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UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
 Washington, D.C.
    20549
   Form 10-Q
   (Mark one)þ

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934For the quarterly period ended
    September 30, 2006oro

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period
    from          
    to   Commission File Number:
    333-118149
   American Casino &
    Entertainment Properties LLC
 (Exact name of registrant as
    specified in its charter)
  Delaware(State or other
    jurisdiction of
    incorporation or organization)

20-0573058(I.R.S. Employer
    Identification No.)s2000 Las Vegas Boulevard
    South
    Las Vegas, NV(Address of principal
    executive offices)

89104(Zip
    Code)   (702) 380-7777
 (Registrants telephone number, including area code)
   (Former name, former address and
    former fiscal year, if changed since last report)
   þ o
  Rule 12b-2
 o o þ
  Rule 12b-2 o þ




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TABLE OF
    CONTENTS
  PagePART I

FINANCIAL
    INFORMATIONItem 1.  Unaudited
    Condensed Consolidated Financial Statements


2Condensed
    Consolidated Balance Sheets as of September 30, 2006
    (unaudited) and December 31, 2005


2Condensed
    Consolidated Statements of Income for the three months ended
    September 30, 2006 and September 30, 2005
    (unaudited)


3Condensed
    Consolidated Statements of Income for the nine months ended
    September 30, 2006 and September 30, 2005
    (unaudited)


4Condensed
    Consolidated Statements of Cash Flows for the nine months ended
    September 30, 2006 and September 30, 2005
    (unaudited)


5Notes to Condensed
    Consolidated Financial Statements (unaudited)


6Item 2.  Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations


10Item 3.  Quantitative
    and Qualitative Disclosures About Market Risk


17Item 4.  Controls
    and Procedures


17PART II

OTHER
    INFORMATIONItem 1A.  Risk
    Factors


19Item 6.  Exhibits


20EX-31.1: CERTIFICATIONEX-31.2: CERTIFICATIONEX-32.1: CERTIFICATIONEX-32.2: CERTIFICATION   1




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PART I.  FINANCIAL
    INFORMATION  ITEM 1.
    Unaudited
    Condensed Consolidated Financial Statements AMERICAN
    CASINO & ENTERTAINMENT PROPERTIES LLC
    CONDENSED CONSOLIDATED BALANCE SHEETS As of


As ofSeptember 30, 2006


December 31, 2005(Unaudited)(In thousands)ASSETSCurrent Assets:Cash and cash equivalents

$
56,009


$
108,316Cash and cash
    equivalents  restricted


268



504Investments  restricted


3,408



2,828Accounts receivable, net


5,624



4,167Related party receivables


216



971Deferred income taxes


2,305



2,305Other current assets


13,986



12,092Total Current Assets


81,816



131,183Property and equipment, net


435,876



319,505Deferred financing costs, net


6,024



6,397Deferred income taxes


36,540



37,172Customer list, net


3,151



Total Other Assets


45,715



43,569Total Assets

$
563,407


$
494,257LIABILITIES AND MEMBERS
    EQUITYCurrent Liabilities:Accounts payable

$
6,109


$
4,352Accrued expenses


24,102



22,582Accrued payroll and related
    expenses


13,413



11,042Current portion of capital lease
    obligation


490



473Total Current Liabilities


44,114



38,449Long-Term Liabilities:Long-term debt, less current
    portion


260,000



215,000Capital lease obligations, less
    current portion


2,454



2,825Other


5,831



5,885Total Long-Term Liabilities


268,285



223,710Total Liabilities


312,399



262,159Commitments and ContingenciesMembers Equity:Members equity


251,008



232,098Total Members Equity


251,008



232,098Total Liabilities and
    Members Equity

$
563,407


$
494,257     2




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AMERICAN
    CASINO & ENTERTAINMENT PROPERTIES LLC



CONDENSED
    CONSOLIDATED STATEMENTS OF INCOME  Three Months EndedSeptember 30,


September 30,2006


2005(Unaudited)(In thousands)Revenues:Casino

$
56,466


$
45,195Hotel


19,698



14,976Food and beverage


22,166



17,524Tower, retail and other


9,689



9,360Gross Revenues


108,019



87,055Less promotional allowances


8,287



5,274Net Revenues


99,732



81,781Costs and Expenses:Casino


21,738



15,856Hotel


9,591



7,183Food and beverage


16,211



13,489Other operating expenses


4,663



3,913Selling, general and administrative


30,232



21,268Depreciation and amortization


7,692



6,021Pre-opening costs


455



Loss (gain) on sale of assets


246



(3
)Total Costs and Expenses


90,828



67,727Income From
    Operations


8,904



14,054Other Income
    (Expense):Interest income


400



469Interest expense


(5,536
)


(4,559
)Total Other Expense, net


(5,136
)


(4,090
)Income Before Income
    Taxes


3,768



9,964Provision for income taxes


862



3,438Net Income

$
2,906


$
6,526    3




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AMERICAN
    CASINO & ENTERTAINMENT PROPERTIES LLC



CONDENSED
    CONSOLIDATED STATEMENTS OF INCOME  Nine Months EndedSeptember 30,


September 30,2006


2005(Unaudited)(In thousands)Revenues:Casino

$
156,074


$
136,715Hotel


55,759



46,481Food and beverage


60,514



52,492Tower, retail and other


27,308



26,785Gross Revenues


299,655



262,473Less promotional allowances


20,854



16,345Net Revenues


278,801



246,128Costs and Expenses:Casino


57,261



47,156Hotel


24,342



20,050Food and beverage


44,276



38,823Other operating expenses


12,676



11,625Selling, general and administrative


75,838



59,953Depreciation and amortization


20,550



17,194Pre-opening costs


1,904



Loss (gain) on sale of assets


246



(24
)Total Costs and Expenses


237,093



194,777Income From
    Operations


41,708



51,351Other Income
    (Expense):Interest income


1,967



992Interest expense


(15,382
)


(13,659
)Total Other Expense, net


(13,415
)


(12,667
)Income Before Income
    Taxes


28,293



38,684Provision for income taxes


9,383



13,386Net Income

$
18,910


$
25,298    4




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AMERICAN
    CASINO & ENTERTAINMENT PROPERTIES LLC



CONDENSED
    CONSOLIDATED STATEMENTS OF CASH FLOWS  Nine Months EndedSeptember 30,


September 30,2006


2005(Unaudited)(In thousands)Cash Flows From Operating
    Activities:Net income

$
18,910


$
25,298Adjustments to reconcile net
    income to net cash provided by operating activities:Depreciation and amortization


20,550



17,194Loss (gain) on sale or disposal of
    assets


246



(24
)Provision for deferred income taxes


632



8,174Changes in operating assets and
    liabilities:Restricted cash


236



(54
)Accounts receivable, net


442



(226
)Other assets


63



1,303Accounts payable and accrued
    expenses


809



(6,331
)Other


(54
)


Net Cash Provided By Operating
    Activities


41,834



45,334Cash Flows From Investing
    Activities:Increase in
    investments  restricted


(580
)


(282
)Acquisition of property and
    equipment


(28,681
)


(20,993
)Acquisition of Flamingo Laughlin,
    net of cash acquired


(109,906
)


(Increase) decrease in related
    party receivables


755



(723
)Proceeds from sale of property and
    equipment


105



42Net Cash Used in Investing
    Activities


(138,307
)


(21,956
)Cash Flows From Financing
    Activities:Debt issuance and deferred
    financing costs


(480
)


Proceeds from line of credit


60,000



Payments on line of credit


(15,000
)


Payments on capital lease
    obligation


(354
)


(335
)Net Cash Provided By (Used in)
    Financing Activities


44,166



(335
)Net increase (decrease) in cash
    and cash equivalents


(52,307
)


23,043Cash and cash
    equivalents  beginning of period


108,316



75,161Cash and Cash
    Equivalents  end of period

$
56,009


$
98,204Supplemental Disclosure of Cash
    Flow Information:Cash paid during the period for
    interest

$
18,433


$
17,113Cash paid during the period for
    income taxes

$
11,650


$
4,000    5




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AMERICAN
    CASINO & ENTERTAINMENT PROPERTIES LLC



NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited)  (Continued)  Note 1.
    The
    Company        Note 2.
    Basis of
    Presentation  Form 10-K No. 333-118149).
    Principles
    of Consolidation
    Recently
    Issued Accounting Pronouncements
   6




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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited)  (Continued)
         Note 3.
    Related
    Party Transactions  out-of-pocket
      Note 4.
    Long-term
    Debt   7




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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited)  (Continued)
   Note 5.
    Non-guarantor
    Subsidiaries    Note 6.
    Legal
    Proceedings    Note 7.
    Acquisitions    Land

$
13,000Building


92,615Equipment


2,685Customer list


3,406Deposits


18Accrued vacation expense


(1,809
)Total Purchase Price


109,915Cash


6,028Accounts receivable


5Other current assets


1,121Equipment


36Accrued liabilities


(3,065
)Total Working Capital


4,125Total Amount Paid

$
114,040       Three Months EndedSeptember 30,2006


2005(In thousands)Net revenues

$
99,732


$
109,485Net income

$
2,906


$
7,965   8




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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited)  (Continued)
   Nine Months EndedSeptember 30,2006


2005(In thousands)Net revenues

$
322,682


$
330,429Net income

$
22,395


$
30,571    9




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Item 2.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations  Form 10-K
  Overview
        Casino


Number of


Number


NumberSquare


Hotel


of


ofFootage


Rooms


Slots


Table GamesStratosphere


80,000



2,444



1,221



49Arizona Charlies Decatur


52,000



258



1,368



15Arizona Charlies Boulder


47,000



303



1,063



15Aquarius


57,000



1,907



1,021



42    10




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Results
    of Operations
  Three
    Months Ended September 30, 2006 Compared to Three Months
    Ended September 30, 2005
  Three Months EndedSeptember 30,IncludingAquarius



Excluding Aquarius2006



2006


2005


% Change(In millions)Income Statement
    Data:Revenues:Casino

$
56.5



$
42.2


$
45.2



(6.6
)%Hotel


19.7




15.4



15.0



2.7
%Food and beverage


22.1




17.9



17.5



2.3
%Tower, retail and other


9.7




8.8



9.4



(6.4
)%Gross revenues


108.0




84.3



87.1



(3.2
)%Less promotional allowances


8.3




5.6



5.3



5.7
%Net revenues


99.7




78.7



81.8



(3.8
)%Costs and expenses:Casino


21.7




16.1



15.9



1.3
%Hotel


9.6




7.2



7.2



0.0
%Food and beverage


16.2




13.0



13.5



(3.7
)%Other operating expenses


4.7




3.9



3.9



0.0
%Selling, general and administrative


30.4




22.1



21.2



4.2
%Pre-opening costs


0.5












Depreciation and amortization


7.7




6.3



6.0



5.0
%Total costs and expenses


90.8




68.6



67.7



1.3
%Income from operations

$
8.9



$
10.1


$
14.1



(28.4
)%     Gross
    Revenues
    Casino
    Revenues
   11




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Non-Casino
    Revenues
        Promotional
    Allowances
    Operating
    Expenses
           12




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Interest
    Expense
    Nine
    Months Ended September 30, 2006 Compared to Nine Months
    Ended September 30, 2005
  Nine Months EndedSeptember 30,IncludingAquarius



Excluding Aquarius2006



2006


2005


% Change(In millions)Income Statement
    Data:Revenues:Casino

$
156.1



$
134.2


$
136.7



(1.8
)%Hotel


55.8




49.2



46.5



5.8
%Food and beverage


60.5




54.0



52.5



2.9
%Tower, retail and other


27.3




25.8



26.8



(3.7
)%Gross revenues


299.7




263.2



262.5



0.3
%Less promotional allowances


20.9




16.8



16.4



2.4
%Net revenues


278.8




246.4



246.1



0.1
%Costs and expenses:Casino


57.3




48.7



47.2



3.2
%Hotel


24.3




21.0



20.1



4.5
%Food and beverage


44.3




39.3



38.8



1.3
%Other operating expenses


12.7




11.4



11.6



(1.7
)%Selling, general and administrative


76.0




63.9



59.9



6.7
%Pre-opening costs


1.9












Depreciation and amortization


20.6




18.3



17.2



6.4
%Total costs and expenses


237.1




202.6



194.8



4.0
%Income from operations

$
41.7



$
43.8


$
51.3



(14.6
)%     Gross
    Revenues
    Casino
    Revenues
   13




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Non-Casino
    Revenues
        Promotional
    Allowances
    Operating
    Expenses
           14




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Interest
    Expense
    Financial
    Condition
  Liquidity
    and Capital Resources
         15




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Contractual
    Commitments
  Form 10-K
  Recently
    Issued Accounting Pronouncements
     16




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Forward-Looking
    Statements
  Form 10-K
  We warn you that forward-looking statements are only
    predictions. Actual events or results may differ as a result of
    risks that we face. Forward-looking statements speak only as of
    the date they were made and we undertake no obligation to update
    them.
  Item 3.
    Quantitative
    and Qualitative Disclosures About Market Risk        Item 4.
    Controls
    and Procedures  Rule 13a-15(e) 15d-15(e).
     17




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18




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PART II.  OTHER
    INFORMATION  Item 1A.
    Risk
    Factors  Form 10-K
  We cannot guarantee that we will be able to recover our
    investment made in connection with the acquisition of the
    Aquarius, and we may have difficulties combining the operations
    of the Aquarius with our existing operations.
            Our operating results for the nine months ended
    September 30, 2006 have been adversely affected by a number
    of factors that have affected and may continue to affect results
    in 2006.
   19




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Item 6.
    Exhibits  Regulation S-K
 20




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SIGNATURES
    American
    Casino & Entertainment Properties
    LLC
  By:
    /s/  Denise
    Barton   Senior Vice President, Chief Financial Officer,
 Treasurer and Secretary
 (Principal Financial and Accounting Officer)
   21




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Exhibits Index
  ExhibitNo.

Description31
.1

Certification of Principal
    Executive Officer pursuant to Section 302(a) of the
    Sarbanes-Oxley Act of 2002.31
.2

Certification of Principal
    Financial Officer pursuant to Section 302(a) of the
    Sarbanes-Oxley Act of 2002.32
.1

Certification of Chief Executive
    Officer pursuant to Section 906 of the Sarbanes-Oxley Act
    of 2002.32
.2

Certification of Chief Financial
    Officer pursuant to Section 906 of the Sarbanes-Oxley Act
    of 2002.