
Less accumulated depreciation...  (138,014) (157,870)
                                  --------  --------
                                   464,771   511,302
Land............................    15,232    20,651
Construction in progress........     5,922    47,592
                                  --------  --------
Net property and equipment......  $485,925  $579,545
                                  ========  ========


                                      F-13
<PAGE>

                       COAST RESORTS, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 4--Leases

     The Barbary Coast  building is located on land that is leased.  The initial
lease term runs  through May 2003,  and the Company has notified the landlord of
its intention to exercise the first of two 30-year renewal options. In addition,
the parking lot adjacent to the  building is being leased under a 10-year  lease
that runs through  January 2003.  The annual rental  payments under these leases
will total $300,000 in 2002 and $310,000 in 2003.

     During December 1995, Coast Hotels entered into a ground lease for the land
underlying  The  Orleans.  The land is owned by The  Tiberti  Company,  a Nevada
general  partnership,  of which a  stockholder  of Coast Resorts is the managing
partner. The stockholder is also the president and a director and stockholder of
the general contractor for the construction of The Orleans and the Suncoast,  as
more fully described in Note 10. The lease provides for an initial term of fifty
years with a  twenty-five  year renewal  option and includes a purchase  option,
exercisable  by Coast  Hotels,  at fair market  value during the  twentieth  and
twenty-first  years of the lease. Lease payments range from $175,000 to $250,000
per month during the first sixteen years of the lease increasing by 3% per annum
thereafter.  The total amount of the base rent  payments on The Orleans lease is
being charged to expense on the straight-line method over the term of the lease.
Coast  Hotels has recorded  deferred  rent to reflect the excess of rent expense
over cash payments since the inception of the lease.

     The Suncoast  lease was entered into in September 1995 for a parcel of land
located  in the  western  area of Las  Vegas to be used for  future  development
opportunities.  The  Suncoast  lease term runs through  December 31, 2055,  with
three 10-year renewal options. Monthly payments started at $166,667 for the year
ended December 31, 1995. Thereafter, the monthly rent increases by the amount of
$5,000 in January of each year. The lease  includes a put option  exercisable by
the landlord  requiring the purchase of the land at fair market value at the end
of the 20th through 24th years of the lease,  provided  that the purchase  price
shall not be less than ten times,  nor more than fifteen times,  the annual rent
at such time.  Based on the terms of the lease,  the  potential  purchase  price
commitment ranges from approximately $31,000,000 to approximately $51,000,000 in
the years 2014 through  2018.  The total amount of the base rent payments on the
Suncoast  lease  are  being  charged  to  expense  (or  capitalized  during  the
construction period) on the straight-line method over the term of the lease. The
Company has  recorded  deferred  rent to reflect the excess of rent expense over
cash payments since the inception of the lease.


                                      F-14
<PAGE>

                       COAST RESORTS, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 4--Leases (continued)

Future Minimum Lease Payments

     The following is an annual  schedule of future  minimum cash lease payments
required  under  operating  leases that have initial or remaining  noncancelable
terms in excess of one year as of December 31, 2001:

              Operating Leases

    Year Ending December 31,      Payments
--------------------------------  --------
                                (in thousands)
2002............................  $  5,370
2003............................     5,490
2004............................     5,430
2005............................     5,490
2006............................     5,800
Later years.....................   404,954
                                  --------
Total minimum lease payments....  $432,534
                                  ========

NOTE 5 -- Accrued Liabilities

Rent Expense

     Rent expense for the years ended  December  31,  1999,  2000 and 2001 is as
follows:

                                December 31,
                      ----------------------------
                        1999      2000      2001
                      --------  --------  --------
                             (in thousands)

Occupancy rentals...  $  6,688  $  5,934  $  8,598
Other equipment.....       120       146        42
                      --------  --------  --------
                      $  6,808  $  6,080  $  8,640
                      ========  ========  ========

     Major  classes  of  accrued  liabilities  consist  of the  following  as of
December 31, 2000 and 2001:

                                             December 31,
                                         ------------------
                                           2000      2001
                                         --------  --------
                                            (in thousands)
Slot club liability....................  $  7,293  $  6,806
Compensation and benefits..............    12,651    14,284
Progressive jackpot payouts............     4,532     4,687
Customer deposits and unpaid winners...     5,594     5,366
Deferred sports book revenue...........     1,500     1,488
Taxes..................................       911       983
Accrued interest expense...............     4,364     5,400
Outstanding chip and token liability...       948     1,645
Other..................................       415       402
                                         --------  --------
                                         $ 38,208  $ 41,061
                                         ========  ========


                                      F-15
<PAGE>

                       COAST RESORTS, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 6 -- Long-Term Debt

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

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

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

Senior secured credit facility due September 2004,
  collateralized by substantially all of the assets
  of Coast Hotels and Casinos, Inc........................   176,000   144,000

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

Other notes payable.......................................       659       524
                                                            --------  --------
                                                             355,767   369,524
Less: current portion.....................................     2,430       148
                                                            --------  --------
                                                            $353,337  $369,376
                                                            ========  ========

     In March 1999, Coast Hotels issued $175.0 million  principal amount of 9.5%
senior  subordinated  notes  with  interest  payable  on April 1 and  October  1
beginning October 1, 1999 and entered into a $75.0 million senior secured credit
facility due 2004 to  facilitate a  refinancing.  Availability  under the credit
facility was increased to $200.0 million in September  1999.  Coast Resorts is a
guarantor of the indebtedness  under both of these debt  agreements.  Borrowings
under the credit facility bear interest,  at Coast Hotel's option,  at a premium
over  the  one-,  two-,  three-  or  six-month  London  Interbank  Offered  Rate
("LIBOR").  The premium varies depending on Coast Hotels' ratio of total debt to
EBITDA and can vary between 125 and 250 basis  points.  As of December 31, 2001,
the premium  over LIBOR was 2.0% (200 basis  points) and the  interest  rate was
3.93%.  For the year ended December 31, 2001, the weighted average interest rate
for the  senior  secured  credit  facility  was  6.09%.  Coast  Hotels  incurs a
commitment  fee,  payable  quarterly  in arrears,  on the unused  portion of the
credit facility.  This variable fee is currently at the maximum rate of 0.5% per
annum times the average unused portion of the facility.


                                      F-16
<PAGE>

                       COAST RESORTS, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 6--Long-Term Debt (continued)

     The  availability  under the senior secured credit  facility was reduced by
$6.0  million to $194.0  million on  September  30, 2001 and by $6.0  million to
$188.0  million on December 31, 2001 and will be reduced by an  additional  $6.0
million on each of March 31, 2002 and June 30,  2002.  The  quarterly  reduction
will increase to $8.5 million on each of September 30, 2002,  December 31, 2002,
March 31, 2003 and June 30, 2003;  and to $11.5 million on each of September 30,
2003,  December 31, 2003,  March 31, 2004 and June 30, 2004. The initial advance
of $47.0  million  under the credit  facility  was used in  connection  with the
repurchase of the 13% first  mortgage notes and the 10-7/8% first mortgage notes
and is more fully described below. Subsequent advances under the credit facility
may be used for working capital, general corporate purposes, construction of the
Suncoast,  and  certain  improvements  to The  Orleans,  the Gold  Coast and the
Barbary  Coast.  As of December  31,  2001,  Coast  Hotels had $44.0  million of
availability under the credit facility.

     In 1999,  with the proceeds from the issuance of $175.0  million  principal
amount of 9.5%  senior  subordinated  notes  and  borrowings  under  the  credit
facility,  Coast  Hotels  repurchased  substantially  all of the $175.0  million
principal  amount  outstanding  of  13%  first  mortgage  notes.  The  remaining
approximately  $2.0 million in principal  amount of the 13% first mortgage notes
was  redeemed  on  December  15,  2000 at a  redemption  price of  106.5% of the
principal amount,  plus any accrued and unpaid interest.  In connection with the
repurchase  of the 13%  notes  and the  10-7/8%  notes,  Coast  Hotels  incurred
repurchase premiums of $31.0 million and $2.1 million, respectively.

     The loan agreement  governing the senior secured credit  facility  contains
covenants  that,  among other  things,  limit the ability of Coast Hotels to pay
dividends  or  make  advances  to  Coast  Resorts,   to  make  certain   capital
expenditures,  to repay  certain  existing  indebtedness,  to  incur  additional
indebtedness or to sell material assets of Coast Hotels. Additionally,  the loan
agreement  requires that Coast Hotels  maintain  certain  financial  ratios with
respect to its leverage and fixed charge coverage.  Coast Hotels is also subject
to  certain  covenants  associated  with  the  indenture  governing  the  senior
subordinated  notes,  including,  in part,  limitations  on  certain  restricted
payments,  the  incurrence  of  additional  indebtedness  and asset  sales.  The
agreement  was  amended  in  December  2001 and in March  2002 to  increase  the
limitations  of the Company to make  certain  capital  expenditures.  Management
believes  that,  at December  31, 2001 Coast Hotels was in  compliance  with all
covenants and required ratios.

     On February 2, 2001 Coast Hotels issued $50.0 million additional  principal
amount of senior  subordinated  notes. The net proceeds of  approximately  $49.1
million were used to reduce borrowings under its senior secured credit facility.
On March 19, 2002 Coast Hotels issued $100.0 million additional principal amount
of senior  subordinated  notes. The net proceeds were used to reduce  borrowings
under its senior secured credit facility by $103.0 million.  As a result,  Coast
Hotels has additional  availability  under the credit  facility.  The notes that
were issued in 2001 and 2002 were issued under the same  indenture  and have the
same terms,  interest  rate and maturity date as the  Company's  $175.0  million
principal amount of senior  subordinated  notes issued in 1999. Coast Hotels has
entered into an interest rate swap agreement with a member of the Company's bank
group  such  that  $100.0  million  of the  Company's  fixed  rate debt has been
converted to a floating rate based upon LIBOR.


                                      F-17
<PAGE>

                 COAST RESORTS, INC. AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 6--Long-Term Debt (continued)

     Maturities on long-term debt are as follows:

Year Ending December 31,  Maturities
------------------------  ----------
                        (in thousands)
2002....................  $    148
2003....................    25,162
2004....................   119,177
2005....................         3
2006....................         3
Thereafter..............   225,031
                          --------
                          $369,524
                          ========

NOTE 7--Income Taxes

     The  components of the income tax  provision  (benefit) for the years ended
December 31, 1999, 2000 and 2001 were as follows:

                            December 31,
                  ----------------------------
                   1999       2000      2001
                  --------  --------  --------
Federal:                (in thousands)
Current.........  $ (1,073) $  6,862  $ 11,426
Deferred........    (3,099)    7,543     7,389
                  --------  --------  --------
                  $ (4,172) $ 14,405  $ 18,815
                  ========  ========  ========

     The  income  tax   provision   (benefit)   before   consideration   of  the
extraordinary  loss for the years ended December 31, 1999, 2000 and 2001 differs
from that computed at the federal statutory corporate tax rate as follows:

                                   December 31,
                           ------------------------
                            1999     2000     2001
                           ------   ------   ------
Federal statutory rate...   35.0%    35.0%    35.0%
Other....................   (2.2%)     --     (0.9%)
                           ------   ------   ------
Effective tax rate.......   32.8%    35.0%    34.1%
                           ======   ======   ======


                                      F-18
<PAGE>

                       COAST RESORTS, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 7--Income Taxes (continued)

     The tax  effects of  significant  temporary  differences  representing  net
deferred  tax  assets  and  liabilities  at  December  31,  2000 and 2001 are as
follows:

                                               December 31,
                                           ------------------
                                             2000      2001
                                           --------  --------
                                              (in thousands)
Deferred tax assets:
  Current:
    Accrued vacation.....................  $    887  $  1,302
    Allowance for doubtful accounts......       319       323
    Accrued slot club points.............       120        27
    Progressive liabilities..............     1,060     1,072
    Accrued medical and other benefits...       567       674
                                           --------  --------
      Total current......................     2,953     3,398
                                           --------  --------
  Non-current:
    FICA, alternative minimum
      tax and other tax credits..........       583        --
    Deferred rent........................     7,116     8,354
                                           --------  --------
      Total non-current..................     7,699     8,354
                                           --------  --------
Total deferred tax assets................    10,652    11,752
                                           --------  --------
Deferred tax liabilities:
  Non-current:
    Property, plant and equipment........   (19,116)  (27,605)
                                           --------  --------
      Total deferred tax liabilities.....   (19,116)  (27,605)
                                           --------  --------
Net deferred tax liability...............  $ (8,464) $(15,853)
                                           ========  ========

NOTE 8 -- Fair Value of Financial Instruments

     The following estimated fair values of Coast Hotels' financial  instruments
have been  determined  by the Company using  available  market  information  and
appropriate  valuation  methodologies.  The  carrying  amounts  of cash and cash
equivalents,  accounts receivable,  and accounts payable approximate fair values
due to the short-term maturities of these instruments.  The carrying amounts and
estimated fair values of the Company's other  financial  instruments at December
31, 2000 and 2001 are as follows:

                                                     December 31,
                                        --------------------------------------
                                               2000                2001
                                        ------------------  ------------------
                                        Carrying    Fair     Carrying    Fair
                                         Amount     Value     Amount    Value
                                        --------  --------  --------  --------
                                          (in thousands)     (in thousands)
Liabilities:
  Current portion of long-term debt...  $  2,430  $  2,430  $    148  $    148
                                        ========  ========  ========  ========
  Senior secured credit facility......  $176,000  $176,000  $144,000  $144,000
                                        ========  ========  ========  ========
  9.5% senior subordinated notes......  $175,000  $168,438  $225,000  $215,753
                                        ========  ========  ========  ========
  Other long-term debt................  $  2,337  $  2,508  $    376  $    376
                                        ========  ========  ========  ========


                                      F-19
<PAGE>

                       COAST RESORTS, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 8 -- Fair Value of Financial Instruments (continued)

     For the current portion of long-term debt, the carrying amount approximates
fair value due to the short-term nature of such debt. The carrying amount on the
senior  secured credit  facility is a reasonable  estimate of fair value because
this debt is carried with a floating  interest  rate. The fair value of the 9.5%
senior subordinated notes was determined based upon market quotes. For all other
long-term  debt,  the fair  value is  estimated  using a  discounted  cash  flow
analysis,  based on the incremental  borrowing rates currently  available to the
Company for debt with similar terms and maturity.

NOTE 9 -- Commitments and Contingencies

     The Company is involved in various  legal  actions  arising in the ordinary
course of business.  In the opinion of management,  the ultimate  disposition of
these matters will not have a material adverse effect on the financial position,
results of operations or cash flows of the Company.

     The Company has commenced certain capital improvement  projects at the Gold
Coast and The Orleans for which  budgeted  expenditures  are  estimated to total
approximately  $210.0  million.  The Company  anticipates  the projects  will be
completed in phases during 2002 and 2003.

NOTE 10 -- Related Party Transactions

     Coast  Hotels'  advertising  services  are provided by LGT  Advertising,  a
company  owned  by  several   stockholders  of  Coast  Resorts.   LGT  purchases
advertising  for Coast Hotels from third  parties and passes along any discounts
they receive.  LGT and its owners  receive no  compensation  or profit for these
services,  as Coast Hotels is invoiced for actual  costs  incurred.  Advertising
expense paid to LGT amounted to  approximately  $5.4  million,  $6.5 million and
$8.3 million for the years ended December 31, 1999, 2000 and 2001, respectively.

     Coast Hotels  purchases  certain of its  equipment  and  inventory  for its
operations  from RJS, a company owned by the father of a major  stockholder  and
director  of Coast  Resorts and a director  and officer of Coast  Hotels and the
Company's  restaurant  manager.  RJS invoices Coast Hotels based on actual costs
incurred.  For the fiscal years ended  December 31, 1999,  2000 and 2001,  Coast
Hotels incurred  expenses  payable to RJS of  approximately  $2.1 million,  $6.5
million and $2.7 million, respectively.

     Coast Hotels purchases  wallboards and parlay cards for its race and sports
books from Nevada  Wallboards,  Inc. A major  stockholder  and director of Coast
Resorts and a director and officer of Coast  Hotels is the majority  stockholder
of Nevada  Wallboards,  Inc. For the fiscal years ended December 31, 1999,  2000
and  2001,  the  Company  incurred  expenses  payable  to Nevada  Wallboards  of
approximately $180,000, $192,000 and $252,000, respectively.

     A  director  of the  Company  is the  president  and  sole  stockholder  of
Yates-Silverman,  Inc.  which was retained by the Company as the designer of The
Orleans and the Suncoast. For the fiscal years ended December 31, 1999, 2000 and
2001, Coast Hotels incurred expenses payable to Yates-Silverman of approximately
$721,000, $548,000 and $947,000, respectively.


                                      F-20
<PAGE>

                       COAST RESORTS, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 10 -- Related Party Transactions (continued)

     Coast Hotels maintains numerous racetrack  dissemination contracts with Las
Vegas Dissemination,  Inc. ("LVDC"). The son of a major stockholder and director
of Coast Resorts and a director and officer of Coast Hotels is the president and
sole  shareholder of LVDC.  LVDC has been granted a license by the Nevada gaming
authorities to disseminate  live racing for those events and tracks for which it
contracts  and  has  been  granted  the  exclusive   right  to  disseminate  all
pari-mutuel  services and race wire services in the State of Nevada. Under these
dissemination contracts, Coast Hotels pays to LVDC an amount based on the wagers
accepted for races held at the racetracks  covered by the respective  contracts.
Coast  Hotels  also pays to LVDC a monthly fee for race wire  services.  For the
fiscal  years ended  December  31, 1999,  2000 and 2001,  Coast Hotels  incurred
expenses  payable to LVDC of approximately  $1.3 million,  $1.6 million and $1.4
million, respectively.

     J.A. Tiberti  Construction  Company ("Tiberti  Construction") has served as
the general  contractor for the original  construction of the Gold Coast and for
certain expansions thereof,  for the original  construction of the Barbary Coast
and all  expansions  thereof  and for the  original  construction  and  Phase II
expansion of The Orleans.  Tiberti  Construction is also the general  contractor
for the construction of the Suncoast. The president of Tiberti Construction is a
stockholder  and director of Coast Resorts and a director of Coast  Hotels.  For
the years ended December 31, 1999, 2000 and 2001, the Company paid approximately
$27.9  million,  $108.5  million  and $63.4  million,  respectively,  to Tiberti
Construction in connection with such construction services.

     As more  fully  described  in Note 4,  Coast  Hotels is a party to a ground
lease with the Tiberti  Company with respect to the land underlying The Orleans.
The  president  of The Tiberti  Company is a director and  stockholder  of Coast
Resorts. Amounts paid to the Tiberti Company with respect to the lease were $2.4
million per year for the fiscal years ended December 31, 1999, 2000 and 2001.

     For the years ended  December 31, 1999,  2000 and 2001,  Coast Hotels spent
$300,000,  $180,000  and  $332,000,  respectively,  to  promote  The  Orleans by
advertising  on a racecar  operated by the son of a major  shareholder  of Coast
Resorts.

     The foregoing transactions are believed to be on terms no less favorable to
the Company than could have been  obtained from  unaffiliated  third parties and
were approved by a majority of the disinterested directors.

NOTE 11 -- Benefit Plans

401(k) Plans

     Coast Hotels offers separate defined contribution 401(k) plans for eligible
employees.  All employees of the Gold Coast,  The Orleans and the Suncoast,  and
all  employees  of the  Barbary  Coast not  covered by a  collective  bargaining
agreement,  are eligible to participate.  The employees may elect to defer up to
15% of their  yearly  compensation,  subject to statutory  limits.  Coast Hotels
makes  matching  contributions  of  50%  of  the  first  6%  of  the  employees'
contributions.  Contribution  expense was $1.1  million,  $1.6  million and $1.7
million for the years ended December 31, 1999, 2000 and 2001, respectively.


                                      F-21
<PAGE>

                   COAST RESORTS, INC. AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 11 -- Benefit Plans (continued)

Defined Benefit Plan

     Certain  employees at the Barbary  Coast are covered by a  union-sponsored,
collectively  bargained,  multi-employer,  defined  benefit  pension  plan.  The
Barbary Coast contributed $310,000, $309,000 and $303,000 during the years ended
December 31, 1999, 2000 and 2001, respectively, to the plan. These contributions
are determined in accordance  with the provisions of negotiated  labor contracts
and generally are based on the number of hours worked.

Stock Incentive Plan

     In December 1996, the Board of Directors  adopted the 1996 Stock  Incentive
Plan (the "Plan") which  authorizes  the issuance of (i) shares of Coast Resorts
Common Stock or any other class of security of the Company which is  convertible
into shares of Coast  Resorts  Common Stock or (ii) a right or interest  with an
exercise or  conversion  privilege at a price  related to Coast  Resorts  Common
Stock or with a value derived from the value of such common stock.  Awards under
the Plan are not  restricted to any specified form or structure and may include,
without limitation,  sales or bonuses of stock, restricted stock, stock options,
reload stock options,  stock purchase  warrants,  other rights to acquire stock,
securities  convertible into or redeemable for stock, stock appreciation rights,
limited  stock  appreciation  rights,   phantom  stock,   dividend  equivalents,
performance  units or performance  shares.  Officers,  key employees,  directors
(whether  employee  directors or non-employee  directors) and consultants of the
Company and its subsidiary are eligible to participate in the Plan.

     Under the terms of the Plan,  the  aggregate  number of shares  issued  and
issuable  pursuant to all awards (including all incentive stock options) granted
under the Plan shall not exceed 220,000 at any time. In addition,  the aggregate
number of shares  subject to awards  granted during any calendar year to any one
eligible  person  (including  the number of shares  involved in awards  having a
value derived from the value of shares) shall not exceed 40,000.

     No awards  may be made under the Plan  after the tenth  anniversary  of the
adoption of the Plan.  Although shares may be issued after the tenth anniversary
of the  adoption  of the Plan  pursuant  to awards  made prior to such date,  no
shares may issued under the Plan after the twentieth  anniversary of adoption of
the Plan.

     Effective  January 1, 1999, the Company  issued options to purchase  30,415
shares of its common stock to its chief operating officer. The options are fully
vested at December 31, 2001. The options expire on December 31, 2008.  Effective
June 14, 1999, the Company issued options to purchase 5,000 shares of its common
stock to its chief financial  officer.  The options are fully vested at December
31,  2001.  The  exercise  price on the  options is at $100 per share,  which is
equivalent  to the  estimated  fair value of the  Company's  common stock at the
grant date,  as  estimated  by the Company  from  recent  sales of common  stock
between shareholders. The options expire on June 13, 2009.


                                      F-22
<PAGE>

                       COAST RESORTS, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 11 -- Benefit Plans (continued)

Stock Incentive Plan (continued)

     Pro forma information regarding net income (loss) and earnings per share is
required by SFAS 123 and has been determined as if the Company had accounted for
its stock option plan under the fair-value-based  method of that Statement.  The
fair  value for  these  options  was  estimated  at the date of grant  using the
minimum  value method  (which is  appropriate  for valuing  options of companies
without publicly traded stock) with the following weighted-average  assumptions:
risk-free rate of return of approximately  5.0%, expected life of the options of
5 years and a 0% dividend  yield.  For  purposes of pro forma  disclosures,  the
estimated  fair value of the options is amortized  over the  respective  vesting
periods of the options.  For fiscal 1999, the pro forma net loss would have been
$6,013,000,  and for fiscal  2000 and 2001 the pro forma net  income  would have
been  $26,531,000  and  $36,184,000,  respectively.  The pro  forma net loss per
common share for fiscal 1999 would have been $4.07.  The fully diluted pro forma
net income per common  share  would have been  $17.76 and $24.16 for fiscal 2000
and 2001, respectively.

NOTE 12 - Treasury Stock

     In May 1999,  the  Company's  board of directors  authorized  the potential
repurchase of up to 50,000 shares of common stock from stockholders at a maximum
aggregate  repurchase  price of $5.0  million.  In  August  2001,  the  board of
directors  increased the maximum aggregate  repurchase price to $5.5 million. As
of December 31, 2001,  the Company had  repurchased  a total of 33,175 shares of
common stock from shareholders at a total purchase price of $3.3 million.

NOTE 13 -- Supplemental Cash Flows Information

     For the years ended  December 31,  1999,  2000 and 2001  supplemental  cash
flows information amounts are as follows:

                                                     December 31,
                                           ----------------------------
                                             1999      2000      2001
                                           --------  --------  --------
                                                  (in thousands)
Interest paid............................  $ 19,387  $ 27,913  $ 29,599
                                            =======  ========  ========
Income taxes paid........................  $     --  $ 12,600  $ 14,446
                                            =======  ========  ========
Supplemental schedule of non-cash
investing and financing activities:
  Property and equipment acquisitions
  included in accounts payable or
  financed through notes payable.........  $  8,304  $  4,868  $ 34,053
                                           ========  ========  ========


                                      F-23
<PAGE>

                 COAST RESORTS, INC. AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 14  -- Regulation of Gaming Operations

     The gaming  operations  of the  Company are  subject to the  licensing  and
regulatory control of the Nevada Gaming Commission (the Nevada Commission),  the
Nevada  State  Gaming  Control  Board (the Nevada  Control  Board) and the Clark
County  Liquor and Gaming  Board (the Clark  County  Board)  (collectively,  the
Nevada Gaming  Authorities).  These agencies  issue gaming  licenses based upon,
among other  considerations,  evidence  that the  character  and  reputation  of
principal  owners,  officers,  directors,  and certain  other key  employees are
consistent with regulatory  goals.  The necessary  licenses have been secured by
the Company.  The licenses are not transferable and must be renewed periodically
upon the  payment of  appropriate  taxes and  license  fees.  The Nevada  Gaming
Authorities  have broad  discretion  with regard to the renewal of the  licenses
which may at any time revoke,  suspend,  condition,  limit or restrict a license
for any cause deemed reasonable by the issuing agency.  Officers,  directors and
key  employees of the Company must be approved by the Nevada  Control  Board and
licensed by the Nevada Commission and Clark County Board.

NOTE 15 - Net Income (Loss) Per Common Share

     The  computations  of basic net income  (loss) per common share and diluted
net income (loss) per common share for the years ended  December 31, 1999,  2000
and 2001, are as follows (in thousands, except share and per share data):

                                           Year Ended December 31,
                                       -------------------------------
                                         1999        2000       2001
                                       ---------  ---------  ---------
Net income (loss) applicable to
computations.........................   $ (5,785)  $ 26,778   $ 36,431
Weighted-average common shares         =========  =========  =========
  applicable to net income (loss)
  per common share...................  1,478,978  1,471,208  1,462,366
Effect of dilutive securities:
  Stock option incremental shares....         --     22,858     35,415
                                       ---------  ---------  ---------
Weighted-average common shares
  applicable to net income per
  common share, assuming dilution....  1,478,978  1,494,066  1,497,781
                                       =========  =========  =========

Basic net income (loss) per share of
common stock.........................   $  (3.91)  $  18.20   $  24.91
                                       =========  =========  =========
Diluted net income (loss) per share
of common stock......................   $  (3.91)  $  17.92   $  24.32
                                       =========  =========  =========


                                      F-24
<PAGE>

                       COAST RESORTS, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 16  -- Quarterly Financial Information (Unaudited)

     The following  unaudited  information  shows  selected items (in thousands,
except per share data),  for each  quarter in the years ended  December 31, 2000
and 2001:

                                               2000
                        ------------------------------------------------
                          First    Second     Third    Fourth     Year
                        --------  --------  --------  --------  --------
Gross revenues........  $107,950  $ 99,476  $105,684  $134,957  $448,067
Less promotional
  allowances..........    (9,364)   (8,729)   (9,240)  (11,809)  (39,142)
                        --------  --------  --------  --------  --------
  Net revenues........    98,586    90,747    96,444   123,148   408,925
                        --------  --------  --------  --------  --------
  Operating income....    20,751    15,143    10,365    17,957    64,216
                        --------  --------  --------  --------  --------
  Net income .........  $ 10,638  $  7,000  $  3,135  $  6,005  $ 26,778
                        ========  ========  ========  ========  ========
Basic net income per
  share...............  $   7.19  $   4.73  $   2.14  $   4.14  $  18.20
                        ========  ========  ========  ========  ========
Diluted net income
  per share...........  $   7.12  $   4.68  $   2.10  $   4.02  $  17.92
                        ========  ========  ========  ========  ========

                                               2001
                        ------------------------------------------------
                          First    Second     Third    Fourth     Year
                        --------  --------  --------  --------  --------
Gross revenues........  $140,145  $139,086  $140,983  $149,383  $569,597
Less promotional
  allowances..........   (12,597)  (12,391)  (12,817)  (13,808)  (51,613)
                        --------  --------  --------  --------  --------
  Net revenues........   127,548   126,695   128,166   135,575   517,984
                        --------  --------  --------  --------  --------
  Operating income....    22,665    19,905    20,082    23,591    86,243
                        --------  --------  --------  --------  --------
  Net income .........  $ 10,659     7,026     8,730    10,016    36,431
                        ========  ========  ========  ========  ========
Basic net income per
  share...............  $   7.28  $   4.80  $   5.97  $   6.86  $  24.91
                        ========  ========  ========  ========  ========
Diluted net income
  per share...........  $   7.11  $   4.69  $   5.83  $   6.69  $  24.32
                        ========  ========  ========  ========  ========


                                      F-25
<PAGE>

       REPORT OF INDEPENDENT ACCOUNTANTS ON FINANCIAL STATEMENTS SCHEDULES

To the Directors and Stockholders of Coast Resorts, Inc. and Subsidiary

Our audits of the consolidated  financial  statements referred to in our opinion
dated  February  5,  2002,  except  for Note 6 as to which the date is March 19,
2002,  appearing in this Annual Report on Form 10-K of Coast Resorts,  Inc. also
included an audit of the financial  statement  schedules listed in Item 14(a)(2)
of this Form 10-K. In our opinion,  these financial  statement schedules present
fairly, in all material respects, the information set forth therein when read in
conjunction with the related consolidated financial statements.

PricewaterhouseCoopers LLP

Las Vegas, Nevada
February 5, 2002


                                      F-26
<PAGE>

                                                                      SCHEDULE I

                               COAST RESORTS, INC.

                 CONDENSED FINANCIAL INFORMATION OF THE COMPANY

     The following  condensed  financial  statements  reflect the parent company
(Coast Resorts,  Inc.) only,  accounting for its wholly owned  subsidiary on the
equity method of accounting.  All footnote  disclosures  have been omitted since
the  information  has been  included  in the  Company's  consolidated  financial
statements included elsewhere in this Form 10-K.

                               COAST RESORTS, INC.

                              (Parent Company Only)

                            CONDENSED BALANCE SHEETS

                           December 31, 2000 and 2001
                    (dollars in thousands, except share data)

                                             2000      2001
                                           --------  --------
                  ASSETS
  CURRENT ASSETS:
    Cash and cash equivalents............. $     --  $      3
    Refundable income taxes...............    5,875     1,603
    Other current assets..................       --        --
                                           --------  --------
      TOTAL CURRENT ASSETS................    5,875     1,606
  INVESTMENT IN SUBSIDIARY................  124,107   160,585
                                           --------  --------
                                           $129,982  $162,191
                                           ========  ========

             LIABILITIES AND
           STOCKHOLDERS' EQUITY

  CURRENT LIABILITIES:
    Due to Coast Hotels................... $  9,464  $  5,464
    Accrued liabilities...................      217       210
                                           --------  --------
      TOTAL CURRENT LIABILITIES...........    9,681     5,674
                                           --------  --------

  COMMITMENTS AND CONTINGENCIES
  STOCKHOLDERS' EQUITY:
    Preferred stock, $.01 par value,
      500,000 shares authorized,
      none issued and outstanding.........       --       --
    Common stock, $.01 par value,
      2,000,000 shares authorized,1,463,178
      (2000) and 1,461,178 (2001) shares
       issued and outstanding.............       15        15
    Treasury stock........................   (3,118)   (3,333)
    Additional paid-in capital............   95,398    95,398
    Retained earnings.....................   28,006    64,437
                                           --------  --------
       TOTAL STOCKHOLDERS' EQUITY........   120,301   156,517
                                           --------  --------
                                           $129,982  $162,191
                                           ========  ========


                                      F-27
<PAGE>

                                                                      SCHEDULE I

                               COAST RESORTS, INC.

                              (Parent Company Only)

                       CONDENSED STATEMENTS OF OPERATIONS

              For The Years Ended December 31, 1999, 2000 and 2001
                             (dollars in thousands)

                                          1999       2000       2001
                                        --------   ---------  ---------
Equity interest in income (loss)
from subsidiary.......................  $ (5,761)  $  26,950  $  36,478
General and administrative expenses...       (35)        (35)       (47)
                                        --------   ---------  ---------
Income (loss) before income taxes.....    (5,796)     26,915     36,431
Income tax provision (benefit)........       (11)        137         --
                                        ---------  ---------  ---------
NET INCOME (LOSS).....................  $ (5,785)  $  26,778  $  36,431
                                        ========   =========  =========
Basic net income (loss) per share of
  common stock........................  $   (3.91) $   18.20  $   24.91
                                        =========  =========  =========
Diluted net income (loss) per share of
  common stock........................  $   (3.91) $   17.92  $   24.32
                                        =========  =========  =========
Basic weighted average common
  shares outstanding..................  1,478,978  1,471,208  1,462,366
                                        =========  =========  =========
Diluted weighted average common
shares outstanding....................  1,478,978  1,494,066  1,497,781
                                        =========  =========  =========


                                      F-28
<PAGE>

                                                                      SCHEDULE I

                               COAST RESORTS, INC.

                              (Parent Company Only)

<TABLE>
<CAPTION>
                       STATEMENTS OF STOCKHOLDERS' EQUITY

              For the Years Ended December 31, 1999, 2000, and 2001
                             (dollars in thousands)

                                    Common Stock
                                  ----------------  Additional   Treasury  Retained
                                   Shares   Amount  Paid-In Cap    Stock   Earnings    Total
                                  --------- ------  -----------  --------  --------  --------
<S>                               <C>        <C>     <C>         <C>        <C>      <C>
Balances at December 31, 1998...  1,494,353  $ 15    $ 95,398    $  7,013   $   --   $102,426
  Repurchase of common stock....    (15,375)   --          --          --   (1,538)    (1,538)
  Net loss......................         --    --          --      (5,785)      --     (5,785)
                                  --------- ------  -----------  --------  --------  --------
Balances at December 31, 1999...  1,478,978    15      95,398       1,228   (1,538)    95,103
  Repurchase of common stock....    (15,800)   --          --          --   (1,580)    (1,580)
  Net income....................         --    --          --      26,778       --     26,778
                                  --------- ------  -----------  --------  --------  --------
Balances at December 31, 2000...  1,463,178    15      95,398      28,006   (3,118)   120,301
  Repurchase of common stock....     (2,000)   --          --          --     (215)      (215)
  Net income........... ........         --    --          --      36,431       --     36,431
                                  --------- ------  -----------  --------  --------  --------
Balances at December 31, 2001...  1,461,178  $ 15    $ 95,398    $ 64,437  $(3,333)  $156,517
                                  ========= ======  ===========  ========  ========  ========
</TABLE>


                                      F-29
<PAGE>

                                                                      SCHEDULE I

                               COAST RESORTS, INC.

                              (Parent Company Only)

                       CONDENSED STATEMENTS OF CASH FLOWS

              For The Years Ended December 31, 1999, 2000 and 2001
                             (dollars in thousands)

                                                     1999      2000      2001
                                                   --------  --------  --------
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income (loss)..............................  $ (5,785) $ 26,778  $ 36,431
                                                   --------  --------  --------
ADJUSTMENTS TO RECONCILE NET INCOME (LOSS) TO
  NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES:
  Equity interest in net (income) loss from
    subsidiary...................................    5,761   (26,950)  (36,478)
  Non-cash tax expense...........................        --       136        --
  Other current assets...........................      (660)   (5,215)    4,272
  Accrued liabilities............................       (30)      217        (7)
                                                   --------  --------  --------
    TOTAL ADJUSTMENTS............................     5,071   (31,812)  (32,213)
                                                   --------  --------  --------
        NET CASH PROVIDED BY (USED IN)
          OPERATING ACTIVITIES...................      (714)   (5,034)    4,218
                                                   --------  --------  --------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Due to Coast Hotels............................     2,262     6,601    (4,000)
  Repurchase at common stock.....................    (1,538)   (1,580)     (215)
                                                   --------  --------  --------
        NET CASH (USED IN) PROVIDED BY
          FINANCING ACTIVITIES...................       724     5,021    (4,215)
                                                   --------  --------  --------
NET INCREASE (DECREASE) IN CASH AND CASH
   EQUIVALENTS...................................        10       (13)        3
CASH AND CASH EQUIVALENTS, at beginning of year..         3        13        --
                                                   --------  --------  --------
CASH AND CASH EQUIVALENTS, at end of year........  $     13  $     --  $      3
                                                   ========  ========  ========


                                      F-30
<PAGE>

                                                                     SCHEDULE II

                       COAST RESORTS, INC. AND SUBSIDIARY

<TABLE>
<CAPTION>
                       VALUATION AND QUALIFYING ACCOUNTS

              For The Years Ended December 31, 1999, 2000 and 2001
                             (dollars in thousands)

                                            ADDITIONS   ADDITIONS
                                BALANCE AT  CHARGED TO  CHARGED TO              BALANCE AT
                                BEGINNING   COSTS AND   OTHER                   END OF
      DESCRIPTION               OF YEAR     EXPENSES    ACCOUNTS    DEDUCTIONS  YEAR
                                ----------  ----------  ----------  ----------  ----------
Allowance for doubtful
  accounts (casino
  receivables):
<S>                            <C>         <C>         <C>         <C>         <C>
Year ended December 31, 1999...  $    594    $  1,281    $     --    $  1,033    $    842
                                ==========  ==========  ==========  ==========  ==========
Year ended December 31, 2000...  $    842    $    556    $     --    $    685    $    713
                                ==========  ==========  ==========  ==========  ==========
Year ended December 31, 2001...  $    713    $  1,707    $     --    $  1,547    $    873
                                ==========  ==========  ==========  ==========  ==========
</TABLE>

                                      F-31