<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, 1998

                                       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, 1998:  1,494,352.94

_______________________________________________________________________________
<PAGE>
 
Item 1.  Financial Statements.

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

<TABLE>
<CAPTION>
                                                                               June 30,                December 31,
                                                                           1998 (unaudited)                1997
                                                                           ---------------             ------------  
                             ASSETS
<S>                                                                          <C>                        <C>
CURRENT ASSETS:
 Cash and cash equivalents.......................................              $ 28,711                  $ 29,430      
 Accounts receivable, net........................................                 5,072                     5,617      
 Other current assets............................................                18,290                    17,975      
                                                                               --------                  --------      
    TOTAL CURRENT ASSETS.........................................                52,073                    53,022      
PROPERTY AND EQUIPMENT, net......................................               303,334                   307,151      
OTHER ASSETS.....................................................                 5,989                     6,446      
                                                                               --------                  --------      
                                                                               $361,396                  $366,619      
                                                                               ========                  ========      
                       LIABILITIES AND
                     STOCKHOLDERS' EQUITY
 
CURRENT LIABILITIES:
 Accounts payable................................................              $  6,913                  $  9,107      
 Accrued liabilities.............................................                24,503                    27,681      
 Construction accounts payable...................................                    --                     2,491      
 Current portion of long-term debt...............................                 7,971                     8,076      
                                                                               --------                  --------      
    TOTAL CURRENT LIABILITIES....................................                39,387                    47,355      
LONG-TERM DEBT, less current portion.............................               203,543                   207,173      
DEFERRED INCOME TAXES............................................                 8,642                     8,645      
DEFERRED RENT....................................................                11,016                     9,007      
                                                                               --------                  --------      
    TOTAL LIABILITIES............................................               262,588                   272,180      
                                                                               --------                  --------      
COMMITMENTS AND CONTINGENCIES                                                                                          
STOCKHOLDERS' EQUITY:                                                                                                  
 Preferred Stock, $.01 par value, 10,000,000 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).....................................                 3,395                      (974)     
                                                                               --------                  --------      
    TOTAL STOCKHOLDERS' EQUITY...................................                98,808                    94,439      
                                                                               --------                  --------      
                                                                               $361,396                  $366,619      
                                                                               ========                  ========      
</TABLE>

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

                                       2
<PAGE>
 
                      COAST RESORTS, INC. AND SUBSIDIARIES
               CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)
        FOR THE THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 1998 AND 1997
                 (amounts in thousands, except per share data)
                                  (UNAUDITED)
<TABLE>
<CAPTION>
                                                      THREE MONTHS ENDED                       SIX MONTHS ENDED
                                                           JUNE 30,                                 JUNE 30,
                                                --------------------------              --------------------------------
                                                     1998          1997                   1998                   1997
                                                -------------   ----------              ---------             ---------- 
<S>                                             <C>            <C>                    <C>
OPERATING REVENUES:                                             
 Casino.......................................   $   57,856     $   51,679             $  117,035             $  103,581
 Food and beverage............................       16,183         14,903                 32,761                 30,183
 Hotel........................................        7,288          7,288                 14,226                 14,336
 Other........................................        5,986          4,714                 12,079                  9,188
                                                 ----------     ----------             ----------             ----------
    GROSS OPERATING REVENUES..................       87,313         78,584                176,101                157,288
 Less:  promotional allowances................       (7,330)        (6,251)               (15,104)               (12,571)
                                                 ----------     ----------             ----------             ----------
    NET OPERATING REVENUES....................       79,983         72,333                160,997                144,717
                                                 ----------     ----------             ----------             ----------
OPERATING EXPENSES:                                          
 Casino.......................................       30,372         27,805                 61,884                 56,084
 Food and beverage............................       11,829         12,852                 23,563                 26,178
 Hotel........................................        3,010          3,268                  5,721                  6,368
 Other........................................        5,160          4,574                  9,988                  8,905
 General and administrative...................       13,932         14,154                 27,837                 29,163
 Deferred rent................................        1,004          1,019                  2,009                  2,039
 Depreciation and amortization................        5,324          4,764                 10,205                  9,485
                                                 ----------     ----------             ----------             ----------
TOTAL OPERATING EXPENSES......................       70,631         68,436                141,207                138,222
                                                 ----------     ----------             ----------             ----------
    OPERATING INCOME                                  9,352          3,897                 19,790                  6,495
                                                 ----------     ----------             ----------             ----------
OTHER INCOME (EXPENSES):
 Interest expense.............................       (6,869)        (6,550)               (13,634)               (13,030)
 Interest income..............................          190             --                    291                     98
 Gain on disposal of assets...................          117             --                    143                    829
                                                 ----------     ----------             ----------             ----------
TOTAL OTHER INCOME (EXPENSES).................       (6,562)        (6,550)               (13,200)               (12,103)
                                                 ----------     ----------             ----------             ----------
INCOME (LOSS) BEFORE INCOME TAXES.............        2,790         (2,653)                 6,590                 (5,608)
                                                 ----------     ----------             ----------             ----------
                                                             
INCOME TAX PROVISION (BENEFIT)................          821           (839)                 2,223                 (1,700)
                                                 ----------     ----------             ----------             ----------
NET INCOME (LOSS).............................   $    1,969     $   (1,814)            $    4,367             $   (3,908)
                                                 ==========     ==========             ==========             ==========
 
BASIC AND DILUTED NET INCOME (LOSS) PER
 SHARE OF COMMON STOCK........................   $     1.32     $    (1.21)            $     2.92             $    (2.62)
                                                 ==========     ==========             ==========             ==========
SHARES USED IN COMPUTATION OF NET INCOME
 (LOSS) PER SHARE.............................    1,494,353      1,494,353              1,494,353              1,494,353
                                                 ==========     ==========             ==========             ==========
</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, 1998 AND 1997
                             (AMOUNTS IN THOUSANDS)
                                  (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                           SIX MONTHS ENDED
                                                                                               JUNE 30,
                                                                                ------------------------------------
                                                                                     1998                    1997
                                                                                   -------                --------
<S>                                                                              <C>                     <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
 Net income (loss).....................................................            $ 4,367                $ (3,908)
                                                                                   -------                --------
 ADJUSTMENTS TO RECONCILE NET INCOME (LOSS) TO NET
  CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES:
   Depreciation and amortization.......................................             10,205                   9,485       
   Provision for bad debts.............................................                316                      23       
   Gain on disposal of assets..........................................               (143)                   (829)      
   Deferred income taxes...............................................                 (3)                     16       
   Deferred rent.......................................................              2,009                   2,039       
   Other non-cash expenses.............................................                338                     295       
   Changes in assets and liabilities:                                                                                    
     Net increase in accounts receivable and other assets..............               (609)                 (3,814)      
     Net decrease in accounts payable and accrued liabilities..........             (5,372)                 (7,404)      
                                                                                   -------                --------
 TOTAL ADJUSTMENTS.....................................................              6,741                    (189)
                                                                                   -------                --------
 NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES...................             11,108                  (4,097)
                                                                                   -------                --------
CASH FLOWS FROM INVESTING ACTIVITIES:
 Capital expenditures..................................................             (7,846)                (34,077)
 Proceeds from disposal of assets......................................                128                   1,088
                                                                                   -------                --------
 NET CASH USED IN INVESTING ACTIVITIES.................................             (7,718)                (32,989)
                                                                                   -------                --------
CASH FLOW FROM FINANCING ACTIVITIES:
 Principal payments on long-term debt..................................             (4,109)                 (3,852)
                                                                                   -------                --------
 NET CASH USED IN FINANCING ACTIVITIES.................................             (4,109)                 (3,852)
                                                                                   -------                --------
NET DECREASE IN CASH AND CASH EQUIVALENTS..............................               (719)                (40,938)
CASH AND CASH EQUIVALENTS, at beginning of year........................             29,430                  61,567
                                                                                   -------                --------
CASH AND CASH EQUIVALENTS, at end of period............................            $28,711                $ 20,629
                                                                                   =======                ========
</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, 1997.  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.

Reclassifications

       Certain amounts in the 1997 financial statements have been reclassified
to conform with the 1998 presentation.

NOTE 2 - ADVANCES TO COAST WEST

     Coast Hotels has agreed to provide advances to Coast West sufficient to
make payments on the Coast West Lease and other obligations, including project
development and site improvement. The Coast West Lease relates to a parcel of
land located in the western area of Las Vegas to be used for future expansion
opportunities. The Coast West Lease term runs through December 31, 2055, with
three 10-year renewal options, with monthly payments of $166,667 for the year
ending December 31, 1995. Thereafter the monthly rent increases by the amount of
$5,000 in January of each year. The lease includes a put option exercisable by
the landlord requiring the purchase of the land at fair market value at the end
of the 20th through 24th years of the lease, provided that the purchase price
shall not be less than ten times, nor more than fifteen times, the annual rent
at such time. Based on the terms of the lease, the potential purchase price
commitment ranges from approximately $31,000,000 to approximately $51,000,000 in
the years 2014 through 2018. The advances to Coast West are non-interest bearing
and, pursuant to the indenture governing 13% first mortgage notes issued by
Coast Hotels (the "Indenture"), cannot exceed $8.0 million in aggregate
principal amount at any time outstanding unless Coast West becomes a subsidiary
of Coast Hotels.  As of June 30, 1998 and December 31, 1997,  Coast Hotels had
advanced Coast West $7.7 million and $6.4 million, respectively, related to the
Coast West Lease and development activities. Coast West is a development stage
enterprise and has no source of income and is therefore solely dependent on the
advances to be provided by Coast Hotels. There can be no assurance that Coast
West will develop a gaming property at the Coast West site or that it will be
able to repay any advances made by Coast Hotels.

     On July 21, 1998, the Company contributed the capital stock of Coast West
to Coast Hotels, as a result of which Coast West became a wholly owned
subsidiary of Coast Hotels.  Coast West remains a guarantor of the 13% First
Mortgage Notes. Pursuant to the terms of the Indenture, Coast Hotels may
continue to make advances to Coast West as it is now a wholly owned subsidiary.

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

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,               
                                                 ---------------------         ----------------------
                                                   1998         1997             1998          1997       
                                                 -------      --------         --------      --------
<S>                                             <C>          <C>               <C>           <C>            
GOLD COAST                                                                                                             
Net operating revenues.............              $31,010      $31,427          $ 63,469      $ 63,955   
Operating income...................                6,351        5,674            13,025        12,025   
EBITDA (1).........................                7,600        6,883            15,505        14,425   
                                                                                                        
BARBARY COAST                                                                                           
Net operating revenues.............              $10,898      $10,176          $ 21,353      $ 22,639   
Operating income...................                  631         (898)              694           (79)  
EBITDA (1).........................                1,071         (496)            1,558           727   
                                                                                                        
THE ORLEANS                                                                                             
Net operating revenues.............              $38,075      $30,730          $ 76,175      $ 58,123   
Operating income...................                4,533        1,264            10,595        (1,217)  
EBITDA (1).........................                8,386        4,663            17,891         5,554   
EBITDAR (1)........................                8,911        5,188            18,941         6,009   
                                                                                                        
TOTAL (INCLUDING CORPORATE)                                                                             
Net operating revenues.............              $79,983      $72,333          $160,997      $144,717   
Operating income...................                9,352        3,896            19,790         6,495   
EBITDA (1).........................               15,680        9,680            32,004        18,018   
EBITDAR (1)........................               16,750       10,736            34,144        19,109    
</TABLE>

(1)  "EBITDA" is defined as earnings before interest, taxes, depreciation,
     amortization and deferred (non-cash) rent. "EBITDAR" is defined as earnings
     before interest, taxes, depreciation, amortization and rent expense (both
     cash and deferred). EBITDA and EBITDAR should not be construed as
     alternatives to operating income as an indicator of the company's operating
     performance, or as alternatives to cash provided by operating activities as
     an indicator of cash flows or a measure of liquidity. EBITDA and EBITDAR
     are presented solely as supplemental disclosure because management believes
     that they are widely used measures of financial performance in the gaming
     industry.

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

Three Months Ended June 30, 1998 Compared to Three Months Ended June 30, 1997
and Six Months ended June 30, 1998 Compared to Six Months Ended June 30, 1997

     Net revenues, operating income and net income all improved in the quarter
ended and six months ended June 30, 1998, primarily due to improved revenues at
the Company's newest hotel-casino, The Orleans.   Net revenues in the quarter
ended June 30, 1998 were $80.0 million compared to $72.3 million in the same
quarter of 1997, an increase of 10.6%.  For the six months ended June 30, 1998,
net revenues were $161.0 million compared to $144.7 million in the same period
in 1997.  Operating income in the second quarter of 1998 was $9.4 million
compared to $3.9 million in the second quarter of 1997, an increase of 126.0%.
For the six months ended June 30, 1998, operating income was $19.8 million, an
increase of 204.6% over operating income of $6.5 million in the same period in
1997.  Net income in the quarter ended June 30, 1998 was $2.0 million compared
to a net loss of $1.8 million in the second quarter of 1997.  For the six months
ended June 30, 1998, net income was $4.4 million compared to a net loss of $3.9
million in 1997.

     The Orleans. The Orleans opened in December 1996 and generated lower-than-
expected revenues in the first half of 1997.  During the second half of 1997,
the property expanded its customer base through increased promotional
activities, the use of headliner entertainment in its showroom and, in December
1997, the opening of twelve new movie theaters.  Net revenues in the three
months ended June 30, 1998 were $38.1 million, an increase of 23.9% over
revenues of $30.7 million in the same quarter in 1997.  For the six month period
ended June 30, 1998, net revenues were $76.2 million, an increase of 31.1%
compared to the first six months of 1997.  Casino revenues were up in the second
quarter of 1998 (25.1%) and in the six months ended June 30, 1998 (35.0%),
primarily as a result of increased slot machine activity.  Increased customer
volume led to an increase in food and beverage revenues of 27.4% in the quarter
ended June 30, 1998 and an increase of 23.9% in the six months ended June 30,
1998.  Hotel revenues increased slightly in the quarter and year-to-date,
primarily as a result of increased occupancy.  Other revenues increased in the
second quarter and year-to-date due primarily to higher showroom revenue.
Despite an increase in operating expenses of 13.8% in the quarter ended June 30,
1998 and 10.5% for the six months ended June 30, 1998,  due primarily to
increased casino promotional activities, operating income increased by $3.3
million in the quarter and by $11.8 million year-to-date.

     Gold Coast.  Net revenues in the three months and six months ended June 30,
1998 were relatively flat compared to the same periods in 1997, with slight
increases in casino revenues and slight decreases in hotel, food and beverage
and other revenues. For the quarter ended June 30, 1998, net revenues were $31.0
million, down 1.3% from second quarter 1997 revenues of $31.4 million. Year-to-
date, net revenues were $63.5 million, down 0.8% compared to $64.0 million in
the first six months of 1997. Operating income in the second quarter of 1998 was
$6.4 million, an increase of 11.9% over the second quarter of 1997. Operating
income in the first six months of 1998 was $13.0 million, an increase of 8.3%
over the first six months of 1997. The increases were due primarily to lower
payroll expenses as a result of reduced staffing.

     Barbary Coast. Net revenues in the three months ended June 30, 1998
increased 7.1% to $10.9 million compared to $10.2 million in the three months
ended June 30, 1997,  primarily as a result of increased customer wagering on
slot machines.  Additionally, table games revenues were up because of improved
win percentages compared to the same quarter in 1997.  Increases in slot machine
and table games revenues were partially offset by decreases in race book
revenues due to lower win percentages.  For the six months ended June 30, 1998,
net revenues were $21.4 million, down $1.3 million (5.7%).

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


compared to the same period in 1997 primarily due to a lower-than-expected table
games win percentage in the first quarter of 1998 as well as a lower win
percentage in the race book.  For the second quarter, operating income was
$631,000 compared to a loss of $898,000 in the second quarter of 1997.  For the
six months ended June 30, 1998, operating income was $694,000 compared to an
operating loss of $79,000 in the same period in 1997.  Operating expenses
declined $808,000 (7.3%) and $2.1 million (9.1%) in the three month and six
month periods ended June 30, 1998, respectively, compared to the same periods in
1997, primarily due to decreased promotional expenses in the race book.


LIQUIDITY AND CAPITAL RESOURCES

     The Company's principal sources of liquidity have consisted of cash
provided by operating activities, bank financing and debt financing.  Cash
provided by operating activities was $11.0 million in the first six months of
1998, an increase of $15.1 million over the same period in 1997, primarily due
to the Company's increased profitability discussed above.

     In January 1996, Coast Hotels issued $175.0 million principal amount of 13%
first mortgage notes due 2002 ("13% First Mortgage Notes").  Additionally, in
November 1997, Coast Hotels issued $16.8 million principal amount of 10 7/8%
first mortgage notes due 2001 ("10 7/8% First Mortgage Notes").  The indentures
pursuant to which the 13% First Mortgage Notes and the 10 7/8% First Mortgage
Notes were issued ("the Indentures") contain covenants that, among other things,
limit the ability of Coast Hotels to pay dividends or make advances to Coast
Resorts, repay existing indebtedness, incur additional indebtedness, or sell
material assets as defined in the Indentures. As a holding company, the Company
is reliant on the operations of its subsidiaries for cash flow.

     The Company's cash requirements, in addition to interest on the 10 7/8%
First Mortgage Notes, the 13% First Mortgage Notes and equipment notes payable,
which is anticipated to be approximately $27.0 million in 1998, include annual
principal payments of approximately $7.5 million on the equipment notes payable,
land lease payments for its properties, ongoing maintenance capital expenditures
at its existing facilities and periodic enhancements to those facilities.  The
Company's maintenance capital expenditures for 1997 were approximately $9.2
million. Management expects that maintenance capital expenditures for 1998 will
be approximately $9.5 million. Management believes that existing cash balances
and operating cash flow will provide the Company with sufficient resources to
meet its existing debt obligations, lease payments and foreseeable capital
expenditure requirements at the Company's existing properties.

     Coast Hotels agreed to provide advances to Coast West sufficient to make
payments on the Coast West Lease and other obligations, including project
development and site improvement. Pursuant to the Indenture under which the 13%
First Mortgage Notes were issued, the advances to Coast West could not exceed
$8.0 million in aggregate principal amount at any time outstanding. As of June
30,

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


     1998, Coast Hotels had advanced Coast West $7.7 million related to the
Coast West Lease and development activities.  Based on the cash requirements of
Coast West for lease payments and anticipated development costs, it is likely
that during 1998 Coast West would require cash from the Coast Hotels that, when
added to the outstanding advances, would exceed $8 million. On July 21, 1998,
the Company contributed the capital stock of Coast West to Coast Hotels, as a
result of which Coast West became a wholly owned subsidiary of Coast Hotels.
Coast West remains a guarantor of the 13% First Mortgage Notes.  Pursuant to the
terms of the Indenture, Coast Hotels may make advances to its wholly owned
subsidiaries.

     The Company has no agreements, arrangements or understandings with respect
to financing the development of future properties.  Any future development would
be subject to, among other things, the Company's ability to obtain necessary
financing.


IMPACT OF THE YEAR 2000 ISSUE

     The "Year 2000 Issue" is the result of computer programs being written
using two digits rather than four to define the applicable year.  If a company's
date-sensitive computer programs should recognize a date "00" as the year 1900
rather than the year 2000, miscalculations or a system failure could occur,
causing disruptions of operations, including, among other things, a temporary
inability to process transactions, send invoices or engage in similar normal
business activities.

     The Company is currently reviewing all of its computer systems with regard
to the Year 2000 Issue and has determined that much of its software is already
compliant.  For those systems not already compliant, the Company will utilize
both internal and external resources to reprogram, replace and test the software
for the Year 2000 modifications so that its computer systems will properly
recognize and utilize dates beyond December 31, 1999. Management believes that
expenditures for these modifications will not be material.  However, the Company
may be adversely affected to the extent that vendors and other entities with
which it does business are unable to achieve Year 2000 compliance by December
31, 1999.


ACCOUNTING PRONOUNCEMENTS

     In June 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 130, "Reporting Comprehensive Income" ("SFAS
130"), which establishes standards for reporting and display of comprehensive
income and its components.  SFAS 130 requires a separate statement to report
components of comprehensive income for each period presented.  The provisions of
SFAS 130 are effective for fiscal years beginning after December 15, 1997.
Management believes that the Company currently does not have items that would
require presentation in a separate statement of comprehensive income.

                                       10
<PAGE>
 
     In June 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 131, "Disclosures about Segments of an
Enterprise and Related Information" ("SFAS 131"), which supersedes FASB
Statement No. 14, "Financial Reporting for Segments of a Business Enterprise."
SFAS 131 establishes standards for the way that public business enterprises
report information about operating segments in annual financial statements and
requires that those enterprises report selected information about operating
segments in interim financial reports issued to shareholders.  SFAS 131 is
effective for fiscal years beginning after December 15, 1997 and requires
restatement of earlier periods presented.  SFAS 131 will not have a material
effect on the Company's financial statements as the required information is
either currently being presented by the Company or it is not applicable to the
Company.

     In April 1998, the American Institute of Certified Public Accountants
issued Statement of Position 98-5 (SOP 98-5), Reporting on the Costs of Start-Up
Activities.  SOP 98-5 requires that the Company expense its pre-opening and
related promotional expense as incurred rather than capitalize it and amortize
it over the estimated period of economic benefit of such costs as has been the
Company's policy in the past.  Effective January 1, 1998, the Company adopted
SOP 98-5.  The adoption had no impact on the financial position, results of
operations or cash flows of the Company as all start-up costs previously
capitalized had been expensed in prior periods.

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, which could cause actual results to vary materially from those
discussed herein.


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, 1998.

                                       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, 1998             COAST RESORTS, INC., a Nevada corporation
                                       

                                  By: /s/ Gage Parrish
                                      ------------------------
                                      Gage Parrish
                                      Vice President and Chief Financial Officer

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