<PAGE>   1
                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    FORM 10-Q




(X)  Quarterly report pursuant to Section 13 or 15(d) of the Securities 
     Exchange Act of 1934

     For the quarterly period ended  March 31,1997 
                                     -------------

                                       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 0-14050
                       -------


                                THE SANDS REGENT
--------------------------------------------------------------------------------
               (exact name of registrant as specified in charter)


                 Nevada                                   88-0201135
-----------------------------------------             -------------------
     (State or other jurisdiction of                   (I.R.S. Employer
     incorporation or organization)                   Identification No.)


345 North Arlington Avenue, Reno, Nevada                    89501 
-----------------------------------------             -------------------
(Address of principal executive offices)                  (zip code)


Registrant's telephone number, including area code  (702) 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 
                                       -----     -----

On May 13, 1997, the registrant had outstanding 4,498,722 shares of its common
stock, $.05 par value.




<PAGE>   2

                      THE SANDS REGENT AND SUBSIDIARIES

                                    FORM 10-Q

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                               Page No.
                                                               --------
<S>                                                            <C>     
PART I   FINANCIAL INFORMATION                                              
                                                                          
Item 1.  Financial Statements.                                  1 - 7         
                                                                          
         Consolidated Statements of Operations                    1           
                                                                              
         Consolidated Balance Sheets                            2 - 3         
                                                                              
         Consolidated Statements of Cash Flows                  4 - 5         
                                                                              
         Notes to Interim Consolidated Financial Statements     6 - 7         
                                                                          
Item 2.  Management's Discussion and Analysis of Financial             
           Condition and Results of Operations.                 8 - 14        
                                                                          
PART II  OTHER INFORMATION                                                 
                                                                          
Item 1.  Legal Proceedings.                                      15           
                                                                          
Item 2.  Changes in Securities.                                  15           
                                                                          
Item 3.  Defaults Upon Senior Securities.                        15           
                                                                          
Item 4.  Submission of Matters to a Vote of                               
           Security Holders.                                     15           
                                                                          
Item 5.  Other Information.                                      15           
                                                                          
Item 6.  Exhibits and Reports on Form 8-K.                       15           
                                                                          
                                                                          
SIGNATURES                                                       16           
</TABLE>







<PAGE>   3

                          PART I  FINANCIAL INFORMATION

Item 1.  Financial Statements.

                        THE SANDS REGENT AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
 (Dollars in thousands,                        THREE MONTHS                         NINE MONTHS
 except per share amounts)                    ENDED MARCH 31,                     ENDED MARCH 31,
                                       -----------------------------       -----------------------------
                                          1996              1997              1996              1997
                                       -----------       -----------       -----------       -----------
<S>                                    <C>               <C>               <C>               <C>
Operating revenues:
  Gaming                               $    11,318       $    10,069       $    32,648       $    31,757
  Lodging                                    1,742             1,631             7,090             5,797
  Food and beverage                          1,993             1,885             5,923             5,853
  Other                                      1,054               331             1,817             1,086
                                       -----------       -----------       -----------       -----------
                                            16,107            13,916            47,478            44,493
Less complimentary lodging, food
  and beverage included above                  807               732             2,086             2,173
                                       -----------       -----------       -----------       -----------
                                            15,300            13,184            45,392            42,320
                                       -----------       -----------       -----------       -----------
Operating costs and expenses:
  Gaming                                     5,833             5,106            16,455            16,527
  Lodging                                    1,152             1,123             3,835             3,701
  Food and beverage                          1,610             1,411             4,898             4,753
  Other                                        157               149               532               481
  Maintenance and utilities                  1,040             1,155             3,440             4,036
  General and administrative                 3,349             3,527             9,721            10,714
  Depreciation and amortization                911               940             2,710             2,820
                                       -----------       -----------       -----------       -----------
                                            14,052            13,411            41,591            43,032
                                       -----------       -----------       -----------       -----------
Income (loss) from operations                1,248              (227)            3,801              (712)
                                       -----------       -----------       -----------       -----------
Other income (deductions):
  Interest and other income                    143                84               455               722
  Interest and other expense                  (586)             (438)           (1,828)           (1,429)
                                       -----------       -----------       -----------       -----------
                                              (443)             (354)           (1,373)             (707)
                                       -----------       -----------       -----------       -----------
Income (loss) before income taxes              805              (581)            2,428            (1,419)
Provision (benefit) for
  income taxes                                 261              (210)              700              (543)
                                       -----------       -----------       -----------       -----------
Net income (loss)                      $       544       ($      371)      $     1,728       ($      876)
                                       ===========       ===========       ===========       ===========
Net income (loss) per share            $       .12       ($      .08)      $       .38       ($      .19)
                                       ===========       ===========       ===========       ===========
Weighted average shares
  outstanding                            4,498,722         4,498,722         4,498,722         4,498,722
                                       ===========       ===========       ===========       ===========
</TABLE>

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


                                      -1-
<PAGE>   4


                        THE SANDS REGENT AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS


<TABLE>
<CAPTION>
(Dollars in thousands)                             JUNE 30,    MARCH 31,
                                                    1996         1997
                                                   --------    ---------
<S>                                                <C>          <C>
                               ASSETS

CURRENT ASSETS:
  Cash and cash equivalents                        $11,357      $ 5,862
  Short-term investments                               200          250
  Accounts and notes receivable less allow-
    ance for possible losses of $107 and $111          400          430
  Inventories                                          789          654
  Prepaid federal income taxes                         141        1,078
  Prepaid expenses and other assets                    980        1,477
                                                   -------      -------
      Total current assets                          13,867        9,751

PROPERTY AND EQUIPMENT:
  Land                                               8,095        8,093
  Buildings, ship and improvements                  45,377       45,667
  Equipment, furniture and fixtures                 21,762       22,380
  Construction in progress                             231        2,425
                                                   -------      -------
                                                    75,465       78,565
  Less accumulated depreciation
    and amortization                                28,051       30,285
                                                   -------      -------
                                                    47,414       48,280

OTHER ASSETS:
  Deferred federal income tax asset                    900          517
  Note receivable                                    1,244        1,239
  Other                                                886          362
                                                   -------      -------
                                                     3,030        2,118
                                                   -------      -------

      Total assets                                 $64,311      $60,149
                                                   =======      =======
</TABLE>









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


                                      -2-
<PAGE>   5


                        THE SANDS REGENT AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS


<TABLE>
<CAPTION>
(Dollars in thousands)                            JUNE 30,       MARCH 31,
                                                    1996           1997
                                                  --------       --------
<S>                                               <C>            <C>
                       LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
  Accounts payable                                $  2,282       $  2,137
  Accrued salaries, wages and benefits               1,687          1,691
  Other accrued expenses                             1,376          1,497
  Deferred federal income tax liability                126            305
  Current maturities of long-term debt              10,789          8,083
                                                  --------       --------
      Total current liabilities                     16,260         13,713

LONG-TERM DEBT                                      14,816         14,096

OTHER                                                   19             --

STOCKHOLDERS' EQUITY:
  Preferred stock, $.10 par value, 5,000,000
    shares authorized, none issued                      --             --
  Common stock, $.05 par value, 20,000,000
    shares authorized, 6,898,722 shares
    issued                                             345            345
  Additional paid-in capital                        13,074         13,074
  Retained earnings                                 42,152         41,276
                                                  --------       --------
                                                    55,571         54,695

  Treasury stock, at cost, 2,400,000 shares        (22,355)       (22,355)
                                                  --------       --------
      Total stockholders' equity                    33,216         32,340
                                                  --------       --------
      Total liabilities and stockholders'
        equity                                    $ 64,311       $ 60,149
                                                  ========       ========
</TABLE>











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


                                      -3-
<PAGE>   6


                       THE SANDS REGENT AND SUBSIDIARIES

                     CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
(Dollars in thousands)                              NINE MONTHS ENDED
                                                        MARCH 31,
                                                 ---------------------
                                                  1996          1997
                                                 -------       -------
<S>                                              <C>           <C>     
OPERATING ACTIVITIES:
  Net income (loss)                              $ 1,728       ($  876)
  Adjustments to reconcile net income
   (loss) to net cash provided by
   operating activities:
    Depreciation and amortization                  2,710         2,820
    (Gain) on sale of property and
      equipment                                     (494)         (314)
    (Increase) in accounts and notes
      receivable                                     (24)          (30)
    (Increase) decrease in inventories               (47)          135
    Decrease in prepaid expenses
      and other current assets                      (218)         (497)
    (Increase) in other assets                        44           116
    Increase (decrease) in accounts
      payable                                        107          (194)
    Increase (decrease) in accrued expenses         (244)          125
    (Decrease) in federal income taxes            (1,001)         (937)
    Changes in deferred federal
      income taxes                                   697           562
    (Decrease) in other liabilities                  (28)          (19)
                                                 -------       -------
NET CASH PROVIDED BY OPERATING ACTIVITIES          3,230           891
                                                 -------       -------
INVESTING ACTIVITIES:
  Purchase of short-term investments                (583)          (50)
  Sale and maturity of short-term
    investments                                    1,941            --
  Payments received on note receivable                 5             5
  Additions to property and equipment             (1,732)       (2,566)
  Proceeds from sale of property and
    equipment                                        697           476
                                                 -------       -------
NET CASH PROVIDED BY (USED IN)
  INVESTING ACTIVITIES                               328        (2,135)
                                                 -------       -------
</TABLE>









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


                                      -4-
<PAGE>   7


                       THE SANDS REGENT AND SUBSIDIARIES

               CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)

<TABLE>
<CAPTION>
(Dollars in thousands)                             NINE MONTHS ENDED
                                                       MARCH 31,
                                                -----------------------
                                                  1996           1997
                                                --------       --------
<S>                                             <C>            <C>
FINANCING ACTIVITIES:
  Payment of accounts payable for prior
    period purchases of property and
    equipment                                        (98)            --
  Issuance of long-term debt                         375            728
  Payments on long-term debt                      (1,863)        (4,979)
  Payment of dividends on common stock              (675)            --
                                                --------       --------
NET CASH USED IN FINANCING ACTIVITIES             (2,261)        (4,251)
                                                --------       --------
INCREASE (DECREASE) IN CASH AND
  CASH EQUIVALENTS                                 1,297         (5,495)
CASH AND CASH EQUIVALENTS, BEGINNING OF
  PERIOD                                          10,356         11,357
                                                --------       --------
CASH AND CASH EQUIVALENTS, END OF PERIOD        $ 11,653       $  5,862
                                                ========       ========
SUPPLEMENTAL CASH FLOW INFORMATION:

  Property and equipment acquired by
    term-debt debt                                    --       $    825
                                                ========       ========
  Property and equipment acquired by
    accounts payable                                  --       $     49
                                                ========       ========
  Property and equipment acquired by
    conversion of other assets                        --       $    400
                                                ========       ========
  Interest paid, net of amount capitalized      $  1,542       $  1,195
                                                ========       ========
  Federal income taxes paid                     $  1,075             --
                                                ========       ========
</TABLE>













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


                                      -5-
<PAGE>   8


                        THE SANDS REGENT AND SUBSIDIARIES

               NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS

                   NINE MONTHS ENDED MARCH 31, 1997 AND 1996


 NOTE 1 - BASIS OF PREPARATION

      These statements should be read in connection with the 1996 Annual Report
 heretofore filed with the Securities and Exchange Commission as Exhibit 13 to
 the Registrant's Form 10-K for the year ended June 30, 1996. The accounting
 policies utilized in the preparation of the financial information herein are
 the same as set forth in such annual report except as modified for interim
 accounting policies which are within the guidelines set forth in Accounting
 Principles Board Opinion No. 28.

      The Consolidated Balance Sheet at June 30, 1996 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,
 consisting only of normal recurring accruals, necessary to present fairly the
 financial condition as of March 31, 1997 and the results of operations and cash
 flows for the three and nine months ended March 31, 1996 and 1997 have been
 included. Interim results of operations are not necessarily indicative of the
 results of operations for the full year.

      The accompanying Consolidated Financial Statements include the accounts
 of the Company and its wholly owned subsidiaries Zante, Inc.  ("Zante"),
 Patrician, Inc.  ("Patrician"), Gulfside Casino, Inc.  ("GCI") and Artemis,
 Inc.  ("Artemis"), and Gulfside Casino Partnership ("GCP") (together the
 "Company").  Patrician, GCI and Artemis are the sole partners in GCP. Zante,
 Inc. owns and operates the Sands Regency hotel/casino in Reno, Nevada and
 GCP owns and operates the Copa Casino in Gulfport, Mississippi.

 NOTE 2 - LONG-TERM DEBT

     Since December 31, 1996, the Company has been in non-compliance with the
 fixed charge coverage ratio specified in a long-term debt loan agreement
 resulting in a default under the loan agreement which permits the lender
 (banks) to accelerate the principal balance which was $11 million at March 31,
 1997. The lender has not accelerated the principal balance and, as a result,
 the Company continues to classify the principal balance as current and
 non-current in accordance with the present loan amortization schedule. The
 Company is currently in discussions with the lender.

 NOTE 3 - COMMITMENTS AND CONTINGENCIES

      In January 1997, an amended judgement was entered in Chancery Court in
 Harrison County, Mississippi requiring that GCP make monthly payments to two
 former shareholders of GCI equal to 60% of all monies not designated for normal
 operational expenses. Such payments are to continue until the judgement entered
 for such former shareholders is satisfied. Through May 1, 1997, no monies have
 been distributed by GCP and GCP has reported that no monies are available for
 distribution. The amount of the judgement against GCI consist primarily of
 notes payable, and accrued interest, due



                                      -6-
<PAGE>   9


                        THE SANDS REGENT AND SUBSIDIARIES

               NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS

                   NINE MONTHS ENDED MARCH 31, 1997 AND 1996


 NOTE 3 - COMMITMENTS AND CONTINGENCIES (continued)

 these former shareholders as presently recorded in the books and records of GCI
 and as included in the Company's consolidated balance sheet in the aggregate
 amount of approximately $7 million at March 31, 1997.

     GCI, GCP and Patrician, as joined parties to such lawsuit, have filed an
 appeal with the Mississippi Supreme Court because it is the Company's belief
 that the Chancery Court's ruling was incorrect and not supported by the facts
 or the law. Further, GCI has filed for protection under Chapter 11 of the
 United States Bankruptcy Code. GCI is taking the position that the automatic
 stay provisions under the United States Bankruptcy Code apply to all of GCI
 creditors, including the two former shareholders. A reorganization plan for GCI
 is presently being prepared.

     In February 1997, the above two former shareholders of GCI each filed
 separate lawsuits in U. S. District Court for the Southern District of
 Mississippi, Biloxi Division, against The Sands Regent and Pete Cladianos, Jr.,
 Jon N. Bengtson and David R. Wood, all officers and directors of GCI and The
 Sands Regent. Such lawsuits allege breach of various common law duties and
 contractual interference by the defendants and seek compensatory and punitive
 damages. Management, and the individual defendants, believe these legal actions
 to be without merit and will vigorously defend them.



























                                      -7-
<PAGE>   10


 ITEM 2.  Management's Discussion and Analysis of
          Financial Condition and Results of Operations.

 Results of operations - Three months ended March 31, 1997 compared to three
 months ended March 31, 1996

     In the three month period ended March 31, 1997, compared to the same three
 month period in fiscal 1996, revenues decreased to $13.2 million from $15.3
 million which consists of a decrease in revenues at the Copa Casino of
 aproximately $100,000 to $6.6 million and a decrease in revenues at the Sands
 Regency of $2.0 million to $6.6 million. For the same comparable periods,
 income from operations decreased from $1.2 million to a loss from operations of
 $227,000. Such decrease consists of a decrease in income from operations at the
 Copa Casino of approximately $279,000 to $799,000 and a decrease at the Sands
 Regency of $1.2 million to a loss from operations of $1.0 million.

       The Company incurred a net loss of $371,000 in the quarter ended March
 31, 1997, or loss per share of $.08 compared to a net income of $544,000, or
 $.12 per share, in the quarter ended March 31, 1996. The Copa Casino
 contributed approximately $364,000 to the consolidated net income in the March
 31, 1997 quarter compared to net income of $591,000 in the March 31, 1996
 quarter. For the same comparable periods, the Sands Regency incurred a net loss
 of approximately $735,000 as compared to a net loss in the prior year third
 quarter of $47,000. The declines in revenues, income from operations, net
 income (loss) and net income (loss) per share at the Sands Regency are
 primarily due to increased competition from new and expanded Reno area
 hotel/casinos and from new Las Vegas megas-resorts. Unusually poor weather
 conditions in Northern Nevada, Northern California and the Pacific Northwest,
 during the third quarter of fiscal 1997, also contributed to the decline in
 Sands Regency Revenues. The decrease in Copa Casino profitability is due to
 increases in various costs including an increase in legal fees as further
 discussed below.

     The decrease in lodging revenue of $111,000, in the third quarter of fiscal
 1997 compared to the same quarter in the prior year, is due to a decrease in
 the Sands Regency's average daily room rate from approximately $24 to $23 and a
 decrease in hotel occupancy from 83.9% to 82.2%.

     The decrease in gaming revenue of $1.2 million, in the March 1997 quarter
 versus the March 1996 quarter, is a composed of a decrease in gaming revenue
 from the Sands Regency of approximately $1.1 million and a slight decrease in
 gaming revenue from the Copa Casino of $106,000. The decrease in gaming revenue
 in Reno consists of a decrease in Sands Regency casino gaming revenue of
 approximately $1.3 million which was offset by increased gaming revenue from
 the Company's slot route operation of $124,000. The decrease in Sands Regency
 casino gaming revenue includes the reclassification of slot participation
 payouts of approximately $381,000 as a reduction in revenue instead of a cost
 and expense as classified prior to July 1996. The decrease also consists
 primarily of a decrease in slot revenue and is due to a decline per occupied
 room. In the third quarter of fiscal 1996, Sands Regency casino gaming revenue
 per occupied room was $70 as compared to $53 in the third quarter of fiscal
 1997. The increase in slot route revenue is due to the Company's acquisition of
 a slot route



                                      -8-
<PAGE>   11


 Results of operations - Three months ended March 31, 1997 compared to three
 months ended March 31, 1996 (continued)

 business in June 1996 which operates slot machines at various non-casino
 businesses (convenience stores and cocktail lounges) in the Reno area.

      The decline in food and beverage revenue of $108,000, in the March 1997
 quarter versus the March 1996 quarter, is primarily attributable to the Sands
 Regency operation. The related decrease in food and beverage costs and expenses
 of $199,000 is also attributable to the Sands Regency operation and represents
 a decline in various cost and expense components.

      The decrease in other revenue of $723,000, is principally due to the
 nonrecurrence of a prior year gain on the sale of a small motel owned and
 operated by the Sands Regency.

     The decrease in complimentary lodging, food and beverage, deducted from
 revenue, of $75,000 consists of a decrease in complimentary lodging at the
 Sands Regency of approximately $214,000 which has been offset by an increase in
 complimentary food and beverage of $139,000 attributable to the Sands Regency.
 The decrease in complimentary lodging is a result of Company implemented
 changes to its lodging programs and packages offered to attract and retain
 guests.

     The decrease in gaming costs and expenses of $727,000, in the quarter ended
 March 31, 1997 versus the quarter ended March 31, 1996, is primarily
 attributable to the Sands Regency and includes the reclassification of $381,000
 of slot participation payouts from an operating expense, where included through
 the December 31, 1996 quarter and prior, to a reduction of revenue. The
 decrease in Sands Regency gaming costs and expenses also includes a decrease of
 $183,000 as a result of the reclassification of custodial costs and expenses
 from gaming costs and expense, where classified through June 1996, to
 maintenance costs and expenses commencing in July 1996. The decreases, which
 also includes various other decreases aggregating approximately $244,000, were
 partially offset by additional costs and expenses associated with the new slot
 route operation of $81,000.

      The increase in maintenance and utilities costs and expenses of $115,000
 in the third quarter of fiscal 1997, as compared to the third quarter of fiscal
 1996, is attributable to the Sands Regency and consists primarily of custodial
 costs and expenses. Commencing in July 1996, custodial costs and expenses were
 included in maintenance and utilities costs and expenses. Prior to July 1996,
 such costs and expenses were included in gaming costs and expenses.

     The increase in general and administrative costs and expenses of $178,000
 is principally attributable to the Copa Casino and represents an increase in
 various cost and expense categories including increased legal and accounting
 costs.

      The decrease in interest and other income of approximately $59,000 is
 primarily due to reduced interest income from the Sands Regency as a result of
 a reduction in excess funds available for investment purposes. The decrease in
 interest and other expense of $148,000 is principally due to a principal
 reduction in an interest bearing long-term debt obligation of the Sands Regency
 in October 1996.


                                      -9-
<PAGE>   12


 Results of operations - Three months ended March 31, 1997 compared to three
 months ended March 31, 1996 (continued)

      The effective income tax rate differs from the statutory rate, in the
 current quarter, as a result of one-time differences including tax-free
 interest income and deductible tax credits.

 Results of operations - First nine months of fiscal 1997 compared to 1996

     In the nine months ended March 31, 1997, compared to the same nine months
 in fiscal 1996, revenues decreased to $42.3 million from $45.4 million as a
 result of a decrease at the Sands Regency of $4.3 million to $22.9 million
 which was offset by an increase at the Copa Casino of $1.3 million to $19.4
 million. For the same comparable periods, income from operations decreased from
 $3.8 million to a loss from operations of $712,000. Such decrease consists of
 an increase at the Copa Casino of approximately $142,000 to $2.0 million which
 was offset by a decrease from the Sands Regency of $4.7 million to a loss from
 operations of $2.7 million.

     In the same comparable nine month periods, net income also decreased from
 $1.7 million, or $.38 per share, to a net loss of $876,000 or loss per share of
 $.19. The Copa Casino contributed approximately $951,000 to the consolidated
 net income in the nine months ended March 31, 1997 compared to $871,000 in the
 same nine months of fiscal 1996. For the same comparable periods, the Sands
 Regency incurred a net loss of approximately $1.8 million as compared to net
 income in the prior year nine months of $857,000. Such declines in revenues,
 income from operations, net income (loss) and net income (loss) per share at
 the Sands Regency are primarily due to increased competition from new and
 expanded Reno area hotel/casinos and from new Las Vegas mega-resorts. Unusually
 poor weather conditions in Northern Nevada, Northern California and the Pacific
 Northwest, during the third quarter of fiscal 1997, also contributed to the
 decline in Sands Regency Revenues. The increases in Copa Casino revenues and
 profitability are due to an increase in customer counts and because operations
 were not interrupted by the threat of hurricanes as occurred in August and
 October 1995.

      The decrease in lodging revenue of $1.3 million, in the nine months ended
 March 31, 1997 compared to the same period in the prior year, is primarily due
 to a decrease in the average daily rate from approximately $33 in the nine
 months ended March 31, 1996 to $27 in the nine months ended March 31, 1997. For
 the same comparable periods, hotel occupancy was approximately the same at 83%.

     The decrease in gaming revenue of $891,000 is a result of a decrease in
 gaming revenue from the Sands Regency of approximately $2.0 million which was
 offset by an increase in gaming revenue from the Copa Casino of $1.1 million.
 The decrease in gaming revenue in Reno consists of a decrease in Sands Regency
 casino gaming revenue of $2.4 million which was offset by increased gaming
 revenue from the Company's slot route operation of $410,000. The decrease in
 Sands Regency casino gaming revenue includes the reclassification of slot
 participation payouts of approximately $381,000 as a reduction in revenue
 instead of a cost and expense as classified prior to July 1996. The decrease
 also consists primarily of a decrease in slot revenue and is due to a decline
 per occupied room. In the nine months ended



                                      -10-
<PAGE>   13


 Results of operations - First nine months of fiscal 1997 compared to 1996
 (continued)

 March 31, 1996, Sands Regency casino gaming revenue per occupied room was $72
 as compared to $61 in the comparable nine months of fiscal 1997. The increase
 in slot route revenue is due to the Company's acquisition of a slot route
 business in June 1996 which operates slot machines at various non-casino
 businesses (convenience stores and cocktail lounges) in the Reno area.

      The slight decrease in food and beverage revenue of $70,000, in the nine
 months ended March 31, 1997 versus the nine months ended March 31, 1996,
 consists of an increase from the Copa Casino of approximately $132,000 and a
 decrease from the Sands Regency of $202,000. The Sands Regency decrease
 represents a decline in food revenue per occupied from approximately $18 to
 $17.

      The decrease in other revenue of $731,000, is principally due to the
 nonrecurrence of a prior year gain on the sale of a small motel owned and
 operated by the Sands Regency.

     The slight increase in gaming costs and expenses of $72,000, in the nine
 months ended March 31, 1997 compared to the same nine months in fiscal 1996,
 consists of an increase from the Copa Casino of approxinmately $532,000 and a
 decrease from the Sands Regency of approximately $460,000. The increase in the
 Copa Casino costs and expenses is primarily attributable to the increase in
 associated gaming revenue. The decrease in Sands Regency gaming costs and
 expenses includes a decrease in custodial costs and expenses of $600,000, a
 reduction in gaming taxes and licenses of $163,000 and a decrease of $381,000
 due to the reclassification of slot participation payouts from an operating
 expense to a reduction of revenue. Custodial costs and expenses have been
 classified as maintenance costs and expenses since July 1996. Prior to July
 1996, such costs and expenses were included with gaming costs and expenses.
 These decreases in Sands Regency gaming costs and expenses have been offset by
 an increase in the cost of complimentary goods and services provided of
 $303,000, costs and expenses associated with the new slot route operation of
 $305,000 and a net increase in various other costs and expenses of
 approximately $76,000.

     The decrease in food and beverage costs and expenses of $145,000, in the
 nine months ended March 31, 1997 compared to the nine months ended March 31,
 1996, consists of a decrease from the Sands Regency of approximately $295,000
 and an increase from the Copa Casino of $150,000. The increase from the Copa
 Casino is due to a decrease in the allocation of costs and expenses to gaming
 relative to the provision of complimentary food and beverage and an increase in
 the cost of beverages provided. The decrease from the Sands Regency consists of
 an increase in the allocation of costs and expenses to gaming relative to the
 provision of complimentary food and beverage.

      The increase in maintenance and utilities costs and expenses of $596,000
 in the nine months ended March 31, 1997, compared to the nine months ended
 March 31, 1996, consists of a decrease from the Copa Casino of $149,000 and an
 increase from the Sands Regency of approximately $745,000. The decrease from
 the Copa Casino is due to the nonrecurrance of



                                      -11-
<PAGE>   14


 Results of operations - First nine months of fiscal 1997 compared to 1996
 (continued)

 the prior year hurricane preparedness costs and expenses associated with
 Hurricane Opal. The increase from the Sands Regency primarily consists of
 custodial costs and expenses of $600,000 and painting costs of $170,000.
 Commencing in July 1996, custodial costs and expenses are included in
 maintenance and utilities costs and expenses. Prior to July 1996, such costs
 and expenses were included in gaming costs and expenses. The increase in
 painting costs is due to the painting of the exterior of the Company's Reno
 facilities and the interior of the five story parking structure.

      The increase in general and administrative costs and expenses of $993,000
 consists of an increase from the Copa Casino of approximately $613,000, an
 increase from the Sands Regency of $380,000. The increase from the Copa Casino
 is attributable to various cost and expense categories including increased
 wages and benefits, and legal and accounting costs. The Sands Regency increase
 consists primarily of an increase in advertising and promotional costs of
 approximately $504,000 reduced by a decrease in property taxes of $138,000.

      The increase in interest and other income of approximately $267,000 is
 primarily due to a gain on the sale of a non-casino property in Reno. The
 decrease in interest and other expense of $399,000 is principally due to a
 principal reduction in an interest bearing long-term debt obligation of the
 Sands Regency in October 1996.

      The effective income tax rate differs from the statutory rate, in the
 current year nine month period, as a result of one-time differences including
 tax-free interest income and deductable tax credits.

     As is true for other hotel/casinos in the Reno area, demand for the
 Company's facilities declines in the winter. Operating margins and, to a lesser
 extent, revenues are lower during the second and third fiscal quarters due to
 lower room rates and a lower level of gaming play per occupied room. The Sands
 Regency is not affected as severely as many other hotel/casinos in the Reno
 area because the Company attracts high levels of group business during that
 period. This group business and the Company's flexible pricing strategy have
 historically enabled the Company to maintain relatively high levels of hotel
 occupancy. Management anticipates that the trend of experiencing lower
 operating margins in the second and third quarters of each fiscal year will
 continue.

     It appears that such seasonal trends are also applicable to the Copa
 Casino. However, because of the limited amount of time that the Copa has been
 in operation, the relatively limited amount of time that gaming has existed on
 the Mississippi gulfcoast and the rapid expansion of gaming in Mississippi and
 nearby Louisiana, the nature and extent of seasonal fluctuations, if any, are
 subject to change.

   Capital resources and liquidity

      In October 1996, the Company entered into an agreement with Wells Fargo
 Bank and Sumitomo Bank, ltd. amending certain financial covenants of its
 long-term debt loan agreement. Such amendment resulted in the Company's
 compliance with the financial covenants at June 30, 1996 and September 30,


                                      -12-
<PAGE>   15


   Capital resources and liquidity (continued)

 1996 and it was anticipated that the Company would also be in compliance
 thereafter. As consideration for such amendments, the Company made a prepayment
 on its long-term debt obligation of approximately $1.7 million which would
 otherwise have been paid on April 1, 1997 and $1.3 million which would
 otherwise have been paid on the loan maturity date in March, 2000.

     As a result of net losses attributable to Zante, Inc. dba the Sands
 Regency, the Company is, and has been, in noncompliance with the fixed charge
 coverage ratio specified in the long-term debt loan agreement at the quarters
 ending December 31, 1996 and March 31, 1997. Such noncompliance is a default
 under the loan agreement and permits the lender (banks) to accelerate the
 principal balance which was $11 million at March 31, 1997. If the lender
 accelerates the principal balance, the Company would not be in the financial
 position to repay the debt in full or on an accelerated schedule.

      The Company is currently in discussions with the lender in an attempt to
 renegotiate certain terms of the loan agreement including restructuring the
 payment schedule. At March 31, 1997, the Company estimates that all of its cash
 funds are necessary for operational purposes.

     As previously discussed in Note 3 to the Company's interim consolidated
 financial statements above, a judgement has been entered against Gulfside
 Casino, Inc. requiring certain payments by Gulfside Casino Partnership to two
 former shareholders of Gulfside Casino, Inc. At present, the circumstances
 requiring such payments, including excess monies not designated for Gulfside
 Casino Partnership operational purposes, have not been met. Further, as a
 result of the GCI filing for protection under Chapter 11 of the United States
 Bankruptcy Code, management believes that the automatic stay provisions under
 the Bankruptcy Code restrict payments to GCI creditors, including the two
 former shareholders. An Appeal of the Chancery Court amended judgement has also
 been filed with the Mississippi Supreme Court.

     In February 1997, the above two former shareholders of GCI also filed
 separate lawsuits against The Sands Regent and Pete Cladianos, Jr., Jon N.
 Bengtson and David R. Wood, all officers and directors of GCI and The Sands
 Regent, in U. S. District Court for the Southern District of Mississippi,
 Biloxi Division. Such lawsuits allege breach of various common law duties and
 contractual interference by the defendants and seek compensatory and punitive
 damages. Management, and the individual defendants, believe these legal actions
 to be without merit and will vigorously defend them.

     The outcome of these actions are not presently subject to reasonable
 estimation.

      In addition to the above lawsuit, the litigation between Gulfside Casino
 Partnership and the Mississippi State Port Authority and Mississippi Department
 of Economic and Community Development, filed in July 1996 is ongoing without
 significant changes since reported in the 1996 Annual Report. Such action could
 result in the termination of GCP's lease in October 1999 which would adversly
 affect GCP's results of operations and the Company's investment in the
 Mississippi gaming operation. At March 31, 1997, the book value of the
 Company's net investment in and advances to


                                      -13-
<PAGE>   16


   Capital resources and liquidity (continued)

 (including accrued interest) the Mississippi gaming operation was
 approximately $3.0 million.

 Cautionary statement for purposes of the "Safe Harbor" provisions of the
 Private Securities Litigation Reform Act of 1995

     The foregoing Management's Discussion and Analysis of Financial Condition
 and Results of Operations may contain various "forward-looking statements"
 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, which
 represent the Company's expectations or beliefs concerning future events.
 Statements containing expressions such as "believes," "anticipates" or
 "expects" used in the Company's press releases and periodic reports on Forms
 10-K and 10-Q filed with the Securities and Exchange previously filed periodic
 reports, including reports filed on Forms 10-K and 10-Q, are further qualified
 by important factors that could cause actual results to differ materially from
 those in the forward-looking statements. Such factors include, without
 limitation, the following: increased competition in existing markets or the
 opening of new gaming jurisdictions; a decline in the public acceptance of
 gaming; the limitation, conditioning or suspension of any of the Company's
 gaming licenses; increases in or new taxes imposed on gaming revenues or gaming
 devices; a finding of unsuitability by regulatory authorities with respect to
 the Company's officers, directors or key employees; loss or retirement of key
 executives; significant increases in fuel or transportation prices; adverse
 economic conditions in the Company's key markets; severe and unusual weather in
 the Company's key markets and adverse results of significant litigation
 matters.





























                                      -14-
<PAGE>   17


                           PART II  OTHER INFORMATION



 Item 1.  Legal Proceedings.

          NONE

 Item 2.  Changes in Securities.

          NONE

 Item 3.  Defaults Upon Senior Securities.

          NONE

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

          NONE

 Item 5.  Other information.

          NONE

 Item 6.  Exhibits and Reports on Form 8-K.

    (a)   Exhibits

          27    Financial Data Schedule

    (b)   Reports on Form 8-K:

          NONE
























                                      -15-
<PAGE>   18
                                  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: May 14, 1997                                  By  /s/ DAVID R. WOOD     
                                                     --------------------------
                                                      David R. Wood            
                                                      Executive Vice President 
                                                      and Principal Accounting 
                                                      and Financial Officer    

































                                      -16-
<PAGE>   19




                               INDEX TO EXHIBITS



<TABLE>
<CAPTION>
                                                          Sequentially
    Exhibit                                                 Numbered
    Number                                                    Page
    -------                                               ------------
      <S>    <C>                                                 <C>
      27     Financial Data Schedule.........................
</TABLE>