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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 December 31, 2002 or

or

|o | 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 0-14050

|THE SANDS REGENT                                                  
|------------------------------------------------------------------
|                                                                  
|(exact name of registrant as specified in charter)                
|                                                                  
|Nevada                                                            
|                                                                  
|(State or other jurisdiction of incorporation or organization)    
|                                                                  
|345 North Arlington Avenue, Reno, Nevada                          
|                                                                  
|(Address of principal executive offices)                          
|                                                                  
|Registrants telephone number, including area code  (775) 348-2200

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

|Yes x | No o
|----- | ----

On February 10, 2003, the registrant had outstanding
4,922,805shares of its common stock, $.10 par value.

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THE SANDS REGENT AND SUBSIDIARIES

FORM 10-Q

TABLE OF CONTENTS

|           |                                                                                        | Page No.
|---------- | -------------------------------------------------------------------------------------- | --------
|           |                                                                                        |         
|           |                                                                                        |         
|PART I     | FINANCIAL INFORMATION                                                                  |         
|           |                                                                                        |         
|Item 1.    | Financial Statements.                                                                  | 1-3     
|           | Condensed Consolidated Statements of Operations  (unaudited)                           | 1       
|           | Condensed Consolidated Balance Sheet  (unaudited)                                      | 2       
|           | Condensed Consolidated Statements of Cash Flows  (unaudited)                           | 3       
|           | Condensed Notes to Interim Consolidated Financial Statements (unaudited)               | 4-5     
|           |                                                                                        |         
|Item 2.    | Managements Discussion and Analysis of Financial Condition and Results of Operations. | 6-10    
|           |                                                                                        |         
|Item 3.    | Quantitative and Qualitative Disclosures About Market Risk.                            | 10-11   
|           |                                                                                        |         
|PART II    | OTHER INFORMATION                                                                      |         
|           |                                                                                        |         
|Item 1.    | Legal Proceedings                                                                      | 11      
|Item 2.    | Changes in Securities                                                                  | 11      
|Item 3.    | Defaults Upon Senior Securities                                                        | 11      
|Item 4.    | Controls and Procedures                                                                | 11      
|Item 5.    | Submission of Matters to a Vote of Security Holders                                    | 11      
|Item 6.    | Other Information                                                                      | 12      
|Item 7.    | Exhibits and Reports on Form 8-K                                                       | 12      
|           |                                                                                        |         
|SIGNATURES | 12                                                                                    



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##### Table of Contents

PART I 
FINANCIAL INFORMATION

Item 1. 
Financial Statements

THE SANDS REGENT AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

|                                                |                                                                                   | THREE MONTHS ENDED DECEMBER 31, |       | SIX MONTHS ENDED DECEMBER 31, |  
|----------------------------------------------- | --------------------------------------------------------------------------------- | ------------------------------- | ----- | ----------------------------- | -
|                                                |                                                                                   |                                 |       |                               |  
|(Dollars in thousands except per share amounts) |                                                                                   | 2001                            |       | 2002                          |  
|                                                |                                                                                   |                                 |       |                               |  
|Operating revenues                              |                                                                                   |                                 |       |                               |  
|                                                | Gaming                                                                            |                                 | $     | 5,000                         |  
|                                                | Lodging                                                                           |                                 |       | 1,659                         |  
|                                                | Food and beverage                                                                 |                                 |       | 1,303                         |  
|                                                | Fuel and convenience store                                                        |                                 |       |                              |  
|                                                | Other                                                                             |                                 |       | 324                           |  
|                                                |                                                                                   |                                 |       |                               |  
|                                                |                                                                                   |                                 |       | 8,286                         |  
|                                                | Less promotional allowances                                                       |                                 |       | 751                           |  
|                                                |                                                                                   |                                 |       |                               |  
|                                                | Net revenues                                                                      |                                 |       | 7,535                         |  
|                                                |                                                                                   |                                 |       |                               |  
|Operating expenses                              |                                                                                   |                                 |       |                               |  
|                                                | Gaming                                                                            |                                 |       | 2,502                         |  
|                                                | Lodging                                                                           |                                 |       | 978                           |  
|                                                | Food and beverage                                                                 |                                 |       | 787                           |  
|                                                | Fuel and convenience store                                                        |                                 |       |                              |  
|                                                | Other                                                                             |                                 |       | 161                           |  
|                                                | Maintenance and utilities                                                         |                                 |       | 793                           |  
|                                                | General and administrative                                                        |                                 |       | 1,762                         |  
|                                                | Depreciation and amortization                                                     |                                 |       | 780                           |  
|                                                |                                                                                   |                                 |       |                               |  
|                                                |                                                                                   |                                 | 7,763 |                               |  
|                                                |                                                                                   |                                 |       |                               |  
|Income (loss) from operations                   |                                                                                   |                                 | (228  | )                             |  
|                                                |                                                                                   |                                 |       |                               |  
|Other income (expense)                          |                                                                                   |                                 |       |                               |  
|                                                | Interest and other income                                                         |                                 |       | 60                            |  
|                                                | Interest expense                                                                  |                                 |       | (276                          | )
|                                                | Gain (loss) on disposal of property and equipment, and abandonment of new project |                                 |       | 53                            |  
|                                                |                                                                                   |                                 |       |                               |  
|                                                |                                                                                   |                                 | (163  | )                             |  
|                                                |                                                                                   |                                 |       |                               |  
|Net income (loss) before income taxes           |                                                                                   |                                 | (391  | )                             |  
|Income tax (provision) benefit                  |                                                                                   |                                 | 139   |                               |  
|                                                |                                                                                   |                                 |       |                               |  
|Net income (loss)                               |                                                                                   | $                               | (252  | )                             | $
|                                                |                                                                                   |                                 |       |                               |  
|Net income (loss) per share                     |                                                                                   |                                 |       |                               |  
|                                                | Basic                                                                             |                                 | $     | (0.06                         | )
|                                                | Diluted                                                                           |                                 |       | (0.06                         | )
|Weighted average of shares outstanding          |                                                                                   |                                 |       |                               |  
|                                                | Basic                                                                             |                                 |       | 4,525,722                     |  
|                                                | Diluted                                                                           |                                 |       | 4,525,722                     |  

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

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THE SANDS REGENT AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEET (unaudited)

|(Dollars in thousands)                                                              |                                                | JUNE 30, 2002 |        | DECEMBER 31, 2002 |  
|----------------------------------------------------------------------------------- | ---------------------------------------------- | ------------- | ------ | ----------------- | -
|                                                                                    |                                                |               |        |                   |  
|ASSETS                                                                              |                                                |               |        |                   |  
|Current assets                                                                      |                                                |               |        |                   |  
|                                                                                    | Cash and cash equivalents                      |               | $      | 5,628             |  
|                                                                                    | Short-term investments                         |               |        | 20                |  
|                                                                                    | Accounts receivable, net of allowance          |               |        | 517               |  
|                                                                                    | Note receivable, sale of subsidiaries          |               |        | 180               |  
|                                                                                    | Inventories                                    |               |        | 716               |  
|                                                                                    | Federal income tax refund receivable           |               |        | 369               |  
|                                                                                    | Prepaid expenses and other assets              |               |        | 1,253             |  
|                                                                                    |                                                |               |        |                   |  
|                                                                                    | Total current assets                           |               |        | 8,683             |  
|                                                                                    |                                                |               |        |                   |  
|Property and equipment                                                              |                                                |               |        |                   |  
|                                                                                    | Land                                           |               |        | 8,506             |  
|                                                                                    | Buildings and improvements                     |               |        | 40,148            |  
|                                                                                    | Equipment, furniture and fixtures              |               |        | 20,345            |  
|                                                                                    | Construction in progress                       |               |        | 346               |  
|                                                                                    |                                                |               |        |                   |  
|                                                                                    |                                                |               | 69,345 |                   |  
|                                                                                    | Less accumulated depreciation and amortization |               |        | 31,811            |  
|                                                                                    |                                                |               |        |                   |  
|                                                                                    | Property and equipment, net                    |               |        | 37,534            |  
|                                                                                    |                                                |               |        |                   |  
|Other assets                                                                        |                                                |               |        |                   |  
|                                                                                    | Note receivable, sale of subsidiaries, net     |               |        | 144               |  
|                                                                                    | Goodwill                                       |               |        | 10,950            |  
|                                                                                    | Other intangibles                              |               |        | 1,356             |  
|                                                                                    | Other                                          |               |        | 477               |  
|                                                                                    |                                                |               |        |                   |  
|                                                                                    | Total other assets                             |               |        | 12,927            |  
|                                                                                    |                                                |               |        |                   |  
|                                                                                    | Total assets                                   |               | $      | 59,144            |  
|                                                                                    |                                                |               |        |                   |  
|LIABILITIES AND STOCKHOLDERS EQUITY                                                |                                                |               |        |                   |  
|Current liabilities                                                                 |                                                |               |        |                   |  
|                                                                                    | Accounts payable                               |               | $      | 3,154             |  
|                                                                                    | Accrued salaries, wages and benefits           |               |        | 997               |  
|                                                                                    | Other accrued expenses                         |               |        | 241               |  
|                                                                                    | Deferred federal income tax liability          |               |        | 222               |  
|                                                                                    | Current maturities of long-term debt           |               |        | 849               |  
|                                                                                    |                                                |               |        |                   |  
|                                                                                    | Total current liabilities                      |               |        | 5,463             |  
|Long-term debt                                                                      |                                                |               | 19,026 |                   |  
|Deferred federal income tax liability                                               |                                                |               | 1,047  |                   |  
|                                                                                    |                                                |               |        |                   |  
|                                                                                    | Total liabilities                              |               |        | 25,536            |  
|                                                                                    |                                                |               |        |                   |  
|Common stock, $.10 par value, 20,000,000 shares authorized, 7,325,805 shares issued |                                                |               | 733    |                   |  
|                                                                                    | Additional paid-in capital                     |               |        | 13,916            |  
|                                                                                    | Retained earnings                              |               |        | 41,317            |  
|                                                                                    |                                                |               |        |                   |  
|                                                                                    |                                                |               | 55,966 |                   |  
|                                                                                    | Treasury stock, at cost; 2,403,000 shares      |               |        | (22,358           | )
|                                                                                    |                                                |               |        |                   |  
|                                                                                    | Total stockholders equity                     |               |        | 33,608            |  
|                                                                                    |                                                |               |        |                   |  
|Total liabilities and stockholders equity                                          |                                                | $             | 59,144 |                   | $
|                                                                                    |                                                |               |        |                   |  
|                                                                                    |                                                |               |        |                   |  

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

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THE SANDS REGENT AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)

|                                               |                                                                                  | SIX MONTHS ENDED DECEMBER 31, |       
|---------------------------------------------- | -------------------------------------------------------------------------------- | ----------------------------- | ------
|                                               |                                                                                  |                               |       
|(Dollars in thousands)                         |                                                                                  | 2001                          |       
|                                               |                                                                                  |                               |       
|Operating Activities                           |                                                                                  |                               |       
|                                               | Net income                                                                       |                               | $     
|                                               | Adjustment to reconcile net income to net cash provided by operating activities: |                               |       
|                                               | Depreciation and amortization                                                    |                               |       
|                                               | Loss on abandonment of new project                                               |                               |       
|                                               | (Gain) loss on disposal of property and equipment                                |                               |       
|                                               | Change in operating assets and liabilities:                                      |                               |       
|                                               | (Increase) decrease in accounts receivable                                       |                               |       
|                                               | (Increase) decrease in inventories                                               |                               |       
|                                               | (Increase) decrease in prepaid expenses and other current assets                 |                               |       
|                                               | Increase in other assets                                                         |                               |       
|                                               | Decrease in accounts payable                                                     |                               |       
|                                               | Increase (decrease) in other accrued expenses                                    |                               |       
|                                               | Change in federal income taxes payable/receivable                                |                               |       
|                                               | Change in deferred federal income taxes                                          |                               |       
|                                               |                                                                                  |                               |       
|Net cash provided by operating activities      |                                                                                  |                               | 1,179 
|                                               |                                                                                  |                               |       
|Investing Activities                           |                                                                                  |                               |       
|                                               | Payments received on notes receivable                                            |                               |       
|                                               | Acquisitions of property and equipment                                           |                               |       
|                                               | Payment of accounts payable for prior year purchases of property and equipment   |                               |       
|                                               | Proceeds from sale of assets                                                     |                               |       
|                                               |                                                                                  |                               |       
|Net cash used in investing activities          |                                                                                  | $                             | (1,469
|                                               |                                                                                  |                               |       
|Financing Activities                           |                                                                                  |                               |       
|                                               | Payments on long-term debt                                                       |                               |       
|                                               |                                                                                  |                               |       
|Net cash used in financing activities          |                                                                                  |                               | (155  
|                                               |                                                                                  |                               |       
|Decrease in cash and cash equivalents          |                                                                                  |                               | (445  
|Cash and cash equivalents, beginning of period |                                                                                  |                               | 10,150
|                                               |                                                                                  |                               |       
|Cash and cash equivalents, end of period       |                                                                                  | $                             | 9,705 
|                                               |                                                                                  |                               |       
|Supplemental cash flow information:            |                                                                                  |                               |       
|                                               | Property and equipment acquired by accounts payable                              |                               | $     
|                                               | Interest paid, net of amount capitalized                                         |                               | $     
|                                               | Federal income taxes paid                                                        |                               | $     
|                                               |                                                                                  |                               |       

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

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THE SANDS REGENT AND SUBSIDIARIESNOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) THREE AND SIX MONTHS ENDED DECEMBER 31, 2002 AND 2001

NOTE 1 - BASIS OF
PRESENTATION

The accompanying Consolidated Financial Statements include the accounts of The Sands Regent (the Company) and its wholly-owned subsidiaries:  Zante, Inc.
(Zante) a Nevada corporation and Last Chance, Inc. (Last Chance), a Nevada corporation.  Zante owns and operates the Sands Regency Casino/Hotel (Sands Regency) in downtown Reno, Nevada.  Last Chance owns
and operates the Gold Ranch Casino and R.V. Resort in Verdi, Nevada, and California Prospectors, Ltd.(California Prospectors), a Nevada limited liability company which operates the California Lottery station. Together, Last Chance and
California Prospectors are presented as (Gold Ranch).

These statements should be read in connection with the 2002 Annual Report filed with the Securities and Exchange Commission as
Exhibit 13 to the Companys Form 10-K for the year ended June 30, 2002.  The accounting policies utilized in the preparation of the financial information herein are the same as those summarized in the 2002 Annual Report.

The Consolidated Balance Sheet at June 30, 2002, has been taken from the audited financial statements at that date.  The interim consolidated financial information is unaudited.  In the opinion of
management, all adjustments and normally recurring accruals necessary to present fairly the financial condition of the Company as of December 31, 2002, and the results of operations and cash flows for the three months and six months ended December
31, 2002 and 2001 have been included. Interim results of operations are not necessarily indicative of the results of operations for the full year.

NOTE 2 - EARNINGS PER SHARE

The weighted average number of shares outstanding for the calculation of diluted earnings per share for the six month period ended December 31, 2002, include the dilutive effect of Company stock options to
purchase common stock. Options to purchase 22,500 shares were not included in the calculation because the exercise price exceeded the average market price. The dilutive effect of Company stock options was not used in the calculation of earnings per
share for the quarters ended December 31, 2002, and 2001, because using them would have an antidilutive effect due to the Company reporting a loss for the period.

NOTE 3 -
ACQUISITION

On June 1, 2002, Last Chance completed an acquisition of certain assets (the Acquired Assets) of Prospector Gaming Enterprises, Inc. (PGE), a Nevada
corporation, pursuant to an Asset Purchase Agreement, dated as of December 27, 2001. Further, the members interest in California Prospectors was also acquired by Last Chance pursuant to the Members Interest Purchase and Sales Agreement,
dated December 27, 2001.

The purchase price for the Acquired Assets consisted of $2.6 million in cash, 377,083 shares of common stock of The Sands Regent, a promissory note in the amount of $5.6
million made by Last Chance in favor of PGE, and $5.6 million of assumed debt, which was refinanced.  The cash paid in connection with the transaction came from invested cash of the Company and borrowings by the Company under a 10-year
revolving loan with the Reno Corporate Lending Division of Nevada State Bank.   A complete disclosure of the Gold Ranch asset acquisition is presented in the Companys 2002 Annual Report.

As a result of the Gold Ranch transaction, the Company added Goodwill and Other intangibles to its balance sheet, specifically broken down as follows:  Goodwill, $11 million; Grandfathered in gaming location,
$861 thousand; Tradename/Trademark, $485 thousand; and Customer database, $10 thousand.  All Goodwill and Other Intangibles have been determined by the Company to have indefinate lives, and therefore are not being amortized.

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THE SANDS REGENT AND SUBSIDIARIES NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) THREE AND SIX MONTHS ENDED DECEMBER 31, 2002
AND 2001

NOTE 4- RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In December 2002, the Financial Accounting Standards Board (FASB)
issued Statement of Financial Accounting Standards(SFAS) No. 148, Accounting for Stock-Based Compensation - Transition and Disclosure, an amendment of FASB Statement No. 123 to provide alternative methods of transition for a
voluntary change to the fair value based method of accounting for stock-based employee compensation.  In addition, SFAS No. 148 amends the disclosure requirements of SFAS No. 123 to require prominent disclosures in both annual and interim
financial statements about the method of accounting for stock-based employee compensation and the effect of the method used on reported results.  The amendments to the transition and transition and disclosure provisions are effective for
financial statements for fiscal year sending after December 15, 2002 with early adoption encouraged.  The Company does not anticipate making a change to the fair value based method of accounting for stock-based employee compensation, and does
not anticipate that the adoption of the annual and interim disclosure requirements of SFAS No. 148 will have a material impact on the consolidated financial statements.

NOTE 5 - BUSINESS
SEGMENTS

The Company reports business segment information based on geographic location.  The following is a breakdown of relevant data by location.  (Dollars in
thousands)

|                                                              |                                   | THREE MONTHS ENDED DECEMBER 31, |       | SIX MONTHS ENDED DECEMBER 31, |  
|------------------------------------------------------------- | --------------------------------- | ------------------------------- | ----- | ----------------------------- | -
|                                                              |                                   |                                 |       |                               |  
|                                                              |                                   | 2001                            |       | 2002                          |  
|                                                              |                                   |                                 |       |                               |  
|Gross revenues less promotional allowances                    |                                   |                                 |       |                               |  
|                                                              | Sands Regency Casino/Hotel        |                                 | $     | 7,535                         |  
|                                                              | Gold Ranch Casino and R.V. Resort |                                 |       |                              |  
|                                                              |                                   |                                 |       |                               |  
|Total consolidated gross revenues less promotional allowances |                                   | $                               | 7,535 |                               | $
|                                                              |                                   |                                 |       |                               |  
|Operating profit (loss)                                       |                                   |                                 |       |                               |  
|                                                              | Sands Regency Casino/Hotel        |                                 | $     | (167                          | )
|                                                              | Gold Ranch Casino and R.V. Resort |                                 |       |                              |  
|                                                              | Corporate costs                   |                                 |       | (61                           | )
|                                                              |                                   |                                 |       |                               |  
|Total consolidated operating profit (loss)                    |                                   | $                               | (228  | )                             | $
|                                                              |                                   |                                 |       |                               |  
|Depreciation and amortization                                 |                                   |                                 |       |                               |  
|                                                              | Sands Regency Casino/Hotel        |                                 | $     | 780                           |  
|                                                              | Gold Ranch Casino and R.V. Resort |                                 |       |                              |  
|                                                              |                                   |                                 |       |                               |  
|Total consolidated depreciation and amortization              |                                   | $                               | 780   |                               | $
|                                                              |                                   |                                 |       |                               |  

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THE SANDS REGENT AND SUBSIDIARIES MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS THREE AND SIX MONTHS ENDED
DECEMBER 31, 2002 AND 2001

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

Managements Discussion and Analysis of Financial Condition and Results of
Operations will be directed at continuing operations.  On June 1, 2002, the Company acquired the Gold Ranch Casino and R.V. Resort (Gold Ranch) on Interstate80 in Verdi, Nevada.  The unaudited consolidated financial results for
the three and six months ended December 31, 2002, include results of operations for Gold Ranch.  Year-over-year and quarter-to-quarter comparisons are affected by this acquisition.

Three and
six months ended December 31, 2002, as compared to the three and six months ended December 31, 2001

CONSOLIDATED RESULTS   For the three months ended December 31, 2002, the
Companys operating revenues less promotional allowances increased from $7.5 million to $12.7 million, or 68% from the three months ended December 31, 2001.  For the six month period ended December 31, 2002, the Companys net
operating revenues increased from $16.5million to $28.5 million, or 72% from the same period in 2001.  The large increase in revenues were due primarily to the acquisition and consolidation of Gold Ranch operations into the Company.

Consolidated income from operations was $55 thousand for the three months ended December 31, 2002, a $283 thousand improvement from the $228 thousand operating loss reported in the three months ended December
31, 2001.  For the six months ended December 31, 2002, consolidated operating income was $2.5 million, a 262% increase over the $687 thousand reported in the same period in 2001.

The Company
posted a consolidated net loss of $234 thousand, or 5 cents per share, for the three months ended December 31, 2002.  This compared favorably to the net loss of $252 thousand, or 6 cents per share, posted in the same three months of 2001. 
For the six months ended December 2002, the Company posted net income of $1.1 million, or 22 cents per share (21 cents diluted), exceeding the $216 thousand net income, or 5 cents per share, earned in the six months ended December 31,
2001.

SANDS REGENCY RENO   In the three months ended December 31, 2002, the Sands Regency posted gross revenues less promotional allowances of $7.6 million, a slight increase over the $7.5
million posted in the same three months of 2001. Total casino revenues for the quarter were flat to last year at $5 million.  Revenues for the current year quarter tracked quite favorably to the comparative quarter of the prior year until
December, when the traditionally soft month was negatively impacted by untimely storms in the Sierra Nevada, which disrupted travel on I-80; and by a New Years holiday which fell mid-week.

In
the six months ended December 31, 2002, the Sands Regency posted gross revenues less promotional allowances of $17.5 million, a 5.8% increase over the $16.5 million posted in the same six months of 2001.  Casino revenues increased $696
thousand, or 6.9%, for the current year accounting for most of the increase.  Specifically, table games revenue increased $199 thousand, or 10.9%, and slot machine revenue increased $406 thousand, or 4.6%.  Hotel room occupancy was up 6.9%
for the six month period, consistent with the casino revenue increase.

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THE SANDS REGENT AND SUBSIDIARIES MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS THREE AND SIX MONTHS ENDED
DECEMBER 31, 2002 AND 2001

The Sands Regency posted an operating loss of $182 thousand in the quarter ended December 31, 2002, as compared to a $167 thousand operating loss in the same quarter
of 2001.  The winter months are the seasonally slow period for Reno area hotel/casinos.  For the six month period ended December 31, 2002, income from operations increased to $1.6 million, from $687 thousand, an increase of $923 thousand
over the six months ended December 31, 2001. Casino costs were slightly lower in the current six month period as compared to the same period in 2001, $4.9 million versus $5.0 million, in spite of the revenue gains. The cost savings were primarily
the result of a lower cost of complimentary rooms, food, beverage, and merchandise given to casino customers.   Additionally, capital investments in new slot machine-related technology in the last year has proven to be convenient for
the customer and requires fewer labor hours.  Utility costs increased for the three and six months ended December 31, 2002 by $54 thousand and $86 thousand, respectively, due to higher charges per kilowatt. General and administrative costs for
the Sands Regency increased $76 thousand, or 4.4%, for the three months ended December 31, 2002, due to a combination of items including higher legal expenses, property insurance, service contacts, and real estate taxes.  However, for the six
months ended December 31, 2002, general and administrative costs are still favorable to the prior year by $33 thousand, or 1.0%, due primarily to labor cost savings.

GOLD RANCH VERDI  Gold Ranch
had gross revenues less promotional allowances of $5.1 million for the quarter ended December 31, 2002 and $11.0 million for the six months ended December 31, 2002.  The Company acquired Gold Ranch in June 2001, so there are no comparable
revenues for the prior year.  The Gold Ranch property has a high volume ARCO gas station and convenience store, which can greatly influence total revenues by a change in the price of gasoline.  Revenues from the gas station and convenience
store accounted for $3.3 million of the $5.1 million in the three month period ended December 31, 2002, and $7.1 million of the $11.0 million in the six month period ended December 31, 2002.  The next highest revenue component, slot machine
revenue, accounted for $1.3 million and $2.8 million of the total revenues in the three and six month periods ended December 31, 2002.  Operating income for Gold Ranch was $351 thousand for the quarter ended, and $1.1 million for the six months
ended December 31, 2002.  These performances met the expectations of management.

CORPORATE COSTS  Corporate costs, including public company reporting and related legal and accounting fees,
were $114 thousand and $200 thousand in the three and six months ended December 31, 2002, respectively.   This was higher than the $42 thousand and $127 thousand realized in the three and six months ended December 31, 2001, due primarily
to incremental costs associated with the addition of Gold Ranch and to additional costs associated with SEC public company disclosure requirements.

INTEREST INCOME AND EXPENSE  
Interest expense net of interest income was $317 thousand and $664 thousand for the three and six month periods ended December 31, 2002, respectively.  This represents an increase of $101 thousand and $222 thousand over the net interest expense
reported in the three and six month periods ending December 31, 2001.  The Companys debt balance has increased from $10 million as of December 31, 2001, to $16.8 million at December 31, 2002, a direct result of the Gold Ranch
acquisition.

GAIN (LOSS) ON DISPOSITION OF ASSETS/ PROJECT ABANDONMENT   In the three and six month periods ended December 31, 2002, the Company posted net losses of $75 thousand and
$146 thousand, respectively, due primarily to the early disposition of slot machines and the write down of a prospective new venture in Minden, Nevada, a project which is no longer actively being pursued.   In the comparable three and six
month periods of 2001, the Company posted net gains on disposition of assets of $53 thousand and $64 thousand, primarily the result of proceeds on an insurance claim.

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##### Table of Contents

THE SANDS REGENT AND SUBSIDIARIES MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS THREE AND SIX MONTHS ENDED
DECEMBER 31, 2002 AND 2001

EBITDAR

EBITDAR increased from $612 thousand in the three months ended December 31, 2001, to $1.1
million in the three months ended December 31, 2002.  For the six months ended December 31, 2002, EBITDAR increased to $4.6 million from $2.4million in same period of 2001.   EBITDAR includes earnings before depreciation and
amortization, interest expense, income taxes, rent, and any gain (loss) on the disposal of property.  EBITDAR is not a calculation determined pursuant to generally accepted accounting principles and is not an alternative to operating income or
net income and is not a measure of liquidity. Since not all companies calculate this measure in the same manner, the Companys EBITDAR measure may not be comparable to similarly titled measures reported by other companies. The Company presents
EBITDAR as a supplemental disclosure to facilitate a more complete analysis of the Companys financial performance.   The Company believes that this disclosure enhances the understanding of the financial performance of a company with
substantial interest expense, depreciation and amortization.  Historically, the Company reported EBITDA data.   With the Gold Ranch acquisition, which includes a substantial real property rent component, the Company
believes EBITDAR provides a more accurate depiction of the Companys ability to service debt and satisfy capital needs.  Moreover, if the option of the Company to purchase the Gold Ranch real property is exercised, which can happen at the
Companys sole discretion, the rental expense would be available for other uses by the Company.  The calculation of EBITDAR to net income is as follows (dollars in thousands):

|                  |                                                                    | Three months ended December 31, |      | Six months ended December 31, |  
|----------------- | ------------------------------------------------------------------ | ------------------------------- | ---- | ----------------------------- | -
|                  |                                                                    |                                 |      |                               |  
|                  |                                                                    | 2001                            |      | 2002                          |  
|                  |                                                                    |                                 |      |                               |  
|Net income (loss) |                                                                    |                                 | (252 | )                             |  
|                  | Interest expense                                                   |                                 |      | 276                           |  
|                  | Income tax expense                                                 |                                 |      | (139                          | )
|                  | (Gain) loss on disposal of property and abandonment of new project |                                 |      | (53                           | )
|                  | Rent and management fees                                           |                                 |      |                              |  
|                  | Depreciation and amortization                                      |                                 |      | 780                           |  
|                  |                                                                    |                                 |      |                               |  
|EBITDAR           |                                                                    |                                 | 612  |                               |  

Capital resources and liquidity

The Companys working capital decreased from $3.2 million at June 30, 2002 to approximately $2.7 million at December 31,2002.  The Companys cash and cash equivalents decreased from $5.6 million at June 30,
2002, to $4.1 million at December 31, 2002. The primary use of cash was in financing activities as the Company reduced long term debt by $3.0 million.  Additionally, cash used in investing activities was $1.5 million, $1.1 million of which
represents completed payments on a large capital outlay for slot machine product upgrades.  Cash flow from operations generated $3.0 million during the six month period.  As of December 31, 2002, the Company had unused credit lines under
its revolving credit facility of $5.5 million.

At December 31, 2002, the Company believes that its cash funds, cash generated from operations, and available borrowing capacity will be sufficient to
fund its operations, meet current debt obligations, and fulfill its capital expenditure obligations; however, the Companys operations are subject to financial, economic, competitive, regulatory, and other factors, many of which are beyond its
control.  If the Company is unable to generate sufficient cash flow, it could be required to adopt one or more alternatives, such as reducing, delaying, or eliminating planned capital expenditures, selling assets, restructuring debt, or
obtaining additional equity capital.

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##### Table of Contents

THE SANDS REGENT AND SUBSIDIARIES MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS THREE AND SIX MONTHS ENDED
DECEMBER 31, 2002 AND 2001

Commitments and Contingencies

The following table summarizes the Companys contractual obligations as of
December 31, 2002.   Other than those identified as item (1) and (2) below, the Company has no off-balance sheet obligations.

|                     |  | Total |            | Less than 1 year |   | 1 - 3 years |  | 4 - 5 years |           | After 5 years |  
|-------------------- |  | ----- | ---------- | ---------------- | - | ----------- |  | ----------- | --------- | ------------- | -
|                     |  |       |            |                  |   |             |  |             |           |               |  
|Long term debt       |  | $     | 16,829,339 |                  | $ | 806,125     |  | $           | 1,913,143 |               | $
|Operating leases (1) |  |       | 5,414,583  |                  |   | 575,000     |  |             | 1,150,000 |               |  
|Other (2)            |  |       | 1,898,562  |                  |   | 189,010     |  |             | 406,230   |               |  
|                     |  |       |            |                  |   |             |  |             |           |               |  
|                     |  | $     | 24,142,484 |                  | $ | 1,570,135   |  | $           | 3,469,373 |               | $
|                     |  |       |            |                  |   |             |  |             |           |               |  

|(1) | Represents contractual lease obligations on real property in connection with the Gold Ranch acquisition agreement.  Amounts reflect a minimum base payment schedule.  The
lease is subject to escalation based on the property meeting certain revenue thresholds.  Management does not believe these thresholds will be met without significant expansion of the gaming facilities.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | Represents management fees due in connection with the R.V. Park at Gold Ranch.  The table reflects a scheduled 20% increase effective June 1, 2003, in accordance with the
management agreement.  Additionally, future amounts payable are subject to adjustment based on changes in interest rates.                                                                                

Cautionary note regarding forward looking
statements

This Annual Report on Form 10-K includes forward-looking statements intended to qualify for the safe harbor from liability established by the Private Securities
Litigation Reform Act of 1995.  You can identify these statements by the fact that they do not relate strictly to historical or current facts.  These statements contains words such as may, will, project,
might, expect, believe, anticipate, intend, could, would, estimate, continue or pursue, or the negative or other variations
thereof or comparable terminology.  In particular, they include statements relating to, among other things, future actions, strategies, future performance, and future financial results.  We have based these forward-looking statements on
our current expectations and projections about future events.

We caution the reader that forward-looking statements involve risks and uncertainties that cannot be predicted or quantified and,
consequently, actual results may differ materially from those expressed or implied by such forward-looking statements. Such risks and uncertainties include, but are not limited to, the following factors as well as other factors described from time
to time in our reports filed with the Securities and Exchange Commission:

| | the effect of economic, credit and capital market conditions on the economy in  general, and on gaming and hotel companies in particular; companies in particular;                                                                   
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  |                                                                                                                                                                                                                                      
| | our ability to timely and cost effectively integrate into our operations the companies and assets that we acquire;                                                                                                                   
|  |                                                                                                                                                                                                                                      
| | access to available and feasible financing;                                                                                                                                                                                          
|  |                                                                                                                                                                                                                                      
| | changes in laws or regulations, third party relations and approvals, and decisions of courts, regulators and governmental governmental bodies; bodies; including judicial actions,
gaming legislative action, referenda and taxation;
|  |                                                                                                                                                                                                                                      
| | abnormal gaming holds; and                                                                                                                                                                                                           
|  |                                                                                                                                                                                                                                      
| | the effects of competition, including locations of competitors and operating and market competition.                                                                                                                                 

Any
forward-looking statements are made pursuant to the Private Securities Litigation Reform Act of 1995 and, as such, speak only as of the date made.  We undertake no obligation to publicly update any forward-looking statements, whether as a
result of new information, future events or otherwise.  We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise.

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THE SANDS REGENT AND SUBSIDIARIES MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS THREE AND SIX MONTHS ENDED
DECEMBER 31, 2002 AND 2001

Critical Accounting Policies and Estimates

The Company prepares its consolidated financial statements
in conformity with generally accepted accounting principles in the United States of America.  Certain of the Companys policies, including the estimated lives assigned to the Companys assets, the determination of bad debt, self
insurance reserves, asset impairment, calculation of income tax liabilities, and the purchase price allocation made in connection with the acquisition of Gold Ranch, requires that the Company apply significant judgment in defining the appropriate
assumptions for calculating financial estimates.  By their nature, these judgments are subject to an inherent degree of uncertainty.  The Companys judgments are based on historical experience, terms of existing contracts,
observations of trends in the industry, information provided by customers and information available from other outside sources, as appropriate. There can be no assurance that actual results will not differ from Company estimates.  To provide an
understanding of the methodologies applied, the Companys significant accounting policies are discussed where appropriate in this discussion and analysis.

Other factors
affecting current and future results

CALIFORNIA NATIVE AMERICAN GAMING   A constitutional amendment approved by the California voters allowing the expansion of Native American
casinos in California continues to have an impact on casino revenues in Nevada in general, and many analysts have predicted the impact will be more significant on the Reno-Tahoe market.  The extent of this impact is difficult to predict, but
the Company believes the impact will be mitigated to an extent due to the Companys emphasis on Reno area residents as a significant base of its business.  However, if other Reno area casinos suffer business losses due to increased
pressure from California casinos, they may intensify their marketing efforts to Reno area residents as well.

DOWNTOWN RENO RAILROAD TRENCH   Leaders in the City of Reno government and
local business persons have led an effort to dig a trench through downtown Reno for the purpose of constructing a below-grade rail transport corridor.  The project is formally known as ReTRAC  (Reno Transportation Railroad Access
Corridor).  Currently, Union Pacifics railroad tracks dissect downtown Reno, as well as the Sands parking facilities.  There was considerable opposition to this project, even after the contract to build the trench
had been awarded and work had begun.  However, it now appears likely to the Company that the trench will be built.   Utility relocation is currently underway and large scale escavation is anticipated to begin in the fall of
2003.

Recent estimates have the trench project taking from 4 to 5 years to be completed.   The Company has been informed that over300 valuable parking spaces will be unavailable during the
construction.  A small number of spaces will be permanently lost.   The law requires that the Sands be given alternate parking or compensation for spaces permanently or temporarily lost due to the project.

The effect of trench construction on downtown Renos business levels, and specifically the business levels of the Sands, is hard to quantify, as any potential downside due to customer inconvenience could
be offset by opportunities, such as the effect this major construction project will have on the Reno area economy.   In light of these uncertainties, the Company feels no assurance can be given that this project will not have an adverse
material impact on the business levels of its downtown Reno property.

Item 3. 
Quantitative and Qualitative Disclosures About Market Risk

The Companys long-term debt is variable relative to changes in interest rates.  Specifically, the
interest rate of the Companys primary debt, a reducing, revolving credit facility through Nevada State Bank, is currently fixed at 7.17% per annum.  However, effective June 1, 2007, the interest rate will be adjusted to a new five year
fixed rate at 2.40% plus the five year U.S. Dollar Swap market rate.    At the time of the rate adjustment, the maximum principal balance of this obligation will be $8.5 million.  Accordingly, a 1% rate adjustment at that time
will have a maximum impact to the Company of $85 thousand per year.  Additionally, the interest rate of the Companys subordinated debt, with a principal balance of $5.1 million at December 31, 2002,

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THE SANDS REGENT AND SUBSIDIARIES MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS THREE AND SIX MONTHS ENDED
DECEMBER 31, 2002 AND 2001

varies directly with a change in the Prime index.  A full percentage point change in the Prime index will have a maximum yearly financial impact of less than $51
thousand, declining as principal is paid down. This subordinated debt is limited to a maximum increase or decrease of 1% per year and 3% over the term of the note.  Finally, terms of the Companys R.V. Park management agreement with PGE,
referenced as (2) in the Contracts and Contingency section of this Report, state that the Company pay monthly to PGE an amount equal to PGEs debt service on the underlying R.V. Park note, which varies directly with changes in the Prime
index.  Further, effective on the first anniversary date, the management fee increases to 120% of that monthly debt service for the remaining life of the agreement.  The financial impact to the Company of a full one percent increase in the
Prime index is less than $25 thousand per year.  The company does not use interest rate derivative instruments to manage exposure to interest rate changes.  A more complete discussion of these debt instruments is included in the
Companys 2002 Annual Report.

PART II 
OTHER INFORMATION

Item 1. 
Legal Proceedings

The Company is party to various lawsuits, which have arisen in the normal course of its business.  At the time of this filing, the liability arising
from unfavorable outcomes of lawsuits is not expected to have a material impact on the Companys financial condition or financial results.

Item 2. 
Changes in Securities

Not applicable

Item 3. 
Defaults Upon Senior Securities

Not applicable

Item 4. 
Controls and Procedures

The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the
Companys Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SECs rules and forms, and that such information is accumulated and communicated to the Companys management,
including its Chief Executive Officer and Principal Accounting Officer, as appropriate, to allow timely decisions regarding required disclosure.  In designing and evaluating the disclosure controls and procedures, management recognized that any
controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily was required to apply its judgment in evaluating the cost-benefit
relationship of possible controls and procedures.

Within 90 days prior to the date of this report, the Company carried out an evaluation, under the supervision and with the participation of the
Companys management, including the Companys Chief Executive Officer and Principal Accounting Officer, of the effectiveness of the design and operation of the Companys disclosure controls and procedures.  Based on the
foregoing, the Companys Chief Executive Officer and Principal Accounting Officer concluded that the Companys disclosure controls and procedures were effective.

There have been no
significant changes in the Companys internal controls or in other factors that could significantly affect the internal controls subsequent to the date the Company completed its evaluation.

Item 5. 
Submission of Matters to a Vote of Security Holders

Not applicable

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##### Table of Contents

THE SANDS REGENT AND SUBSIDIARIES

PART II  OTHER INFORMATION 
(continued)

Item 6. 
Other Information

None

Item 7. 
Exhibits and Reports on Form 8-K

|Exhibit 99.1 | Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                    
|------------ | ----------------------------------------------------------------------------------------------------------------------------
|             |                                                                                                                             
|Exhibit 99.2 | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002,                         
|             |                                                                                                                             
|Exhibit 99.3 | Certification of Chief Operating and Principal Accounting Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned thereunto duly authorized.

|                        |     | THE SANDS REGENT                                                    
|----------------------- | --- | --------------------------------------------------------------------
|                        |     | (Registrant)                                                        
|                        |     |                                                                     
|Date: February 11, 2003 | By: | /S/ FERENCB. SZONY                                                  
|                        |     |                                                                     
|                        |     | Ferenc B. Szony, President and Chief Executive Officer              
|                        |     |                                                                     
|Date: February 11, 2003 | By: | /S/ ROBERTJ. MEDEIROS                                               
|                        |     |                                                                     
|                        |     | Robert J. Medeiros, Chief Operating and Principal Accounting Officer

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