<PAGE>

                                   FORM 10-K
                      SECURITIES AND EXCHANGE COMMISSION
                               Washington, D.C.

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

For the fiscal year ended    December 31, 2000
                             -----------------

                                      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 number        1-6339
                              ------

                         GREATE BAY CASINO CORPORATION
--------------------------------------------------------------------------------
            (Exact name of registrant as specified in its charter)


               DELAWARE                                      75-1295630
--------------------------------------------      ------------------------------
       (State or other jurisdiction of                   (I.R.S. Employer
       incorporation or organization)                    Identification No.)

  c/o Advanced Casino Systems Corporation
      200 Decadon Drive, Suite 100
     Egg Harbor Township, New Jersey                             08234
--------------------------------------------      ------------------------------
  (Address of principal executive offices)                     (Zip Code)


(Registrant's telephone number, including area code):          (609) 441-0704
                                                               --------------

          Securities registered pursuant to Section 12(b) of the Act:

           Common Stock,
      par value $.10 per share
--------------------------------    ------------------------------------------
        Title of each class             Name of exchange on which registered

       Securities registered pursuant to Section 12(g) of the Act:  None

     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 aggregate market value of the voting stock held by non-affiliates of
the registrant, based on the closing price of such stock on March 23, 2001, was
$103,063. For the purposes of this computation, all officers, directors and 5%
beneficial owners of the registrant are deemed to be affiliates. Such
determination should not be deemed an admission that such officer, directors and
beneficial owners are, in fact, affiliates of the registrant. As of March 23,
2001, 5,186,627 shares of Common Stock, $.10 par value per share, were
outstanding.

                      DOCUMENTS INCORPORATED BY REFERENCE

     Portions of the following documents are incorporated by reference into the
indicated part or parts of this report.

                                     None

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                                    PART I


ITEM 1.  BUSINESS

General
-------

     Greate Bay Casino Corporation, a Delaware corporation, and its subsidiaries
("GBCC" or the "Company") are engaged in the development and sale of casino-
related information technology systems. In prior years, GBCC was also engaged in
casino-related operations consisting of management and consulting contracts with
gaming facilities located in Aurora, Illinois (the "Aurora Casino") and Tunica
County, Mississippi (the "Tunica Casino") and ownership and operation of the
Sands Hotel and Casino in Atlantic City, New Jersey (the "Sands"). GBCC's common
stock is listed on the OTC Bulletin Board Service under the trading symbol
"GEAA". Approximately 36% of GBCC's outstanding stock is owned by Jack E. Pratt,
Edward T. Pratt, Jr., William D. Pratt, Edward T. Pratt III and by certain
general partnerships and trusts controlled by the Pratts and by other family
members (collectively, the "Pratt Family"). The Pratt Family also owns
approximately 54% of Hollywood Casino Corporation ("HCC", a Delaware
corporation), which owns the Aurora Casino and the Tunica Casino. The principal
executive offices of GBCC are located at 200 Decadon Avenue, Suite 100, Egg
Harbor Township, New Jersey 08234, telephone (609) 441-0704.

     GBCC is insolvent and its only remaining operating activity is the
development, installation and maintenance of casino systems by its wholly owned
subsidiary, Advanced Casino Systems Corporation ("ACSC"). At December 31, 2000
GBCC and its subsidiaries had debt outstanding to HCC consisting of (1) demand
notes and accrued interest thereon totaling $9.3 million and (2) a 14.875%
secured promissory note due 2006 in the amount of $46.7 million. ACSC's
operations do not generate sufficient cash flow to provide debt service on the
HCC demand notes and, consequently, GBCC is currently insolvent. Additionally,
semi-annual interest payments of approximately $3.5 million attributable to the
14.875% secured promissory note become payable commencing in August 2001. GBCC
is currently negotiating with HCC to restructure its obligations and, in that
connection, has entered into certain standstill agreements with HCC. Under the
standstill agreements, all payments of principal and interest due from HCC
during the period from March 1, 2000 through March 1, 2001 with respect to an
intercompany note as detailed in Note 6 of the Notes to Consolidated Financial
Statements have been deferred until April 1, 2001 in consideration of HCC's
agreement not to demand payment of principal or interest on the demand notes
owed by GBCC (see (1) above). The fair market value of GBCC's assets is
substantially less than its existing obligations to HCC. Accordingly, management
anticipates that any restructuring of GBCC's obligations will result in the
conveyance of all of its assets (or the proceeds from the sale of its assets) to
HCC, resulting in no cash or other assets remaining available for distribution
to the Company's shareholders. Any restructuring of GBCC's obligations,
consensual or otherwise, will require the Company to file for protection under
federal bankruptcy laws and will ultimately result in liquidation of the
Company.

     The insolvency of GBCC raises substantial doubt about its ability to
continue as a going concern. The consolidated financial statements do not
include any adjustments that might result from the outcome of these
uncertainties.

     GB Holdings, Inc. and Subsidiaries -

     On January 5, 1998, GB Holdings, Inc. ("Holdings"), at the time a wholly
owned subsidiary of GBCC, together with Holdings' wholly owned subsidiaries,
Greate Bay Hotel and Casino, Inc. ("GBHC") and GB Property Funding Corp. ("GB
Property Funding"), filed petitions for relief under Chapter 11 of the United
States Bankruptcy Code (the "Bankruptcy Code") in the United States

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Bankruptcy Court for the District of New Jersey (the "New Jersey Bankruptcy
Court"). On June 1, 1999, a plan of reorganization was filed by the debtors with
the New Jersey Bankruptcy Court. The reorganization plan, as filed, provided for
the secured bondholders to receive new debt and 100% of the equity ownership of
Holdings in exchange for their claims and for unsecured creditors to receive a
partial cash settlement of their claims. Subsequent to the filing of a
reorganization plan by the debtors, two competing plans were filed by (1) Park
Place Entertainment Corporation, a large and diversified gaming company with
significant operations in Atlantic City, and (2) jointly by High River Limited
Partnership ("High River"), an entity controlled by Carl C. Icahn, and by the
Official Committee of Unsecured Creditors (the "Joint Plan"). On August 14,
2000, the New Jersey Bankruptcy Court confirmed the Joint Plan. The Sands
subsequently transferred 46.3% of its equity interests to High River in exchange
for $65 million in cash and the secured bondholders received $110 million in new
notes plus the remaining equity interests in exchange for the $182.5 million of
first mortgage notes in default. No distributions were made to the previous
shareholders, including Greate Bay Holdings, L.L.C., an indirect, wholly owned
subsidiary of GBCC, which held 79% of the outstanding common stock of Holdings.

     As a result of the Chapter 11 filings discussed above, GBCC's control over
the filing subsidiaries was subject to supervision of the New Jersey Bankruptcy
Court and GBCC did not expect to have ownership or operating control of such
subsidiaries after reorganization.  Furthermore, as a result of a settlement
agreement reached by GBCC and Holdings during September 1998, GBCC no longer
participated in the management of the Sands.  Accordingly, Holdings, GB Property
Funding and GBHC have not been included in the accompanying consolidated
financial statements of GBCC.

     Pratt Casino Corporation and Subsidiaries -

     The filings of petitions for relief by Holdings and its subsidiaries
resulted in a default under the indenture for $85 million principal amount of
11.625% senior notes (the "PRT Funding Notes") issued by PRT Funding Corp. and
guaranteed by Pratt Casino Corporation ("PCC"), both wholly owned, indirect
subsidiaries of GBCC. Accordingly, the outstanding principal amount of the PRT
Funding Notes accelerated and became due and payable. PRT Funding deferred
payment of interest due on the April 15 and October 15, 1998 and April 15, 1999
payment dates. On October 22, 1998, PRT Funding paid the bondholders an amount
equal to a single semiannual interest payment ($4.9 million) while negotiations
to restructure the PRT Funding Notes continued.

     On April 28, 1999, PCC, PRT Funding Corp., New Jersey Management, Inc.
("NJMI," a PCC subsidiary) GBCC, HCC and the holders of substantially all of the
PRT Funding Notes entered into a voting agreement which provided for the
restructuring of the PRT Funding Notes (the "Restructuring"). The voting
agreement provided for HCC to acquire the stock of PCC, the parent of PRT
Funding, from GBCC for nominal consideration. When acquired by HCC, PCC's assets
were to consist of its limited partnership interest in a management contract for
the Aurora Casino and its consulting contract for the Tunica Casino and its
liabilities were to consist of a new obligation in the amount of $40.3 million
payable in satisfaction of the PRT Funding Notes. The voting agreement provided
for HCC to immediately discharge the obligation.

     As part of the Restructuring, holders of the PRT Funding Notes were also to
receive 100% of the remaining assets of PCC and its subsidiaries not acquired by
HCC which consisted primarily of claims against Holdings, GB Property Funding
and GBHC in their Chapter 11 proceedings. In connection with the Restructuring,
PRT Funding also paid deferred interest amounting to $6.8 million to the
bondholders on April 30, 1999.

     The successful completion of the Restructuring required that PCC, PRT
Funding and NJMI file for protection under Chapter 11 with the above
transactions included as part of a pre-negotiated plan of reorganization. Such
petitions for relief were filed on May 25, 1999 in the United States Bankruptcy

                                       3
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Court for the District of Delaware (the "Delaware Bankruptcy Court") and the
related plan of reorganization was filed on May 26, 1999. The plan was confirmed
by the Delaware Bankruptcy Court on October 1, 1999 and the Restructuring was
completed on October 14, 1999.

     As a result of the Chapter 11 filings and plan of reorganization of PCC,
PRT Funding and NJMI, GBCC's control over the filing subsidiaries was subject to
supervision of the Delaware Bankruptcy Court. GBCC did not expect to have
ownership or operating control of such subsidiaries after reorganization.
Accordingly, GBCC's investment in PCC and its subsidiaries as well as certain
intercompany balances with PCC and its subsidiaries were revalued to a zero
basis effective on May 25, 1999. For the period from May 25, 1999 until the sale
of PCC to HCC on October 13, 1999, GBCC accounted for its investment in PCC
under the cost method of accounting.

     Other Filings -

     On June 30, 2000, three inactive, wholly owned, indirect subsidiaries of
GBCC filed for liquidation under Chapter 7 of the Bankruptcy Code in the
Delaware Bankruptcy Court. The subsidiaries were originally formed to acquire
property and build a second casino/hotel in Atlantic City, New Jersey. These
plans were subsequently abandoned; however, the companies remained in existence
pending the outcome of certain litigation which was substantially resolved in
1996. The cases were closed by the Trustee in Bankruptcy in December 2000 and
are awaiting a final liquidation order from the Delaware Bankruptcy Court. The
filings did not and are not expected to have a significant effect on the
operations or financial position of GBCC.

Advanced Casino Systems Corporation
-----------------------------------

     ACSC's computer services and information technology includes table game and
slot machine monitoring systems which enable casinos to track and rate patron
play through the use of a casino player's card. These systems provide casino
management with the key characteristics of patron play as slot machines are
connected with, and information with respect to table games can be input into
its data base monitoring system. When patrons use the casino player's card at
slot machines or table games, the information is immediately available to casino
management and allowing them to implement marketing programs to recognize and
reward patrons during their visits to the casino. Certain of these marketing
programs allow patrons to automatically credit themselves with complimentaries
based on their levels of play. Such promotions and complimentaries include free
meals, hotel accommodations, retail merchandise, parking and sweepstakes
giveaways based on slot machine patrons' gross wagering. ACSC's systems also
allow casino management to monitor, analyze and control the granting of gaming
credit, promotional expenses and other marketing costs.

     ACSC provided its systems to the Sands, the Aurora Casino and the Tunica
Casino. In 1997, ACSC began marketing its casino information technology systems,
previously restricted to use by its affiliates, to unaffiliated gaming
companies. To date, ACSC has completed contracts to implement or is currently
installing such systems in eleven unaffiliated casinos and is currently
negotiating to obtain additional contracts.

     ACSC's computer service revenues are derived primarily from system
installation contracts and from sales to affiliates. System installation
contracts generally require an extended period of time to complete and represent
significant, but nonrecurring revenue earned from a given customer. Upon
completion of an installation, ACSC may continue to recognize service or
maintenance revenues from the customer at a much reduced amount. Accordingly, in
order to maintain its current level of revenues, ACSC needs to continue to
obtain installation contracts. For the years ended December 31, 2000, 1999 and
1998, respectively, installation contracts accounted for approximately 61%, 61%
and 66% of

                                       4
<PAGE>

ACSC's revenues and affiliate sales accounted for approximately 23%, 23% and 22%
of ACSC's revenues.

Competition
-----------

     ACSC competes with other providers of casino software in marketing its
casino information technology systems. Due to the limited number of customers in
the gaming industry, competition is intense. There are approximately three
significant competitors to ACSC, some of which have greater resources for both
marketing and implementation. Technological innovation is also a key factor in
the industry. Management believes that its systems are state of the art and can
compete effectively with other casino software system providers.

Regulation
----------

     General -

     Because the casino industry is highly regulated at the state level, ACSC is
required to be licensed in order to provide services to casino operators in most
jurisdictions. Generally, licensing requires that ACSC and its officers,
including officers of GBCC, be investigated and found suitable by state
authorities. In addition, ACSC must meet periodic reporting requirements and
provide other information to state authorities as requested. The suspension or
revocation of a license could materially impact ACSC's ability to carry on its
business activities.

     Nevada -

     The manufacture and distribution in Nevada of gaming devices, cashless
wagering systems, and computer software used in such devices and systems are
subject to the Nevada Gaming Control Act and the related regulations and various
local regulations. ACSC's manufacturing and distributing businesses are subject
to the licensing and regulatory control of the Nevada Gaming Commission (the
"Nevada Commission"), the Nevada State Gaming Control Board (the "Nevada Board")
and various local regulatory authorities.

     The laws, regulations and supervisory procedures of the Nevada gaming
authorities are based upon declarations of public policy which are concerned
with, among other things:

     1.   the prevention of unsavory or unsuitable persons from having a direct
          or indirect involvement with gaming at any time or in any capacity;

     2.   the establishment and maintenance of responsible accounting practices
          and procedures;

     3.   the maintenance of effective controls over the financial practices of
          licensees, including the establishment of 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;

     4.   the prevention of cheating and fraudulent practices; and

     5.   providing a source of state and local revenues through taxation and
          licensing fees.

     Any change in such laws, regulations and procedures could have an adverse
effect on ACSC's operations.

                                       5
<PAGE>

     ACSC is required to be licensed by the Nevada gaming authorities as a
manufacturer and distributor.  GBCC is registered by the Nevada Commission as a
publicly traded corporation and, as such, it is required periodically to submit
detailed financial and operating reports to the Nevada Commission and furnish
any other information which the Nevada Commission may require.  No person may
become a stockholder of, or receive any percentage of profits from, ACSC without
first obtaining licenses and approvals from the Nevada gaming authorities.  The
Company and ACSC have obtained from the Nevada gaming authorities the various
registrations, approvals, permits and licenses required in order to engage in
manufacturing and distributing activities in Nevada.

     The Nevada gaming authorities may investigate any individual who has a
material relationship to, or material involvement with, the Company or ACSC in
order to determine whether such individual is suitable or should be licensed as
a business associate of a gaming licensee.  Officers, directors and certain key
employees of ACSC 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 the Company who are
actively and directly involved in the manufacturing or distributing activities
of ACSC may be required to be licensed or found suitable by the Nevada gaming
authorities. The Nevada gaming authorities may deny any 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 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 corporate position.

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

     The Company and ACSC 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 ACSC must be
reported to, or approved by, the Nevada Commission.

     If it were determined that the Nevada gaming laws were violated by ACSC,
the licenses it holds could be limited, conditioned, suspended or revoked,
subject to compliance with certain statutory and regulatory procedures. In
addition, ACSC, the Company, and the persons involved could be subject to
substantial fines for each separate violation of the Nevada gaming laws at the
discretion of the Nevada Commission. Limitation, conditioning or suspension of
any license could (and revocation of any license would) materially adversely
affect ACSC's manufacturing and distributing operations in the State of Nevada.

     Any beneficial holder of the Company'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 the Company'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 gaming laws require any person who acquires more than 5% of the
Company's voting securities to report the acquisition to the Nevada Commission.
The Nevada gaming laws require that

                                       6
<PAGE>

beneficial owners of more than 10% of the Company's voting securities apply to
the Nevada Commission for a finding of suitability within thirty 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 gaming laws, which acquires more than 10%, but not more than 15%, of the
Company'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 shall 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 the Company, any change in the Company's corporate charter, bylaws,
management, policies or operations of the Company, or any of its gaming
affiliates, or any other action which the Nevada Commission finds to be
inconsistent with holding the Company's voting securities for investment
purposes only. Activities which are not deemed to be inconsistent with holding
voting securities for investment purposes only include:

     1.   voting on all matters voted on by stockholders;

     2.   making financial and other inquiries of management of the type
          normally made by securities analysts for informational purposes and
          not to cause a change in management, policies or operations; and

     3.   such other activities as the Nevada Commission may determine to be
          consistent with such investment.

     If the beneficial holder of voting securities who must be found suitable is
a corporation, partnership, limited partnership, limited liability company 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 thirty 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 record 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 publicly traded corporation beyond such period of time as may be
prescribed by the Nevada Commission may be guilty of a criminal offense. The
Company 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
the Company or ACSC, the Company:

     1.   pays the person any dividend or interest upon voting securities of the
          Company;

     2.   allows that person to exercise, directly or indirectly, any voting
          right conferred through securities held by that person;

     3.   pays remuneration in any form to that person for services rendered or
          otherwise; or

     4.   fails to pursue all lawful efforts to require such unsuitable person
          to relinquish his voting securities for cash at fair market value.

     The Nevada Commission, in its discretion, may require the holder of any
debt security of a registered publicly traded corporation to file applications,
be investigated and be found suitable to own the debt security of a registered
publicly traded corporation. Nevada law provides that if the Nevada Commission
determines that a person is unsuitable to own a debt security of a registered
publicly traded

                                       7
<PAGE>

corporation, the corporation can be sanctioned, including the loss of its
approvals, if it takes any of the following actions without having first
obtained the approval of the Nevada Commission:

     1.   pays to the unsuitable person any dividend, interest, or any
          distribution whatsoever;

     2.   recognizes any voting right by such unsuitable person in connection
          with such securities;

     3.   pays the unsuitable person remuneration in any form; or

     4.   makes any payment to the unsuitable person by way of principal,
          redemption, conversion, exchange, liquidation, or similar transaction.

     The Company 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. The Company is also required to render maximum
assistance in determining the identity of the beneficial owner. The Nevada
Commission has the power to require the Company's stock certificates to bear a
legend indicating that the securities are subject to the Nevada gaming laws.

     The Company may not make a public offering of its securities without the
prior approval of the Nevada Commission if the securities or the proceeds
therefrom are intended to be used to construct, acquire or finance gaming
facilities in Nevada, or to retire or extend obligations incurred from such
purposes. Such approval, if given, does not constitute a finding, recommendation
or approval by the Nevada Commission or the Nevada Board as to the accuracy or
adequacy of the prospectus or the investment merits of the securities. Any
representation to the contrary is unlawful.

     Changes in control of the Company 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 the registered
publicly traded corporation must satisfy the Nevada Board and Nevada Commission
in a variety of stringent standards prior to assuming control of a registered
publicly traded 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 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 Nevada gaming licensees, and registered publicly traded
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 effect of these business
practices upon Nevada's gaming industry and to further Nevada's policy to:

     1.   assure the financial stability of corporate gaming operators and their
          affiliates;

     2.   preserve the beneficial aspects of conducting business in the
          corporate form; and

     3.   promote a neutral environmental for the orderly governance of
          corporate affairs.

     Approvals are, in certain circumstances, required from the Nevada
Commission before the Company 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 gaming

                                       8
<PAGE>

laws also require prior approval of a plan of recapitalization proposed by the
Company's board of directors in response to a tender offer made directly to the
registered publicly traded corporation's stockholders for the purposes of
acquiring control of the registered publicly traded corporation.

     Nevada licensees such as ACSC that hold licenses as a manufacturer and
distributor are required to pay annual license renewal fees to the State of
Nevada.

     Any person who is licensed, required to be licensed, registered, required
to be registered, or who is under common control with such persons (collectively
referred to as "Licensees"), and who proposes to become involved in the
operation of 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 in
the discretion of the Nevada Commission. Thereafter, Licensees are required to
comply with certain reporting requirements imposed by the Nevada gaming laws. A
licensee is also subject to disciplinary action by the Nevada Commission if he
knowingly violates any laws of the foreign jurisdiction pertaining to the
foreign gaming operation, fails to conduct the foreign gaming operation in
accordance with the standards of honesty and integrity required of Nevada gaming
operations, engages in activities that are harmful to the State of Nevada or its
ability to collect gaming taxes and fees, or employs a person in the foreign
operations who has been denied a license or finding of suitability in Nevada on
the ground of personal unsuitability.

Employees
---------

     At December 31, 2000, GBCC had approximately 87 employees, none of whom are
represented under collective bargaining agreements.  Management considers its
labor relations to be good.


ITEM 2.  PROPERTIES

     ACSC, leases approximately 18,000 square feet of office space for its
operating and administrative needs including two offices in New Jersey and one
in California.  The office leases expire at various dates through October 31,
2003.

ITEM 3.  LEGAL PROCEEDINGS

Subsidiary Chapter 11 Filings and Related Litigation
----------------------------------------------------

     Subsidiary Chapter 11 Filings and Related Litigation -

     On January 5, 1998, Holdings together with its wholly owned subsidiaries,
GBHC and GB Property Funding, filed petitions for relief under Chapter 11 of the
Bankruptcy Code  in the New Jersey Bankruptcy Court.  On June 1, 1999, a plan of
reorganization was filed by debtors with the New Jersey Bankruptcy Court.  The
reorganization plan, as filed, provided for the secured bondholders to receive a
new debt and 100% of the equity ownership of Holdings in exchange for their
claims and for unsecured creditors to receive a partial cash settlement of their
claims.  Subsequent to the filing of a reorganization plan by the debtors, two
competing plans were filed by (1) Park Place Entertainment Corporation, a large
and diversified gaming company with significant operations in Atlantic City, and
(2) jointly by High River, an entity controlled by Carl C. Icahn, and by the
Official Committee of Unsecured Creditors (the "Joint Plan").  On August 14,
2000, the New Jersey Bankruptcy Court confirmed the Joint Plan.  The Sands
subsequently transferred 46.3% of its equity interests to High River in exchange
for $65 million in cash and the secured bondholders received $110 million in new
notes plus the remaining equity interests in exchange for the $182.5 million of
first mortgage notes in default.  No distributions were made to the

                                       9
<PAGE>

previous shareholders, including Greate Bay Holdings, L.L.C., an indirect,
wholly owned subsidiary of GBCC, which held 79% of the outstanding common stock
of Holdings.

     Other Filings -

     On June 30, 2000, three inactive, wholly owned, indirect subsidiaries of
GBCC filed for liquidation under Chapter 7 of the United States Bankruptcy Code
in the United States Bankruptcy Court for the District of Delaware. The
subsidiaries were originally formed to acquire property and build a second
casino/hotel in Atlantic City, New Jersey. These plans were subsequently
abandoned; however, the companies remained in existence pending the outcome of
certain litigation which was substantially resolved in 1996. The cases were
closed by the Trustee in Bankruptcy in December 2000 and are awaiting a final
liquidation order from the Delaware Bankruptcy Court. The filings did not and
are not expected to have a significant effect on the operations or financial
position of GBCC.

     Planet Hollywood Litigation -

     In 1996, Planet Hollywood International, Inc. and Planet Hollywood (Region
IV), Inc. filed a complaint in the United States District Court for the Northern
District of Illinois, Eastern Division, against GBCC and against HCC and certain
of its subsidiaries seeking (1) a declaratory judgment that it was entitled to
use the name "Planet Hollywood" for a casino and (2) damages. In its complaint,
Planet Hollywood alleged, among other things, that GBCC and HCC had, in
operating the Hollywood Casino concept, infringed on their trademark, service
mark and trade dress and had engaged in unfair competition and deceptive trade
practices. GBCC and HCC and its subsidiaries filed counterclaims seeking (1) a
declaratory judgment that Planet Hollywood was not entitled to use the name
"Planet Hollywood" for a casino and (2) damages. The counterclaims alleged,
among other things, that Planet Hollywood had, through its planned use of its
mark in connection with casino services, infringed on GBCC and HCC's service
marks and trade dress and had engaged in unfair competition. The trial commenced
on July 19, 1999 and was completed on July 26, 1999. On August 25, 1999, GBCC,
HCC and the other defendants filed a motion to dismiss the declaratory judgment
claims of all parties asserting, among other things, that as a result of Planet
Hollywood's reported deteriorating financial condition and perceived inability
to enter into the casino business, there was no longer any actual case or
controversy. On October 12, 1999, Planet Hollywood (Region IV), Inc. filed a
petition for reorganization under Chapter 11 of the United States Bankruptcy
Code. On December 3, 1999 the judge entered a judgment in favor of GBCC and HCC
with respect to the damage claims brought by Planet Hollywood and granted their
motion to dismiss the declaratory judgment claims of all parties. Planet
Hollywood filed a notice of appeal of the judgment with the Seventh Circuit
Court of Appeals; however, pursuant to a joint motion filed by the parties, such
appeal was dismissed effective as of November 2, 2000.

     Other Litigation -

     On October 8, 1998, GBCC and HCC filed a complaint against their former
independent accountants and tax advisors in the District Court of Dallas County,
Texas. On September 8, 2000, a mutually acceptable agreement was reached
concluding the dispute and resulting in the dismissal of the lawsuit.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     During the fourth quarter of 2000, no matter was submitted to a vote of
security holders through the solicitation of proxies or otherwise.

                                       10
<PAGE>

                                    PART II

ITEM 5.  MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED SECURITY HOLDER
MATTERS

     The common stock of GBCC is traded on the OTC Bulletin Board Service under
the trading symbol "GEAA". The prices set forth in the following table represent
actual transactions.


          Period                        High       Low
          ------                        ----       ---

          2000
               First Quarter            $.35       $.09
               Second Quarter            .22        .05
               Third Quarter             .15        .05
               Fourth Quarter            .11        .01

          1999
               First Quarter            $.44       $.23
               Second Quarter            .31        .06
               Third Quarter             .34        .06
               Fourth Quarter            .34        .08


     At March 23, 2001, there were approximately 3,900 holders of record of
GBCC's common stock.

     No dividends have been paid on GBCC's common stock in the past and GBCC has
no plans to pay dividends in the foreseeable future.

                                       11
<PAGE>

ITEM 6.  SELECTED FINANCIAL DATA

     The following tables present selected financial data for GBCC and are
qualified in their entirety by the consolidated financial statements, including
the notes thereto, appearing elsewhere in this Form 10-K. The data as of
December 31, 2000 and 1999, and for the years ended December 31, 2000, 1999 and
1998, have been derived from the audited consolidated financial statements of
GBCC presented in Item 8.

<TABLE>
<CAPTION>

Statement of Operations Data:                                              Year Ended December 31,
                                                        ---------------------------------------------------------------
                                                         2000(1)     1999(1, 2)    1998(1)         1997          1996
                                                        --------     ----------   ---------     ---------     ---------
                                                                  (in thousands, except per share amounts)

<S>                                                     <C>          <C>          <C>           <C>           <C>
Net revenues..........................................  $ 14,121     $    6,422   $   8,971     $ 263,691     $ 284,563
                                                        --------     ----------   ---------     ---------     ---------
Expenses:
 Operating expenses...................................    10,983          5,400       2,371       216,247       240,944
 General and administrative...........................     2,883          3,154       3,667        16,192        19,363
 Depreciation and amortization........................       181            181         129        13,392        18,781
                                                        --------     ----------   ---------     ---------     ---------
  Total expenses......................................    14,047          8,735       6,167       245,831       279,088
                                                        --------     ----------   ---------     ---------     ---------
Income (loss) from operations.........................        74         (2,313)      2,804        17,860         5,475
                                                        --------     ----------   ---------     ---------     ---------
Non-operating income (expenses):
 Interest income......................................       548            667         942         1,486         1,852
 Interest expense.....................................    (7,156)       (10,303)    (16,194)      (39,318)      (40,938)
 Equity in earnings of limited partnership............         -          2,660       6,494         5,012             -
 Gain on elimination of investment in Pratt
  Casino Corporation..................................         -         85,633           -             -             -
 Equity in earnings of and gain on elimination of
  investment in GB Holdings, Inc......................         -              -      31,233             -             -
 Restructuring costs..................................         -           (230)     (1,548)         (505)            -
 Gain (loss) on disposal of assets....................         -              -         472         2,120        (1,795)
                                                        --------     ----------   ---------     ---------     ---------
  Total non-operating (expense) income, net...........    (6,608)        78,427      21,399       (31,205)      (40,881)
                                                        --------     ----------   ---------     ---------     ---------
(Loss) income before income taxes, extraordinary and
 other items..........................................    (6,534)        76,114      24,203       (13,345)      (35,406)
Write off deferred financing costs....................         -              -           -        (6,515)            -
                                                        --------     ----------   ---------     ---------     ---------
(Loss) income before income taxes and
 extraordinary item...................................    (6,534)        76,114      24,203       (19,860)      (35,406)
Income tax (provision) benefit........................       (63)             7         287        (1,014)         (160)
                                                        --------     ----------   ---------     ---------     ---------
(Loss) income before extraordinary item...............    (6,597)        76,121      24,490       (20,874)      (35,566)
Extraordinary item:
 Gain on early extinguishment of debt.................         -              -           -           310             -
                                                        --------     ----------   ---------     ---------     ---------
  Net (loss) income...................................  $ (6,597)    $   76,121   $  24,490     $ (20,564)    $ (35,566)
                                                        ========     ==========   =========     =========     =========

Basic and diluted (loss) income per common share:
 (Loss) income before extraordinary item..............  $  (1.27)    $    14.68   $    4.72     $   (4.02)    $   (6.86)
 Extraordinary item...................................         -              -           -           .06             -
                                                        --------     ----------   ---------     ---------     ---------
  Net (loss) income...................................  $  (1.27)    $    14.68   $    4.72     $   (3.96)    $   (6.86)
                                                        ========     ==========   =========     =========     =========

<CAPTION>
Balance Sheet Data:                                                               December 31,
                                                        ---------------------------------------------------------------
                                                         2000(1)      1999(1, 2)   1998(1)       1997(1)         1996
                                                        --------     ----------   ---------     ---------     ---------
                                                                                (in thousands)
<S>                                                     <C>          <C>          <C>           <C>           <C>
Total assets..........................................  $ 11,570     $    9,004   $  19,946     $  15,752     $ 221,345
Total debt............................................    46,687         40,446     120,040       115,949       326,024
Shareholders' deficit.................................   (49,102)       (42,505)   (118,626)     (143,116)     (159,207)
</TABLE>


(1)  As a result of the Chapter 11 filings by Holdings, GB Property Funding and
     GBHC, GBCC's control over these subsidiaries was subject to supervision of
     the New Jersey Bankruptcy Court and GBCC did not expect to be in control of
     such subsidiaries after

                                       12
<PAGE>

     reorganization. Furthermore, as a result of a settlement agreement reached
     by GBCC and Holdings in September 1998, GBCC no longer participated in the
     management of the Sands. Accordingly, these subsidiaries were excluded from
     the consolidated balance sheets of GBCC at December 31, 1999, 1998 and
     1997. As more fully explained in Note 1 of the Notes to Consolidated
     Financial Statements of GBCC, during the period from January 1, 1998
     through June 30, 1998, the operations of Holdings and its subsidiaries were
     accounted for by GBCC under the equity method of accounting. As a result of
     GBCC no longer controlling the operations of the Sands, the continued
     expectation that ownership control of Holdings would only be temporary and
     the September 1998 settlement agreement which resolved certain significant
     uncertainties, GBCC's investment in Holdings as well as certain amounts due
     to Holdings and its subsidiaries were revalued to a zero basis effective on
     July 1, 1998. Accordingly, for periods subsequent to June 30, 1998 and
     prior to confirmation of the Joint Plan on August 14, 2000, GBCC accounted
     for its investment in Holdings under the cost method of accounting.

(2)  As a result of the Chapter 11 filings and plan of reorganization of PCC,
     PRT Funding and NJMI, GBCC's control over the filing subsidiaries was
     subject to supervision of the Delaware Bankruptcy Court. GBCC did not
     expect to have ownership or operating control over such subsidiaries after
     reorganization. As more fully explained in Note 1 of the Notes to
     Consolidated Financial Statements, GBCC's investment in PCC and its
     subsidiaries as well as certain amounts due from PCC and its subsidiaries
     were revalued to a zero basis effective on May 25, 1999. Accordingly, for
     period subsequent to May 25, 1999, GBCC accounted for its investment in PCC
     under the cost method of accounting. As part of the Restructuring, GBCC
     sold its interest in PCC to HCC in October 1999.

                                       13
<PAGE>

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

     This Quarterly Report on Form 10-Q contains forward-looking statements
about the business, results of operations, cash flows, financial condition and
prospects of GBCC. The actual results could differ materially from those
indicated by the forward-looking statements because of various risks and
uncertainties including, among other things, changes in competition, economic
conditions, tax regulations, state regulations applicable to ACSC's operations,
and other risks indicated in GBCC's filing with the Securities and Exchange
Commission. Such risks and uncertainties are beyond management's ability to
control and, in many cases, can not be predicted by management. When used in
this Quarterly Report on Form 10-Q, the words "believes", "estimates",
"anticipates" and similar expressions as they relate to GBCC or its management
are intended to identify forward-looking statements.

LIQUIDITY AND CAPITAL RESOURCES

     Operating Activities

     In prior years, GBCC and its subsidiaries conducted three major business
activities: (1) non-casino operations and the management thereof, (2) management
services for casino operations and (3) ownership of the Sands Hotel and Casino
in Atlantic City, New Jersey.  As a result of the Chapter 11 filings by PCC, PRT
Funding and NJMI and the resulting plan of reorganization confirmed in October
1999, GBCC no longer provides casino-related management services.  As a result
of Holdings and GBHC's Chapter 11 filings and the confirmation of the Joint Plan
on August 14, 2000, GBCC no longer holds an equity position in the Sands.
Accordingly, GBCC's current business activity consists solely of the operations
of ACSC.

     ACSC licenses casino information technology systems to HCC's casino
facilities, the Sands and non-affiliated casino companies.  The results of
ACSC's operations for the years ended December 31, 2000, 1999 and 1998 are set
forth below:

                                            Year Ended December 31,
                                    -------------------------------------
                                       2000         1999          1998
                                    -----------  -----------   ----------

System sales and support service
 revenues                           $14,121,000  $ 5,945,000   $5,255,000
                                    -----------  -----------   ----------

Cost of sales                         6,023,000    2,628,000    1,304,000
System development and support
  services                            3,749,000    2,363,000    1,003,000
Marketing                             1,211,000      409,000       63,000
General and administrative            1,915,000    1,457,000    1,426,000
Depreciation                            181,000      181,000      130,000
                                    -----------  -----------   ----------

                                     13,079,000    7,038,000    3,926,000
                                    -----------  -----------   ----------

Income (loss) from operations       $ 1,042,000  $(1,093,000)  $1,329,000
                                    ===========  ===========   ==========


     The improvement in operating results during 2000 from the prior year period
is primarily due to the increased volume of system sales and installation
contracts.  The decline in operating results during 1999 compared to 1998 is
primarily due to marketing and administrative costs incurred in order to

                                       14
<PAGE>

expand ACSC's business activities. These fluctuations are more fully explained
under the caption "Results of Operations".

     ACSC's computer service revenues are derived primarily from system
installation contracts and from sales to affiliates.  System installation
contracts generally require an extended period of time to complete and represent
significant, but nonrecurring revenue earned from a given customer.  Upon
completion of an installation, ACSC may continue to recognize service or
maintenance revenues from the customer at a much reduced amount.  Accordingly,
in order to maintain its current level of revenues, ACSC would need to continue
to obtain installation contracts.  The following table demonstrates ACSC's
dependence on installation contracts and on sales to affiliates:


                                                 Year Ended December 31,
                                                 -----------------------
                                                   2000    1999    1998
                                                 -------  ------ -------

Total percentage of period revenues
 attributable to installation contracts           60.9%    61.3%   65.7%
Percentage of period revenues attributable
  to affiliate sales                              22.9%    22.8%   22.5%


     At December 31, 2000, GBCC and its subsidiaries had debt outstanding to HCC
consisting of (1) demand notes (the "GBCC Notes") and accrued interest thereon
totaling $9.3 million and (2) a 14.875% secured promissory note due 2006 (the
"PPI Funding Notes") which had a discounted value of $46.7 million. ACSC's
operations do not generate sufficient cash flow to provide debt service on the
HCC demand notes and, consequently, GBCC is currently insolvent. Additionally,
semi-annual interest payments of approximately $3.5 million attributable to the
PPI Funding Notes become payable commencing in August 2001. Accordingly, GBCC is
currently negotiating with HCC to restructure its obligations and, in that
connection, has entered into certain standstill agreements with HCC. Under the
standstill agreements, all payments of principal and interest due from HCC
during the period from March 1, 2000 through March 1, 2001 with respect to an
intercompany note more fully described in Note 6 of the Notes to Consolidated
Financial Statements have been deferred until April 1, 2001 in consideration of
HCC's agreement not to demand payment of principal or interest on the GBCC
Notes. The fair market value of GBCC's assets is substantially less than its
existing obligations to HCC. Accordingly, management anticipates that any
restructuring of GBCC's obligations will result in the conveyance of all of its
assets (or the proceeds from the sale of its assets) to HCC, resulting in no
cash or other assets remaining available for distribution to the Company's
shareholders. Any restructuring of GBCC's obligations, consensual or otherwise,
will require the Company to file for protection under federal bankruptcy laws
and will ultimately result in liquidation of the Company.

     The insolvency of GBCC raises substantial doubt about its ability to
continue as a going concern. The consolidated financial statements do not
include any adjustments that might result from the outcome of these
uncertainties.

     Financing Activities

     During 1994, GBCC issued the PPI Funding Notes to HCC in exchange for $38.8
million principal amount of 15.5% notes issued by another GBCC subsidiary and
held by HCC. The PPI Funding Notes have a maturity value of $47.6 million.
Payment of interest on the PPI Funding Notes is deferred through February 17,
2001 at which time interest will become payable semiannually beginning on August
17, 2001, with the unpaid balance due on February 17, 2006.

     Effective as of April 1, 1997, HCC acquired from PPI Corporation the
general partnership interest in Pratt Management, L.P. ("PML"), the GBCC-owned
limited partnership which, prior to

                                       15
<PAGE>

October 14, 1999, held the Aurora management contract. The acquisition price for
the general partnership interest included, among other things, the assignment of
a portion of the PPI Funding Notes to PPI Corporation and a new note in the
original amount of $3.8 million. Principal and interest payments by HCC on the
$3.8 million note approximated the general partner's share of annual partnership
distributions made to HCC while PML held the Aurora management contract. GBCC
and HCC have entered into standstill agreements to defer all payments of
principal and interest on the note otherwise due during the period from March 1,
2000 through March 1, 2001 while GBCC negotiates with HCC to restructure its
obligations. These deferrals do not extend the maturities or represent a
forgiveness of either principal or interest as all past due amounts, if not
otherwise restructured, will become due and payable on the extended payment date
of April 1, 2001.

     The GBCC Notes consist primarily of loans in the original amount of $6.5
million borrowed from HCC during the third quarter of 1996. Such borrowings
accrue interest at the rate of 13.75% per annum payable quarterly commencing
October 1, 1996. GBCC loaned the proceeds from this loan to GBHC on similar
terms. The loan to GBHC along with the related interest receivable were
cancelled as part of a settlement agreement approved by the New Jersey
Bankruptcy Court on September 2, 1998. Although payment of the GBCC Notes is on
a demand basis, HCC has agreed not to demand payment as part of the standstill
agreements described in the previous paragraph. During October 2000, GBCC paid
$900,000 of the outstanding principal balance of the GBCC Notes to HCC and
agreed to offset an additional $146,000 of principal against other receivables
due from HCC while negotiations to restructure GBCC's debt continue.

     As previously described, GBCC is currently negotiating with HCC to
restructure its obligations. The fair market value of GBCC's assets is
substantially less than its existing obligations to HCC. Accordingly, management
anticipates that any restructuring of GBCC's obligations will result in the
conveyance of all of its assets (or the proceeds from the sale of its assets) to
HCC, resulting in no cash or other assets remaining available for distribution
to the Company's shareholders. Any restructuring of GBCC's obligations,
consensual or otherwise, will require the Company to file for protection under
federal bankruptcy laws and will ultimately result in liquidation of the
Company.

     Capital Expenditures and Other Investments

     Property and equipment additions during the year ended December 31, 2000
totaled $184,000; management anticipates that capital expenditures during 2001,
consisting only of ongoing equipment replacements and enhancements at ACSC, will
not be significant.

RESULTS OF OPERATIONS

     General

     As a result of the filings by Holdings, GB Property Funding and GBHC,
GBCC's control over the filing subsidiaries was subject to the supervision of
the New Jersey Bankruptcy Court.  GBCC did not expect to have ownership or
operating control of such subsidiaries after reorganization.  Accordingly, the
accompanying consolidated statement of operations for the year ended December
31, 1998 reflects the operations of the filing subsidiaries for periods from
January 1, 1998 through June 30, 1998 under the equity method of accounting and
for periods subsequent to June 30, 1998 (including the year 2000 period prior to
confirmation of the Joint Plan on August 14) under the cost method of
accounting.

     As a result of the filings by PCC, NJMI and PRT Funding, GBCC's control
over these subsidiaries was subject to the supervision of the Delaware
Bankruptcy Court and GBCC did not expect to have ownership or control of such
subsidiaries after reorganization.  Accordingly, the accompanying consolidated
statement of operations for the year ended December 31, 1999 reflects the
operations of

                                       16
<PAGE>

PCC and its subsidiaries under the cost method of accounting for periods
subsequent to the filings (May 25, 1999). GBCC sold its interest in PCC to HCC
during October 1999 as part of the Restructuring. The accompanying consolidated
statement of operations for the year ended December 31, 1998 includes the
activities of PCC, NJMI and PRT Funding on a consolidated basis.

     HCC acquired the general partnership interest in PML from a subsidiary of
GBCC effective April 1, 1997.  From that date until October 14, 1999, GBCC held
only the limited partnership interest in PML, which was presented under the
equity method of accounting on the accompanying consolidated statements of
operations for such periods.

     Revenues

     System sales and support service revenues earned by ACSC increased $8.2
million (137.5%) and $690,000 (13.1%), respectively, during the years ended
December 31, 2000 and 1999 compared to the prior years. The year 2000 increase
results from increased system installations. During 2000, ACSC provided services
on six system installation contracts (including one for an affiliate), four of
which were substantially completed during the year. These six contracts
accounted for approximately $10.9 million of revenues during 2000. By
comparison, 1999 and 1998 included revenues of $3.3 million and $3.5 million,
respectively, from system installation contracts. The addition of personnel
during 1999 has better positioned ACSC to service multiple contracts. Also
contributing to the revenue increases were additional billings to third parties
for inventory sales and other services. Such billings increased during 2000 to
$2.3 million from $945,000 in 1999 and $624,000 in 1998. The year 2000 revenue
increases were slightly offset by decreases in billings to affiliates (exclusive
of new installations) resulting from the restructuring of maintenance and
support agreements. Billings to affiliates decreased to $867,000 in 2000 from
$1.4 million in 1999 and $1.2 million in 1998.

     Other revenues consist primarily of consulting and management fees earned
in prior years by various GBCC subsidiaries.  Consulting fees earned by PCC with
respect to the Tunica Casino, which amounted to $477,000 during 1999 and $1.2
million during 1998, were discontinued on May 25, 1999 upon the filing by PCC of
its petition under Chapter 11.  NJMI earned management fees under its management
contract with the Sands during 1998 amounting to $2.4 million.   As discussed in
Note 6 of the Notes to Consolidated Financial Statements,  the management
contract was rejected in September 1998.

     Cost of Sales

     ACSC's cost of sales increased $3.4 million (129.2%) and $1.3 million
(101.5%), respectively, during 2000 and 1999 compared to the prior year periods.
The increases were a result of increased contract installations as previously
described. Cost of sales does not fluctuate proportionately with the increase in
revenues due to the mix of revenues earned (sales versus support services) as
well as to differences in the profitability of system installation contracts
resulting from the bidding process.

     System Development and Support Service Expenses

     System development and support services increased $1.4 million during both
2000 and 1999 (58.7% and 135.6%), respectively, compared to the prior year
periods. These increases result from additional personnel and equipment costs
due to the expansion of ACSC's business activities.

                                       17
<PAGE>

     Marketing Expenses

     Marketing expenses for ACSC increased $802,000 (196.1%) and $345,000
(539.1%), respectively, during the years ended December 31, 2000 and 1999
compared to the preceding years.  The 2000 increase reflects additional sales
commissions associated with system sales and installation contract revenues
earned as well as continuing efforts to market ACSC's casino information
technology systems. The 1999 increase reflects additional personnel and other
costs incurred in developing new sales initiatives to aggressively market ACSC's
systems to third parties.  Such marketing efforts have resulted in the
significant increase in system installation revenues during 2000 of
approximately $7.6 million.

     General and Administrative Expenses

     GBCC's consolidated general and administrative expenses decreased by
$271,000 (8.6%) and $513,000 (14%), respectively, during 2000 and 1999 compared
to the prior year periods. These reductions in corporate general and
administrative expenses resulted from the curtailment of GBCC's operations other
than ACSC. The decrease in corporate expenses in 2000 offset an increase of
$458,000 (31.4%) at ACSC resulting from the expansion of its operations. General
and administrative expenses at ACSC did not change significantly during the year
ended December 31, 1999 compared to 1998.

     Depreciation and Amortization

     Depreciation and amortization expense was unchanged during 2000 compared to
1999 following an increase of $52,000 (40.3%) in 1999 compared to 1998.
Increases in depreciation resulting from capital expenditures in 2000 were
offset by the elimination of depreciation on certain assets that became fully
depreciated during the year.  The 1999 increase reflects additional capital
expenditures by ACSC in 1999 as well as to a full year's depreciation during
1999 on assets acquired by ACSC in 1998.

     Interest

     Consolidated interest income for GBCC decreased $119,000 (17.8%) and
$275,000 (29.2%), respectively, during the years ended December 31, 2000 and
1999 compared to the prior years as less cash was available for investment
purposes and less interest was earned on GBCC's note receivable from HCC as a
result of principal reductions prior to the implementation of the standstill
agreements.

     Interest expense decreased $3.1 million (30.5%) and $5.9 million (36.4%),
respectively, during 2000 and 1999 compared to the prior year periods as
interest expense with respect to the PRT Funding Notes was no longer recognized
subsequent to the May 1999 filings under Chapter 11 by PCC and its subsidiaries.
The PRT Funding Notes were later settled as part of the Restructuring in October
1999. Interest expense on the PRT Funding Notes during 1999 was $4 million
compared to $9.9 million in 1998. Exclusive of the $4 million of interest
incurred with respect to the PRT Funding Notes during 1999, interest expense
during 2000 increased by $805,000 compared to 1999 as a result of additional
amortization of discount with respect to the PPI Funding Notes.

     Equity in Earnings of Limited Partnership

     Effective February 17, 1994, PCC acquired the limited partnership interest
in PML, a limited partnership which earned management fees from the operation of
the Aurora Casino.  The Agreement of Limited Partnership of PML provided for
distributions to PCC of 1% of the first $84,000 of net income earned by PML each
month and 99% of any net income earned above such amount, with all remaining
income distributed to the general partner.  GBCC reflected its equity in the
earnings of PML only through the May 25, 1999 deconsolidation of PCC, which held
the limited partnership interest.  The $2.7 million earned prior to May 25, 1999
compares favorably to the $2.4 million earned during the first

                                       18
<PAGE>

five months of 1998, reflecting improved operations at the Aurora Casino, on
which management fees earned by PML were based.

     Equity in Earnings of and Gain on Elimination of Investment in GB Holdings,
Inc.

     GBCC's equity in the earnings of Holdings for the year ended December 31,
1998 amounted to $3.7 million and represents equity in earnings for the period
from January 1, 1998 through June 30, 1998. Effective July 1, 1998, GBCC
eliminated its investment in Holdings and is no longer recognizing equity in the
earnings of Holdings and its subsidiaries.

     As a result of GBCC no longer controlling the operations of the Sands, the
expectation that control of Holdings will only be temporary and the September
1998 settlement agreement which resolved certain significant uncertainties,
GBCC's investment in Holdings and its subsidiaries as well as certain
intercompany balances with Holdings were revalued to a zero basis effective on
July 1, 1998. The elimination of the investment in and intercompany balances
with Holdings resulted in a gain amounting to $27.5 million during the year
ended December 31, 1998.

     Gain on Elimination of Investment in Pratt Casino Corporation

     As a result of the filing of petitions for relief under Chapter 11 by PCC,
NJMI and PRT Funding on May 25, 1999, GBCC did not expect to have ownership or
operating control of these subsidiaries after reorganization.  Accordingly,
these subsidiaries are no longer included in the consolidated financial
statements of GBCC for any period subsequent to May 25, 1999.  GBCC's investment
in PCC and its subsidiaries as well as certain intercompany balances with PCC
and its subsidiaries were revalued to a zero basis effective on May 25, 1999.
The elimination of the investment in and intercompany balances with PCC resulted
in a gain amounting to $85.6 million for the year ended December 31, 1999.

     Restructuring Costs

     Restructuring costs decreased by $1.3 million (85.1%) during 1999 compared
to 1998 as such costs were no longer reflected in GBCC's consolidated results of
operations subsequent to the May 25, 1999 Chapter 11 filings by PCC and its
subsidiaries.  In addition to the deconsolidation, restructuring costs as a
whole were substantially reduced in 1999 due to progress made during 1998 which
ultimately led to the successful completion of the Restructuring.

     Gain on Disposal of Assets

     The 1998 gain results from the sale to GBHC of GBCC's rights under an
option agreement to acquire a parcel of land in Atlantic City from an unrelated
third party.

     Income Tax Provision

     As a result of a settlement agreement entered into in September 1998 (see
Note 10 of Notes to Consolidated Financial Statements), Holdings and its
subsidiaries were no longer included in the consolidated tax return of GBCC for
periods subsequent to December 31, 1998.  The deconsolidation and sale of PCC
and its subsidiaries also resulted in those entities no longer being included in
GBCC's consolidated tax return for periods subsequent to October 1999.  Due to
the availability of NOL's originating in prior years and uncertainties regarding
GBCC's ability to continue as a going concern, management is unable to determine
that realization of deferred tax assets resulting from NOL's and temporary
differences is more likely than not.  Accordingly, under the provisions of
Statement of Financial Accounting Standards No. 109, "Accounting for Income
Taxes", GBCC has provided valuation

                                       19
<PAGE>

allowances for substantially all of the deferred tax assets at December 31, 2000
and 1999. The remaining deferred tax assets represent state timing differences
expected to be utilized.

     GBCC was included in the consolidated federal income tax returns of HCC
until HCC distributed the stock of GBCC it owned to its shareholders on December
31, 1996. The Internal Revenue Service has been examining the consolidated
federal income tax returns of HCC for the years 1993 through 1996 during which
period GBCC was included. Such examination for 1993 and 1994 has been completed
and resulted in adjustments to GBCC's consolidated NOL's and deferred tax
assets, but in no additional tax obligations. The Internal Revenue Service is
continuing its examination of the consolidated federal income tax returns of
HCC, including GBCC, for 1995 and 1996. Until such examination is completed,
allocations of tax attributes and additional alternative minimum tax or regular
tax obligations, if any, can not be determined. As a result, management is
presently unable to estimate the ultimate impact of the examination on the
consolidated financial position or results of operations of GBCC.

     Year 2000 Compliance

     At the beginning of the year 2000, computer programs that had date
sensitive software might have recognized a date using "00" as the year 1900
rather than 2000. Such an error could have resulted in a system failure or
miscalculations causing disruptions of operations including, among other things,
a temporary inability to process transactions or engage in similar normal
business activities.

     In preparation for the Year 2000, management conducted a program to prepare
the Company's computer systems and applications as well as its non-information
technology (embedded microchip) systems. Such program included the use of both
internal and external resources to test and, if necessary, modify or replace
software applications. Year 2000 date conversion projects were completed on a
timely basis and the cost of acquiring, testing and converting such systems
proved to be minimal. The Company also communicated with its significant
suppliers to determine the extent to which GBCC's information systems might have
been vulnerable to those third parties' failure to resolve their Year 2000
issues. Such suppliers either confirmed their compliance or new suppliers were
located.

     As a result of its planning and implementation efforts, GBCC experienced no
significant disruptions to any of its computer systems and non-information
technology systems and management believes that all such systems have
successfully responded to the Year 2000 change.  The Company also encountered no
significant Year 2000 problems with its vendors or suppliers.  Management is
continuing to monitor the Company's systems and communicate with its suppliers
and vendors to ensure that any latent Year 2000 problems that might arise are
promptly addressed.

     Market Risk

     The Company does not have and does not expect to have any securities
subject to interest rate fluctuations.  Management believes that all market
risks are immaterial.

     Inflation

     Management believes that in the near term, modest inflation, together with
competition for qualified and experienced personnel, will continue to cause
increases in operating expenses, particularly labor and employee benefits costs.

     Seasonality

     Management believes  with the termination of its management contracts and
limited partnership interest in such contracts, seasonality  no longer
materially affects GBCC's results of operations.

                                       20
<PAGE>

ITEM 8.  INDEX TO FINANCIAL STATEMENTS

Greate Bay Casino Corporation and Subsidiaries:

<TABLE>
<CAPTION>
                                                                    Page
                                                                    ----
<S>                                                                 <C>
   Independent Auditors' Report....................................   22

   Consolidated Balance Sheets as of December 31, 2000 and 1999....   23

   Consolidated Statements of Operations for the Years Ended
    December 31, 2000, 1999 and 1998...............................   25

   Consolidated Statement of Changes in Shareholders' Deficit for
    the Three Years Ended December 31, 2000........................   26

   Consolidated Statements of Cash Flows for the Years Ended
    December 31, 2000, 1999 and 1998...............................   27

   Notes to Consolidated Financial Statements......................   28
</TABLE>

                                       21
<PAGE>

                         INDEPENDENT AUDITORS' REPORT
                         ----------------------------


To Greate Bay Casino Corporation:

     We have audited the accompanying consolidated balance sheets of Greate Bay
Casino Corporation (the Company and a Delaware corporation) and subsidiaries as
of December 31, 2000 and 1999 and the related consolidated statements of
operations, changes in shareholders' deficit and cash flows for each of the
three years in the period ended December 31, 2000. These financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.

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

     In our opinion, such consolidated financial statements present fairly, in
all material respects, the financial position of Greate Bay Casino Corporation
and subsidiaries as of December 31, 2000 and 1999, and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 2000, in conformity with accounting principles generally accepted
in the United States of America.

     The accompanying consolidated financial statements have been prepared
assuming that the Company will continue as a going concern. As discussed in Note
1 to the consolidated financial statements, during 1998, the Company was in
violation of certain indenture covenants, which resulted in the acceleration of
the due date of the Company's debt obligations. At December 31, 2000, the
insolvency of the Company and the current level of its operating revenues raise
substantial doubt about the Company's ability to continue as a going concern.
Management's plans concerning these matters are also described in Note 1. The
consolidated financial statements do not include any adjustments that might
result from the outcome of these uncertainties.



Deloitte & Touche LLP
Dallas, Texas
March 15, 2001

                                       22
<PAGE>

                GREATE BAY CASINO CORPORATION AND SUBSIDIARIES
                          CONSOLIDATED BALANCE SHEETS

                                    ASSETS

<TABLE>
<CAPTION>
                                                                             December 31,
                                                                      ---------------------------
                                                                          2000            1999
                                                                      -----------      ----------
<S>                                                                   <C>              <C>
Current Assets:
 Cash and cash equivalents                                            $ 6,003,000      $4,801,000
 Accounts receivable, net of allowance of $28,000 in 1999               1,301,000         391,000
 Inventories                                                              520,000         599,000
 Costs and estimated earnings in excess of billing                        340,000         126,000
 Due from affiliates                                                    2,241,000       1,088,000
 Refundable deposits and other current assets                             612,000         473,000
                                                                      -----------      ----------

  Total current assets                                                 11,017,000       7,478,000
                                                                      -----------      ----------

Operating Equipment                                                       946,000         771,000
 Less - accumulated depreciation and amortization                        (610,000)       (438,000)
                                                                      -----------      ----------

  Net operating equipment                                                 336,000         333,000
                                                                      -----------      ----------

Other Assets:
 Due from affiliates, net of valuation allowance of $232,000 in 1999      216,000       1,180,000
 Other assets                                                               1,000          13,000
                                                                      -----------      ----------

  Total other assets                                                      217,000       1,193,000
                                                                      -----------      ----------

                                                                      $11,570,000      $9,004,000
                                                                      ===========      ==========
</TABLE>

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

                                       23
<PAGE>

                GREATE BAY CASINO CORPORATION AND SUBSIDIARIES
                          CONSOLIDATED BALANCE SHEETS

                     LIABILITIES AND SHAREHOLDERS' DEFICIT


                                                      December 31,
                                             ------------------------------
                                                   2000            1999
                                             -------------   -------------

Current Liabilities:
 Borrowings from affiliate                   $   5,704,000   $   6,750,000
 Accounts payable                                1,878,000       1,223,000
 Accrued liabilities -
  Salaries and wages                               305,000         188,000
  Interest                                       3,635,000       2,722,000
  Other                                             36,000          15,000
 Unearned revenues                               2,407,000         133,000
 Other current liabilities                          20,000          32,000
                                             -------------   -------------

  Total current liabilities                     13,985,000      11,063,000
                                             -------------   -------------

Long-Term Debt                                  46,687,000      40,446,000
                                             -------------   -------------

Commitments and Contingencies

Shareholders' Deficit:
 Common stock, $.10 par value per
  share; 10,000,000 shares authorized;
  5,186,627 shares issued and outstanding          519,000         519,000
 Additional paid-in capital                     75,212,000      75,212,000
 Accumulated deficit                          (124,833,000)   (118,236,000)
                                             -------------   -------------

  Total shareholders' deficit                  (49,102,000)    (42,505,000)
                                             -------------   -------------

                                             $  11,570,000   $   9,004,000
                                             =============   =============

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

                                       24
<PAGE>

                GREATE BAY CASINO CORPORATION AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                            Year Ended December 31,
                                                  -----------------------------------------
                                                      2000          1999           1998
                                                  -----------   ------------   ------------
<S>                                               <C>           <C>            <C>
Revenues:
   Computer services                              $14,121,000   $  5,945,000   $  5,255,000
   Other                                                    -        477,000      3,716,000
                                                  -----------   ------------   ------------

       Net revenues                                14,121,000      6,422,000      8,971,000
                                                  -----------   ------------   ------------

Expenses:
   Cost of sales                                    6,023,000      2,628,000      1,304,000
   System development and support services          3,749,000      2,363,000      1,003,000
   Marketing                                        1,211,000        409,000         64,000
   General and administrative                       2,883,000      3,154,000      3,667,000
   Depreciation and amortization                      181,000        181,000        129,000
                                                  -----------   ------------   ------------

       Total expenses                              14,047,000      8,735,000      6,167,000
                                                  -----------   ------------   ------------

       Income (loss) from operations                   74,000     (2,313,000)     2,804,000
                                                  -----------   ------------   ------------

Non-operating income (expenses):
   Interest income                                    548,000        667,000        942,000
   Interest expense                                (7,156,000)   (10,303,000)   (16,194,000)
   Gain on elimination of investment in Pratt
     Casino Corporation                                     -     85,633,000              -
   Equity in earnings of Limited Partnership                -      2,660,000      6,494,000
   Equity in earnings of and gain on elimination
     of investment in GB Holdings, Inc.                     -              -     31,233,000
   Restructuring costs                                      -       (230,000)    (1,548,000)
   Gain on disposal of assets                               -              -        472,000
                                                  -----------   ------------   ------------

       Total non-operating (expense) income, net   (6,608,000)    78,427,000     21,399,000
                                                  -----------   ------------   ------------


(Loss) income before income taxes                  (6,534,000)    76,114,000     24,203,000

Income tax (provision) benefit                        (63,000)         7,000        287,000
                                                  -----------   ------------   ------------

Net (loss) income                                 $(6,597,000)  $ 76,121,000   $ 24,490,000
                                                  ===========   ============   ============

Basic and diluted net (loss) income per common
   share                                          $     (1.27)  $      14.68   $       4.72
                                                  ===========   ============   ============
</TABLE>

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

                                       25
<PAGE>

                 GREATE BAY CASINO CORPORATION AND SUBSIDIARIES
           CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' DEFICIT
                  For the Three Years Ended December 31, 2000

<TABLE>
<CAPTION>
                                                              Additional
                                           Common Stock        Paid-in     Accumulated
                                        -------------------
                                          Shares    Amount     Capital       Deficit
                                        ---------  --------  -----------  -------------
<S>                                     <C>        <C>       <C>          <C>
BALANCES, January 1,  1998              5,186,627  $519,000  $75,212,000  $(218,847,000)
  Net income                                    -         -            -     24,490,000
                                        ---------  --------  -----------  -------------

BALANCES, December 31, 1998             5,186,627   519,000   75,212,000   (194,357,000)
  Net income                                    -         -            -     76,121,000
                                        ---------  --------  -----------  -------------

BALANCES, December 31, 1999             5,186,627   519,000   75,212,000   (118,236,000)
  Net loss                                      -         -            -     (6,597,000)
                                        ---------  --------  -----------  -------------

BALANCES, December 31, 2000             5,186,627  $519,000  $75,212,000  $(124,833,000)
                                        =========  ========  ===========  =============
</TABLE>

          The accompanying notes to consolidated financial statements
             are an integral part of this consolidated statement.

                                       26
<PAGE>

                GREATE BAY CASINO CORPORATION AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF CASH FLOWS


<TABLE>
<CAPTION>
                                                                            Year Ended December 31,
                                                                 -----------------------------------------
                                                                    2000           1999           1998
                                                                 -----------   ------------   ------------
<S>                                                             <C>           <C>            <C>
OPERATING ACTIVITIES:
 Net (loss) income                                               $(6,597,000)  $ 76,121,000   $ 24,490,000
 Adjustments to reconcile net (loss) income to net cash
  provided by (used in) operating activities:
  Depreciation and amortization, including
   accretion of debt discount                                      6,422,000      5,587,000      4,848,000
  Gain on disposal of assets                                               -              -       (472,000)
  Provision for doubtful accounts                                     20,000         50,000        115,000
  Equity in earnings of Limited Partnership                                -     (2,660,000)    (6,494,000)
  Distributions received from Limited Partnership                          -      4,038,000      5,646,000
  Gain on elimination of investment in Pratt Casino
   Corporation                                                             -    (85,633,000)             -
  Equity in earnings of and gain on elimination of investment
   in GB Holdings, Inc.                                                    -              -    (31,233,000)
  Deferred income tax provision (benefit)                              8,000         27,000       (287,000)
  Increase in accounts receivable                                   (930,000)       (52,000)      (306,000)
  Increase (decrease) in accounts payable and
   other accrued liabilities                                       1,706,000     (2,874,000)     7,923,000
  Net change in other current assets and liabilities               1,517,000       (523,000)    (1,235,000)
  Net change in other noncurrent assets and liabilities                    -        220,000       (807,000)
                                                                 -----------   ------------   ------------

    Net cash provided by (used in) operating activities            2,146,000     (5,699,000)     2,188,000
                                                                 -----------   ------------   ------------

INVESTING ACTIVITIES:
 Purchases of property and equipment                                (184,000)       (51,000)      (247,000)
 Deconsolidation of Pratt Casino Corporation                               -       (868,000)             -
 Increase in cash from sale of subsidiary                                  -              -        245,000
 Proceeds from disposal of assets                                          -              -      1,300,000
 Collections on notes receivable                                     140,000        803,000        611,000
                                                                 -----------   ------------   ------------

   Net cash (used in) provided by investing activities               (44,000)      (116,000)     1,909,000
                                                                 -----------   ------------   ------------

FINANCING ACTIVITIES:
 Repayment of affiliate borrowings                                  (900,000)             -              -
 Repayments of long-term debt                                              -              -        (36,000)
                                                                 -----------   ------------   ------------

  Net cash used in financing activities                             (900,000)             -        (36,000)
                                                                 -----------   ------------   ------------

  Net increase (decrease) in cash and cash equivalents             1,202,000     (5,815,000)     4,061,000
  Cash and cash equivalents at beginning of year                   4,801,000     10,616,000      6,555,000
                                                                 -----------   ------------   ------------

  Cash and cash equivalents at end of year                       $ 6,003,000   $  4,801,000   $ 10,616,000
                                                                 ===========   ============   ============
</TABLE>

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

                                       27
<PAGE>

                GREATE BAY CASINO CORPORATION AND SUBSIDIARIES

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


(1)  Organization, Business and Basis of Presentation

     Greate Bay Casino Corporation ("GBCC" or the "Company"), a Delaware
corporation, is engaged in the development, installation and maintenance of
casino systems through its wholly owned subsidiary, Advanced Casino Systems
Corporation ("ACSC"). In prior years, GBCC and its other subsidiaries were also
engaged in the operation and management of and provision of services to casino
properties, including the ownership and operation of the Sands Hotel and Casino
located in Atlantic City, New Jersey (the "Sands") and, until October 1999,
contracts to manage and consult with gaming facilities located in Aurora,
Illinois (the "Aurora Casino") and Tunica County, Mississippi (the "Tunica
Casino") (see Notes 6 and 7). As explained below, the GBCC subsidiary which
owned the Sands recently emerged from its Chapter 11 proceedings; as expected,
GBCC did not retain ownership or operating control after reorganization. The
GBCC subsidiary which held the casino management and consulting contracts
completed its reorganization under Chapter 11 in October 1999 and is no longer
owned by GBCC. Accordingly, as further described below, the activities of the
subsidiaries which owned the Sands and which held the management contracts with
the Aurora Casino and Tunica Casino are no longer included in the consolidated
operating results of GBCC.

     Approximately 36% of GBCC's outstanding stock is owned by Jack E. Pratt,
Edward T. Pratt, Jr., William D. Pratt, Edward T. Pratt III and by certain
general partnerships and trusts controlled by the Pratts and by other family
members (collectively, the "Pratt Family"). The Pratt Family also owns
approximately 54% of Hollywood Casino Corporation ("HCC"), which owns the Aurora
Casino and the Tunica Casino.

     Until October 1999, GBCC's limited partnership interest in Pratt
Management, L.P. ("PML"), the limited partnership which held the management
contract on the Aurora Casino was held by its wholly owned subsidiary, Pratt
Casino Corporation ("PCC"), and was presented under the equity method of
accounting (see Note 7). As explained below, the operating results of PCC,
including its equity in the earnings of PML, for periods subsequent to May 25,
1999 are not included in the consolidated results of operations of GBCC.

     Current GBCC Operations -

     GBCC is insolvent and its only remaining operating activity is the
development, installation and maintenance of casino systems by ACSC. At December
31, 2000, GBCC and its subsidiaries had debt outstanding to HCC consisting of
(1) demand notes and accrued interest thereon totaling $9,339,000 (see Notes 3
and 6) and (2) a 14.875% secured promissory note due 2006 in the amount of
$46,687,000 (see Note 4). ACSC's operations do not generate sufficient cash flow
to provide debt service on the HCC demand notes and, consequently, GBCC is
currently insolvent. Additionally, semi-annual interest payments of $3,540,000
attributable to the 14.875% secured promissory note become payable commencing in
August 2001. GBCC is currently negotiating with HCC to restructure its
obligations and, in that connection, has entered into certain standstill
agreements with HCC. Under the standstill agreements, all payments of principal
and interest due from HCC during the period from March 1, 2000 through March 1,
2001 with respect to an intercompany note more fully described in Note 6 have
been deferred until April 1, 2001 in consideration of HCC's agreement not to
demand payment of principal or interest on the demand notes owed by GBCC (see
(1) above). The fair market value of GBCC's assets is substantially less than
its existing obligations to HCC. Accordingly, management anticipates that any
restructuring of GBCC's obligations will result in the conveyance of all of its
assets (or the proceeds

                                       28
<PAGE>

                GREATE BAY CASINO CORPORATION AND SUBSIDIARIES

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)




from the sale of its assets) to HCC, resulting in no cash or other assets
remaining available for distribution to the Company's shareholders. Any
restructuring of GBCC's obligations, consensual or otherwise, will require the
Company to file for protection under federal bankruptcy laws and will ultimately
result in liquidation of the Company.

     The insolvency of GBCC raises substantial doubt about its ability to
continue as a going concern. The consolidated financial statements do not
include any adjustments that might result from the outcome of these
uncertainties.

     GB Holdings, Inc. and Subsidiaries -

     On January 5, 1998, GB Holdings, Inc. ("Holdings"), at that time a wholly
owned subsidiary of GBCC, together with Holdings' wholly owned subsidiaries, GB
Property Funding Corp. ("GB Property Funding") and Greate Bay Hotel and Casino,
Inc. ("GBHC"), filed petitions for relief under Chapter 11 of the United States
Bankruptcy Code (the "Bankruptcy Code") in the United States Bankruptcy Court
for the District of New Jersey (the "New Jersey Bankruptcy Court"). On June 1,
1999, a plan of reorganization was filed by the debtors with the New Jersey
Bankruptcy Court. The reorganization plan, as filed, provided for the secured
bondholders to receive new debt and 100% of the equity ownership of Holdings in
exchange for their current claims and for unsecured creditors to receive a
partial cash settlement of their claims. Subsequent to the filing of a
reorganization plan by the debtors, two competing plans were filed by (1) Park
Place Entertainment Corporation, a large and diversified gaming company with
significant operations in Atlantic City, and (2) jointly by High River Limited
Partnership ("High River"), an entity controlled by Carl C. Icahn, and by the
Official Committee of Unsecured Creditors (the "Joint Plan"). On August 14,
2000, the New Jersey Bankruptcy Court confirmed the Joint Plan . The Sands
subsequently transferred 46.3% of its equity interests to High River in exchange
for $65 million in cash and the secured bondholders received $110 million in new
notes plus the remaining equity interests in exchange for the $182.5 million of
first mortgage notes in default. No distributions were made to the previous
shareholders, including Greate Bay Holdings, L.L.C., an indirect, wholly owned
subsidiary of GBCC, which held 79% of the outstanding common stock of Holdings
(see Note 9).

     As a result of the Chapter 11 filings, GBCC's control over the filing
subsidiaries was subject to supervision of the New Jersey Bankruptcy Court and
GBCC did not expect to have ownership or operating control of such subsidiaries
after reorganization. Furthermore, as the result of a settlement agreement
reached by GBCC and Holdings during September 1998 (see Note 10), GBCC no longer
participated in the management of the Sands. Accordingly, Holdings, GB Property
Funding and GBHC have not been included in the accompanying consolidated
financial statements of GBCC.

     Pratt Casino Corporation and Subsidiaries -

     The filings under Chapter 11 by Holdings, GB Property Funding and GBHC
resulted in a default under the indenture for $85,000,000 principal amount of
11.625% senior notes due 2004 (the "PRT Funding Notes") issued by PRT Funding
Corp. ("PRT Funding"), an indirect, wholly owned subsidiary of GBCC.
Accordingly, the outstanding principal amount of the PRT Funding Notes
accelerated and became due and payable. PCC, as guarantor of the PRT Funding
Notes, did not have sufficient assets to satisfy the outstanding amounts
applicable to the PRT Funding Notes. PRT Funding deferred payment of

                                       29
<PAGE>

                GREATE BAY CASINO CORPORATION AND SUBSIDIARIES

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)



interest due on the April 15 and October 15, 1998 and April 15, 1999 interest
payment dates. On October 22, 1998, PRT Funding paid the bondholders an amount
equal to a single semiannual interest payment ($4,941,000) while negotiations to
restructure the PRT Funding Notes continued.

     On April 28, 1999, PCC, PRT Funding, New Jersey Management, Inc. ("NJMI," a
PCC subsidiary which managed the Sands), GBCC, HCC and the holders of
substantially all of the PRT Funding Notes entered into a voting agreement which
provided for the restructuring of the PRT Funding Notes (the "Restructuring").
The voting agreement provided for HCC to acquire the stock of PCC, the parent of
PRT Funding, from GBCC for nominal consideration. When acquired by HCC, PCC's
assets were to consist of its limited partnership interest in its management
contract for the Aurora Casino and a consulting contract for the Tunica Casino
and its liabilities were to consist of a new obligation in the amount of
$40,329,000 payable in satisfaction of the PRT Funding Notes. The voting
agreement provided for HCC to immediately discharge the obligation.

     As part of the Restructuring, holders of the PRT Funding Notes were also to
receive 100% of the remaining assets of PCC and its subsidiaries not acquired by
HCC which consisted primarily of claims against Holdings, GB Property Funding
and GBHC in their Chapter 11 proceedings. In connection with the Restructuring,
PRT Funding paid deferred interest amounting to $6,768,000 to the bondholders on
April 30, 1999.

     The successful completion of the Restructuring required that PCC, PRT
Funding and NJMI file for protection under Chapter 11 with the above
transactions included as part of a pre-negotiated plan of reorganization. Such
petitions for relief were filed on a May 25, 1999 in the United States
Bankruptcy Court for the District of Delaware (the "Delaware Bankruptcy Court")
and the related plan of reorganization was filed on May 26, 1999. The plan was
confirmed by the Delaware Bankruptcy Court on October 1, 1999. On October 13,
1999, GBCC sold its ownership of PCC to HCC. At the time of the sale, PCC's
assets consisted of the limited partnership interest and the consulting
agreement valued in the aggregate at $40,329,000 and its liabilities consisted
of an obligation in the amount of $40,329,000 payable in satisfaction of the PRT
Funding Notes. HCC settled the obligation on October 14, 1999. GBCC's claims
against Holdings, GB Property Funding and GBHC in their Chapter 11 proceedings
as well as other claims previously held by PCC, PRT Funding and NJMI were
conveyed to Greate Bay Holdings, L.L.C. for the benefit of the PRT Funding
noteholders (see Note 9).

     As a result of the Chapter 11 filings and plan of reorganization of PCC,
PRT Funding and NJMI, GBCC's control over the filing subsidiaries was subject to
supervision of the Delaware Bankruptcy Court and GBCC did not expect to have
ownership or operating control of such subsidiaries after reorganization.
Accordingly, GBCC's investment in PCC and its subsidiaries as well as certain
intercompany balances with PCC and its subsidiaries were revalued to a zero
basis effective on May 25, 1999. For periods from May 25, 1999 until the sale of
PCC to HCC on October 13, 1999, GBCC accounted for its investment in PCC under
the cost method of accounting.

     Other Filings -

     On June 30, 2000, three inactive, wholly owned, indirect subsidiaries of
GBCC filed for liquidation under Chapter 7 of the Bankruptcy Code in the
Delaware Bankruptcy Court. The subsidiaries

                                       30
<PAGE>

                GREATE BAY CASINO CORPORATION AND SUBSIDIARIES

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)



were originally formed to acquire property and build a second casino/hotel in
Atlantic City, New Jersey. These plans were subsequently abandoned; however, the
companies remained in existence pending the outcome of certain litigation which
was substantially resolved in 1996. The cases were closed by the Trustee in
Bankruptcy in December 2000 and are awaiting a final liquidation order from the
Delaware Bankruptcy Court. The filings did not and are not expected to have a
significant effect on the operations or financial position of GBCC.

(2)  Summary of Significant Accounting Policies

     The significant accounting policies followed in the preparation of the
accompanying consolidated financial statements are discussed below. The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.

 Principles of consolidation -

     Except as explained in Note 1 with respect to PCC, Holdings and their
respective subsidiaries, the consolidated financial statements include the
operating activities and cash flows of GBCC and its wholly owned subsidiaries.
All significant intercompany transactions have been eliminated.

 Revenue recognition -

     ACSC licenses casino information technology systems to affiliates of GBCC
as well as to non-affiliated casino companies. Revenue is generally recognized
when all significant contractual obligations have been satisfied and collection
is reasonably assured. Revenue from hardware and inventory sales is recognized
upon delivery and acceptance. Revenue from services is recognized upon
performance.

     Certain of ACSC's sales of software to third parties are pursuant to
agreements which specify modifications to be made, require on-going vendor
support or provide for other specialized terms and conditions. In recognizing
revenue under such agreements, ACSC has adopted and complies with the reporting
requirements of Statement of Position 97-2, "Software Revenue Recognition" ("SOP
97-2") issued by the American Institute of Certified Public Accountants. The
provisions of SOP 97-2 require, among other things, that revenue from software
sales that do not require significant production, modification or customization
be recognized when evidence of an arrangement exists, delivery has occurred, the
fee is fixed as determinable and collectability is probable. Software sales for
which significant modifications are required are recognized under a percentage-
of-completion method based on costs incurred to date compared with total
estimated costs. Profit estimates on such contracts are reviewed periodically
whenever there is a change in facts or circumstances. Any losses on a contract
would result in the full amount of the loss being recognized immediately.

     Costs and estimated earnings in excess of billings on contracts in progress
represents recoverable costs and the estimated profit thereon which have not yet
been billed to the customer. Unearned

                                       31
<PAGE>

                GREATE BAY CASINO CORPORATION AND SUBSIDIARIES

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)




revenues represent deposits or prepayments received from customers for services
yet to be performed. Such advance payments are applied over the lives of the
contracts.

 Cash and cash equivalents -

     Cash and cash equivalents are generally comprised of cash and investments
with original maturities of three months or less, such as commercial paper,
certificates of deposit and fixed repurchase agreements.

 Allowance for doubtful accounts -

     The allowance for doubtful accounts is maintained at a level considered
adequate to provide for possible future losses. Provisions for doubtful accounts
amounting to $20,000, $50,000 and $115,000, respectively, were made during 2000,
1999 and 1998.

 Inventories -

     Inventories are stated at the lower of cost (on a first-in, first-out
basis) or market.

 Property and equipment -

     Operating equipment is recorded at cost and is being depreciated utilizing
the straight-line method over estimated useful lives of three to 15 years.

 Long-lived assets -

     Statement of Financial Accounting Standards No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of"
requires, among other things, that an entity review its long-lived assets and
certain related intangibles for impairment whenever changes in circumstances
indicate that the carrying amount of an asset may not be fully recoverable. As a
result of its review, GBCC does not believe that any such changes have occurred.

 Accrued insurance -

     GBCC is self insured for a portion of its general liability, certain health
care and other liability exposures. Accrued insurance includes estimates of such
accrued liabilities based on an evaluation of the merits of individual claims
and historical claims experience; accordingly, GBCC's ultimate liability may
differ from the amounts accrued.

 Interest expense -

     Interest expense includes the accretion of debt discount amounting to
$6,241,000, $5,406,000 and $4,719,000, respectively, during the years ended
December 31, 2000, 1999 and 1998.

                                       32
<PAGE>

                GREATE BAY CASINO CORPORATION AND SUBSIDIARIES

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)



  Net (loss) income per common share -

     Basic earnings per common share is calculated by dividing the net (loss)
income by the weighted average number of shares of common stock outstanding.
Diluted earnings per common share is calculated for any period in which income
from continuing operations was earned by dividing the components of net (loss)
income by the weighted average number of shares of common stock and potential
common shares outstanding. For each of the years ended December 31, 2000, 1999
and 1998, there were no potential common shares outstanding and basic and
diluted (loss) income per share were the same. The weighted average number of
shares of common stock used in the calculation of both basic and diluted (loss)
income per share was 5,186,627 for each of the years ended December 31, 2000,
1999 and 1998.

 Recent accounting pronouncement -

     In June 1998, the FASB issued a new statement, "Accounting for Derivative
Instruments and Hedging Activities" ("SFAS 133"), which has been amended to be
effective for fiscal years beginning after June 15, 2000. SFAS 133 requires,
among other things, that derivatives be recorded on the balance sheet at fair
value. Changes in the fair value of derivatives may, depending on circumstances,
be recognized in earnings or deferred as a component of shareholders' equity
until a hedged transaction occurs. The adoption of SFAS 133 on January 1, 2001
had no impact on the consolidated financial position or results of operations of
GBCC.

(3)  Borrowings from Affiliates

     GBCC and its subsidiaries had outstanding affiliate borrowings from HCC of
$5,704,000 and $6,750,000, respectively, at December 31, 2000 and 1999. During
the third quarter of 1996, GBCC borrowed $6,500,000 from HCC on a demand basis
with interest at the rate of 13.75% per annum payable quarterly commencing
October 1, 1996; such funds were loaned by GBCC to GBHC for working capital
purposes on the same terms. On September 2, 1998, the working capital loans to
GBHC were cancelled as part of a settlement agreement among GBCC and Holdings,
together with certain of their subsidiaries, and HCC (see Note 10). In addition,
a $250,000 loan from HCC with interest at the rate of 14% per annum payable
semiannually was due on April 1, 1998 and remains outstanding. These borrowings
from HCC are currently subject to a standstill agreement (see Notes 1 and 6)
while GBCC is in negotiations with HCC to restructure its obligations. During
October 2000, GBCC paid $900,000 of the outstanding principal balance and agreed
to offset an additional $146,000 of principal against other receivables due from
HCC while negotiations to restructure the debt continue.

     GBHC made an advance to a GBCC subsidiary in the amount of $5,672,000. The
GBCC subsidiary which received the advance is insolvent and GBCC has no
obligation with respect to the advance. A settlement agreement entered into by
GBCC and GBHC during September 1998 (see Note 10) provides, among other things,
that GBHC preserves whatever rights of offset, if any, it might have with
respect to such advance together with accrued interest thereon against
$15,000,000 of subordinated loans made to GBHC by other GBCC subsidiaries (see
Note 6). As GBHC's only recourse, if any, was against intercompany obligations
already fully reserved by GBCC, the advance, together with accrued

                                       33
<PAGE>

                GREATE BAY CASINO CORPORATION AND SUBSIDIARIES

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)




interest of $4,602,000, were eliminated from the consolidated balance sheet of
GBCC and included in the gain on elimination of investment in Holdings of
$27,510,000 included on the accompanying consolidated statement of operations
for the year ended December 31, 1998.

(4)  Long-Term Debt and Pledge of Assets

     Long-term debt consists of the following:

<TABLE>
<CAPTION>
                                                          December 31,     December 31,
                                                             2000             1999
                                                         --------------    -------------
    <S>                                                 <C>               <C>
     14.875% secured promissory note, due 2006, net of
      discount of $916,000 and $7,157,000,
      respectively                                       $   46,687,000    $  40,446,000

     Less - current maturities                                        -                -
                                                         --------------    -------------

     Total long-term debt                                $   46,687,000    $  40,446,000
                                                         ==============    =============
</TABLE>

     On February 17, 1994, PPI Funding Corp., a subsidiary of GBCC, issued
$40,524,000 discounted principal amount of new deferred interest notes (the "PPI
Funding Notes") to HCC in exchange for $38,779,000 principal amount of 15.5%
unsecured notes (the "PCPI Notes") held by HCC and issued by PCPI Funding Corp.,
another subsidiary of GBCC. The PPI Funding Notes were discounted to yield
interest at the rate of 14.875% per annum and had a face value of $110,636,000.
Subsequent principal payments by PPI Funding Corp. reduced the maturity value of
the notes to $98,353,000 at December 31, 1996. During the second quarter of
1997, HCC assigned $13,750,000 undiscounted principal amount of the PPI Funding
Notes to PPI Corporation, a wholly owned subsidiary of GBCC, as consideration,
in part, for HCC's acquisition of the general partnership interest in PML (see
Note 6). Such assignment reduced the maturity value of the notes to $84,603,000.
At December 31, 1997, an additional $37,000,000 undiscounted face value
($23,631,000 discounted value) of the PPI Funding Notes was forgiven by HCC,
further reducing the maturity value to $47,603,000. Payment of interest on the
PPI Funding Notes is deferred through February 17, 2001 at which time interest
will become payable semiannually beginning on August 17, 2001, with the unpaid
principal balance due on February 17, 2006.

     No interest was paid during the year ended December 31, 2000; interest paid
during the years ended December 31, 1999 and 1998 amounted to $6,768,000 and
$4,968,000, respectively.

                                       34
<PAGE>

                GREATE BAY CASINO CORPORATION AND SUBSIDIARIES

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)




(5)  Income Taxes

     Components of GBCC's (provision) benefit for income taxes consist of the
following:

<TABLE>
<CAPTION>
                                                  Year Ended December 31,
                                         -----------------------------------------
                                           2000           1999           1998
                                         -----------  -------------   ------------
<S>                                     <C>          <C>             <C>
Federal income tax benefit (provision):
  Current                                $         -  $     (29,000)  $          -
  Deferred                                 1,399,000    (10,412,000)    (9,012,000)
State income tax (provision) benefit:
  Current                                    (55,000)        63,000              -
  Deferred                                    (8,000)       (27,000)       (21,000)
Valuation allowance                       (1,399,000)    10,412,000      9,320,000
                                         -----------  -------------   ------------

                                         $   (63,000) $       7,000   $    287,000
                                         ===========  =============   ============
</TABLE>

     GBCC paid no federal income taxes during either of the years ended December
31, 2000 and 1998; federal income taxes of $29,000 were paid during the year
ended December 31, 1999. Total state income taxes paid by GBCC for the years
ended December 31, 2000, 1999 and 1998 amounted to $15,000, $178,000 and
$319,000, respectively.

     A reconciliation between the calculated tax benefit (provision) based on
the statutory rates in effect and the effective tax rates follows:


<TABLE>
<CAPTION>
                                                        Year Ended December 31,
                                             ----------------------------------------------
                                                  2000           1999             1998
                                             -------------   -------------   --------------
<S>                                         <C>             <C>              <C>
Calculated income tax benefit (provision)    $   2,222,000   $  (26,640,000)  $  (8,229,000)
Excludable cancellation of debt income                   -       16,710,000               -
Other                                             (886,000)        (475,000)       (804,000)
Valuation allowance change                      (1,399,000)      10,412,000       9,320,000
                                             -------------   --------------   -------------

Tax (provision) benefit as shown on
 consolidated statements of operations       $     (63,000)  $        7,000   $     287,000
                                             =============   ==============   =============
</TABLE>

     As a result of a settlement agreement entered into in September 1998 (see
Note 10), Holdings and its subsidiaries are no longer included in the
consolidated tax return of GBCC for periods subsequent to December 31, 1998. The
deconsolidation and sale of PCC and its subsidiaries has also resulted in those
entities no longer being included in GBCC's consolidated tax return for periods
subsequent to October 1999. As of December 31, 2000, GBCC and its remaining
subsidiaries have net operating loss carryforwards ("NOL's") totaling
approximately $19,350,000 for federal income tax purposes, none of which begin
to expire before the year 2012. Additionally, GBCC has alternative minimum tax
credits and other tax credits available totaling $29,000 and $414,000,
respectively. Alternative minimum tax credits do not expire and the other tax
credits expire in 2001. Statement of Financial Accounting

                                       35
<PAGE>

                GREATE BAY CASINO CORPORATION AND SUBSIDIARIES

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)





Standards No. 109, "Accounting for Income Taxes" ("SFAS 109") requires that the
tax benefit of such NOL's and credit carryforwards, together with deferred tax
assets resulting from temporary differences, be recorded as an asset and, to the
extent that management can not assess that the utilization of such asset is more
likely than not, a valuation allowance should be recorded. Due to the continued
availability of NOL's originating in prior years and uncertainties regarding
GBCC's ability to continue as a going concern, management is unable to determine
that realization of such asset is more likely than not and, thus, has provided
valuation allowances for substantially all of the deferred tax assets for all
periods presented. The remaining deferred tax assets at December 31, 2000 and
1999 represent state timing differences expected to be utilized.

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


<TABLE>
<CAPTION>

                                            December 31,
                                      -------------------------
                                        2000          1999
                                      -----------   -----------
<S>                                  <C>           <C>
Deferred tax assets:
  Net operating loss carryforwards    $ 6,579,000   $ 5,060,000
  Allowance for doubtful accounts               -        94,000
  Alternative minimum tax credit           29,000        29,000
  Investment and jobs tax credits         414,000       511,000
  Other liabilities and accruals           67,000        11,000
  Other                                     7,000             -
                                      -----------   -----------

Deferred tax asset                      7,096,000     5,705,000
Valuation allowance                    (7,082,000)   (5,683,000)
                                      -----------   -----------

                                      $    14,000   $    22,000
                                      ===========   ===========
</TABLE>

     Sales or purchases of GBCC common stock by certain five percent
stockholders, as defined in the Internal Revenue Code of 1986, as amended (the
"Code"), can cause a "change of control", as defined in Section 382 of the Code,
which would limit the ability of GBCC to utilize these loss carryforwards in
later tax periods. Should such a change of control occur, the amount of annual
loss carryforwards available for use would most likely be substantially reduced.
Future treasury regulations, administrative rulings or court decisions may also
effect GBCC's future utilization of its loss carryforwards.

     GBCC was included in the consolidated federal income tax returns of HCC
until HCC distributed the stock of GBCC it owned to its shareholders on December
31, 1996. The Internal Revenue Service has been examining the consolidated
federal income tax returns of HCC for the years 1993 through 1996 during which
period GBCC was included. Such examination for 1993 and 1994 has been completed
and resulted in adjustments to GBCC's consolidated NOL's and deferred tax
assets, but in no additional tax obligations. The Internal Revenue Service is
continuing its examination of the consolidated federal income tax returns of
HCC, including GBCC, for 1995 and 1996. Until such examination is completed,
allocations of tax attributes and additional alternative minimum tax or regular
tax obligations, if any, can

                                       36
<PAGE>

                GREATE BAY CASINO CORPORATION AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)




not be determined. As a result, management is presently unable to estimate the
ultimate impact of the examination on the consolidated financial position or
results of operations of GBCC.

(6)  Transactions with Related Parties

     In April 1997, HCC issued a five-year note in the original amount of
$3,800,000 and assigned $13,750,000 undiscounted principal amount ($7,597,000
discounted value) of PPI Funding Notes (see Note 4) and $350,000 of accrued
interest due from GBCC to PPI Corporation in exchange for the general
partnership interest in PML. The $3,800,000 note was payable in monthly
installments of $83,000, including interest at the rate of 14% per annum,
commencing on May 1, 1997, with additional quarterly variable principal payments
commencing on July 1, 1997 in an amount equal to the general partner's share of
quarterly cash distributions, as defined, from PML. The note was amended as of
the October 1999 acquisition of PCC by HCC (see Note 1) to provide for monthly
installments of $83,000 including interest and additional quarterly principal
payments of $21,000 beginning January 1, 2000. PPI Corporation and HCC have
entered into agreements to defer all payments of principal and interest on the
note otherwise due during the period from March 1, 2000 through March 1, 2001 in
consideration of HCC's agreement not to demand payment on the short-term
borrowings described in Note 3. These deferrals do not extend the maturities or
represent a forgiveness of either principal or interest as all past due amounts,
if not otherwise restructured, will become due and payable on the extended
payment date of April 1, 2001. The outstanding note balances at December 31,
2000 and 1999 are $1,893,000 and $2,033,000, respectively. Of these balances,
$1,695,000 and $853,000, respectively, are included in current amounts due from
affiliates and $198,000 and $1,180,000, respectively, are included in noncurrent
due from affiliates at December 31, 2000 and 1999. Interest income on the note
from HCC amounted to $266,000, $348,000 and $439,000, respectively, during the
years ended December 31, 2000, 1999 and 1998. Accrued interest receivable of
$243,000 and $24,000, respectively, is included in amounts due from affiliates
on the accompanying consolidated balance sheets at December 31, 2000 and 1999.

     Pursuant to a consulting agreement which was terminated effective October
13, 1999 with Hollywood Casino - Tunica, Inc. ("HCT"), the HCC subsidiary which
owns and operates the Tunica Casino, PCC received monthly consulting fees of
$100,000. Fees earned during 1999 prior to the deconsolidation of PCC on May 25,
1999 amounted to $477,000. Total fees earned for the year ended December 31,
1998 amounted to $1,200,000.

     HCC and its subsidiaries allocate certain general and administrative costs
to GBCC and its subsidiaries pursuant to services agreements and GBCC allocates
certain of its administrative costs to HCC. Net allocated costs and fees charged
to GBCC and its subsidiaries by HCC and its subsidiaries amounted to $307,000,
$604,000 and $974,000, respectively, during the years ended December 31, 2000,
1999 and 1998. In connection with such charges, net payables in the amount of
$16,000 and $20,000 are included on the accompanying consolidated balance sheets
at December 31, 2000 and 1999, respectively.

                                       37
<PAGE>

                GREATE BAY CASINO CORPORATION AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

     ACSC provides computer, marketing and other administrative services to the
Sands and to HCC and its subsidiaries. Computer services provided include
hardware, software and operator support and, for the most part, such services
are billed by ACSC at its direct cost plus expenses incurred. ACSC and HCT
entered into a Computer Services Agreement dated as of January 1, 1994 and
renewed through December 31, 1999 to provide such services and to license or
sublicense to HCT computer software necessary to operate HCT's casino, hotel and
related facilities and business operations. HCT paid ACSC for such equipment and
licensed such software at amounts and on terms and conditions that ACSC provided
to unrelated third parties. HCT also paid ACSC a fixed license fee of $33,600
per month. ACSC also provided services to the Aurora Casino through its
management agreement with PML. ACSC's service agreements with PML and HCT
terminated on October 13 and December 31, 1999, respectively. ACSC continued to
provide services to the Aurora Casino on an as needed basis at third party
consulting rates. ACSC entered into new maintenance and support agreements with
HCT and the Aurora Casino effective as of January 1, 2000 which provide for an
aggregate monthly fee of $26,000 (subject to change upon 60 days written notice)
plus additional services at rates charged by ACSC to third parties. The
agreement has an initial term of one year with automatic annual renewals unless
notice of termination is given. ACSC's billings to HCC, HCT and the Aurora
Casino for such services amounted to $950,000, $1,315,000 and $1,147,000 for the
years ended December 31, 2000, 1999 and 1998, respectively. Unpaid charges from
HCC, HCT and the Aurora Casino included in due from affiliates on the
accompanying consolidated balance sheets at December 31, 2000 and 1999 amounted
to $141,000 and $106,000, respectively. Billings to the Sands amounted to
$372,000, $818,000 and $787,000, respectively, for the years ended December 31,
2000, 1999 and 1998. There were no unpaid charges from the Sands on the
accompanying consolidated balance sheet at December 31, 2000. Unpaid charges
from the Sands included in due from affiliates on the accompanying consolidated
balance sheet at December 31, 1999 amounted to $76,000.

     During 2000, ACSC also provided and installed casino system software to a
new HCC-owned casino property constructed in Shreveport, Louisiana (the
"Shreveport Casino"). ACSC entered into a similar maintenance and support
agreement with the Shreveport Casino effective as of October 12, 2000 at a
monthly fee of $11,000 commencing 90 days after installation of ACSC's casino
system software. Total amounts billed during 2000 to the Shreveport Casino
amounted to $2,474,000. The accompanying consolidated balance sheet at December
31, 2000 includes receivables in the amount of $160,000 in due from affiliates
and unearned revenues in the amount of $125,000 with respect to the Shreveport
Casino installation.

     ACSC had outstanding payables to the Sands amounting to $159,000 at
December 31, 1999 included in accounts payable in the accompanying consolidated
balance sheet.

     Interest expense with respect to borrowings from HCC is set forth below:





                                            Year Ended December 31,
                                    ----------------------------------
                                       2000        1999        1998
                                    ----------  ----------  ----------
PPI Funding Notes (Note 4)          $6,241,000  $5,406,000  $4,719,000
Short-term borrowings (Note 3)         913,000     941,000     942,000

                                       38
<PAGE>

                GREATE BAY CASINO CORPORATION AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

     Accretion of interest on the PPI Funding Notes is included in the
outstanding note payable balances at December 31, 2000 and 1999. Interest
accrued on short-term borrowings at December 31, 2000 and 1999, which amounted
to $3,635,000 and $2,722,000, respectively, is included in interest payable on
the accompanying consolidated balance sheets.

     Prior to May 1, 1998, NJMI was responsible for the operations of the Sands
under a management agreement with GBHC.  On May 22, 1998, GBHC filed a motion
with the New Jersey Bankruptcy Court seeking to reject the existing management
agreement with NJMI.  The Interim Agreement was entered into on June 27, 1998
and was approved by the Bankruptcy Court on July 7, 1998.  Under the Interim
Agreement, effective as of May 1, 1998 and terminating on September 28, 1998,
NJMI continued to provide certain agreed upon services to GBHC at a monthly fee
of $165,000 of which $122,000 was paid on a monthly basis in arrears and the
remaining $43,000 per month was deferred.  The deferred portion of the fees were
paid upon confirmation of GBHC's plan of reorganization by the New Jersey
Bankruptcy Court.  All management fees terminated upon the granting of GBHC's
motion to reject the management contract by the New Jersey Bankruptcy Court on
September 28, 1998.  As a consequence of the September 1998 settlement agreement
(see Note 10), GBCC and GBHC may no longer assert claims against each other with
respect to the operation of the management contract and, with the passage of
time, the cancellation thereof.  Fees earned by NJMI under the management
agreement and Interim Agreement amounted to $2,405,000 for the year ended
December 31, 1998.

(7)  Investment in Pratt Management, L.P.

     Prior to the Restructuring in October 1999 (see Note 1) and since April 1,
1997, PCC held the limited partnership interest in PML which earned management
fees from the Aurora Casino and incurred operating and other expenses with
respect to its management thereof.  As the limited partner in PML, PCC received
1% of the first $84,000 of net income earned by the partnership each month and
99% of any income earned above such amount.  PML earned management fees
amounting to $3,583,000 during 1999 prior to the deconsolidation of PCC on May
25, 1999 and $8,872,000 for the year ended December 31, 1998.  PML also incurred
operating and other expenses amounting to $498,000 and $1,313,000, respectively,
during the comparable periods for which management fees were earned in 1999 and
1998.

(8)  Regulatory Matters

     Because the casino industry is highly regulated at the state level, ACSC is
required to be licensed in order to provide services to casino operators in most
jurisdictions.  Generally, licensing requires that ACSC and its officers,
including officers of GBCC, be investigated and found suitable by state
authorities.  In addition, ACSC must meet periodic reporting requirements and
provide other information to state authorities as requested.  The suspension or
revocation of a license could materially impact ACSC's ability to carry on its
business activities.

                                       39
<PAGE>

                GREATE BAY CASINO CORPORATION AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(9)  Summarized Combined Financial Information of and Transactions With
     Unconsolidated Affiliates

     Holdings -

     As discussed in Note 1, the operations of Holdings and its subsidiaries
were accounted for under the equity method of accounting for the six month
period from January 1, 1998 through June 30, 1998. Due to the significance of
Holdings' operations, summarized consolidated results of operations of Holdings
for the six month period ended June 30, 1998 are set forth below.  Transactions
with Holdings and its subsidiaries are included in Note 6.

<TABLE>
<CAPTION>
                                                               Six Months Ended
                                                                 June 30, 1998
                                                               -----------------
<S>                                                            <C>

Net revenues                                                       $114,066,000
                                                                   ------------

Departmental expenses                                                95,499,000
General and administrative expenses                                   7,115,000
Depreciation and amortization                                         5,825,000
                                                                   ------------

   Total operating expenses                                         108,439,000
                                                                   ------------

Income from operations                                                5,627,000
                                                                   ------------

Interest, net                                                           899,000
Gain on disposal of assets                                               28,000
                                                                   ------------

   Total non-operating income                                           927,000
                                                                   ------------

Income before taxes and other item                                    6,554,000
Income tax provision                                                          -
                                                                   ------------

Income before other items                                             6,554,000
Reorganization and other related costs                               (2,831,000)
                                                                   ------------

Net income                                                         $  3,723,000
                                                                   ============
</TABLE>

     Greate Bay Holdings, L.L.C. -

     Greate Bay Holdings, L.L.C. is an indirect, wholly owned limited liability
subsidiary of GBCC formed in October 1999 for the purpose of holding the
remaining assets of PCC not acquired by HCC in connection with the
Restructuring.  Such assets consist primarily of claims against Holdings, GB
Property Funding and GBHC in their Chapter 11 proceedings.  Greate Bay Holdings,
L.L.C. has no operating activities and all transactions, once approved by the
Delaware Bankruptcy Court, are accounted for as an adjustment to its net assets
and obligations.  In accordance with the plan of reorganization confirmed by the
Delaware Bankruptcy Court in October 1999, the holders of the PRT Funding Notes
will at some future date receive whatever assets of Greate Bay Holdings, L.L.C.
remain in final

                                       40
<PAGE>

                GREATE BAY CASINO CORPORATION AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

settlement of their claims. Accordingly, because control by GBCC of Greate Bay
Holdings, L.L.C. is temporary and because all of its net assets have an
offsetting liability to the holders of the PRT Funding Notes, the accounts of
Greate Bay Holdings, L.L.C. are not included in the accompanying consolidated
balance sheets of GBCC.

     The schedule below sets forth the accounts of Greate Bay Holdings, L.L.C.:


                                                      December 31, December 31,
                                                         2000         1999
                                                      ---------   -----------

  Cash and cash equivalents                           $ 108,000   $   402,000
  Receivables from Holdings and its subsidiaries (a)     61,000    23,247,000
  Receivable from Park Place Entertainment              300,000             -
                                                      ---------   -----------

  Total assets                                          469,000    23,649,000
                                                      ---------   -----------

  Accounts payable and accrued liabilities               14,000       156,000
  Due to holders of PRT Funding Notes (a)               368,000    23,254,000
  Litigation reserve as established by the plan
    of reorganization                                    87,000       239,000
                                                      ---------   -----------

  Total obligations                                     469,000    23,649,000
                                                      ---------   -----------

  Net assets                                          $       -   $         -
                                                      =========   ===========
_______________

(a)  As a consequence of the confirmation of the Joint Plan, intercompany notes
     and accrued interest which had a carrying amount of $22,368,000 are now
     considered fully impaired.  Greate Bay Holdings, L.L.C. received $711,000
     from Holdings during October 2000 in satisfaction of certain receivables
     and wrote off an additional $107,000 of receivables from Holdings in
     December 2000.  Amounts due to holders of the PRT Funding Notes were
     correspondingly reduced by $107,000.  In January 2001, Greate Bay Holdings,
     L.L.C. collected the remaining $61,000 from Holdings.

(10) Commitments and Contingencies

     Subsidiary Chapter 11 Filings and Related Litigation -

     On January 5, 1998, Holdings, GB Property Funding and GBHC filed petitions
for relief under Chapter 11 of the Bankruptcy Code.  On June 1, 1999, a plan of
reorganization was filed by the debtors with the New Jersey Bankruptcy Court.
Subsequent to this filing, two competing plans were filed,

                                       41
<PAGE>

                GREATE BAY CASINO CORPORATION AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


including the Joint Plan (see Note 1). On August 14, 2000, the New Jersey
Bankruptcy Court confirmed the Joint Plan. The Sands subsequently transferred
46.3% of its equity interests to High River in exchange for $65 million in cash
and the secured bondholders received $110 million in new notes plus the
remaining equity interests in exchange for the $182.5 million of first mortgage
notes in default. No distributions were made to the previous shareholders.

     The filings of petitions for relief by Holdings and its subsidiaries
resulted in a default and automatic acceleration under the indenture for the PRT
Funding Notes. On April 28, 1999, PCC, PRT Funding, NJMI, GBCC, HCC and the
holders of substantially all of the PRT Funding Notes entered into a voting
agreement with HCC which provided for the Restructuring of the PRT Funding
Notes. The voting agreement provided for HCC to acquire the stock of PCC, the
parent of PRT Funding, from GBCC for nominal consideration. When acquired by
HCC, PCC's assets were to consist of its limited partnership interest in a
management contract for the Aurora Casino and a consulting contract for the
Tunica Casino and its liabilities were to consist of a new obligation in the
amount of $40,329,000 in satisfaction of the PRT Funding Notes. The voting
agreement provided for HCC to immediately discharge the obligation (see Note 1).

     As part of the Restructuring, holders of the PRT Funding Notes were also to
receive 100% of the remaining assets of PCC and its subsidiaries not acquired by
HCC.  Such assets consisted primarily of claims against Holdings, GB Property
Funding and GBHC in their Chapter 11 proceedings (see discussion of Greate Bay
Holdings, L.L.C. in Note 9).

     The successful completion of the Restructuring required that PCC, PRT
Funding and NJMI file for protection under Chapter 11 with the above
transactions included as part of a pre-negotiated plan of reorganization.  Such
petitions for relief were filed on May 25, 1999 in the Delaware Bankruptcy Court
and the plan of reorganization was filed on May 26, 1999.  The plan was
confirmed by the Delaware Bankruptcy Court on October 1, 1999.  HCC completed
its acquisition of PCC and settled PCC's obligations on October 14, 1999.

     On May 22, 1998, GBHC filed a motion with the New Jersey Bankruptcy Court
seeking to reject its management agreement with NJMI.  A substitute agreement
was entered into and approved by the New Jersey Bankruptcy Court on July 7, 1998
and the motion to reject the management agreement was approved by the New Jersey
Bankruptcy Court on September 28, 1998.  As a consequence of the September 1998
settlement agreement described below, GBCC and GBHC may no longer assert claims
against each other with respect to the operation of the management contract and,
with the passage of time, the cancellation thereof.

     On April 22, 1999, GBHC filed a motion with the New Jersey Bankruptcy Court
seeking to disallow NJMI's pre-petition claims (see Note 6).  In November 1999,
a compromise was reached establishing the amount of the claim at $75,000.

     On July 27, 1998, GBHC filed an action in the New Jersey Bankruptcy Court
against GBCC, certain affiliates of GBCC and Jack E. Pratt, Edward T. Pratt, Jr.
and William D. Pratt as directors of GBCC and former directors of GBHC
(collectively, the "GBCC Parties"), which alleged, among other things,
usurpation of corporate opportunities of GBHC and breach of fiduciary duty with
respect to

                                       42
<PAGE>

                GREATE BAY CASINO CORPORATION AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

GBHC in connection with the acquisition of certain land parcels in Atlantic
City, New Jersey. The action sought, among other things, to enjoin the GBCC
Parties from transferring the land parcels to third parties and to require that
the land parcels be conveyed to GBHC. The action also sought to enjoin GBCC from
using the tax NOL's of GBHC.

     On September 2, 1998, the GBCC Parties reached a settlement with GBHC which
was approved by the New Jersey Bankruptcy Court.  The terms of the settlement
agreement provided, among other things, (1) that the GBCC Parties convey the
land parcels and related mortgage note to GBHC in exchange for a cash payment
equal to the GBCC Parties' cost in such land parcels with an additional $500,000
payment due upon confirmation of a plan of reorganization by the New Jersey
Bankruptcy Court and (2) that GBHC be included in the consolidated federal
income tax return of GBCC for 1997 and 1998 enabling GBCC to utilize GBHC's tax
NOL's.  The right to receive the additional $500,000 payment was subsequently
conveyed to Greate Bay Holdings, L.L.C. (Note 9).  The agreement also provided
that on or before December 31, 1998, GBCC would cause Holdings and its
subsidiaries to be deconsolidated from the GBCC federal income tax return by
means of transferring 21% of the stock ownership of Holdings to an
unconsolidated entity.  Such transfer was accomplished effective as of December
31, 1998.  In addition, the settlement agreement also allowed GBHC to offset its
working capital loan from GBCC in the amount of $8,000,000 together with
interest accrued thereon against a claim asserted by GBHC against GBCC under
certain tax allocation agreements.

     GBCC licenses the "Sands" name under a license agreement dated as of May
19, 1987, which rights with respect to Atlantic City, New Jersey were
sublicensed to GBHC.  The license agreement has a term of 99 years and requires
a royalty payment for each location of the greater of 1.5% of gross room
charges, as defined in the agreement, payable monthly, or $100,000 per calendar
year.  GBCC has entered into an agreement with the licensor whereby GBCC agreed
to relinquish all rights under the license agreement with respect to Atlantic
City and the licensor agreed to release GBCC from all liability and
responsibility with respect to Atlantic City.  The agreement became effective on
the September 29, 2000 Effective Date of the Joint Plan.  The Joint Plan
provides for a substituted license agreement between GBHC and the licensor.
GBCC does not currently operate any properties under the "Sands" name.

     Other Filings -

     On June 30, 2000, three inactive, wholly owned, indirect subsidiaries of
GBCC filed for liquidation under Chapter 7 of the United States Bankruptcy Code
in the United States Bankruptcy Court for the District of Delaware.  The
subsidiaries were originally formed to acquire property and build a second
casino/hotel in Atlantic City, New Jersey.  These plans were subsequently
abandoned; however, the companies remained in existence pending the outcome of
certain litigation which was substantially resolved in 1996.  The cases were
closed by the Trustee in Bankruptcy in December 2000 and are awaiting a final
liquidation order from the Delaware Bankruptcy Court.  The filings did not and
are not expected to have a significant effect on the operations or financial
position of GBCC.

                                       43
<PAGE>

                GREATE BAY CASINO CORPORATION AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

     Planet Hollywood Litigation -

     In 1996, Planet Hollywood International, Inc. and Planet Hollywood (Region
IV), Inc. filed a complaint in the United States District Court for the Northern
District of Illinois, Eastern Division, against GBCC and HCC and certain of its
subsidiaries seeking (1) a declaratory judgment that it was entitled to use the
name "Planet Hollywood" for a casino and (2) damages.  In its complaint, Planet
Hollywood alleged, among other things, that GBCC and HCC had, in operating the
Hollywood Casino concept, infringed on their trademark, service mark and trade
dress and had engaged in unfair competition and deceptive trade practices.  GBCC
and  HCC and its subsidiaries filed counterclaims seeking (1) a declaratory
judgment that Planet Hollywood was not entitled to use the name "Planet
Hollywood" for a casino and (2) damages.  The counterclaims alleged, among other
things, that Planet Hollywood had, through its planned use of its mark in
connection with casino services, infringed on GBCC and HCC's service marks and
trade dress and had engaged in unfair competition.  The trial commenced on July
19, 1999 and was completed on July 26, 1999.  On August 25, 1999, GBCC and HCC
and the other defendants filed a motion to dismiss the declaratory judgment
claims of all parties asserting, among other things, that as a result of Planet
Hollywood's reported deteriorating  financial condition and perceived inability
to enter into the casino business, there was no longer any actual case or
controversy.  On October 12, 1999, Planet Hollywood (Region IV), Inc. filed a
petition for reorganization under Chapter 11 of the United States Bankruptcy
Code.  On December 3, 1999 the judge entered a judgment in favor of GBCC and HCC
with respect to the damage claims brought by Planet Hollywood and granted their
motion to dismiss the declaratory judgment claims of all parties.  Planet
Hollywood  filed a notice of appeal of the judgment with the Seventh Circuit
Court of Appeals; however, pursuant to a joint motion filed by the parties, such
appeal was dismissed effective as of November 2, 2000.

     Other Litigation -

     On October 8, 1998, GBCC and HCC filed a complaint against their former
independent accountants and tax advisors in the District Court of Dallas County,
Texas.  On September 8, 2000, a mutually acceptable agreement was reached
concluding the dispute and resulting in the dismissal of the lawsuit.

(11) Operating Leases

     GBCC and its subsidiaries lease office space and operating equipment under
lease agreements accounted for as operating leases.  The lease agreements expire
at various dates through the year 2005 and several contain automatic renewals
unless notice of termination is given.    Total rental expense amounted to
$445,000, $389,000 and $362,000, respectively, during the years ended December
31, 2000, 1999 and 1998.

                                       44
<PAGE>

                GREATE BAY CASINO CORPORATION AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

     Future minimum lease payments as of December 31, 2000 under operating
leases having an initial or remaining noncancellable lease term in excess of one
year are as follows:

     2001                                     $455,000
     2002                                      231,000
     2003                                       64,000
     2004                                       11,000
     2005                                        5,000
                                              --------

                                              $766,000
                                              ========
(12) Supplemental Cash Flow Information

     During 2000, GBCC offset $146,000 of the outstanding principal balance of
certain demand notes due to HCC against certain receivables owing from HCC (see
Note 3).  This offset has been excluded from the accompanying consolidated
statement of cash flows as a noncash transaction.

     As a result of the May 1999 Chapter 11 filings by PCC, NJMI and PRT
Funding, and as more fully explained in Note 1, GBCC changed to the cost method
of accounting for its investment in PCC. Accordingly, the elimination of the
following non-cash assets and liabilities from GBCC's consolidated balance sheet
has been excluded from the accompanying consolidated statement of cash flows for
the year ended December 31, 1999 as a non-cash transaction.

     Net current assets                                         $    463,000
     Investment in PML                                             1,726,000
     Accounts payable and accrued liabilities                     (5,202,000)
     Long-term debt                                              (85,000,000)
                                                                ------------

     Net non-cash liabilities                                   $(88,013,000)
                                                                ============

     During the third quarter of 1998, GBCC transferred ownership of an indirect
subsidiary to GBHC as part of the September 2, 1998 settlement agreement (see
Note 10).  In connection with the transfer, certain liabilities of the
subsidiary were assumed by GBHC in a non-cash transaction excluded from the
accompanying consolidated statement of cash flows for the year ended December
31, 1998. The liabilities assumed are set forth below:

     Land                                                       $(864,000)
     Other assets                                                  (1,000)
     Net cash received                                            245,000
     Investment in GBHC                                            28,000
                                                                ---------

     Mortgage note assumed                                      $(592,000)
                                                                =========

                                       45
<PAGE>

                GREATE BAY CASINO CORPORATION AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(13)  Major Customers

      ACSC's computer service revenues are derived primarily from either system
installation contracts or from sales to affiliates. System installation
contracts generally require an extended period of time to complete and represent
significant, but nonrecurring revenue earned from a given customer. Upon
completion of an installation, ACSC may continue to recognize service or
maintenance revenues from the customer at a much reduced amount. The following
table demonstrates ACSC's dependence on installation contracts and on sales to
affiliates:

                                                        Year Ended December 31,
                                                       ----------------------
                                                       2000      1999      1998
                                                       ----      ----      ----

Total percentage of period revenues
 attributable to installation contracts                60.9%     61.3%     65.7%
Percentage of period revenues attributable
  to affiliate sales                                   22.9%     22.8%     22.5%

(14)  Disclosures about Fair Value of Financial Instruments

      The following methods and assumptions were used to estimate the fair value
of each class of financial instruments for which it is practicable to estimate
that value:

      Cash and cash equivalents - The carrying amounts approximate fair value
      -------------------------
because of the short maturity of these instruments.

      Notes receivable - affiliates - Notes receivable from affiliates are
      -----------------------------
valued at carrying amount.

      Interest payable - The carrying amount of interest payable approximates
      ----------------
fair value because of the short maturity of the obligation.

      Long-term debt - Borrowings from affiliates are valued at the carrying
      ---------------
amount.

      The estimated carrying amounts and fair values of GBCC's financial
instruments are as follows:

<TABLE>
<CAPTION>
                                         December 31, 2000               December 31, 1999
                                  ------------------------------  ------------------------------
                                                   Carrying        Carrying
                                    Amount        Fair Value        Amount        Fair Value
                                  -----------  -----------------  -----------  -----------------
<S>                               <C>          <C>                <C>          <C>
Financial Assets
  Cash and cash equivalents       $ 6,003,000        $ 6,003,000  $ 4,801,000        $ 4,801,000
  Notes receivable - affiliates     1,893,000          1,893,000    2,033,000          2,033,000

Financial Liabilities
  Interest payable                $ 3,635,000        $ 3,635,000  $ 2,722,000        $ 2,722,000
  Borrowings from affiliates        5,704,000          5,704,000    6,750,000          6,750,000
  14 7/8% PPI Funding Notes        46,687,000         46,687,000   40,446,000         40,446,000
</TABLE>

                                       46
<PAGE>

                GREATE BAY CASINO CORPORATION AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(15) Selected Quarterly Financial Data (Unaudited)

                                              Quarter
                       -----------------------------------------------------
                          First         Second        Third         Fourth
                       ------------  ------------  ------------  -----------
Year ended
 December 31, 2000:
Net revenues           $   717,000   $ 4,148,000   $ 4,644,000   $ 4,612,000
                       ===========   ===========   ===========   ===========

Net loss               $(2,525,000)  $(1,545,000)  $(1,150,000)  $(1,377,000)
                       ===========   ===========   ===========   ===========
Net loss per
 common share          $      (.49)  $      (.30)  $      (.22)  $      (.26)
                       ===========   ===========   ===========   ===========


                                              Quarter
                       -----------------------------------------------------
                         First         Second        Third         Fourth
                       -----------   -----------   -----------   -----------
Year ended
 December 31, 1999:
Net revenues           $ 2,203,000   $ 1,885,000   $ 1,587,000   $   745,000
                       ===========   ===========   ===========   ===========

Net (loss) income      $(2,036,000)  $83,156,000   $(1,934,000)  $(3,065,000)
                       ===========   ===========   ===========   ===========
Net (loss) income
 per common share      $      (.39)  $     16.03   $      (.37)  $      (.59)
                       ===========   ===========   ===========   ===========

(16) Reclassifications

     Certain reclassifications have been made to the prior years' consolidated
financial statements to conform to the 2000 consolidated financial statement
presentation.

                                       47
<PAGE>

ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE

     GBCC had no disagreements with their independent accountants to report
     under this item.

                                   PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     Certain information is set forth below concerning the executive officers
and directors of Greate Bay Casino Corporation ("GBCC" or the "Company").

               Name                 Age                 Position
               ----                 ---                 --------

John C. Hull......................   62  Chairman of the Board, Chief Executive
                                         Officer and Director

Edward T. Pratt III...............   45  President and Chief Operating Officer

Edward T. Pratt, Jr...............   77  Vice Chairman of the Board, Treasurer
                                         and Director

William D. Pratt..................   72  Executive Vice President, General
                                         Counsel, Secretary and Director

Lawrence C. Cole..................   54  Vice President for Management
                                         Information Systems

Charles F. LaFrano III............   45  Vice President

Jack E. Pratt.....................   73  Director and formerly Chief Executive
                                         Officer of the Company

Bernard A. Capaldi................   58  Director

Michael J. Chesser................   52  Director

     Business Experience for Past Five Years

     John C. Hull was elected to the positions shown above on January 2, 1998.
He previously served as Corporate Controller of the Company since November 1994.
Mr. Hull also served from April 1994 until January 1998 as Corporate Controller
for Hollywood Casino Corporation ("HCC") which, prior to December 31,1996, owned
approximately 80% of the outstanding common stock of the Company. Mr. Hull also
served as Principal Accounting Officer for GB Holdings, Inc. ("Holdings") and GB
Property Funding Corp. from November 1994 until January 1998. On January 5,
1998, these GBCC subsidiaries filed petitions for relief under Chapter 11 of the
United States Bankruptcy Code in the United States Bankruptcy Court for the
District of New Jersey. Mr. Hull was elected President, Chief Executive Officer
and director of Pratt Casino Corporation ("PCC"), PRT Funding Corp. ("PRT
Funding") and New Jersey Management, Inc. ("NJMI"), all wholly owned
subsidiaries of the Company, on January 2,

                                       48
<PAGE>

1998 and served in such positions at the time of the filings by such companies
of petitions for relief under Chapter 11 of the United States Bankruptcy Code on
May 25, 1999. Mr. Hull also previously served as Principal Accounting Officer of
PCC and PRT Funding Corp. until January 1998.

     Edward T. Pratt, Jr. has served as Vice Chairman of the Board and as
director and executive officer of the Company for more than five years. He also
serves as Vice Chairman of the Board, President and Treasurer of HCC. Mr. Pratt
also served until his resignation from such positions on January 2, 1998 as Vice
Chairman of the Board of Directors of Holdings and of GB Property Funding Corp.
and as a director of Greate Bay Hotel and Casino, Inc. ("GBHC"). On January 5,
1998, these three GBCC subsidiaries filed petitions for relief under Chapter 11
of the United States Bankruptcy Code in the United States Bankruptcy Court for
the District of New Jersey. Mr. Pratt was elected Chief Financial Officer,
Principal Accounting Officer and a director of PCC, PRT Funding and NJMI on
January 2, 1998 and served in such positions at the time of the filings by such
companies of petitions for relief under Chapter 11 of the United States
Bankruptcy Code on May 25, 1999. He also served as Vice Chairman of the Board of
Directors of PCC and PRT Funding from September 1993 to January 1, 1998 and as
Executive Vice President, Treasurer and a director of NJMI for more than five
years prior to January 1, 1998. Mr. Pratt also served as Vice President,
Treasurer and a director of Pratt Hollywood, Inc. ("PHI") and as a director of
BPHC Acquisition, Inc. ("Acquisition") and BPHC Parking Corp. ("Parking") prior
to his resignation from such positions in July 2000. On June 30, 2000, these
three subsidiaries of the Company filed petitions for liquidation under Chapter
7 of the United States Bankruptcy Code.

     William D. Pratt has served as Executive Vice President, Secretary and as
director of the Company for more than five years. He currently serves as General
Counsel and, prior to May 1995, served as General Counsel of the Company for
more than five years. He also serves as Executive Vice President, Secretary,
General Counsel and a director of HCC. Mr. Pratt also served until his
resignation from such positions on January 2, 1998 as Executive Vice President,
General Counsel and Secretary of Holdings and of GB Property Funding Corp. and
as a director of GBHC. On January 5, 1998, these three GBCC subsidiaries filed
petitions for relief under Chapter 11 of the United States Bankruptcy Code. Mr.
Pratt also served until his resignation from such positions in January 1998 as
Executive Vice President, Secretary, General Counsel and a director of PCC and
PRT Funding and as Vice President, Secretary and a director of NJMI. On May 25,
1999, these three subsidiaries of the Company filed petitions for relief under
Chapter 11 of the United States Bankruptcy Code. Mr. Pratt also served as Vice
President, Secretary and a director of PHI and as Secretary and a director of
Acquisition and Parking prior to his resignation from such positions in July
2000. On June 30, 2000, these three subsidiaries of the Company filed petitions
for liquidation under Chapter 7 of the United States Bankruptcy Code.

     Edward T. Pratt III was elected President and Chief Operating Officer of
the Company in November 1995. From May 1987 until November 1995, he served the
Company as Executive Vice President -- Development and Corporate Affairs. He
also serves as President, Chief Operating Officer and a director of HCC. Mr.
Pratt served until his resignation from such positions on January 2, 1998 as
President, Chief Operating Officer and a director of Holdings; as Executive Vice
President and a director of GB Property Funding Corp.; and as a director of
GBHC. On January 5, 1998, these three GBCC subsidiaries filed petitions for
relief under Chapter 11 of the United States Bankruptcy Code. Mr. Pratt was
elected Executive Vice President and Secretary of PCC, PRT Funding and NJMI on
January 2, 1998 and served in such positions at the time of the filings by such
companies of petitions for relief under Chapter 11 of the United States
Bankruptcy Code on May 25, 1999. He also served as President, Chief Operating
Officer and a director of PCC and as Executive Vice President and a director of
PRT Funding from September 1993 to January 1, 1998. Mr. Pratt also served as
Vice President and Assistant Treasurer of PHI prior to his resignation from such
positions in July 2000. On June 30, 2000, PHI filed a petition for liquidation
under Chapter 7 of the United States Bankruptcy Code.

                                       49
<PAGE>

     Lawrence C. Cole has served as Vice President of Management Information
Systems of the Company since December 1987. Mr. Cole also serves as Chief
Executive Officer and President of Advanced Casino Systems Corporation ("ACSC"),
a subsidiary of the Company which licenses software for automated casino
accounting and control systems.

     Charles F. LaFrano III has served as Vice President of the Company since
September 1988. He also served as Corporate Controller (Principal Accounting
Officer) of the Company from September 1988 until November 1994. He also serves
as Vice President of Finance for HCC. Mr. LaFrano served until his resignation
from such positions on January 2, 1998 as Vice President and Assistant Secretary
of Holdings and GB Property Funding Corp. On January 5, 1998, these GBCC
subsidiaries filed petitions for relief under Chapter 11 of the United States
Bankruptcy Code. Mr. LaFrano served until his resignation from such positions in
January 1998 as Vice President and Assistant Secretary of PCC and PRT Funding.
On May 25, 1999, PCC and PRT Funding filed petitions for relief under Chapter 11
of the United States Bankruptcy Code.

     Jack E. Pratt served as Chairman of the Board and Chief Executive Officer
of the Company for more than five years until January 2, 1998. He is Chairman of
the Board and Chief Executive Officer of HCC. Mr. Pratt served as Chairman of
the Board of Directors and Chief Executive Officer of Holdings and GBHC and as
Chairman of the Board of Directors, President and Chief Executive Officer of GB
Property Funding Corp. until his resignation from such positions on January 2,
1998. On January 5, 1998, these three GBCC subsidiaries filed petitions for
relief under Chapter 11 of the United States Bankruptcy Code. Mr. Pratt served
until his resignation from such positions in January 1998 as Chairman of the
Board and Chief Executive Officer of PCC, Chairman of the Board, President and
Chief Executive Officer of PRT Funding and Chairman of the Board and President
of NJMI. On May 25, 1999, these three subsidiaries of the Company filed
petitions for relief under Chapter 11 of the United States Bankruptcy Code. Mr.
Pratt also served as a President and a director of PHI, Acquisition and Parking
prior to his resignation from such positions in July 2000. On June 30, 2000,
these three subsidiaries of the Company filed petitions for liquidation under
Chapter 7 of the United States Bankruptcy Code.

     Bernard A. Capaldi is a certified public accountant and is a principal of
Capaldi, Reynolds & Associates, P.A., C.P.A.'s in New Jersey, and has held such
position since 1965. He is also the Chairman of the Board of Shore Memorial
Hospital's parent holding company. Mr. Capaldi also served as a director of PCC,
PRT Funding and NJMI at the time they filed for protection under Chapter 11 of
the United States Bankruptcy Code.

     Michael J. Chesser was elected to the Board of Directors of the Company on
September 9, 1997. He is currently President and Chief Executive Officer of GPU
Energy and has held such position since April 2000. He previously served as
President, Chief Executive Officer and a director of Itron, Inc. from June 1999
until April 2000. From May 1998 until June 1999, Mr. Chesser was self employed
as a business consultant. Prior to that, he served as President and Chief
Operating Officer of Atlantic Energy Corporation since 1994 and served as a
director of such company from 1996 until 1997. Mr. Chesser also served as a
director of PCC, PRT Funding and NJMI at the time of the filings by such
companies of petitions for relief under Chapter 11 of the United States
Bankruptcy Code on May 25, 1999.

     Family Relationships

     Jack E. Pratt, Edward T. Pratt, Jr. and William D. Pratt are brothers (the
"Pratt Brothers"). Edward T. Pratt III, President of the Company, is the son of
Edward T. Pratt, Jr. There is no other family relationship between any of the
directors and any executive officers of the Company or its subsidiaries or
affiliates.

                                       50
<PAGE>

ITEM 11.  EXECUTIVE COMPENSATION

     Summary of Cash and Certain Other Compensation

     The following table provides certain summary information concerning
compensation paid or accrued by the Company, and its subsidiaries (exclusive of
Holdings and its subsidiaries) to or on behalf of the Company's Chief Executive
Officer and its other compensated executive officer determined as of the end of
the last fiscal year (hereafter referred to as the named executive officers) for
the fiscal years ended December 31, 2000, 1999 and 1998.  No other executive
officers of the Company receive compensation for their services.  These
uncompensated officers are employees of and are paid by HCC. HCC bills the
Company pursuant to intercompany allocation agreements ratified by the
respective Boards of Directors.  Executive officers of Holdings and its
subsidiaries are not included in the following table as the Company no longer
exercises control over Holdings and no longer includes the operations of
Holdings and its subsidiaries in its consolidated results of operations.
Accordingly, officers of Holdings do not perform policy-making functions on
behalf of the Company.

<TABLE>
<CAPTION>
                                                                                    Long-Term
                                                       Annual Compensation         Compensation
                                                ---------------------------------
                                                                     Other Annual    Awards/        All Other
     Name and Principal Position        Year     Salary     Bonus    Compensation    Options     Compensation (1)
     ---------------------------        ----    --------   --------  ------------    -------     ----------------
<S>                                     <C>     <C>        <C>       <C>             <C>         <C>
John C. Hull (2)                        2000    $228,077   $ 35,000  $          -          -     $          4,250
 Chief Executive Officer and            1999     300,000    150,000             -          -                4,000
 Chairman of the Board of Directors     1998     302,485          -             -          -                4,000
 of the Company

Lawrence C. Cole                        2000     320,307     54,833             -          -                4,250
 Vice President of Management           1999     287,323     50,000             -          -                4,000
 Information Systems of the Company     1998     310,312    102,805             -          -                4,000
</TABLE>

 __________________________

(1) Includes matching contributions by the Company to The Hollywood Casino
    Corporation and Subsidiaries Retirement Savings Plan on behalf of the named
    executive officer.  See also "Employee Retirement Savings Plan" below.

(2) Amounts shown for John C. Hull represent payments by the Company to HCC for
    services provided by Mr. Hull.

    Option Exercises and Holdings

    The Pratt Hotel Corporation 1990 Incentive Stock Option Plan (the "Plan")
has expired. No options under the Plan were granted or exercised during 2000 and
no unexercised options remain outstanding.

    Employment Contracts

    During the year ended December 31, 2000, John C. Hull, Chief Executive
Officer of the Company, was under an employment agreement dated as of February
13, 2000 and continuing through December 31, 2000.  The contract was
subsequently renewed through December 31, 2001.  The terms of Mr. Hull's
agreement provide for an annual base salary of $215,000 and a bonus of $35,000.

                                       51
<PAGE>

     Lawrence C. Cole, Vice President of Management Information Systems of the
Company serves under an employment contract, as amended on November 30, 1998,
with a wholly owned subsidiary of the Company.  The employment agreement
continues through December 31, 2001 unless sooner terminated by one of the
respective parties.  The terms of Mr. Cole's amended contract provides for a
minimum annual base salary of $275,000 subject to annual increases based on
changes in the Consumer Price Index, as defined in the employment contract,
together with incentive bonuses based on operating results.

     Employee Retirement Savings Plan

     Employees of the Company participate in the The Hollywood Casino
Corporation and Subsidiaries Retirement Savings Plan (the "Savings Plan"). The
Savings Plan is qualified under the requirements of section 401(k) of the Code
allowing participating employees to benefit from the tax deferral opportunities
provided therein. All employees of the Company who have completed one year of
service, as defined, and who have attained the age of 21, are eligible to
participate in the Savings Plan.

     The Savings Plan provides for a matching contribution by the Company based
upon certain criteria, including levels of participation by the Company's
employees.  The Company incurred matching contributions totaling approximately
$43,000 for the year ended December 31, 2000.

     Compensation of Directors

     Nonemployee directors of the Company received an annual fee of $40,000 for
service on the Board of Directors and $1,000 for each Board meeting attended.
The Board of Directors of the Company held three regularly scheduled meetings
and one special meeting during the year ended December 31, 2000. The Board of
Directors of the Company has Audit, Compliance and Compensation Committees, but
does not have a standing nominating committee.  Nonemployee members of the Audit
Committee and Compliance Committee receive an annual fee of $2,500 for service
on each committee and $500 for each committee meeting attended.  The Audit
Committee, which is comprised of Edward T. Pratt, Jr., Bernard A. Capaldi and
Michael J. Chesser, met once during 2000.  The Compliance Committee, which is
comprised of Edward T. Pratt, Jr., William D. Pratt and Bernard A Capaldi, met
three times during 2000. The meeting with respect to the fourth quarter of 2000
was held on January 16, 2001.  No additional compensation or fees are paid to
directors for attending Compensation Committee meetings.

     Compensation Committee Interlocks and Insider Participation

     The Compensation Committee of the Board of Directors of the Company is
comprised of Bernard A. Capaldi, Michael Chesser and Jack E. Pratt.  Michael
Chesser replaced Mr. Edward D. Muir on the Compensation Committee effective May
26, 2000.  Neither Mr. Chesser nor Mr. Capaldi is a former or current officer or
employee of the Company or any of its subsidiaries.  Jack E. Pratt served as an
executive officer and director of the Company until January 2, 1998 and
continues to serve as an executive officer and director of HCC.

                                       52
<PAGE>

                     REPORT OF THE COMPENSATION COMMITTEE

     As members of the Compensation Committee, it is our duty to review
compensation levels of members of management, to evaluate the performance of
management and to consider management succession and related matters.  The
Compensation Committee reviews with the Board in detail all aspects of
compensation for all executive officers.

     The compensation policy of the Company, which is endorsed by the
Compensation Committee, is that the annual compensation of each officer has been
established to reward long-term strategic management and the enhancement of
stockholder value, as well as to attract and retain key executives critical to
the long-term success of the Company. Such compensation relates to and must be
contingent upon the contributions, responsibilities and relative position in the
Company of each individual officer, as well as the relative performance of the
Company. The Compensation Committee has also taken into consideration
competition within the rapidly expanding gaming industry for experienced
personnel as well as other subjective considerations in its deliberations
regarding executive compensation.

     Mr. John C. Hull was elected to the position of Chief Executive Officer of
the Company effective January 2, 1998.  Mr. Hull entered into a new employment
agreement (the "Hull Agreement") effective as of February 13, 2000.  The terms
of the Hull Agreement called for an annual base salary of $215,000 and a bonus
of $35,000 upon the first to occur of December 31, 2000 or completion of certain
specified corporate restructurings. The Hull Agreement expired on December 31,
2000 and was renewed through December 31, 2001 on the same terms.  A bonus of
$35,000 was accrued during fiscal year 2000 and was paid to Mr. Hull by the
Company in 2001.

     This report and the accompanying stock price performance graph are provided
for general informational purposes only pursuant to regulations under the
Securities Exchange Act of 1934.  No information contained in this report or the
accompanying graph shall be deemed to be filed in whole or in part for purposes
under the Securities Act of 1933 or the Securities Exchange Act of 1934, or
incorporated by reference into any filing made thereunder.


                                             Compensation Committee


                                             Jack E. Pratt
                                             Bernard A. Capaldi
                                             Michael J. Chesser

                                       53
<PAGE>

                            STOCK PRICE PERFORMANCE

     The graph set forth below compares the stock price performance of the
Company with those of the Dow Jones Equity Market Index and the Dow Jones Index
for the Casino Industry for the previous five years. The Company has not paid
dividends over such period of time; however, the comparative equity market and
industry data assumes reinvestment of dividends. The stock price performance
shown below may not be indicative of future stock price performance. (Table
substituted for graph).


                         Greate Bay Casino Corporation
                            Stock Price Performance
                            (January 1, 1996 = 100)

                                                              Greate Bay
                                   Equity         Casino        Casino
           Date                    Index          Index       Corporation
     ---------------               -----          -----       -----------

     January 1, 1996               100.0          100.0          100.0
     March 29, 1996                105.6          122.1          127.8
     June 28, 1996                 110.3          138.5          350.0
     September 30, 1996            113.8          117.1          161.1
     December 31, 1996             122.0          103.2           77.8
     March 31, 1997                123.4           92.8           66.7
     June 30, 1997                 144.4          100.4           61.1
     September 30, 1997            157.3          118.0           61.1
     December 31, 1997             160.8           93.9           55.6
     March 31, 1998                182.2          104.6           44.4
     June 30, 1998                 186.3           94.1           22.2
     September 30, 1998            165.2           63.0           11.1
     December 31, 1998             200.9           67.2            9.0
     March 31, 1999                208.9           87.1           10.4
     June 30, 1999                 224.7           97.4            2.8
     September 30, 1999            209.9          104.2           15.3
     December 31, 1999             246.5          103.4            5.6
     March 31, 2000                256.5           96.8            9.7
     June 30, 2000                 246.0          111.5            3.6
     September 29, 2000            247.2          134.0            4.0
     December 29, 2000             223.7          113.0             .5


                                       54
<PAGE>

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

   Security Ownership of Certain Beneficial Owners

   Based on filings with the Securities and Exchange Commission, no persons,
other than certain directors of the Company, are known who beneficially owned
more than 5% of the outstanding Common Stock as of the March 1, 2001.

   Security Ownership of Management

   The following table presents the number of shares of Common Stock
beneficially owned by each director, nominee for director and executive officer
named under Item 11. "Executive Compensation" and by all current directors and
officers of the Company as a group as of March 1, 2001:

<TABLE>
<CAPTION>
                                     Shares of    Percentage of
                                   Common Stock    Outstanding
                                    Beneficially      Common
Beneficial Owner                     Owned (a)         Stock
----------------                   -------------   ------------
<S>                                <C>             <C>

Jack E. Pratt..................      1,051,654(b)         20.3%
Edward T. Pratt, Jr............        180,469             3.5%
William D. Pratt...............        204,379(c)          3.9%
Edward T. Pratt III............        314,698(d)          6.1%
John C. Hull...................             --              --
Bernard A. Capaldi, CPA........             --              --
Michael J. Chesser.............             --              --
Lawrence C. Cole...............             --              --
All directors and officers as
  a group (9 individuals)......      1,751,200            33.8%
</TABLE>

__________________________

(a) Except as otherwise described, each individual has the sole power to vote
    and dispose of the Common Stock beneficially owned by him.

(b) Beneficial ownership is attributable to the following: (1) C.A. Pratt
    Partners, Ltd., a Texas limited partnership of which Jack E. Pratt is the
    General Partner, owns 58,106 shares (1.1%) of the outstanding common stock
    of the Company, (2) Mr. Pratt, as custodian for his minor children holds
    160,492 shares (3.1%) of the outstanding common stock of the Company and (3)
    Mr. Pratt's adult children are the owners of record of 174,318 shares (3.4%)
    of the outstanding common stock of the Company which are subject to a proxy
    giving him the right to vote such shares and prohibiting the transfer of
    such shares without his approval.

(c) Beneficial ownership is attributable to the following:  (1) WDP Jr. Family
    Trust, for which Mr. Pratt is the Trustee, owns 27,452 shares (less than 1%)
    of the outstanding common stock of the Company and (2) Mr. Pratt's adult
    children are the owners of record of 54,906 shares (1.1%) of the outstanding
    common stock of the Company which are subject to a proxy giving him the
    right to vote such shares and prohibiting the transfer of such shares
    without his approval.

                                       55
<PAGE>

(d) Beneficial ownership is attributable to 232,188 shares (4.5%) of the
    outstanding common stock of the Company owned of record by siblings of Mr.
    Pratt and subject to a proxy giving him the right to vote such shares and
    prohibiting the transfer of such shares without his approval.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

    Hollywood Casino Corporation.  During 1990, HCC, which was then wholly owned
by the Pratt Family, acquired approximately $38.8 million of unsecured notes
(the "PCPI Notes") issued by PCPI Funding Corp., a subsidiary of the Company.
As part of a refinancing in February 1994 of virtually all of the Company's
casino-related outstanding debt, a newly formed subsidiary of the Company issued
approximately $40.5 million discounted principal amount of new deferred interest
notes (the "PPI Funding Notes") in exchange for the $38.8 million principal
amount of PCPI Notes held by HCC. Interest expense accreted with respect to the
PPI Funding Notes for the year ended December 31, 2000 amounted to $6.2 million.
The PPI Funding Notes were discounted to yield 14 7/8% interest per annum and
had an original face value of $110.6 million.  Subsequent principal payments,
the assignment of a portion of the PPI Funding Notes in 1997 (as discussed
below) and the forgiveness of $37 million undiscounted fair value of the PPI
Funding Notes by HCC in 1997 have reduced the maturity value to $84.6 million.

    Since May 1992, the Company and its subsidiaries have borrowed funds from
HCC for various purposes.  As of December 31, 1999, the outstanding balance on
such borrowings was $6.8 million, including $6.5 million borrowed on a demand
basis at the rate of 13.75% per annum.  In addition, a $250,000 loan from HCC at
the rate of 14% per annum was due on April 1, 1998 and remains outstanding.
Payment of interest on borrowings from HCC was, prior to February 2, 2000,
subject to the approval of New Jersey gaming authorities.    These borrowings
from HCC are currently subject to a standstill agreement while the Company is in
negotiations with HCC to restructure its obligations. During October 2000, GBCC
paid $900,000 of the outstanding principal balance and agreed to offset an
additional $146,000 of principal against other receivables due from HCC while
negotiations to restructure the debt continue. As a result of these payments,
the balance outstanding at December 31, 2000 has been reduced to $5.7 million.
Interest expense on the borrowings from HCC amounted to $913,000 for the year
ended December 31, 2000.  Interest payable to HCC with respect to such
borrowings amounted to $3.6 million at December 31, 2000.

    Hollywood Casino - Aurora, Inc. ("HCA"), a wholly owned subsidiary of HCC,
was organized for the purpose of developing and owning a riverboat gaming
facility in Aurora, Illinois, (the "Aurora Casino") which commenced operations
on June 17, 1993.  Effective as of April 1, 1997, a subsidiary of the Company
sold its general partnership interest in the limited partnership which held the
management contract on the Aurora Casino to a subsidiary of HCC.  The subsidiary
of the Company received from HCC a five-year note in the original amount of $3.8
million,  $7.6 million discounted principal amount of PPI Funding Notes (see
above) and the assignment of certain accrued interest receivable in exchange for
the general partnership interest.  The $3.8 million note, as amended as of
October 12, 1999, provides for monthly installments of $83,000 including
interest and additional quarterly principal payments of $21,000 beginning
January 1, 2000.  PPI Corporation and HCC have entered into standstill
agreements to defer all payments of principal and interest on the note otherwise
due during the period from March 1, 2000 through March 1, 2001 in consideration
of HCC's agreement not to demand payment of the notes described in the previous
paragraph.  These deferrals do not extend the maturities or represent a
forgiveness of either principal or interest as all past due amounts, if not
otherwise restructured, will become due and payable on the extended payment date
of April 1, 2001.  The outstanding principal balance of the note receivable was
$1.9 million at December 31, 2000.  Interest earned on the note amounted to
$266,000 during the year ended December 31, 2000.

                                       56
<PAGE>

    The Company and its subsidiaries share certain general and administrative
costs with HCC pursuant to services agreements and the Company allocates certain
of its administrative costs to HCC.  Net allocated costs and fees charged to the
Company by HCC amounted to $307,000 during the year ended December 31, 2000.  A
payable in the amount of $16,000 in connection with such allocated costs and
fees was due to HCC at December 31, 2000.

    A subsidiary of the Company provides computer, marketing and other
administrative services to HCC and its subsidiaries.  Computer services provided
include hardware, software and operator support and, for the most part, such
services are billed by the GBCC subsidiary at its direct cost plus expenses
incurred.   The GBCC subsidiary entered into new maintenance and support
agreements with HCT and HCA effective as of January 1, 2000 which provide for an
aggregate monthly fee of $26,000 (subject to change upon 60 days written notice)
plus additional services at rates charged by the subsidiary to third parties.
The agreement has an initial term of one year with automatic annual renewals
unless notice of termination  is given.  Billings to HCC, HCT and HCA for such
services amounted to $950,000 for the year ended December 31, 2000.  Unpaid
charges from HCC and its subsidiaries at December 31, 2000 amounted to $141,000.

    During 2000, the GBCC subsidiary described in the preceding paragraph also
provided and installed casino system software to a new HCC-owned casino property
constructed in Shreveport, Louisiana (the "Shreveport Casino").  ACSC entered
into a similar maintenance and support agreement with the Shreveport Casino
effective as of October 12, 2000 at a monthly fee of $11,000 commencing 90 days
after installation of ACSC's casino system software.  Total amounts billed
during 2000 to the Shreveport Casino amounted to $2,474,000.  Receivables in the
amount of $160,000 and unearned revenues in the amount of $125,000 were
outstanding at December 31, 2000 with respect to the Shreveport Casino
installation.

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a)  The following documents are filed as a part of this report:

     1.  Financial Statements

         The financial statements filed as part of this report are listed on the
     Index to Financial Statements on page 21.

     2.  Financial Statement Schedule

     --  Independent Auditors' Report
     --  Schedule II; Valuation and Qualifying Accounts

         All other schedules for which provision is made in the applicable
     accounting regulation of the Securities and Exchange Commission are not
     required under the related instructions or are inapplicable and therefore
     have been omitted.

     3.  Exhibits

       @3.1    --   Certificate of Incorporation of Pratt Hotel Corporation
                    ("PHC", now known as GBCC) as amended. (Exhibit 3.1)
      ##3.2    --   Amendment to Certificate of Incorporation of PHC. (Exhibit
                    3.2)
       @3.3    --   Amended Bylaws of PHC.  (Exhibit 3.2)

                                       57
<PAGE>

      ++9.1    --   Voting Trust Agreement dated as of December 29, by and among
                    Jill R. Pratt and Jack E. Pratt, Sr. Pratt Laferney,
                    formerly Jill A. Pratt, and John 1998 (Exhibit 9.1)
      ++9.2    --   Voting Trust Agreement dated as of December 29, 1998 by and
                    among Shawn Denise Bradshaw and Michael Shannan Pratt and
                    William D. Pratt, Sr. (Exhibit 9.2)
      ++9.3    --   Voting Trust Agreement dated as of December 29, 1998 by and
                    among Carolyn S. Hickey, Diana Pratt-Wyatt, formerly Diana
                    L. Heisler, and Sharon A. Naftel, formerly Sharon R. Nash,
                    and Edward T. Pratt III. (Exhibit 9.3)
     ++10.1    --   Management and Administrative Services Agreement dated
                    October 1, 1998, by and between Hollywood Casino Corporation
                    ("HCC") and GBCC. (Exhibit 10.1)
      +10.2    --   Tax Allocation Agreement by and among PHC, PPI Corporation,
                    Greate Bay Hotel Corporation, Pratt Casino Properties, Pacsa
                    No. 2, Inc., Pacsa No. 3, Inc., Pratt Hotel Funding, Inc.
                    and Greate Bay Property Funding Corp., effective as of
                    January 1, 1987. (Exhibit 10.17)
      +10.3    --   Tax Allocation Agreement by and among Pratt Casino
                    Properties, BPHC Acquisition, Inc., PHMI, Greate Bay Casino
                    Corporation, PCPI Funding Corp. and GBHC effective as of
                    January 1, 1987. (Exhibit 10.18)
     ++10.4    --   Amendment to Employment Agreement dated November 30, 1998,
                    between ACSC and Lawrence C. Cole. (Exhibit 10.9)
      #10.5    --   Employment Agreement dated as of February 13, 2000 between
                    GBCC and John C. Hull. (Exhibit 10.9)
       21.1    --   Subsidiaries of GBCC.

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

          @    Incorporated by reference from the exhibit shown in parenthesis
               to GBCC's Annual Report on Form 10-K for the fiscal year ended
               December 31, 1992.

          +    Incorporated by reference from the exhibit shown in parenthesis
               to Form S-1 Registration Statement (Registration No. 33-58732)
               for Hollywood Casino Corporation as filed with the SEC on May 27,
               1993.

         ++    Incorporated by reference from the exhibit shown in parenthesis
               filed in GBCC's Annual Report on Form 10-K for the fiscal year
               ended December 31, 1998.

          #    Incorporated by reference from the exhibit shown in parenthesis
               to GBCC's Annual Report on Form 10-K for the fiscal year ended
               December 31, 1999.

         ##    Incorporated by reference from the exhibit shown in parenthesis
               to GBCC's Annual Report on Form 10-K for the fiscal year ended
               December 31, 1996.

(b)  Reports on Form 8-K.

      The Registrant did not file any Reports on Form 8-K during the quarter
ended December 31, 2000.

                                       58
<PAGE>

                                   SIGNATURES

   Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of Egg
Harbor Township, State of New Jersey on March 23, 2001.

                                 GREATE BAY CASINO CORPORATION


                                 By:        /s/ John C. Hull
                                     ------------------------------
                                              John C. Hull
                                         Chief Executive Officer

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

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


    /s/ John C. Hull              Chief Executive Officer   March 23, 2001
--------------------------------                            --------------
    John C. Hull                  and Director

    /s/ Edward T. Pratt, Jr.      Treasurer, Principal      March 23, 2001
--------------------------------                            --------------
    Edward T. Pratt, Jr.          Financial and Accounting
                                  Officer and Director

    /s/ Edward T. Pratt III       President and Chief       March 23, 2001
--------------------------------                            --------------
    Edward T. Pratt III           Operating Officer

    /s/ William D. Pratt          Executive Vice            March 23, 2001
--------------------------------                            --------------
    William D. Pratt              President, General
                                  Counsel, Secretary
                                  and Director

    /s/ Jack E. Pratt             Director                  March 23, 2001
--------------------------------                            --------------
    Jack E. Pratt

    /s/ Bernard A. Capaldi        Director                  March 23, 2001
--------------------------------                            --------------
    Bernard A. Capaldi

    /s/ Michael J. Chesser        Director                  March 23, 2001
--------------------------------                            --------------
    Michael J. Chesser

                                       59
<PAGE>

                     INDEX TO FINANCIAL STATEMENT SCHEDULE


Greate Bay Casino Corporation and Subsidiaries

     --  Independent Auditors' Report

     --  Schedule II; Valuation and Qualifying Accounts

                                       60
<PAGE>

                          INDEPENDENT AUDITORS' REPORT
                          ----------------------------

To Greate Bay Casino Corporation:

We have audited the consolidated financial statements of Greate Bay Casino
Corporation and subsidiaries as of, and for each of the three years in the
period ended December 31, 2000 and have issued our report thereon dated March
15, 2001; such report is included elsewhere in this Form 10-K.  Our audit also
includes the financial statement schedule of Greate Bay Casino Corporation
listed in Item 14. This financial statement schedule is the responsibility of
the Company's management.  Our responsibility is to express an opinion based on
our audit.  In our opinion, such financial statement schedule, when considered
in relation to the basic financial statements taken as a whole, presents fairly
in all material respects the information set forth therein.




Deloitte & Touche LLP
Dallas, Texas
March 15, 2001



                                       61
<PAGE>

                                                            SCHEDULE II

                GREATE BAY CASINO CORPORATION AND SUBSIDIARIES

                       Valuation and Qualifying Accounts

<TABLE>
<CAPTION>
                                                Amounts
                                  Balance at  Charged to                                            Balance
                                  Beginning    Costs and                                             at End
                                  of Period    Expenses     Deductions         Other               of Period
                                 -----------  ----------  -------------  -----------------        -----------
<S>                              <C>          <C>         <C>            <C>                      <C>
Description
-----------

Year Ended December 31, 2000:
 Valuation allowances on
  affiliates receivables         $   232,000  $        -  $  (54,000) (1) $       (178,000) (2)    $         -
 Allowance for doubtful
  accounts receivable                 28,000      20,000     (48,000) (1)                -                   -
                                 -----------  ----------  ----------      ----------------         -----------

                                 $   260,000  $   20,000  $ (102,000)     $       (178,000)        $         -
                                 ===========  ==========  ==========      ================         ===========

Year Ended December 31, 1999:
 Valuation allowances on
  affiliates receivables         $20,977,000  $   22,000  $        -      $    (20,767,000) (3)    $   232,000
 Allowance for doubtful
  accounts receivable                      -      28,000           -                     -              28,000
                                 -----------  ----------  ----------      ----------------         -----------

                                 $20,977,000  $   50,000  $        -     $     (20,767,000)        $   260,000
                                 ===========  ==========  ==========     =================         ===========

Year Ended December 31, 1998:
 Valuation allowance on
  affiliate receivables          $   213,000  $2,306,000  $        -     $      18,458,000 (4)     $20,977,000
                                 ===========  ==========  ==========     =================         ===========
</TABLE>

______________________________

(1)  Represents net write offs of uncollectible accounts.

(2)  Represents recoveries of previously reserved balances.

(3)  Represents reserves written off in connection with the transfer of
     affiliate receivables to Greate Bay Holdings, L.L.C. for the benefit of the
     PRT Funding noteholders.

(4)  Represents valuation allowances on notes and associated interest due from
     Greate Bay Hotel and Casino, Inc., a wholly owned subsidiary of GB
     Holdings, Inc. At December 31, 1997, such amounts were reflected as an
     adjustment to GBCC's negative investment in GB Holdings, Inc. During 1998,
     the negative investment was written off and the outstanding receivables
     were reclassified to due from affiliates.

               The accompanying notes to consolidated financial
               statements are an integral part of this schedule.

                                      62
<PAGE>

                               INDEX TO EXHIBITS

<TABLE>
<CAPTION>
                                                                                               Sequentially
Exhibit                                                                                          Numbered
Number                                                                                             Page
------                                                                                         ------------
<S>            <C>    <C>                                                                      <C>
       @3.1    --     Certificate of Incorporation of Pratt Hotel Corporation
                      ("PHC", now known as GBCC) as amended. (Exhibit 3.1)
      ##3.2    --     Amendment to Certificate of Incorporation of PHC. (Exhibit 3.2)
       @3.3    --     Amended Bylaws of PHC.  (Exhibit 3.2)
      ++9.1    --     Voting Trust Agreement dated as of December 29, 1998 by
                      and among Jill Pratt Laferney, formerly Jill A. Pratt, and
                      John R. Pratt and Jack E. Pratt, Sr. (Exhibit 9.1)
      ++9.2    --     Voting Trust Agreement dated as of December 29, 1998 by and
                      among Shawn Denise Bradshaw and Michael Shannan Pratt and
                      William D. Pratt, Sr. (Exhibit 9.2)
      ++9.3    --     Voting Trust Agreement dated as of December 29, 1998 by and
                      among Carolyn S. Hickey, Diana Pratt-Wyatt, formerly Diana L.
                      Heisler, and Sharon A. Naftel, formerly Sharon R. Nash, and
                      Edward T. Pratt III. (Exhibit 9.3)
     ++10.1    --     Management and Administrative Services Agreement dated October
                      1, 1998, by and between Hollywood Casino Corporation ("HCC")
                      and GBCC. (Exhibit 10.1)
      +10.2    --     Tax Allocation Agreement by and among PHC, PPI Corporation,
                      Greate Bay Hotel Corporation, Pratt Casino Properties, Pacsa
                      No. 2, Inc., Pacsa No. 3, Inc., Pratt Hotel Funding, Inc. and
                      Greate Bay Property Funding Corp., effective as of January 1,
                      1987. (Exhibit 10.17)
      +10.3    --     Tax Allocation Agreement by and among Pratt Casino Properties,
                      BPHC Acquisition, Inc., PHMI, Greate Bay Casino Corporation,
                      PCPI Funding Corp. and GBHC effective as of January 1, 1987.
                      (Exhibit 10.18)
     ++10.4    --     Amendment to Employment Agreement dated November 30, 1998,
                      between ACSC and Lawrence C. Cole. (Exhibit 10.9)
     ##10.5    --     Employment Agreement dated as of February 13, 2000 between GBCC
                      and John C. Hull. (Exhibit 10.9)
       21.1    --     Subsidiaries of GBCC.
</TABLE>

_________________________

        @   Incorporated by reference from the exhibit shown in parenthesis to
            GBCC's Annual Report on Form 10-K for the fiscal year ended December
            31, 1992.

        +   Incorporated by reference from the exhibit shown in parenthesis to
            Form S-1 Registration Statement (Registration No. 33-58732) for
            Hollywood Casino Corporation as filed with the SEC on May 27, 1993.
<PAGE>

<TABLE>
<CAPTION>
                                                                                               Sequentially
       Exhibit                                                                                   Numbered
       Number                                                                                      Page
       ------                                                                                  ------------
       <S>        <C>                                                                          <C>
         ++       Incorporated by reference from the exhibit shown in parenthesis
                  filed in GBCC's Annual Report on Form 10-K for the fiscal year
                  ended December 31, 1998.

          #       Incorporated by reference from the exhibit shown in parenthesis to
                  GBCC's Annual Report on Form 10-K for the fiscal year ended
                  December 31, 1999.

         ##       Incorporated by reference from the exhibit shown in parenthesis to
                  GBCC's Annual Report on Form 10-K for the fiscal year ended
                  December 31, 1996.
</TABLE>