<PAGE>
 
================================================================================

                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C.  20549

                                   FORM 10-Q

(Mark One)

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

     For the Quarterly Period Ended June 30, 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 0-26922

                              COAST RESORTS, INC.

            (Exact name of registrant as specified in its charter)


               NEVADA                                 88-0345704
(State or other jurisdiction of                    (I.R.S. Employer
 incorporation or organization)                     identification number)


4500 WEST TROPICANA AVENUE, LAS VEGAS, NEVADA              89103
  (Address of principal executive offices)               (Zip code)

                                (702) 365-7000
             (Registrant's telephone number, including area code)

                                     None
(Former name, former address and former fiscal year, if changed since last
report.)

     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
                                                  ---    ---

                     APPLICABLE ONLY TO CORPORATE ISSUERS:

     Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.

          Shares of Common Stock outstanding as of June 30, 1997:  1,494,352.94

================================================================================
<PAGE>
 
ITEM 1.  FINANCIAL STATEMENTS.

                      COAST RESORTS, INC. AND SUBSIDIARIES
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                   (amounts in thousands, except share data)
                                  (UNAUDITED)

<TABLE>
<CAPTION>
                                                       JUNE 30, DECEMBER 31,
                                                         1997      1996
                                                       -------- ------------
ASSETS
 
CURRENT ASSETS:
<S>                                                    <C>         <C>
   Cash and cash equivalents.........................  $ 20,629     $ 53,382
   Restricted cash equivalents, in escrow account....        --        8,185
   Accounts receivable, net..........................     4,142        3,659
   Other current assets..............................    16,422       13,660
                                                       --------     --------
   TOTAL CURRENT ASSETS..............................    41,193       78,886
PROPERTY AND EQUIPMENT, net..........................   292,498      286,580
OTHER ASSETS.........................................     6,147        6,780
                                                       --------     --------
                                                       $339,838     $372,246
                                                       ========     ========
LIABILITIES AND                                      
STOCKHOLDERS' EQUITY                                 
                                                     
CURRENT LIABILITIES:                                 
   Accounts payable..................................  $  7,535     $ 36,996
   Accrued liabilities...............................    26,956       23,864
   Current portion of long-term debt.................     7,561        6,781
                                                       --------     -------- 
   TOTAL CURRENT LIABILITIES.........................    42,052       67,641
                                                       --------     -------- 
LONG-TERM DEBT, less current portion.................   191,427      195,764
                                                       --------     --------
DEFERRED RENT........................................     6,968        4,929
                                                       --------     -------- 
OTHER LIABILITIES....................................     4,250        4,863
                                                       --------     --------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
   Preferred Stock, $.01 par value, 500,000 shares 
     authorized, no shares issued and outstanding....        --           --
   Common Stock, $.01 par value, 2,000,000 shares    
     authorized, 1,494,353 shares issued             
     and outstanding.................................        15           15
   Additional paid - in capital......................    95,398       95,398
   Retained earnings (deficit).......................      (272)       3,636
                                                       --------     -------- 
   TOTAL STOCKHOLDERS' EQUITY........................    95,141       99,049
                                                       --------     --------
                                                       $339,838     $372,246
                                                       ========     ========
</TABLE>

The accompanying notes are an integral part of these condensed consolidated
financial statements.
<PAGE>
 
                      COAST RESORTS, INC. AND SUBSIDIARIES
                  CONDENSED CONSOLIDATED STATEMENTS OF INCOME
        FOR THE THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 1997 AND 1996
                 (amounts in thousands, except per share data)
                                  (UNAUDITED)
                                        
<TABLE>
<CAPTION>
                                                       Three Months Ended           Six Months Ended
                                                            JUNE 30,                    JUNE 30,
                                                 -------------------------------------------------------
                                                       1997          1996          1997          1996
                                                    -----------   -----------   -----------   -----------
<S>                                                 <C>           <C>           <C>           <C>
OPERATING REVENUES:
 Casino..........................................   $   51,679    $   35,380    $  103,581    $   71,300
 Food and beverage...............................       14,903         9,510        30,183        19,389
 Hotel...........................................        7,288         3,496        14,336         7,017
 Other...........................................        4,714         2,463         9,188         4,914
                                                    ----------    ----------    ----------    ----------
   GROSS OPERATING REVENUES......................       78,584        50,849       157,288       102,620
 Less:  promotional allowances...................       (6,251)       (4,061)      (12,571)       (8,420)
                                                    ----------    ----------    ----------    ---------- 
   NET OPERATING REVENUES........................       72,333        46,788       144,717        94,200
                                                    ----------    ----------    ----------    ----------
OPERATING EXPENSES:
 Casino..........................................       27,461        16,903        55,174        33,842
 Food and beverage...............................       12,404         7,268        25,222        14,672
 Hotel...........................................        3,141         1,806         6,131         3,485
 Other...........................................        3,878         1,827         7,596         3,698
 General and administrative......................       15,769         9,442        32,575        18,723
 Deferred rent...................................        1,019           440         2,039           880
 Depreciation and amortization...................        4,764         1,861         9,485         3,622
                                                    ----------    ----------    ----------    ---------- 
TOTAL OPERATING EXPENSES.........................       68,436        39,547       138,222        78,922
                                                    ----------    ----------    ----------    ----------
   OPERATING INCOME..............................        3,897         7,241         6,495        15,278
                                                    ----------    ----------    ----------    ----------
OTHER INCOME (EXPENSES)
 Interest expense................................       (6,550)       (5,870)      (13,030)      (10,177)
 Interest income.................................           --         1,484            98         2,447
 Interest capitalized............................           --         1,530            --         2,231
 Gain on disposal equipment and securities.......           --             2           829             2
                                                    ----------    ----------    ----------    ---------- 
TOTAL OTHER INCOME (EXPENSES)....................       (6,550)       (2,854)      (12,103)       (5,497)
                                                    ----------    ----------    ----------    ---------- 
INCOME (LOSS) BEFORE INCOME TAXES................       (2,653)        4,387        (5,608)        9,781
                                                    ----------    ----------    ----------    ---------- 
INCOME TAX PROVISION (BENEFIT)...................         (839)        1,535        (1,700)        5,924
                                                    ----------    ----------    ----------    ----------
NET INCOME (LOSS)................................   $   (1,814)   $    2,852    $   (3,908)   $    3,857
                                                    ==========    ==========    ==========    ========== 
NET INCOME (LOSS) PER SHARE OF COMMON STOCK......   $    (1.21)   $     1.91    $    (2.62)   $     2.66
                                                    ==========    ==========    ==========    ==========
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING.......    1,494,353     1,494,353     1,494,353     1,450,893
                                                    ==========    ==========    ==========    ========== 
PRO FORMA DATA (reflecting change in tax status):
 Income tax provision (benefit)..................         (839)        1,535        (1,700)        3,423
                                                    ----------    ----------    ----------    ----------
 Net income (loss)...............................   $   (1,814)   $    2,852    $   (3,908)   $    6,358
                                                    ==========    ==========    ==========    ==========
 Net income (loss) per share of common stock.....       $(1.21)        $1.91        $(2.62)        $4.38
                                                    ==========    ==========    ==========    ==========
</TABLE>

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

                                       3
<PAGE>
 
                      COAST RESORTS, INC. AND SUBSIDIARIES
                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                FOR THE SIX MONTHS ENDED JUNE 30, 1997 AND 1996
                             (AMOUNTS IN THOUSANDS)
                                  (UNAUDITED)

                                        
<TABLE>
<CAPTION>
                                                                           Six Months Ended
                                                                               June 30,
                                                                       ------------------------
                                                                          1997          1996
                                                                       -----------   ----------
<S>                                                                     <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
 Net income (loss).....................................................  $  (3,908)    $   3,857
                                                                         ---------     ---------
 ADJUSTMENTS TO RECONCILE NET INCOME (LOSS) TO NET
  CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES:
   Depreciation and amortization.......................................      9,485         3,622
   Provision for bad debts.............................................         23            38
   Gain on disposal of assets..........................................       (829)           (2)
   Deferred income taxes...............................................         16         2,500
   Other non-cash expenses.............................................      2,334         1,097
   Changes in assets and liabilities:                                             
     Net increase in accounts receivable and other assets..............     (3,814)       (2,003)
     Net decrease in accounts payable and accrued                
      liabilities......................................................     (7,404)         (977)      
                                                                         ---------     ---------
 TOTAL ADJUSTMENTS.....................................................       (189)        4,275
                                                                         ---------     ---------
 NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES...................     (4,097)        8,132
                                                                         ---------     ---------
CASH FLOWS FROM INVESTING ACTIVITIES:                                             
 Capital expenditures..................................................    (34,077)      (42,807)
 Proceeds from disposal of assets......................................      1,088            20
 Net additions to restricted cash equivalents..........................         --       (91,137)
                                                                         ---------     ---------
 NET CASH USED IN INVESTING ACTIVITIES.................................    (32,989)     (133,924)
                                                                         ---------     ---------   
CASH FLOW FROM FINANCING ACTIVITIES:        
 Proceeds from issuance of long-term debt,                                        
   net of discounts and commissions....................................         --       164,124
 Principal payments on long-term debt..................................     (3,852)       (1,181)
 Proceeds from borrowings under bank line of credit....................         --         1,045
 Principal payments on bank line of credit.............................         --       (29,200)
 Payments for debt issue costs.........................................         --        (1,236)
                                                                         ---------     ---------
 NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES                        (3,852)      133,552
                                                                         ---------     ---------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                       (40,938)        7,760
CASH AND CASH EQUIVALENTS, at beginning of year........................     61,567        14,543
                                                                        ----------     ---------
CASH AND CASH EQUIVALENTS, at end of period............................ $   20,629     $  22,303
                                                                        ==========     =========
</TABLE>

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

                                       4
<PAGE>
 
                      COAST RESORTS, INC. AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - BACKGROUND INFORMATION AND BASIS OF PRESENTATION

Background Information

     Coast Resorts, Inc. ("Coast Resorts" or the "Company") is a Nevada
corporation and serves as a holding Company for Coast Hotels and Casinos, Inc.
("Coast Hotels") and Coast West, Inc. ("Coast West").  Through Coast Hotels, the
Company owns and operates the following Las Vegas hotel-casinos:

     - Gold Coast Hotel and Casino, approximately one mile west of the Las Vegas
          Strip on Flamingo Road.
     - Barbary Coast Hotel and Casino, located on the Las Vegas Strip.
     - The Orleans Hotel and Casino, located approximately one mile west of the
          Las Vegas Strip on Tropicana Avenue.

     Coast West has no operations but holds a long-term lease (the "Coast West
Lease") on approximately fifty acres of land in Las Vegas on which the Company
may develop and operate a future hotel-casino.

     The Gold Coast and Barbary Coast hotel-casinos had previously been owned
and operated independently by two partnerships, Gold Coast Hotel and Casino, a
Nevada limited partnership, and Barbary Coast Hotel and Casino, a Nevada general
partnership (collectively, the "Predecessor Partnerships").  On January 1, 1996,
the partners of the Predecessor Partnerships completed a reorganization (the
"Reorganization") with Coast Resorts.  Coast Resorts was formed in September
1995 for the purpose of effecting such Reorganization of the Predecessor
Partnerships.  Coast Resorts, Gold Coast and Barbary Coast were all related
through common ownership and management control.

     In the Reorganization, the partners of the Predecessor Partnerships each
transferred to Coast Resorts their respective partnership interests in the
Predecessor Partnerships in exchange for an aggregate of 1,000,000 shares of
common stock, par value $.01 per share, of Coast Resorts ("Coast Resorts Common
Stock").  Coast Resorts immediately contributed to Coast Hotels all of the
assets and liabilities of the Predecessor Partnerships other than those relating
to the Coast West Lease,  which Coast Resorts contributed to Coast West.  Coast
Resorts retained the liability for an aggregate principal amount of $51.0
million in notes payable to former partners and retained the liability for $1.5
million relating to demand notes due to a related party (the "Exchange
Liabilities").  On January 16, 1996, the Exchange Liabilities were exchanged for
494,353 shares of Coast Resorts Common Stock, based upon management's estimate
of the fair market value of such Coast Resorts Common Stock.

                                       5
<PAGE>
 
     COAST RESORTS, INC. AND SUBSIDIARIES

     NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - BACKGROUND INFORMATION AND BASIS OF PRESENTATION (CONTINUED)

Basis of Presentation

     The accompanying financial statements are unaudited and have been prepared
in accordance with generally accepted accounting principles for interim
financial information and with Article 10 of Regulation S-X.  Accordingly, they
do not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements.  The unaudited
financial statements should be read in conjunction with the audited financial
statements and footnotes for the year ended December 31, 1996.  In the opinion
of management, all adjustments and normal recurring accruals considered
necessary for a fair presentation of the results for the interim period have
been included.  The interim results reflected in the unaudited financial
statements are not necessarily indicative of expected results for the full year.


NOTE 2 - CONSTRUCTION COMMITMENTS

     In the first quarter of 1997, Coast Hotels began construction of Phase
Two of The Orleans.  The project, expected to cost $35 to $40 million, will
include twelve movie theaters, a child care facility, additional restaurants,
gaming facilities and space for live entertainment.  In addition, the Company
began construction in the first quarter of 1997 of a new restaurant at the
Barbary Coast, estimated to cost $1.3 million. As of June 30, 1997, the Company
had expended $8.6 million and $812,000, respectively, related to the two
construction projects.


NOTE 3 - INCOME TAXES

       Prior to the Reorganization, the Company operated as individual
partnerships which did not pay federal income taxes.  The partners of the
Predecessor Partnerships were taxed on their proportionate share of each of
their respective partnership's taxable income or loss.  Effective January 1,
1996 and in connection with the Reorganization, the Predecessor Partnerships
were terminated.  The change in status to a "C" corporation resulted in the
recognition of net deferred tax liabilities, and a corresponding charge to
earnings through the income tax provision of approximately $2.5 million for the
quarter ended March 31, 1996.  In addition, upon termination of the partnership
tax status on January 1, 1996, all undistributed earnings of the Predecessor
Partnerships were reclassified to additional paid-in capital.

     The pro forma provision for income taxes and the related pro forma net
income reflect adjustments to income taxes assuming that the recognition of net
deferred tax liabilities occurred prior to January 1, 1996.

                                       6
<PAGE>
 
ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF   FINANCIAL CONDITION AND
     RESULTS OF OPERATIONS


Results of Operations

     The following table sets forth, for the periods indicated, certain
financial information regarding the results of operations of the Company:


<TABLE>
<CAPTION>
                                       THREE MONTHS ENDED          SIX MONTHS ENDED
                                              JUNE 30,                 JUNE 30,
                                    -------------------------   --------------------------
                                       1997           1996          1997          1996
                                    -----------   -----------   -----------   ------------
<S>                                 <C>           <C>           <C>           <C>
Net Operating Revenues:
Gold Coast                           $   31,427      $ 35,055      $ 63,955       $ 70,768
Barbary Coast                            10,176        11,733        22,639         23,432
The Orleans                              30,730            --        58,123             --
                                    -----------    ----------    ----------     ----------
                                    $    72,333    $   46,788    $  144,717     $   94,200
                                    ===========    ==========    ==========     ==========
  
OPERATING INCOME (LOSS):
Gold Coast                          $     5,674    $    7,727     $  12,025     $   16,317
Barbary Coast                              (898)        1,260           (79)         2,224
The Orleans                               1,264            --        (1,217)            --
Corporate Expenses                       (2,143)       (1,746)       (4,234)        (3,263)
                                    -----------     ---------     ----------    ----------
                                    $     3,897     $   7,241     $    6,495    $   15,278
                                    ===========     =========     ==========    ==========
</TABLE>

Three Months Ended June 30, 1997 Compared to Three Months Ended June 30, 1996
and Six Months ended June 30, 1997 Compared to Six Months Ended June 30, 1996

COAST RESORTS, INC.

     Net revenues for the Company were $72.3 million in the second quarter of
1997  compared to $46.8 million in the second quarter of 1996, an increase of
$25.5 million (54.6%), and were $144.7 million in the six months ended June 30,
1997 compared to $94.2 million for the same period in 1996, an increase of $50.5
million (53.6%).  The increased revenues were due to the opening of the
Company's newest hotel-casino, The Orleans, in December 1996. Operating income
was $3.9 million in the quarter ended June 30, 1997 compared to $7.2 million in
the same quarter in 1996 and $6.5 million in the six month period ended June 30,
1997 compared to $15.3 million in 1996. The decline was due to lower revenues at
the Gold Coast and Barbary Coast, as well as lower-than-expected results at The
Orleans. The Company had a net loss of $1.8 million in the second quarter of
1997 compared to net income of $2.9 million in the second quarter of 1996. In
the six months ended June 30, 1997, the Company experienced a net loss of $3.9
million compared to net income of $3.9 million in the same period in 1996. The
losses were primarily a result of the lower operating income at the Company's
hotel-casinos (discussed below) as well as increased net interest expense (a
portion of interest was capitalized in 1996 during the construction of The
Orleans).

                                       7
<PAGE>
 
ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF   FINANCIAL CONDITION AND
     RESULTS OF OPERATIONS  (CONTINUED)


Coast Hotels and Casinos, Inc.

     Net revenues for the Company's operating subsidiary, Coast Hotels and
Casinos, Inc., were $72.3 million in the quarter ended June 30, 1997, an
increase of $25.5 million (54.6%) over revenues of $46.8 million in the same
quarter in 1996.  For the six months ended June 30, 1997, net revenues were
$144.7 million, an increase of $50.5 million over revenues of $94.2 million in
the first six months of 1996.  The increases were due to the opening of the
Company's newest hotel-casino, The Orleans, in December 1996.

     Operating income for Coast Hotels decreased to $4.4 million in the quarter
ended June 30, 1997 compared to $7.7 million in the second quarter of 1996.  For
the first six months of 1997, operating income decreased to $7.4 million
compared to $16.2 million in the same period in 1996.  The decreases were
primarily due to lower-than-expected results at the Company's newest hotel-
casino, the Orleans, as well as decreases at the Company's other two hotel-
casinos, the Gold Coast and the Barbary Coast (discussed below).

     Net loss for the quarter ended June 30, 1997 was $2.0 million compared to
net income of $3.1 million in the quarter ended June 30, 1996.  For the first
six months of 1997 net loss was $3.6 million compared to net income of $4.4
million in the first six months of 1996.  The decreases were due to increased
interest expense as well as the lower-than-expected operating results at the
Company's three hotel-casinos described below.


     Gold Coast.  Net revenues for the Gold Coast Hotel and Casino declined in
     ----------
the three months and six months ended June 30, 1997 compared to revenues in the
same periods in 1996. For the three months ended June 30, 1997, net revenues
were $31.4 million compared to $35.1 million in 1996, a decrease of $3.7 million
(10.4%). For the six months ended June 30, 1997, net revenues were $64.0 million
compared to $70.8 million in 1996, a decrease of $6.8 million (9.6%). Compared
to 1996, casino revenues declined $3.0 million in the second quarter and $5.9
million in the first six months, due to lower customer wagering volume and low
win percentages. Food and beverage business decreased causing revenues to
decline $972,000 in the second quarter and $1.8 million in the first six months
of 1997, down 13.6% and 12.6%, respectively, compared to the same two periods in
1996. Management attributes the overall revenue decline at the Gold Coast to the
openings of new casinos (including The Orleans) and expanded capacity in others.
Due to the lower revenues, operating income at the Gold Coast was $5.7 million
in the second quarter of 1997 compared to $7.7 million in the second quarter of
1996. For the six months ended June 30, 1997, Gold Coast operating income was
$12.0 million compared to $16.3 million in 1996.

     Barbary Coast.  Net revenues for the Barbary Coast Hotel and Casino were
     -------------
$10.2 million in the second quarter of 1997 compared to $11.7 million in the
same period in 1996, a decrease of 13.3%.  For the first six months of 1997, net
revenues were $22.6 million, a 3.4% decrease from revenues of $23.4 million in
the first half of 1996.  The lower revenues

                                       8
<PAGE>
 
ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF   FINANCIAL CONDITION AND
     RESULTS OF OPERATIONS  (CONTINUED)



were primarily due to casino revenues which declined $1.6 million (17.2%) in the
second quarter of 1997 compared to the second quarter of 1996, and declined
$875,000 (4.7%) in the first half of 1997 compared to the first half of 1996.
Second quarter table games revenues declined $2.4 million (50.9%) compared to
1996 and for the first six months table games revenues declined $2.5 million
(29.0%) compared to 1996.  The lower table games revenues were due to a
decrease in customer wagering volume (11.8% in the second quarter and 7.6% for
the first half of 1997) and to a low table games win percentage.  Due to the
lower revenues, the Barbary Coast experienced an operating loss of $898,000 in
the quarter ended June 30, 1997 compared to operating income of $1.3 million in
1996.  For the first six months of 1997, the Barbary Coast had an operating loss
of $79,000 compared to operating income of $2.2 million in the first half of
1996.

     The Orleans.  The three months ended June 30, 1997 was the second full
     -----------
quarter of operations for the hotel-casino which opened December 18, 1996.  Net
operating revenues for the three months and six months ended June 30, 1997 were
$30.7 million and  $58.1 million, respectively.  Operating income was $1.3
million in the second quarter of 1997 compared to an operating loss of $2.5
million in the first quarter.  The increase was primarily due to a 15.4%
increase in casino revenues.


COAST WEST, INC.

     Coast West, Inc. has no operations but holds a lease on approximately fifty
acres of land held for possible future development.  The net losses for Coast
West for the three months and six months ended June 30, 1997 were $956,000 and
$1.9 million, respectively, due entirely to rent expense on the leased land.
Net losses for the three months and six months ended June 30, 1996 were $955,000
and $1.9 million, respectively.


LIQUIDITY AND CAPITAL RESOURCES

     Coast Resorts, Inc. is a holding company without operations of its own.
The Company's principal sources of liquidity on a consolidated basis have
consisted of cash provided by the operating activities of Coast Hotels and,
until termination of its revolving credit facility in January 1996, bank
financing.  In connection with the reorganization in which the Barbary Coast
Hotel and Casino and the Gold Coast Hotel and Casino were combined with the
Company, the Company exchanged shares of common stock, par value $.01 per share,
of Coast Resorts for approximately $52.5 million principal amount of notes
payable to certain shareholders of Coast Resorts, resulting in a reduced debt
service.  See Note 1 to Notes to Condensed Consolidated Financial Statements.

                                       9
<PAGE>
 
ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
     RESULTS OF OPERATIONS  (CONTINUED)

Liquidity and Capital Resources (continued)

     On January 30, 1996, Coast Hotels issued $175.0 million principal amount of
First Mortgage Notes to finance, in part, the development, construction,
equipping and opening of The Orleans.  The net proceeds from the issuance, after
deducting discounts and commissions, were approximately $164.1 million.  Of that
amount, (i) approximately $114.8 million was deposited in a construction
disbursement account for use by Coast Hotels to finance in part The Orleans,
(ii) approximately $19.3 million was used by Coast Hotels to purchase U.S.
Government Obligations which were deposited into an interest escrow account to
fund the interest payable on the First Mortgage Notes through December 15, 1996
and (iii) approximately $29.2 million was used by Coast Hotels to repay all
outstanding indebtedness under its revolving credit facility, which was
terminated upon repayment.  The balance of approximately $800,000 was used to
pay, in part, the offering expenses of approximately $2.4 million. Coast Hotels
also financed approximately $30 million of equipment for the Orleans project
through capital lease financing. Coast Hotels is permitted by the indenture
pursuant to which the First Mortgage Notes were issued to borrow up to an
additional $20 million for working capital purposes.

     The Company's consolidated cash requirements, in addition to debt service
on the First Mortgage Notes and equipment capital leases, include land lease
payments for its properties, ongoing maintenance capital expenditures at its
existing facilities and periodic enhancements to those facilities.  The
Company's capital expenditures (exclusive of those associated with the
development and construction of The Orleans) for 1996 were approximately $6.2
million, most of which related to normal maintenance capital expenditures.
Management expects that maintenance capital expenditures for 1997 will be
approximately $7.0 million.  In the first quarter of 1997, the Company began
construction of Phase Two of The Orleans.  The project, expected to cost $35 to
$40 million, will include twelve movie theaters, a child care facility,
additional restaurants, gaming facilities and space for live entertainment.  In
addition, the Company began construction in the 1997 first quarter of a new
restaurant at the Barbary Coast, estimated to cost $1.3 million. The Company
expects to finance the capital projects with existing cash reserves, cash from
operations and, if necessary, debt and/or equity financing. No assurance can be
given that cash from operations, in combination with cash reserves, will be
sufficient for the second phase of The Orleans and the Barbary Coast restaurant,
or that debt and/or equity financing, if necessary, will be obtainable. The
Company may obtain financing for working capital purposes, but no arrangements
for any such financing have been finalized.

FORWARD LOOKING STATEMENTS

     The statements in this Management's Discussion and Analysis which are not
historical fact are forward looking statements that are made pursuant to the
Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995.
The statements are subject to risks and uncertainties, including, but not
limited to increased competition, both in Nevada and other jurisdictions,
dependence on the Las Vegas area and the Southern California region for a
majority of the Company's customers, uncertainties associated with construction
projects, including the related disruption of operations and the availability of
financing, if necessary, which could cause actual results to vary materially
from those discussed herein.

                                       10
<PAGE>
 


ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

       Not Applicable

                                       11
<PAGE>
 
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.

              There were no reports filed on Form 8-K during the three months
              ended June 30, 1997.

                                       12
<PAGE>
 
SIGNATURES
----------

     Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Quarterly Report on Form 10-Q to be signed on
its behalf by the undersigned thereunto duly authorized.


Date:  August 14, 1997                COAST RESORTS, INC., a Nevada corporation
                                      
                                      By:   /s/ Gage Parrish
                                         ----------------------------------
                                            Gage Parrish
                                            Vice President and Chief Financial
                                               Officer

                                       13