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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



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Form 10-Q



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|x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ---------------------------------------------------------------------------------------

FOR THE QUARTERLY PERIOD ENDED March 31, 2007.

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



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CIRCUS AND ELDORADO JOINT
VENTURE

SILVER LEGACY CAPITAL CORP.

(Exact names of registrants as specified in their charters)



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|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|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)



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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 the registrants are large accelerated filers, accelerated filers, or a non-accelerated filers. See definition of
accelerated filer and large accelerated filer in Rule 12b-2 of the Exchange Act.

(Check one): Large accelerated
filers ̈Accelerated filers ̈Non-accelerated filers  x

Indicate by check mark whether either of the registrants is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Circus and Eldorado Joint Venture    Yes ̈No  x

Silver Legacy Capital Corp.
    Yes  x    No ̈

The number of shares of Silver Legacy Capital Corp.s common stock outstanding at May 15, 2007 was 2,500. All of these shares are owned by
Circus and Eldorado Joint Venture.



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##### Table of Contents

CIRCUS AND ELDORADO JOINT VENTURE

SILVER LEGACY CAPITAL CORP.

FORM 10-Q

INDEX



|                              |  |                                                                                                              |  |     
|----------------------------- |  | ------------------------------------------------------------------------------------------------------------ |  | ----
|                              |  |                                                                                                              |  | Page
|PART I. FINANCIAL INFORMATION |  |                                                                                                             
|                              |  |                                                                                                             
|Item 1.                       |  | Financial Statements:                                                                                        |  |     
|                              |  |                                                                                                             
|                              |  | Unaudited Condensed Consolidated Balance Sheets as of March 31, 2007 and December 31, 2006                   |  | 3   
|                              |  |                                                                                                             
|                              |  | Unaudited Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2007 and 2006 |  | 4   
|                              |  |                                                                                                             
|                              |  | Unaudited Condensed Consolidated Statements of Partners Equity for the Three Months Ended March 31, 2007    |  | 5   
|                              |  |                                                                                                             
|                              |  | Unaudited Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2007 and 2006 |  | 6   
|                              |  |                                                                                                             
|                              |  | Notes to Unaudited Condensed Consolidated Financial Statements                                               |  | 7   
|                              |  |                                                                                                             
|Item 2.                       |  | Managements Discussion and Analysis of Financial Condition and Results of Operations                        |  | 10  
|                              |  |                                                                                                             
|Item 3.                       |  | Quantitative and Qualitative Disclosures About Market Risk                                                   |  | 16  
|                              |  |                                                                                                             
|Item 4.                       |  | Controls and Procedures                                                                                      |  | 17  
|                              | 
|PART II. OTHER INFORMATION    |  |                                                                                                             
|                              |  |                                                                                                             
|Item 6.                       |  | Exhibits                                                                                                     |  | 17  
|                              | 
|SIGNATURES                    |  | 18                                                                                                          



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##### Table of Contents

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, |         | December 31,
|                                       |  | 2007      |         | 2006        
|ASSETS                                 |  |           |         |              |   |        
|                                       |  |          
|CURRENT ASSETS:                        |  |           |         |              |   |        
|Cash and cash equivalents              |  | $         | 44,833  |              | $ | 47,179 
|Accounts receivable, net               |  |           | 5,181   |              |   | 6,007  
|Inventories                            |  |           | 2,093   |              |   | 2,131  
|Prepaid expenses and other             |  |           | 3,954   |              |   | 3,346  
|                                       |  |           |         |              |   |        
|Total current assets                   |  |           | 56,061  |              |   | 58,663 
|                                       |  |          
|PROPERTY AND EQUIPMENT, NET            |  |           | 253,443 |              |   | 255,769
|                                       |  |          
|OTHER ASSETS, NET                      |  |           | 8,834   |              |   | 8,897  
|                                       |  |           |         |              |   |        
|Total Assets                           |  | $         | 318,338 |              | $ | 323,329
|                                       |  |           |         |              |   |        
|                                       |  |          
|LIABILITIES AND PARTNERS EQUITY       |  |           |         |              |   |        
|                                       |  |          
|CURRENT LIABILITIES:                   |  |           |         |              |   |        
|Accounts payable                       |  | $         | 4,747   |              | $ | 6,694  
|Accrued interest                       |  |           | 1,350   |              |   | 5,413  
|Accrued and other liabilities          |  |           | 11,163  |              |   | 10,752 
|                                       |  |           |         |              |   |        
|Total current liabilities              |  |           | 17,260  |              |   | 22,859 
|                                       |  |          
|LONG-TERM DEBT                         |  |           | 159,694 |              |   | 159,679
|                                       |  |          
|OTHER LONG-TERM LIABILITIES            |  |           | 5,452   |              |   | 5,195  
|                                       |  |           |         |              |   |        
|                                       |  |          
|Total liabilities                      |  |           | 182,406 |              |   | 187,733
|                                       |  |          
|PARTNERS EQUITY                       |  |           | 135,932 |              |   | 135,596
|                                       |  |           |         |              |   |        
|                                       |  |          
|Total Liabilities and Partners Equity |  | $         | 318,338 |              | $ | 323,329
|                                       |  |           |         |              |   |        

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



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##### Table of Contents

CIRCUS AND ELDORADO JOINT VENTURE

(doing business as Silver Legacy Resort Casino)

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands)



|                                     |  |                              |        |   |      |   |        |  
|------------------------------------ |  | ---------------------------- | ------ | - | ---- | - | ------ | -
|                                     |  | Three Months Ended March 31, |       
|                                     |  | 2007                         |        |   | 2006 |  
|OPERATING REVENUES:                  |  |                              |        |   |      |   |        |  
|Casino                               |  | $                            | 19,486 |   |      | $ | 18,274 |  
|Rooms                                |  |                              | 9,969  |   |      |   | 8,910  |  
|Food and beverage                    |  |                              | 9,503  |   |      |   | 8,372  |  
|Other                                |  |                              | 1,877  |   |      |   | 1,903  |  
|                                     |  |                              |        |   |      |   |        |  
|                                     |  |                              | 40,835 |   |      |   | 37,459 |  
|Less: promotional allowances         |  |                              | (3,544 | ) |      |   | (3,332 | )
|                                     |  |                              |        |   |      |   |        |  
|Net operating revenues               |  |                              | 37,291 |   |      |   | 34,127 |  
|                                     |  |                              |        |   |      |   |        |  
|                                     |  |                             
|OPERATING EXPENSES:                  |  |                              |        |   |      |   |        |  
|Casino                               |  |                              | 10,147 |   |      |   | 10,176 |  
|Rooms                                |  |                              | 3,132  |   |      |   | 2,942  |  
|Food and beverage                    |  |                              | 6,801  |   |      |   | 5,956  |  
|Other                                |  |                              | 1,443  |   |      |   | 1,553  |  
|Selling, general and administrative  |  |                              | 8,203  |   |      |   | 7,950  |  
|Depreciation                         |  |                              | 3,364  |   |      |   | 3,140  |  
|(Gain) loss on disposition of assets |  |                              | 20     |   |      |   | (61    | )
|                                     |  |                              |        |   |      |   |        |  
|Total operating expenses             |  |                              | 33,110 |   |      |   | 31,656 |  
|                                     |  |                              |        |   |      |   |        |  
|                                     |  |                             
|OPERATING INCOME                     |  |                              | 4,181  |   |      |   | 2,471  |  
|                                     |  |                              |        |   |      |   |        |  
|                                     |  |                             
|OTHER (INCOME) EXPENSE:              |  |                              |        |   |      |   |        |  
|Interest expense, net                |  |                              | 4,253  |   |      |   | 4,258  |  
|Interest income                      |  |                              | (323   | ) |      |   | (136   | )
|Other                                |  |                              | (85    | ) |      |   | (105   | )
|                                     |  |                              |        |   |      |   |        |  
|Total other (income) expense         |  |                              | 3,845  |   |      |   | 4,017  |  
|                                     |  |                              |        |   |      |   |        |  
|                                     |  |                             
|NET INCOME (LOSS)                    |  | $                            | 336    |   |      | $ | (1,546 | )
|                                     |  |                              |        |   |      |   |        |  

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, 2007 |  | $             | 62,798 |                       | $ | 72,798 |  | $ | 135,596
|Net income               |  |               | 168    |                       |   | 168    |  |   | 336    
|                         |  |               |        |                       |   |        |  |   |        
|                         |  |               |       
|BALANCE, March 31, 2007  |  | $             | 62,966 |                       | $ | 72,966 |  | $ | 135,932
|                         |  |               |        |                       |   |        |  |   |        

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 Ended March 31, |       
|                                                                                     |  | 2007                         |        |   | 2006 |  
|CASH FLOWS FROM OPERATING ACTIVITIES:                                                |  |                              |        |   |      |   |        |  
|Net income (loss)                                                                    |  | $                            | 336    |   |      | $ | (1,546 | )
|Adjustments to reconcile net income (loss) to net cash used in operating activities: |  |                              |        |   |      |   |        |  
|Depreciation and amortization                                                        |  |                              | 3,540  |   |      |   | 3,320  |  
|Loss (gain) on disposition of assets                                                 |  |                              | 20     |   |      |   | (61    | )
|Increase in accrued pension cost                                                     |  |                              | 257    |   |      |   | 214    |  
|Changes in current assets and current liabilities:                                   |  |                              |        |   |      |   |        |  
|Accounts receivable, net                                                             |  |                              | 826    |   |      |   | 1,292  |  
|Inventories                                                                          |  |                              | 38     |   |      |   | 25     |  
|Prepaid expenses and other                                                           |  |                              | (608   | ) |      |   | 338    |  
|Accounts payable                                                                     |  |                              | (1,947 | ) |      |   | (994   | )
|Accrued interest                                                                     |  |                              | (4,063 | ) |      |   | (4,050 | )
|Accrued and other liabilities                                                        |  |                              | 411    |   |      |   | 87     |  
|                                                                                     |  |                              |        |   |      |   |        |  
|Net cash used in operating activities                                                |  |                              | (1,190 | ) |      |   | (1,375 | )
|                                                                                     |  |                              |        |   |      |   |        |  
|                                                                                     |  |                             
|CASH FLOWS FROM INVESTING ACTIVITIES:                                                |  |                              |        |   |      |   |        |  
|Proceeds from sale of assets                                                         |  |                              | 28     |   |      |   | 61     |  
|Increase in other assets                                                             |  |                              | (116   | ) |      |   | (107   | )
|Purchase of property and equipment                                                   |  |                              | (1,055 | ) |      |   | (1,308 | )
|                                                                                     |  |                              |        |   |      |   |        |  
|Net cash used in investing activities                                                |  |                              | (1,143 | ) |      |   | (1,354 | )
|                                                                                     |  |                              |        |   |      |   |        |  
|                                                                                     |  |                             
|CASH FLOWS FROM FINANCING ACTIVITIES:                                                |  |                              |        |   |      |   |        |  
|Debt issuance costs                                                                  |  |                              | (13    | ) |      |   |       |  
|                                                                                     |  |                              |        |   |      |   |        |  
|Net cash used in financing activities                                                |  |                              | (13    | ) |      |   |       |  
|                                                                                     |  |                              |        |   |      |   |        |  
|                                                                                     |  |                             
|CASH AND CASH EQUIVALENTS:                                                           |  |                              |        |   |      |   |        |  
|Net decrease for the period                                                          |  |                              | (2,346 | ) |      |   | (2,729 | )
|Balance, beginning of period                                                         |  |                              | 47,179 |   |      |   | 35,142 |  
|                                                                                     |  |                              |        |   |      |   |        |  
|Balance, end of period                                                               |  | $                            | 44,833 |   |      | $ | 32,413 |  
|                                                                                     |  |                              |        |   |      |   |        |  
|                                                                                     |  |                             
|SUPPLEMENTAL CASH FLOW INFORMATION:                                                  |  |                              |        |   |      |   |        |  
|Cash paid during period for interest                                                 |  | $                            | 8,128  |   |      | $ | 8,128  |  
|                                                                                     |  |                              |        |   |      |   |        |  

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 MGM MIRAGE and previously owned and controlled by Mandalay Resort Group (Mandalay) (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.

On
April 25, 2005, a wholly owned subsidiary of MGM MIRAGE was merged with and into Mandalay as a result of which Mandalay became a wholly owned subsidiary of MGM MIRAGE. With the consummation of the merger, MGM MIRAGE acquired Mandalays
ownership of Galleon, Inc.

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, 2007,
and the results of operations and cash flows for the three months ended March 31, 2007 and 2006. 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, 2006.

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.

Recently Issued Accounting Standards

In September 2006, the Financial Accounting Standards Board (the FASB) issued Statement No. 158, Employers Accounting for
Defined Benefit Pension and Other Postretirement Plans  an amendment of FASB Statements No. 87, 88, 106, and 132(R) (FASB 158). FASB 158 requires the full recognition, as an asset or liability, of the overfunded or underfunded
status of a company-sponsored postretirement benefit plan. Adoption of FASB 158 is effective for the Partnerships fiscal year ending December 31, 2007. We are evaluating FASB 158 and have not yet determined the impact its adoption will
have on our consolidated financial statements.



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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 the constitutional
amendment which legalized Nevada-style gaming on Native American reservations. Many existing Native American gaming facilities in northern California are modest compared to Silver Legacy. However, some Native American tribes have
established large-scale gaming facilities in California and several 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.

Under their current compacts, most Native American tribes in California may operate up to 2,000 slot machines, and up to two
gaming facilities may be operated on any reservation. However, under action taken by the National Indian Gaming Commission, gaming devices similar in appearance to slot machines, but which are deemed to be technological enhancements to bingo style
gaming, are not subject to such limits and may be used by tribes without state permission. The number of machines the tribes are allowed to operate may increase as a result of any new or amended compacts the tribes may enter into with the State of
California that receive the requisite approvals, such as has been the case with respect to a number of new or amended compacts which have been executed and approved.

In April 2007, the California Senate approved amendments to the compacts of five Native American tribes that, if approved by the California Assembly, will increase the number of slot machines permitted to be operated
by two of the tribes to 5,000 each and will increase to 7,500 the number that may be operated by each of the other three tribes. We cannot determine at this time the likelihood of the Assemblys approval of the Senates action which, if
approved, will increase the total number of slot machines at Californias 57 Native American casinos to approximately 70,000. Management believes that the increase in the number of slot machines permitted to be operated by the five tribes, if
approved by the Assembly, will not significantly impact Silver Legacys operations since the casinos operated by those tribes are located in southern California. However, similar modifications to the compacts of tribes that operate casinos in
central or northern California, where the largest number of slot machines currently permitted to be operated by a tribe is 2,700, could have a material adverse impact on our operations, depending on the number of tribes securing modification of
their compacts, the number of additional machines permitted and the locations of the properties utilizing the additional machines.

We
believe the continued growth of Native American gaming establishments could continue to place additional competitive pressure on our operations. While we cannot predict the extent of any future impact, it could be significant.

Note 3. Long-Term Debt

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



|                                                                                            |  |           |         |              |   |        
|------------------------------------------------------------------------------------------- |  | --------- | ------- | ------------ | - | -------
|                                                                                            |  | March 31, |         | December 31,
|                                                                                            |  | 2007      |         | 2006        
|101/8% Mortgage Notes due 2012 (net of unamortized discount of $306 and $321, respectively) |  | $         | 159,694 |              | $ | 159,679

On March 5, 2002, the Partnership and Capital (collectively, 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 senior secured credit facility (the Credit Facility) for $40,000,000. The
proceeds from the Notes, together with $26,000,000 in borrowings under the Credit Facility, were used to repay $150,200,000 representing all of the indebtedness outstanding under a prior 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.



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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 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 interest in the
Partnership to secure the Notes, which is junior to a pledge of such partnership interest to secure the Partnerships obligations on the 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 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 remaining balance due March 31, 2007.

The Notes and
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,
U.S. Bank, N.A. and Bank of America, N.A., executed an amendment to the Credit Facility which reduced the revolving facility to $10,000,000 and revised certain covenant ratios with retroactive effect to September 30, 2003. On June 15,
2005, the parties executed a further amendment to the Credit Facility to provide a conditional waiver of the facilitys financial covenants in respect of the quarter ended June 30, 2005, and each subsequent quarter through and including
December 31, 2005, provided that no additional credit was extended under the Credit Facility during the quarter for which the waiver was relied upon. In addition, as a condition precedent to any draw on the Credit Facility subsequent to
June 15, 2005, the Partnership must be in compliance with the Credit Facilitys financial covenants as to the then most recent fiscal quarter in respect of which the Partnership is required to deliver financial statements pursuant to
section 6.1 of the Credit Facility. For further information regarding our financial covenants, see Senior Secured Credit Facility in Item 2.

On March 2, 2006, the Partnership executed a further amendment to the Credit Facility which extended the previously granted waiver for any defaults under the Credit Facilitys covenants to cover the fiscal
quarter ended March 31, 2006 and each subsequent fiscal quarter through and including December 31, 2006, provided that no additional credit was extended under the Credit Facility during such quarters. The March 2, 2006 amendment also
waived for 2005 the covenant in Section 7.8 of the Credit Facility which then limited capital expenditures to $10,000,000 within a calendar year, which the Partnership exceeded for the year ended December 31, 2005. In addition, the
amendment raised the capital expenditure limit to $12,500,000 for future calendar years.

On March 28, 2007, an additional amendment
was executed to extend the Credit Facilitys original maturity date of March 31, 2007 for an additional year to March 31, 2008. This amendment also reduced the minimum ratio of EBITDA to fixed charges to 1.10 to 1.00 and raised the
capital expenditure limit to an aggregate of $15,000,000 in any twelve-month period. Furthermore, this amendment revised in its entirety Section 7.16 of the Credit Facility to allow for prepayments of the Notes provided certain conditions
precedent are satisfied. There was no debt outstanding under the Credit Facility at March 31, 2007. As of such date, the Partnership was in compliance with all of the covenants in the Credit Facility and had the ability to borrow on a revolving
basis all of the $10,000,000, available under the Credit Facility. As of March 31, 2007, the Partnership also was in compliance with the covenants in the indenture relating to the Notes.

Note 4. Related Parties

An affiliate of each of our
Partners owns and 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 as a result of the interests their
affiliates have in the Eldorado Hotel & Casino and Circus Circus Hotel & Casino-Reno, respectively.



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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 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, 2007 will be approximately $1,059,300, of which $265,000 had been accrued as of March 31, 2007.

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 now owned and controlled by MGM MIRAGE, 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 the second largest number of slot machines and 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, or average daily rate (ADR), are key indicators for our hotel business.

Significant Factors Affecting Results of Operations

Expansion of Native American Gaming

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. Many existing Native American gaming facilities in northern California are modest compared to Silver Legacy. However, some Native American tribes have established large-scale gaming facilities in California
and several Native American tribes have announced that they are in the process of



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expanding, developing, or are considering establishing, large-scale hotel and gaming facilities in northern California. As northern California Native
American gaming operations have expanded, we believe the increasing competition generated by these gaming operations has negatively impacted drive-in, day-trip visitor traffic from our main feeder markets in northern California.

Under their current compacts, most Native American tribes in California may operate up to 2,000 slot machines, and up to two gaming facilities may be
operated on any reservation. However, under action taken by the National Indian Gaming Commission, gaming devices similar in appearance to slot machines, but which are deemed to be technological enhancements to bingo style gaming, are not subject to
such limits and may be used by tribes without state permission. The number of machines the tribes are allowed to operate may increase as a result of any new or amended compacts the tribes may enter into with the State of California that receive the
requisite approvals, such as has been the case with respect to a number of new or amended compacts which have been executed and approved.

In April 2007, the California Senate approved amendments to the compacts of five Native American tribes that, if approved by the California Assembly, will increase the number of slot machines permitted to be operated by two of the tribes to
5,000 each and will increase to 7,500 the number that may be operated by each of the other three tribes. We cannot determine at this time the likelihood of the Assemblys approval of the Senates action which, if approved, will increase
the total number of slot machines at Californias 57 Native American casinos to approximately 70,000. Management believes that the increase in the number of slot machines permitted to be operated by the five tribes, if approved by the Assembly,
will not significantly impact Silver Legacys operations since the casinos operated by those tribes are located in southern California. However, similar modifications to the compacts of tribes that operate casinos in central or northern
California, where the largest number of slot machines currently permitted to be operated by a tribe is 2,700, could have a material adverse impact on our operations, depending on the number of tribes securing modification of their compacts, the
number of additional machines permitted and the locations of the properties utilizing the additional machines.

We believe the continued
growth of Native American establishments could continue to place additional competitive pressure on our operations. While we cannot predict the extent of any future impact, it could be significant.

Bowling Tournaments Within the Reno Market

The
National Bowling Stadium, located one block from Silver Legacy, is one of the largest bowling complexes in North America and has been selected to host multi-month tournaments in Reno two of every three years through 2018. Historically, these bowling
tournaments have attracted a significant number of visitors to the Reno market and have benefited the downtown area. In 2007, the United States Bowling Congress Open Tournament (USBC Open Tournament) began in mid-February and will
continue through June. Both men and women bowlers may participate in the USBC Open Tournament which is estimated to attract approximately 80,000 bowlers to the Reno market during the tournament period. In 2006, the United States Bowling Congress
Womens Bowling Tournament (USBC Womens Tournament) took place from mid-March through the first week of July and brought approximately 50,000 bowlers to downtown Reno.

Summary Financial Results

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



|                   |  |                                 |        |               |       |   |                                 |   |        |  
|------------------ |  | ------------------------------- | ------ | ------------- | ----- | - | ------------------------------- | - | ------ | -
|                   |  | Three monthsended March 31,2007 |        | PercentChange |       |   | Three monthsended March 31,2006 |  
|Net revenues       |  | $                               | 37,291 |               | 9.3   | % |                                 | $ | 34,127 |  
|Operating expenses |  |                                 | 33,110 |               | 4.6   |   |                                 |   | 31,656 |  
|Operating income   |  |                                 | 4,181  |               | 69.2  |   |                                 |   | 2,471  |  
|Net income (loss)  |  |                                 | 336    |               | 121.7 |   |                                 |   | (1,546 | )

Net Revenues. During the first quarter of 2007 compared to the same prior year period, net
revenues rose due to increased casino, rooms, and food and beverage revenues. We were able to achieve growth in these areas primarily as a result of the escalated visitor traffic generated in downtown Reno by the previously discussed USBC Open
Tournament.



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This tournament began in mid-February of 2007 while the USBC Womens Tournament did not commence until mid-March of 2006. In addition, a more aggressive
concert schedule combined with increased direct mail casino promotional offers also contributed to higher net revenues in 2007 compared to 2006.

Operating Income and Net Income (Loss). Operating income and net income increased during the first quarter of 2007 compared to 2006 due to higher departmental revenues combined with operational efficiencies, including lower direct
payroll as a percentage of revenues. As a result, our operating profit margin and net income during the current quarter improved significantly over the same prior year period.

Revenues

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



|                       |  |                                 |        |               |      |   |                                 |   |       
|---------------------- |  | ------------------------------- | ------ | ------------- | ---- | - | ------------------------------- | - | ------
|                       |  | Three monthsended March 31,2007 |        | PercentChange |      |   | Three monthsended March 31,2006
|Casino                 |  | $                               | 19,486 |               | 6.6  | % |                                 | $ | 18,274
|Rooms                  |  |                                 | 9,969  |               | 11.9 |   |                                 |   | 8,910 
|Food and beverage      |  |                                 | 9,503  |               | 13.5 |   |                                 |   | 8,372 
|Other                  |  |                                 | 1,877  |               | (1.4 | ) |                                 |   | 1,903 
|Promotional allowances |  |                                 | 3,544  |               | 6.4  |   |                                 |   | 3,332 

Casino Revenues.Increases in slot handle and table games drop of 6.4% and 8.0%,
respectively, drove casino revenues during the first quarter of 2007 compared to the same prior year period. The primary contributors to this growth in casino volume were the same factors benefiting overall net revenues.

Room Revenues.Our ADR and occupancy percentages were $73.86 and 79.7%, respectively, during the first quarter of 2007 compared to $68.27 and
76.8%, respectively, during the first quarter of 2006. These increases in ADR and occupancy were mainly attributable to additional bowler room nights affiliated with the USBC Open Tournament which began in mid-February of 2007. Moreover, our
enhanced concert schedule and increased casino promotional offers also generated increased room nights and room revenues during the current quarter.

Food and Beverage Revenues. Food and beverage revenues rose during the first quarter of 2007 compared to 2006 primarily due to increased restaurant guest counts in connection with the USBC Open Tournament along
with an increase in our average restaurant check. Additionally, incremental cash beverage sales associated with our new lounge, Drinx, which opened in December 2006, also contributed to the increase in food and beverage revenues during the current
quarter.

Other Revenues. Other revenues are comprised of revenues generated by our retail outlets, entertainment, events pavilion
and other miscellaneous items. The decrease in other revenues was mainly due to the absence of our events pavilion, which was located across North Virginia Street from Silver Legacy on a special events plaza previously owned by our affiliates. The
events pavilion was removed in January of 2007 to allow for the construction of a new city-owned ballroom facility on the plaza site which will be operated and managed by Silver Legacy, together with Eldorado and Circus Circus. The construction
period is estimated to be approximately one year. Several large banquet functions held in the events pavilion produced revenues during the first quarter of 2006. This decline in events pavilion revenues was partially offset by an increase in
entertainment revenues resulting from more concerts, both on-property and in the downtown Reno Events Center, during the first quarter of 2007 compared the same prior year period. Retail revenues remained flat during both periods.

Promotional Allowances. Promotional allowances, expressed as a percentage of gross revenues, decreased to 8.7% in 2007 from 8.9% in 2006. This
decrease was primarily due to a reduction in food complimentaries related to a decline in on-property special events promotions held during the first quarter of 2007 compared to the same prior year period.



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Operating Expenses

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



|                                    |  |                                 |        |               |      |    |                                 |   |       
|----------------------------------- |  | ------------------------------- | ------ | ------------- | ---- | -- | ------------------------------- | - | ------
|                                    |  | Three monthsended March 31,2007 |        | PercentChange |      |    | Three monthsended March 31,2006
|Casino                              |  | $                               | 10,147 |               | (0.3 | )% |                                 | $ | 10,176
|Rooms                               |  |                                 | 3,132  |               | 6.5  |    |                                 |   | 2,942 
|Food and beverage                   |  |                                 | 6,801  |               | 14.2 |    |                                 |   | 5,956 
|Other                               |  |                                 | 1,443  |               | (7.1 | )  |                                 |   | 1,553 
|Selling, general and administrative |  |                                 | 8,203  |               | 3.2  |    |                                 |   | 7,950 
|Depreciation                        |  |                                 | 3,364  |               | 7.1  |    |                                 |   | 3,140 

Casino Expenses. Despite revenue increases within the casino department during the first
quarter of 2007 compared to the first quarter of 2006, casino expenses experienced a slight decline during the current period. This decrease resulted mainly from significant savings in casino departmental payroll, as a percentage of casino revenues,
in addition to declines in on-property special events expenditures.

Room Expenses. Higher occupancy during the first quarter of
2007 compared to the same prior year period was the primary contributor to the increase in room expenses. However, continued improvements in our ADR, in conjunction with efforts to control housekeeping labor and supplies, resulted in a higher profit
margin in the rooms department during 2007 versus 2006.

Food and Beverage Expenses. Food and beverage expenses grew in association
with the increase in food and beverage revenues. However, a modest increase in food and beverage cost of sales, as a percentage of departmental revenues, produced a lower departmental profit margin during the first quarter of 2007 compared to 2006.

Other Operating Expenses. Other operating expenses are comprised of expenses associated with the operation of our retail outlets
and events pavilion along with the entertainment departments production costs and professional fees. Other operating expenses declined during the first quarter of 2007 compared to 2006 primarily due to a decrease in expenses associated with
the previously discussed removal of our events pavilion in January of 2007. This decrease was partially offset by increased costs associated with a more aggressive concert schedule in 2007 versus 2006.

Selling, General and Administrative Expenses. Selling, general and administrative expenses increased during the first quarter of 2007 compared to
the same prior year period principally as a result of higher general and administrative expenses including increased payroll and benefits. In addition, facilities costs, primarily payroll and building repairs and maintenance, rose during 2007 over
2006. These increases were partially offset by a slight decrease in advertising expenditures during the current quarter.

Depreciation
Expense. Depreciation expense during the first quarter of 2007 increased over the same prior year period primarily due to depreciation associated with new capital purchases.

Other (Income) Expense

Other (income) expense is comprised of net interest expense, interest income
and other. During the first quarter of 2007 compared to the same prior year period, net interest expense remained flat while interest income continued to increase due to the steady growth in our invested cash reserves. Other, in both years, 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, 2007, we used cash flows from operating activities of $1.2 million compared to $1.4
million during the three months ended March 31, 2006. The $0.2 million decrease in cash used by operations was primarily due to various changes in balance sheet accounts combined with an increase in net income during the current quarter. The
changes in these balance sheet accounts represented changes which occurred in the normal course of business. As of March 31, 2007, cash and cash equivalents were $44.8 million, which are sufficient for normal operating requirements.



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Cash used in investing activities for the three months ended March 31, 2007 was $1.1 million
compared to $1.4 million for the three months ended March 31, 2006, and related primarily to capital expenditures for various renovation projects and equipment purchases. Our executive committee has approved $12.1 million in capital
expenditures for 2007. In addition, our executive committee has approved up to an additional $3.2 million for equipment purchases for a city-owned ballroom facility currently under construction. The new ballroom will be located across from Silver
Legacy on a special events plaza which was previously owned by our affiliates and donated to the City of Reno in January of 2007.

Cash
used in financing activities was $13,000 during the three months ended March 31, 2007 and related to costs associated with the one-year extension of the maturity date of our credit facility.

In July 2006, we renewed our general and liability insurance policies. Under these policies, the Partnership and the owner of the adjacent property,
Eldorado Resorts LLC (which is an affiliate of ELLC), have combined earthquake coverage of $350 million and combined flood coverage of $225 million. In the event that an earthquake causes damage only to the Partnerships property, the
Partnership is eligible to receive up to $350 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 $220 million of the coverage amount (based on our percentage of the earthquake coverage) and up to the portion of the other $130 million, if any, remaining after satisfaction of a claim of Eldorado Resorts LLC with respect to its adjoining
property. In the event that a flood causes damage only to the Partnerships property, the Partnership is eligible to receive up to $225 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 $220 million of the coverage amount (based on our percentage of the flood coverage) and up to the portion of the other $5 million, if any,
remaining after satisfaction of a claim of Eldorado Resorts LLC with respect to its adjoining property.

Our insurance policy also includes
combined terrorism coverage up to $450 million for a certified act of terrorism and up to $250 million for a non-certified act of terrorism. In the event that a certified, or a non-certified, act of terrorism causes damage only to the
Partnerships property, the Partnership is eligible to receive up to $450 million, or $250 million, respectively, 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 $238.5 million for a certified act, or up to $132.5 million for a non-certified act, of the coverage amount (based on our percentage of the total property value) and up to the portion
of the other $211.5 million, or $117.5 million, respectively, if any, remaining after satisfaction of a claim of Eldorado Resorts LLC with respect to its adjoining property. This new policy also covers an additional property located in Shreveport,
LA which was acquired by Eldorado Resorts LLC. In the event that a certified, or a non-certified, act of terrorism causes damage to all three properties, the Partnership is entitled to receive, to the extent of any replacement cost incurred, up to
$193.5 million for a certified act, or up to $107.5 million for a non-certified act, of the coverage amount (based on our percentage of the total property value) and up to the portion of the other $256.5 million, or $142.5 million, respectively, if
any, remaining after satisfaction of the claims with respect to the other two properties.

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.



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(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, 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.

The Notes

On March 5, 2002, the Partnership and Capital issued $160,000,000 principal amount of senior secured mortgage notes due 2012 (Notes). 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 under its 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 interest in the Partnership to
secure the Notes, which is junior to a pledge of such partnership interest to secure the Partnerships obligations on the 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. At March 31, 2007, we were in compliance with all of the covenants in the indenture related to the Notes.

Senior Secured Credit Facility

We have a credit
facility (as amended, the Credit Facility) which provides a $10.0 million revolving facility. Under the Credit Facility, as currently in effect, we must maintain a maximum ratio of total debt to EBITDA of 4.75 to 1.00 and are also
required to maintain a minimum ratio of EBITDA to fixed charges of 1.10 to 1.00 at all times. The 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 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 Credit Facility are senior to the security interests securing our obligations on the Notes. The 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.

On June 15, 2005, we executed a further amendment to the Credit Facility to provide a conditional waiver of the facilitys financial covenants in respect of the quarter ended June 30, 2005, and each subsequent quarter through
and including December 31, 2005, provided that no additional credit was extended under the Credit Facility during a quarter for which a waiver was relied upon. In addition, as a condition precedent to any draw on the Credit Facility subsequent
to June 15, 2005, we must be in compliance with the Credit Facilitys financial covenants as to the then most recent fiscal quarter in respect of which we are required to deliver financial statements pursuant to the Credit Facility.



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On March 2, 2006, the Partnership executed a further amendment to the Credit Facility which extended
the previously granted waiver for any defaults under the Credit Facilitys covenants to cover the fiscal quarter ended March 31, 2006 and each subsequent fiscal quarter through and including December 31, 2006, provided that no
additional credit was extended under the Credit Facility during such quarters. The March 2, 2006 amendment also waived for 2005 the covenant in Section 7.8 of the Credit Facility which then limited capital expenditures to $10.0 million
within a calendar year, which the Partnership exceeded for the year ended December 31, 2005. In addition, the amendment raised the capital expenditure limit to $12.5 million for future calendar years.

On March 28, 2007, an additional amendment was executed to extend the Credit Facilitys original maturity date of March 31, 2007 for an
additional year to March 31, 2008. This amendment also reduced the minimum ratio of EBITDA to fixed charges to 1.10 to 1.00 and raised the capital expenditure limit to an aggregate of $15.0 million in any twelve-month period. Furthermore, this
amendment revised in its entirety Section 7.16 of the Credit Facility to allow for prepayments of the Notes provided certain conditions precedent are satisfied. There was no debt outstanding under the Credit Facility at March 31, 2007. As
of such date, the Partnership was in compliance with all of the covenants in the Credit Facility and had the ability to borrow on a revolving basis all of the $10.0 million available under the Credit Facility.

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, 2006. There had been no material changes to these policies as of March 31, 2007.

Forward-Looking Statements

Certain information
included in this report and other materials filed or to be filed by the Partnership and Capital with the Securities and Exchange Commission (as well as information included in oral statements or written statements made or to be made by them)
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 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, 2006. 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. 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 although we



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did not utilize any financial instruments during the first quarter of 2007. As of March 31, 2007, 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, 2007, 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
|------- | --------



| | (a) | Exhibits.
| | --- | ---------



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



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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 15, 2007 |  | By: |  | /s/ Gary L. Carano                                                                  |  | 
|                   |  |     |  | Gary L. Carano                                                                      |  | 
|                   |  |     |  | Chief Executive Officer (Principal Executive Officer)                               |  | 
|                   |  |     | 
|Date: May 15, 2007 |  | By: |  | /s/ Stephanie D. Lepori                                                             |  | 
|                   |  |     |  | Stephanie D. Lepori                                                                 |  | 
|                   |  |     |  | Chief Accounting and Financial Officer (Principal Financial and Accounting Officer) |  | 
|                   |  |     | 
|                   |  |     |  | SILVER LEGACY CAPITAL CORP.                                                         |  | 
|                   |  |     | 
|Date: May 15, 2007 |  | By: |  | /s/ Gary L. Carano                                                                  |  | 
|                   |  |     |  | Gary L. Carano                                                                      |  | 
|                   |  |     |  | Chief Executive Officer (Principal Executive Officer)                               |  | 
|                   |  |     | 
|Date: May 15, 2007 |  | By: |  | /s/ Stephanie D. Lepori                                                             |  | 
|                   |  |     |  | Stephanie D. Lepori                                                                 |  | 
|                   |  |     |  | Treasurer (Principal Financial and Accounting Officer)                              |  | 



18