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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



Form 10-Q



|[X] |  | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED March 31, 2004.
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------



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 333-87202



CIRCUS AND ELDORADO JOINT VENTURE

SILVER LEGACY CAPITAL CORP.

(Exact names of registrants as specified in their charters)



|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Nevada                                                         |  | 88-0310787                          
|Nevada                                                         |  | 71-0868362                          
|(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification No.)



407 North Virginia
Street, Reno, Nevada 89501

---

(Address of principal executive offices, including zip
code)



(800) 687-7733

---

(Registrants telephone number, including area code)



Not Applicable

---

(Former name, former address and former fiscal year, if changed since last report)



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



Indicate by check mark whether either of the
registrants is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).    Yes ̈No  x



The number of shares of Silver Legacy Capital Corp.s Common Stock outstanding at May 13, 2004 was 2,500. All of these shares are owned by Circus and Eldorado Joint Venture.



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CIRCUS AND ELDORADO JOINT VENTURE

SILVER LEGACY CAPITAL CORP.



FORM 10-Q



INDEX



|                              |  |         |  |                                                                                                              |  |         
|----------------------------- |  | ------- |  | ------------------------------------------------------------------------------------------------------------ |  | --------
|                              |  |         |  |                                                                                                              |  | Page No.
|                             
|PART I. FINANCIAL INFORMATION
|                              |  |         | 
|                              |  | Item 1. |  | Financial Statements:                                                                                        |  |         
|                              |  |         | 
|                              |  |         |  | Unaudited Condensed Consolidated Balance Sheets as of March 31, 2004 and December 31, 2003                   |  | 3       
|                              |  |         | 
|                              |  |         |  | Unaudited Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2004 and 2003 |  | 4       
|                              |  |         | 
|                              |  |         |  | Unaudited Condensed Consolidated Statements of Partners Equity for the Three Months Ended March 31, 2004    |  | 5       
|                              |  |         | 
|                              |  |         |  | Unaudited Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2004 and 2003 |  | 6       
|                              |  |         | 
|                              |  |         |  | Notes to Unaudited Condensed Consolidated Financial Statements                                               |  | 7       
|                              |  |         | 
|                              |  | Item 2. |  | Managements Discussion and Analysis of Financial Condition and Results of Operations                        |  | 9       
|                              |  |         | 
|                              |  | Item 3. |  | Quantitative and Qualitative Disclosures About Market Risk                                                   |  | 14      
|                              |  |         | 
|                              |  | Item 4. |  | Controls and Procedures                                                                                      |  | 14      
|                             
|PART II. OTHER INFORMATION   
|                              |  |         | 
|                              |  | Item 6. |  | Exhibits and Reports on Form 8-K                                                                             |  | 14      
|                              | 
|SIGNATURES                    |  | 15     



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PART I. FINANCIAL INFORMATION



Item 1. Financial Statements



CIRCUS AND ELDORADO JOINT VENTURE

(doing business as Silver Legacy Resort Casino)



UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)



|                                       |  |               |         |                  |   |        
|-------------------------------------- |  | ------------- | ------- | ---------------- | - | -------
|                                       |  | March 31,2004 |         | December 31,2003
|ASSETS                                 |  |               |         |                  |   |        
|CURRENT ASSETS:                        |  |               |         |                  |   |        
|Cash and cash equivalents              |  | $             | 18,522  |                  | $ | 19,405 
|Accounts receivable, net               |  |               | 3,284   |                  |   | 3,476  
|Inventories                            |  |               | 1,886   |                  |   | 1,757  
|Prepaid expenses and other             |  |               | 3,915   |                  |   | 3,720  
|                                       |  |               |         |                  |   |        
|Total current assets                   |  |               | 27,607  |                  |   | 28,358 
|PROPERTY AND EQUIPMENT, NET            |  |               | 264,636 |                  |   | 265,852
|OTHER ASSETS, NET                      |  |               | 7,951   |                  |   | 8,176  
|                                       |  |               |         |                  |   |        
|Total Assets                           |  | $             | 300,194 |                  | $ | 302,386
|                                       |  |               |         |                  |   |        
|LIABILITIES AND PARTNERS EQUITY       |  |               |         |                  |   |        
|CURRENT LIABILITIES:                   |  |               |         |                  |   |        
|Accounts payable                       |  | $             | 4,257   |                  | $ | 4,260  
|Accrued interest                       |  |               | 1,350   |                  |   | 5,400  
|Accrued and other liabilities          |  |               | 8,570   |                  |   | 8,168  
|                                       |  |               |         |                  |   |        
|Total current liabilities              |  |               | 14,177  |                  |   | 17,828 
|LONG-TERM DEBT                         |  |               | 159,508 |                  |   | 159,492
|OTHER LONG-TERM LIABILITIES            |  |               | 2,775   |                  |   | 2,554  
|                                       |  |               |         |                  |   |        
|Total liabilities                      |  |               | 176,460 |                  |   | 179,874
|PARTNERS EQUITY                       |  |               | 123,734 |                  |   | 122,512
|                                       |  |               |         |                  |   |        
|Total Liabilities and Partners Equity |  | $             | 300,194 |                  | $ | 302,386
|                                       |  |               |         |                  |   |        



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



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CIRCUS AND ELDORADO JOINT VENTURE

(doing business as Silver Legacy Resort Casino)



UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands)



|                                     |  |                             |        |   |      |   |        |  
|------------------------------------ |  | --------------------------- | ------ | - | ---- | - | ------ | -
|                                     |  | Three Months EndedMarch 31, |       
|                                     |  | 2004                        |        |   | 2003 |  
|OPERATING REVENUES:                  |  |                             |        |   |      |   |        |  
|Casino                               |  | $                           | 19,896 |   |      | $ | 19,481 |  
|Rooms                                |  |                             | 8,641  |   |      |   | 7,602  |  
|Food and beverage                    |  |                             | 8,425  |   |      |   | 8,123  |  
|Other                                |  |                             | 2,090  |   |      |   | 1,696  |  
|                                     |  |                             |        |   |      |   |        |  
|                                     |  |                             | 39,052 |   |      |   | 36,902 |  
|Less: promotional allowances         |  |                             | (3,449 | ) |      |   | (3,403 | )
|                                     |  |                             |        |   |      |   |        |  
|Net operating revenues               |  |                             | 35,603 |   |      |   | 33,499 |  
|                                     |  |                             |        |   |      |   |        |  
|OPERATING EXPENSES:                  |  |                             |        |   |      |   |        |  
|Casino                               |  |                             | 10,076 |   |      |   | 10,122 |  
|Rooms                                |  |                             | 2,856  |   |      |   | 2,678  |  
|Food and beverage                    |  |                             | 5,725  |   |      |   | 5,517  |  
|Other                                |  |                             | 1,591  |   |      |   | 1,261  |  
|Selling, general and administrative  |  |                             | 7,234  |   |      |   | 7,309  |  
|Depreciation                         |  |                             | 2,658  |   |      |   | 2,629  |  
|Loss (gain) on disposition of assets |  |                             | 18     |   |      |   | (15    | )
|                                     |  |                             |        |   |      |   |        |  
|Total operating expenses             |  |                             | 30,158 |   |      |   | 29,501 |  
|                                     |  |                             |        |   |      |   |        |  
|OPERATING INCOME                     |  |                             | 5,445  |   |      |   | 3,998  |  
|                                     |  |                             |        |   |      |   |        |  
|OTHER (INCOME) EXPENSE:              |  |                             |        |   |      |   |        |  
|Interest expense                     |  |                             | 4,259  |   |      |   | 4,354  |  
|Other, net                           |  |                             | (36    | ) |      |   | 28     |  
|                                     |  |                             |        |   |      |   |        |  
|Total other (income) expense         |  |                             | 4,223  |   |      |   | 4,382  |  
|                                     |  |                             |        |   |      |   |        |  
|NET INCOME (LOSS)                    |  | $                           | 1,222  |   |      | $ | (384   | )
|                                     |  |                             |        |   |      |   |        |  



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



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CIRCUS AND ELDORADO JOINT VENTURE

(doing business as Silver Legacy Resort Casino)



UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF PARTNERS EQUITY

(In thousands)



|                         |  |               |        |                       |   |        |  |   |        
|------------------------ |  | ------------- | ------ | --------------------- | - | ------ |  | - | -------
|                         |  | Galleon, Inc. |        | Eldorado Resorts, LLC |   | Total 
|BALANCE, January 1, 2004 |  | $             | 56,256 |                       | $ | 66,256 |  | $ | 122,512
|Net income               |  |               | 611    |                       |   | 611    |  |   | 1,222  
|                         |  |               |        |                       |   |        |  |   |        
|BALANCE, March 31, 2004  |  | $             | 56,867 |                       | $ | 66,867 |  | $ | 123,734
|                         |  |               |        |                       |   |        |  |   |        



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



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CIRCUS AND ELDORADO JOINT VENTURE

(doing business as Silver Legacy Resort Casino)



UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)



|                                                                                                             |  |                             |        |   |      |   |        |  
|------------------------------------------------------------------------------------------------------------ |  | --------------------------- | ------ | - | ---- | - | ------ | -
|                                                                                                             |  | Three Months EndedMarch 31, |       
|                                                                                                             |  | 2004                        |        |   | 2003 |  
|CASH FLOWS FROM OPERATING ACTIVITIES:                                                                        |  |                             |        |   |      |   |        |  
|Net income (loss)                                                                                            |  | $                           | 1,222  |   |      | $ | (384   | )
|                                                                                                             |  |                             |        |   |      |   |        |  
|Adjustments to reconcile net income (loss) to net cash provided by (used in) operating operating activities: |  |                             |        |   |      |   |        |  
|Depreciation and amortization                                                                                |  |                             | 2,840  |   |      |   | 2,810  |  
|Loss (gain) on disposition of assets                                                                         |  |                             | 18     |   |      |   | (15    | )
|Increase in accrued pension cost                                                                             |  |                             | 221    |   |      |   | 204    |  
|Changes in current assets and current liabilities:                                                           |  |                             |        |   |      |   |        |  
|Decrease in accounts receivable, net                                                                         |  |                             | 192    |   |      |   | 312    |  
|(Increase) decrease in inventories                                                                           |  |                             | (129   | ) |      |   | 245    |  
|Increase in prepaid expenses and other                                                                       |  |                             | (213   | ) |      |   | (367   | )
|(Decrease) increase in accounts payable                                                                      |  |                             | (3     | ) |      |   | 156    |  
|Decrease in accrued interest                                                                                 |  |                             | (4,050 | ) |      |   | (4,027 | )
|Increase (decrease) in accrued and other liabilities                                                         |  |                             | 402    |   |      |   | (873   | )
|                                                                                                             |  |                             |        |   |      |   |        |  
|Total adjustments                                                                                            |  |                             | (722   | ) |      |   | (1,555 | )
|                                                                                                             |  |                             |        |   |      |   |        |  
|Net cash provided by (used in) operating activities                                                          |  |                             | 500    |   |      |   | (1,939 | )
|                                                                                                             |  |                             |        |   |      |   |        |  
|CASH FLOWS FROM INVESTING ACTIVITIES:                                                                        |  |                             |        |   |      |   |        |  
|Proceeds from sale of assets                                                                                 |  |                             |       |   |      |   | 19     |  
|Decrease in other assets                                                                                     |  |                             | 60     |   |      |   | 39     |  
|Purchase of property and equipment                                                                           |  |                             | (1,443 | ) |      |   | (571   | )
|                                                                                                             |  |                             |        |   |      |   |        |  
|Net cash used in investing activities                                                                        |  |                             | (1,383 | ) |      |   | (513   | )
|                                                                                                             |  |                             |        |   |      |   |        |  
|CASH FLOWS FROM FINANCING ACTIVITIES:                                                                        |  |                             |        |   |      |   |        |  
|Proceeds from bank credit facility                                                                           |  |                             |       |   |      |   | 3,000  |  
|Debt issuance costs                                                                                          |  |                             |       |   |      |   | (1     | )
|Payments on bank credit facility                                                                             |  |                             |       |   |      |   | (5,000 | )
|                                                                                                             |  |                             |        |   |      |   |        |  
|Net cash used in financing activities                                                                        |  |                             |       |   |      |   | (2,001 | )
|                                                                                                             |  |                             |        |   |      |   |        |  
|Net decrease in cash and cash equivalents                                                                    |  |                             | (883   | ) |      |   | (4,453 | )
|Cash and cash equivalents at beginning of period                                                             |  |                             | 19,405 |   |      |   | 14,913 |  
|                                                                                                             |  |                             |        |   |      |   |        |  
|Cash and cash equivalents at end of period                                                                   |  | $                           | 18,522 |   |      | $ | 10,460 |  
|                                                                                                             |  |                             |        |   |      |   |        |  
|SUPPLEMENTAL CASH FLOW INFORMATION:                                                                          |  |                             |        |   |      |   |        |  
|Cash paid during period for interest                                                                         |  | $                           | 8,128  |   |      | $ | 8,200  |  
|                                                                                                             |  |                             |        |   |      |   |        |  



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



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CIRCUS AND ELDORADO JOINT VENTURE

(doing business as Silver Legacy Resort Casino)



NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS



Note 1. Summary of Significant Accounting Policies and Basis of
Presentation



Principles of Consolidation/Operations



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



The condensed consolidated financial statements include the accounts of the Partnership and its wholly owned subsidiary, Silver Legacy Capital Corp.
(Capital). Capital was established solely for the purpose of serving as a co-issuer of $160,000,000 principal amount of 101/8% mortgage notes due 2012 issued by the Partnership and Capital and, as such, Capital does not have any operations, assets, or revenues. All significant intercompany accounts and transactions have been eliminated in
consolidation.



In the opinion of Management, the
accompanying unaudited condensed consolidated financial statements contain all adjustments, all of which are normal and recurring, necessary to present fairly the financial position of the Partnership as of March 31, 2004, and the results of
operations for the three months ended March 31, 2004 and 2003 and cash flows for the three months ended March 31, 2004 and 2003. The results of operations for such periods are not necessarily indicative of the results to be expected for a full year.



Certain information and footnote disclosures normally included
in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. These condensed consolidated financial statements should be read in conjunction with the
consolidated financial statements and notes thereto included in the Partnerships annual report on Form 10-K for the year ended December 31, 2003.



Use of Estimates



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



Note 2.
Certain Risks and Uncertainties



A significant portion of
the Partnerships revenues and operating income are generated from patrons who are residents of northern California. A change in general economic conditions or the extent and nature of casino gaming in California, Washington or Oregon could
adversely affect the Partnerships operating results. In March 2000, California voters approved a constitutional amendment which legalized Nevada-style gaming on Native American reservations. While most existing Native American
gaming facilities in northern California are modest compared to Silver Legacy, numerous Native American tribes have announced that they are in the process of expanding, developing, or are considering establishing large-scale hotel and gaming
facilities in northern California. In particular, a significant new Native American casino located approximately 21 miles northeast of Sacramento opened in June 2003. While this new casino does not have hotel rooms, its gaming facilities are
comparable in size to Silver Legacy with approximately 1,900 slot machines and 100 table games. During the six months following its opening date in June 2003, we experienced a moderate decrease in our weekend casino volume resulting in a negative
impact on our operating results during that period. However, despite this increased competition, we were able to achieve higher casino volume during the three months ended March 31, 2004 compared to the same prior year period when this facility was
not operating. Based on its size and proximity, and potential expansion capabilities, we believe this new casino, along with the continued growth of other Native American gaming establishments, could continue to place additional competitive pressure
on our operating results. While we cannot predict the extent of any future impact, it could be significant.



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Note 3. Long-Term Debt



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



|                                                                                            |  |               |         |                  |   |        
|------------------------------------------------------------------------------------------- |  | ------------- | ------- | ---------------- | - | -------
|                                                                                            |  | March 31,2004 |         | December 31,2003
|101/8% Mortgage Notes due 2012 (net of unamortized discount of $492 and $508, respectively) |  | $             | 159,508 |                  | $ | 159,492



On March 5, 2002, the
Partnership and Capital (the Issuers) issued $160,000,000 principal amount of senior secured mortgage notes due 2012 (Notes). Concurrent with issuing the Notes, the Partnership entered into a new senior secured credit
facility (the New Credit Facility) for $40,000,000. The proceeds from the Notes, together with $26,000,000 in borrowings under the New Credit Facility, were used to repay $150,200,000 representing all of the indebtedness outstanding
under the prior bank credit facility (the Bank Credit Facility) and to fund $30,000,000 of distributions to the Partners. In addition, the remaining proceeds along with operating cash flows were used to pay $6,300,000 in related fees and
expenses of the transactions. These fees were capitalized and are included in other assets.



The Notes are senior secured obligations which rank equally with all of the Partnerships outstanding senior debt and senior to any subordinated debt. The Notes are secured by a security interest in the
Issuers existing and future assets, which is junior to a security interest in such assets securing the Partnerships obligations on the New Credit Facility and any refinancings of such facility that are permitted pursuant to the terms of
the Notes. Each of the Partners executed a pledge of all of its partnership interests in the Partnership to secure the Notes, which is junior to a pledge of such partnership interests to secure the Partnerships obligations on the New Credit
Facility and any refinancings of such facility that are permitted pursuant to the terms of the Notes. The Notes mature on March 1, 2012 and bear interest at the rate of 101/8% per annum, payable semi-annually in arrears on March 1 and September 1 of each year, commencing on September 1, 2002.



The New Credit Facility originally provided for a $20,000,000 senior secured
revolving credit facility and a $20,000,000 five-year term loan facility, each of which provided for the payment of interest at floating rates based on LIBOR plus a spread. The commitment under the term loan facility originally provided for periodic
reductions with the then remaining balance due March 31, 2007. The term loan was paid in full as of December 31, 2003.



The Notes and New Credit Facility contain various restrictive covenants including the maintenance of certain financial ratios and limitations on
additional debt, disposition of property, mergers and similar transactions. On November 4, 2003, the Partnership executed an amendment to the New Credit Facility (as amended, the Amended Credit Facility) which reduced the revolving
facility to $10,000,000, and revised certain covenant ratios with retroactive effect to September 30, 2003, including the maximum total debt to EBITDA ratio which the Partnership had exceeded as of September 30, 2003. At March 31, 2004, there was no
indebtedness outstanding under the Amended Credit Facility. As of such date, the Partnership was in compliance with all of the covenants in the Amended Credit Facility and had the ability to borrow on a revolving basis all of the $10,000,000
available under the Amended Credit Facility. The entire principal amount then outstanding under the Amended Credit Facility becomes due and payable on March 31, 2007 unless the maturity date is extended with the consent of the lenders. As of March
31, 2004, the Partnership was in compliance with the covenants in the indenture relating to the Notes.



Note 4. Related Parties



Each of our Partners operates a casino attached and adjacent to Silver Legacy. Our Partners may be deemed to be in a conflict of interest position with respect to decisions they make relating to the Partnership, the Eldorado Hotel &
Casino and Circus Circus Hotel & Casino-Reno.



Note 5. Supplemental
Executive Retirement Plan



Effective January 1, 2002, the
Partnership adopted a Supplemental Executive Retirement Plan (SERP) for a select group of highly compensated management employees. The SERP provides for a lifetime benefit at age 65, based on a formula which takes into account a
participants highest annual compensation, years of service, and executive



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level. The SERP also provides an early retirement benefit at age 55 with at least four years of service, a disability
provision, and a lump sum death benefit. While the SERP is an unfunded plan, the Partnership is informally funding the plan through life insurance contracts on the participants. The Partnership anticipates that its periodic pension cost for the year
ending December 31, 2004 will be approximately $885,800, of which $221,200 had been accrued as of March 31, 2004.



Note 6. Partnership Agreement



Concurrent with the issuance of the Notes on March 5, 2002, the Partnerships partnership agreement was amended and restated in its entirety and was
further amended in April 2002 (the Partnership Agreement). The Partnership Agreement provides for, among other things, profits and losses to be allocated to the Partners in proportion to their percentage interests, separate capital
accounts to be maintained for each Partner, provisions for management of the Partnership and payment of distributions and bankruptcy and/or dissolution of the Partnership. The April 2002 amendments were principally (i) to provide equal voting rights
for ELLC and Galleon with respect to approval of the Partnerships annual business plan and the appointment and compensation of the general manager, and (ii) to give each Partner the right to terminate the general manager.



Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations



Overview



Effective March 1, 1994, Eldorado Limited Liability Company (ELLC), a Nevada limited liability company owned and controlled by Eldorado
Resorts LLC, and Galleon, Inc. (Galleon), a Nevada corporation owned and controlled by Mandalay Resort Group, formerly known as Circus Circus Enterprises, Inc., entered into a joint venture agreement to establish the Partnership, for the
purpose of constructing, owning and operating Silver Legacy. Capital, a wholly owned subsidiary of the Partnership, was incorporated for the sole purpose of serving as a co-issuer of the $160 million principal amount of 101/8% mortgage notes due 2012 issued by the Partnership and Capital (the Notes), and does not have any operations, assets or revenues.



On July 28, 1995, Silver Legacy commenced operations as a hotel-casino in downtown Reno, Nevada. Silver Legacy is a leader
within the Reno market, offering the largest number of table games and slot machines and the second largest number of hotel rooms of any property in the Reno market. Silver Legacys net operating revenues and income are derived largely from our
gaming activities. In an effort to enhance our gaming revenues, we attempt to maximize the use of our gaming facilities at Silver Legacy by providing a well-balanced casino environment that contains a mix of games attractive to multiple market
segments. Rooms, food and beverage also contribute a large portion of our net revenues.



Our operating results are highly dependent on the volume of customers visiting and staying at our resort. Key volume indicators include table games drop and slot handle, which refer to amounts wagered by our
customers. The amount of volume we retain, which is not fully controllable by us, is recognized as casino revenues and is referred to as our win or hold. In addition, hotel occupancy and price per room designated by average daily rate
(ADR) are key indicators for our hotel business.



Significant
Factors Affecting Results of Operations



A significant
portion of Silver Legacys revenues and operating income are generated from patrons who are residents of northern California, and as such, our results of operations have been adversely impacted by the growth in Native American gaming in
northern California over the past three years. While most existing Native American gaming facilities in northern California are modest compared to Silver Legacy, numerous Native American tribes have announced that they are in the process of
expanding, developing, or are considering establishing, large-scale hotel and gaming facilities in northern California. In particular, a significant new Native American casino located approximately 21 miles northeast of Sacramento opened in June
2003. While this new casino does not have hotel rooms, its gaming facilities are comparable in size to Silver Legacy with approximately 1,900 slot machines and 100 table games. During the six months following its opening date in June 2003, we
experienced a moderate decrease in our weekend casino volume resulting in a negative impact on our operating results during that period. However, despite this increased competition, we were able to achieve higher casino volumes during the three
months ended March 31, 2004 compared to the same prior year period when this facility was not operating. Based on its size and proximity, and potential expansion capabilities, we believe this new casino, along with the continued growth of other
Native American gaming establishments, could continue to place additional competitive pressure on our operating results. While we cannot predict the extent of any future impact, it could be significant.



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Other Factors Affecting Results of Operations



In July 2003, the Governor of Nevada signed into law a new tax bill that provides for increases in the taxes applicable to
our operations. Based on our evaluation of the new Nevada tax law, we estimate the full-year incremental impact on our operations will be less than $1.0 million.



Two public works projects are underway in the downtown area of Reno. The first project will lower the train tracks that
traverse Renos downtown district and separate the Silver Legacy and the two adjoining properties from the rest of the downtown gaming facilities. Construction on this project is expected to be completed in 2006. The second project involves the
construction of a downtown special events center next to the National Bowling Stadium. Construction of this project began in January 2004 with an expected completion date in December 2004. To date, the impact of these projects on our operations has
been minimal; however, we cannot determine the effect of either of the projects on our future operations.



Summary Financial Results



The following table highlights the results of our operations (dollars in thousands):



|                   |  |                                 |        |               |       |   |                                 |   |        |  
|------------------ |  | ------------------------------- | ------ | ------------- | ----- | - | ------------------------------- | - | ------ | -
|                   |  | Three monthsended March 31,2004 |        | PercentChange |       |   | Three monthsended March 31,2003 |  
|Net revenues       |  | $                               | 35,603 |               | 6.3   | % |                                 | $ | 33,499 |  
|Operating expenses |  |                                 | 30,158 |               | 2.2   |   |                                 |   | 29,501 |  
|Operating income   |  |                                 | 5,445  |               | 36.2  |   |                                 |   | 3,998  |  
|Net income (loss)  |  |                                 | 1,222  |               | 418.2 |   |                                 |   | (384   | )



Net Revenues.
Net revenues grew due to growth in all revenue segments, with casino and room revenues producing the largest increases in absolute dollars. We believe the drivers of our current period revenues were improvements in the national economy and traffic
generated by the American Bowling Congress Tournament (ABC Tournament) which brought men bowlers to the Reno market beginning in mid-February 2004. The Womens International Bowling Congress Tournament did not commence until
mid-March in 2003. In addition, the war with Iraq was a negative factor affecting tourism in general during the first quarter of 2003.



Operating Income. The increase in operating income was attributable to increased net revenues combined with cost control efforts which produced an
increase in our profit margin to 15.3% for the three months ended March 31, 2004 from 11.9% for the three months ended March 31, 2003. Payroll, which is our largest expense, declined (both as a percentage of revenues and in absolute dollars) during
the three months ended March 31, 2004 compared to the same prior year period. Savings in payroll, advertising, and various other variable expenses were offset by increases in general liability insurance premiums, state gaming taxes, and professional
fees for entertainers. In addition, casino marketing and customer acquisition costs, specifically promotional offers, rose during the first quarter of 2004 compared to the same prior year period as the result of our efforts to generate new casino
customers and drive visitation.



Net Income. Net income
increased as a result of the aforementioned factors affecting net revenues and operating income. In addition, interest expense during the current period declined $0.1 million which produced a higher percentage increase in net income in the first
quarter of 2004 compared to the first quarter of 2003.



Revenues



The following table highlights our sources of net
operating revenues (dollars in thousands):



|                       |  |                                 |        |               |      |   |                                 |   |       
|---------------------- |  | ------------------------------- | ------ | ------------- | ---- | - | ------------------------------- | - | ------
|                       |  | Three monthsended March 31,2004 |        | PercentChange |      |   | Three monthsended March 31,2003
|Casino                 |  | $                               | 19,896 |               | 2.1  | % |                                 | $ | 19,481
|Rooms                  |  |                                 | 8,641  |               | 13.7 |   |                                 |   | 7,602 
|Food and beverage      |  |                                 | 8,425  |               | 3.7  |   |                                 |   | 8,123 
|Other                  |  |                                 | 2,090  |               | 23.2 |   |                                 |   | 1,696 
|Promotional allowances |  |                                 | 3,449  |               | 1.4  |   |                                 |   | 3,403 



Casino Revenues.Casino revenues increased principally due to the aforementioned factors affecting net revenues. In addition, our casino volume was adversely affected in the prior year by the disruption caused by carpet replacement and other remodeling in the
casino area during the months of January and February 2003.



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Room Revenues.Our ADR and occupancy percentage were $63.29 and 79.2%, respectively, for the three
months ended March 31, 2004 compared to $60.11 and 74.2%, respectively, for the three months ended March 31, 2003. These increases in ADR and occupancy were primarily due to increased convention business, and to a lesser extent, increases in our
leisure and casino segments throughout the first quarter of 2004. The primary contributor to the growth in our convention segment was the ABC Tournament which generated room nights beginning in mid-February through March 2004.



Food and Beverage Revenues. The increase in food and beverage revenues
was due primarily to selective menu pricing increases and increased guest counts in several of our dining venues. These increases were partially offset by a decline in banquet revenues resulting from the absence of a few large convention groups that
produced large volume during the first quarter of 2003. In addition, complimentary food revenues in our buffet declined during the three months ended March 31, 2004.



Other Revenues. Other revenues are comprised of revenues generated by our retail outlets, arcade, entertainment and
other miscellaneous items. The increase in other revenues was due primarily to increased entertainment revenues resulting from more concert dates during the three months ended March 31, 2004 compared to the same prior year period.



Promotional Allowances. Promotional allowances increased only 1.4%
despite a 5.8% increase in gross revenues primarily due to decreased complimentary rooms and food promotional allowances. Promotional allowances, expressed as a percentage of gross revenues, declined to 8.8% for the three months ended March 31, 2004
compared to 9.2% for the three months ended March 31, 2003.



Operating
Expenses



The following table highlights our operating
expenses (dollars in thousands):



|                                    |  |                                 |        |               |      |    |                                 |   |       
|----------------------------------- |  | ------------------------------- | ------ | ------------- | ---- | -- | ------------------------------- | - | ------
|                                    |  | Three monthsended March 31,2004 |        | PercentChange |      |    | Three monthsended March 31,2003
|Casino                              |  | $                               | 10,076 |               | (0.5 | )% |                                 | $ | 10,122
|Rooms                               |  |                                 | 2,856  |               | 6.6  |    |                                 |   | 2,678 
|Food and beverage                   |  |                                 | 5,725  |               | 3.8  |    |                                 |   | 5,517 
|Other                               |  |                                 | 1,591  |               | 26.2 |    |                                 |   | 1,261 
|Selling, general and administrative |  |                                 | 7,234  |               | (1.0 | )  |                                 |   | 7,309 
|Depreciation                        |  |                                 | 2,658  |               | 1.1  |    |                                 |   | 2,629 



Casino
Expenses. Despite growth in casino revenues, the amount of state gaming taxes paid, and casino marketing costs, reductions in departmental payroll and other variable expenses resulted in an overall decrease in casino expenses.



Room Expenses. While room expenses increased in absolute terms, a
$3.18 increase in ADR combined with lower room expenses, specifically departmental payroll and laundry expense, as a percentage of room revenues, resulted in increased departmental profit during the first quarter of 2004 compared to the same prior
year period.



Food and Beverage Expenses. Food and
beverage expenses increased as a result of the previously discussed food and beverage revenue increases.



Other Operating Expenses. Other operating expenses are comprised of expenses associated with the operation of our retail outlets, arcade and events
pavilion along with the entertainment departments production costs and professional fees. Other expenses increased primarily due to an increase in entertainment expenses, principally for professional entertainer fees, associated with our
enhanced concert schedule, both in terms of quality and the number of dates, throughout the first quarter of 2004.



Selling, General and Administrative Expenses. Selling, general and administrative expenses declined despite increases in credit card discounts,
computer hardware and software maintenance contracts, and general liability insurance premiums which were offset by declines in advertising media expenditures.



Depreciation Expense. Depreciation expense increased primarily due to depreciation associated with new capital purchases.



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Other (Income) Expense



Other (income) expense is comprised of interest income, interest expense, and other (income) expense. Interest expense decreased $0.1 million as a
result of lower average outstanding borrowings during the current period. Other (income) expense in both periods was related to the change in market value of the funded portion of our supplemental executive retirement plan.



Liquidity and Capital Resources



During the three months ended March 31, 2004, we generated cash flows from
operating activities of $0.5 million compared to $1.9 million used in operating activities during the three months ended March 31, 2003. The $2.4 million increase in cash provided by operations was primarily due to the $1.6 million increase in net
income and various changes in balance sheet accounts. The changes in these balance sheet accounts represented changes which occurred in the normal course of business. As of March 31, 2004, cash and cash equivalents were $18.5 million, sufficient for
normal operating requirements.



Cash used in investing
activities for the three months ended March 31, 2004 was $1.4 million compared to $0.5 million for the three months ended March 31, 2003, and related primarily to capital expenditures for various renovation projects and equipment purchases. During
the third quarter of 2004, we expect to begin our hotel room renovation project. The budget for this project is approximately $7.2 million, of which half will be completed in 2004, with the remainder to be completed in 2005. Including $3.6 million
for the aforementioned room renovation project, our executive committee has approved $7.1 million in capital expenditures for 2004.



There was no cash used in financing activities during the three months ended March 31, 2004. During the three months ended March 31, 2003, cash used in
financing activities totaled $2.0 million related to a prepayment in the principal amount of $2.0 million made on the term portion of our credit facility. During the same period, $3.0 million was borrowed and subsequently paid on the revolving
portion of our credit facility. For the three months ended March 31, 2004 and 2003, there were no tax payments due, and as a result, no distributions were made to our partners. In April 2004, we distributed $0.4 million to our partners in tax
distributions relating to income earned during the three months ended March 31, 2004.



In July 2003, we renewed our general and liability insurance policies which included an increase in our previous earthquake coverage. Under the new policy, the Partnership and the owner of the adjacent property,
Eldorado Resorts LLC (which is an affiliate of ELLC), have combined earthquake coverage of $500 million. In the event that an earthquake causes damage only to the Partnerships property, the Partnership is eligible to receive up to $500 million
in coverage depending on the replacement cost. However, in the event that both properties are damaged, the Partnership is entitled to receive, to the extent of any replacement cost incurred, up to $276.5 million of the coverage amount (based on our
percentage of the total property value) and up to the portion of the other $223.5 million, if any, remaining after satisfaction of a claim of Eldorado Resorts LLC. Our new insurance policy includes terrorism coverage up to $150 million.



The Partnerships partnership agreement, as currently in effect,
provides that, subject to any contractual restrictions to which the Partnership is subject, including the indenture relating to the Notes, and prior to the occurrence of a Liquidating Event, the Partnership will be required to make
distributions to its partners as follows:



(i)
The estimated taxable income of the Partnership allocable to each partner multiplied by the greater of the maximum marginal federal income tax rate applicable to individuals for such period or the maximum marginal federal income tax rate applicable
to corporations for such period (as of the date hereof both rates were 35%); provided, however, that if the State of Nevada enacts an income tax (including any franchise tax based on income), the applicable tax rate for any tax distributions
subsequent to the effective date of such income tax shall be increased by the higher of the maximum marginal individual tax rate or corporate income tax rate imposed by such tax (after reduction for the federal tax benefit for the deduction of state
taxes, using the maximum marginal federal individual or corporate rate, respectively).



(ii) Annual distributions of remaining Net Cash From Operations in proportion to the percentage interests of the partners.



(iii) Distributions of Net Cash From
Operations in amounts or at times that differ from those described in (i) and (ii) above, provided in each case that both partners agree in writing to the distribution in advance thereof.



As defined in the partnership agreement, the term Net Cash From
Operations means the gross cash proceeds received by the Partnership, less the following amounts: (i) cash operating expenses and payments of other expenses and obligations of the Partnership, including interest and scheduled principal
payments on Partnership indebtedness,



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including indebtedness owed to the partners, if any, (ii) all capital expenditures made by the Partnership, and (iii)
such reasonable reserves as the partners deem necessary in good faith and in the best interests of the Partnership to meet its anticipated future obligations and liabilities (less any release of reserves previously established, as similarly
determined).



The Partnerships partnership agreement
provides that the partners shall not be permitted or required to contribute additional capital to the Partnership without the consent of the partners, which consent may be given or withheld in each partners sole and absolute discretion.



We believe we have sufficient capital resources to meet all of
our obligations. These obligations include existing cash obligations, funding of capital commitments and servicing our debt. Our future sources of liquidity are anticipated to be from our operating cash flow and borrowings available under our
amended senior secured credit facility. See Senior Secured Credit Facility below.



Senior Secured Credit Facility



On November 4, 2003, we executed an amendment to our credit facility (as amended, the Amended Credit Facility) which reduced the revolving facility to $10.0 million, none of which was outstanding at March 31, 2004, and revised
certain covenant ratios with retroactive effect to September 30, 2003, including the maximum total debt to EBITDA ratio which we had exceeded as of September 30, 2003. Under the Amended Credit Facility, we must maintain a maximum ratio of total debt
to EBITDA of 5.00 to 1.00 for the quarters ending September 30, 2003 through March 31, 2006 and 4.75 to 1.00 for the quarter ending June 30, 2006 and thereafter. Under the Amended Credit Facility, we are also required to maintain a minimum ratio of
EBITDA to fixed charges of 1.20 to 1.00 at all times. The Amended Credit Facility is secured by a first priority security interest in substantially all of our existing and future assets, other than certain licenses which may not be pledged under
applicable law, and a first priority pledge of and security interest in all of the partnership interests in the Partnership held by its partners. The Amended Credit Facility ranks equal in right of payment to our existing and future senior
indebtedness, including the Notes, but the security interests securing our obligations under the Amended Credit Facility are senior to the security interests securing our obligations on the Notes. The Amended Credit Facility contains customary
events of default and covenants, including covenants that limit or restrict our ability to incur additional debt, create liens or other encumbrances, pay dividends or make other restricted payments, prepay subordinated indebtedness, make
investments, loans or other guarantees, sell or otherwise dispose of a portion of our assets, or make acquisitions or merge or consolidate with another entity.



At March 31, 2004, there was no indebtedness outstanding under the Amended Credit Facility. As of such date, we were in compliance with all of the
covenants in the Amended Credit Facility and we had the ability to borrow all of the $10.0 million available under the revolving portion of the Amended Credit Facility. The entire principal amount then outstanding under the Amended Credit Facility
becomes due and payable on March 31, 2007 unless the maturity date is extended with the consent of the lenders. At March 31, 2004, we were also in compliance with all of the covenants in the indenture relating to the Notes.



Critical Accounting Policies



A description of our critical accounting policies can be found in Item 7 of
our Annual Report on Form 10-K for the year ended December 31, 2003. There had been no material changes to these policies as of March 31, 2004.



Forward-Looking Statements



Certain information included in this report and other materials filed or to be filed by the Issuers with the Securities and Exchange Commission (as well
as information included in oral statements or written statements made or to be made by the Issuers) contains statements that are forward-looking within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. These statements can be identified by the fact that they do not relate strictly to historical or current facts. We have based these forward-looking statements on our current expectations about future
events. These forward-looking statements include statements with respect to our beliefs, plans, objectives, goals, expectations, anticipations, intentions, financial condition, results of operations, future performance and business, including,
current and future operations and statements that include the words may, could, should, would, believe, expect, anticipate, estimate, intend,
plan or similar expressions. Such statements include information relating to capital spending, financing sources and the effects of regulation (including gaming and tax regulation) and competition. Such forward-looking information
involves important risks and uncertainties that could significantly affect anticipated results in the future and, accordingly, such results may



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differ from those expressed in any forward-looking statements made by us or on our behalf. These risks and uncertainties
include, but are not limited to dependence on existing management, leverage and debt service (including sensitivity to fluctuations in interest rates), domestic or global economic conditions, changes in Federal or state tax laws or the
administration of such laws, changes in gaming laws or regulations (including the legalization of gaming in certain jurisdictions), expansion of gaming on Native American lands (including such lands in California), risks and uncertainties relating
to any applications for licenses and approvals under applicable laws and regulations (including gaming laws and regulations) and any further terrorist attacks similar to those that occurred September 11, 2001. Additional information concerning
potential factors that we think could cause our actual results to differ materially from expected and historical results is included under the caption Factors that May Affect Our Future Results in Item 1 of our annual report on Form 10-K
for the fiscal year ended December 31, 2003. If one or more of the assumptions underlying our forward-looking statements proves incorrect, then our actual results, performance or achievements could differ materially from those expressed in, or
implied by, the forward-looking statements contained in this report. Therefore, we caution you not to place undue reliance on our forward-looking statements. This statement is provided as permitted by the Private Securities Litigation Reform Act of
1995.



Item 3. Quantitative and Qualitative Disclosures About Market Risks



We are potentially exposed to market risk in the form of fluctuations in interest rates and their potential impact upon our variable rate debt
outstanding, if any. We evaluate our exposure to this market risk by monitoring interest rates in the marketplace and we have, on occasion, utilized derivative financial instruments to help manage this risk. To manage our exposure to counterparty
credit risk in interest rate swaps, we enter into agreements with highly rated institutions. As of March 31, 2004, we had no variable rate debt outstanding. However, under our $10.0 million revolving credit facility, we may have outstanding from
time to time up to $10.0 million of variable rate debt.



Item 4. Controls and Procedures



An evaluation was performed by management, with the participation of our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on this
evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that, as of March 31, 2004, our disclosure controls and procedures are effective to ensure that information required to be disclosed in the reports that we file or
submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in applicable rules and forms of the Securities and Exchange Commission.



There have been no changes in our internal controls over financial reporting
that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, these internal controls over financial reporting.



Part II. OTHER INFORMATION



Item 6. Exhibits and Reports on Form 8-K



(a) Exhibits.



|     |  |                                                                    
|---- |  | -------------------------------------------------------------------
|     | 
|31.1 |  | Certification of Gary L. Carano                                    
|     | 
|31.2 |  | Certification of Bruce C. Sexton                                   
|     | 
|32.1 |  | Certification of Gary L. Carano pursuant to 18 U.S.C. Section 1350 
|     | 
|32.2 |  | Certification of Bruce C. Sexton pursuant to 18 U.S.C. Section 1350



(b) Reports on Form
8-K



During the period covered by this
report, the Partnership did not file any report on Form 8-K.



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SIGNATURES



Pursuant to the
requirements of the Securities Exchange Act of 1934, the registrants have duly caused this report to be signed on their behalf by the undersigned thereunto duly authorized.





|                   |  |  |  |     |  |                                   |  |                                                       
|------------------ |  |  |  | --- |  | --------------------------------- |  | ------------------------------------------------------
|                   |  |  |  |     |  | CIRCUS AND ELDORADO JOINT VENTURE
|                   |  |  | 
|Date: May 13, 2004 |  |  |  | By: |  | /s/    GARY L. CARANO            
|                   |  |  |  |     |  |                                   |  | Gary L. Carano                                        
|                   |  |  |  |     |  |                                   |  | Chief Executive Officer (Principal Executive Officer) 
|                   |  |  | 
|Date: May 13, 2004 |  |  |  | By: |  | /s/    BRUCE C. SEXTON           
|                   |  |  |  |     |  |                                   |  | Bruce C. Sexton                                       
|                   |  |  |  |     |  |                                   |  | Chief Accounting and Financial Officer (Principal     
|                   |  |  |  |     |  |                                   |  | Financial and Accounting Officer)                     
|                   |  |  | 
|                   |  |  |  |     |  | SILVER LEGACY CAPITAL CORP.      
|                   |  |  | 
|Date: May 13, 2004 |  |  |  | By: |  | /s/    GARY L. CARANO            
|                   |  |  |  |     |  |                                   |  | Gary L. Carano                                        
|                   |  |  |  |     |  |                                   |  | Chief Executive Officer (Principal Executive Officer) 
|                   |  |  | 
|Date: May 13, 2004 |  |  |  | By: |  | /s/    BRUCE C. SEXTON           
|                   |  |  |  |     |  |                                   |  | Bruce C. Sexton                                       
|                   |  |  |  |     |  |                                   |  | Treasurer (Principal Financial and Accounting Officer)



15