<PAGE 1>
         U.S. Securities and Exchange Commission
                Washington, D.C. 20549

                       Form 10-QSB

(Mark One)

[x]     QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE 
        SECURITIES EXCHANGE ACT OF 1934

        For the quarterly period ended       September 30, 1998     

[  ]    TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE    
        EXCHANGE ACT

        For the transition period from _______________ to ____________ 

        Commission file number          0-19049            


                       American Gaming & Entertainment, Ltd.
        _________________________________________________________________
        (Exact name of small business issuer as specified in its charter)

              Delaware                             74-2504501   
   ________________________________         ________________________________
   (State or other jurisdiction of          (IRS Employer Identification No.)
    incorporation or organization)

               One Woodland Avenue, Paramus, New Jersey 07652
               __________________________________________________
                   (Address of principal executive offices)


                               (609) 822-8505               
                          __________________________
                          (Issuer's telephone number)

______________________________________________________________________________
(Former name, former address and former fiscal year, if changed since last 
report)

Check whether the issuer (1) filed all reports required to be filed by Section 
13 or 15(d) of the Exchange Act during the past 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 ___


Number of shares outstanding of each of the issuer's classes of common equity, 
as of the latest practicable date.


            Class                    Outstanding at September 30, 1998
     _________________________         ______________________________
     Common Stock, $.01 par value              12,532,102 shares



<PAGE 2>

                    AMERICAN GAMING & ENTERTAINMENT, LTD.        
                        CONSOLIDATED BALANCE SHEETS       
                                (Unaudited)    
                                                            
                                           September 30,          December 31,
                                                1998                  1997
                                           ____________           ____________
ASSETS                                                            
Current Assets                                                            
    Cash                                  $    152,000          $    381,000
    Restricted cash                          1,105,000               630,000
    Prepaid expenses                           154,000               232,000
    Other current assets                       359,000               313,000
                                          ____________          ____________
Total current assets                         1,770,000             1,556,000
                                                            
Assets held for sale                           435,000               431,000
                                                            
Casino barge and improvements, subject to
lease, net of accumulated depreciation of
$4,909,000 - 1998 and $3,907,000 -  1997     7,684,000             8,686,000
                                                            
Furniture, fixtures and equipment, 
net of accumulated depreciation 
of $78,000 - 1998 and $71,000 - 1997             7,000                14,000
                                                            
Other non-current assets                       262,000               465,000
                                         _____________          ____________
                                         $  10,158,000          $ 11,152,000
                                         =============          ============


See Notes to Consolidated Financial Statements                       



<PAGE 3>

                    AMERICAN GAMING & ENTERTAINMENT, LTD.         
                        CONSOLIDATED BALANCE SHEETS         
                                (Unaudited)         
         
                                           September 30,          December 31,
                                                1998                  1997
                                           ____________           ____________
         
LIABILITIES AND STOCKHOLDERS' DEFICIENCY         
Current Liabilities         
   Amounts due to related parties:         
     Accrued interest                   $   20,987,000        $   16,788,000
     Dividends payable                       2,403,000             1,953,000
     Accrual for lease costs                 2,701,000             2,701,000
     Current portion of long term debt      40,510,000            40,510,000
                                            __________            __________
                                            66,601,000            61,952,000
         
   Accounts payable                            132,000                68,000
   Accrued payroll and related expenses          2,000                12,000
   Accrued expenses and other current 
     liabilities                             2,056,000             1,389,000
   Short term portion of estimated net 
     liabilities for subsidiaries in 
     bankruptcy                              1,646,000             1,162,000
                                             _________             _________
Total current liabilities                   70,437,000            64,583,000
                                            __________            __________
Long term portion of estimated net 
liabilities for subsidiaries in bankruptcy   2,845,000             3,329,000
                                             _________             _________
                                            73,282,000            67,912,000
                                             __________            __________

Commitments and Contingencies         
         
Stockholders' Deficiency         
Preferred stock, 1,000,000 shares authorized:         
  Series A preferred stock, par value 
    $.01 per share,  55,983 shares issued        1,000                 1,000
  Series C  and D cumulative preferred 
    stock, and Series E preferred stock, 
    par value $.01 per share, 4,000 shares 
    authorized and issued for each series   15,552,000            14,602,000
Common stock, par value $.01 per share; 
  50,000,000 shares authorized, 12,556,137 
  shares issued (including 24,035 shares 
  held in treasury)                            126,000               126,000
Additional paid-in capital                  41,888,000            43,288,000
Cost of shares held in treasury                (25,000)              (25,000)
Accumulated deficit                       (120,666,000)         (114,752,000)
                                          _____________          ____________
                                           (63,124,000)          (56,760,000)
                                          _____________          ____________
                                        $   10,158,000        $   11,152,000
                                          =============          ============
See Notes to Consolidated Financial Statements


<PAGE 4>
<TABLE>
                               AMERICAN GAMING & ENTERTAINMENT LTD.         
                              CONSOLIDATED STATEMENTS OF OPERATIONS      
                                            (Unaudited)                        
                        
                        
                        
                                              Three months ended        Nine months ended
                                                  September 30,            September 30,
                                              __________________        ___________________
                                             1998         1997           1998         1997
                                           ________     ________       ________      _______
<S>                                     <C>          <C>            <C>            <C>
Revenues                                $       -    $   136,000    $   445,000    $   516,000
                                         _________     _________     __________     __________
Costs and expenses                        
  Selling, general and administrative      397,000       503,000      1,283,000      1,247,000
  Depreciation and amortization            336,000       295,000      1,009,000        887,000
                                         _________     _________    ___________     __________
Total costs and expenses                   733,000       798,000      2,292,000      2,134,000
                                         _________      ________    ___________     __________

Operating loss                            (733,000)     (662,000)    (1,847,000)    (1,618,000)
                                         _________      ________     __________     __________

Other income (expense)                        
  Interest income                           26,000        19,000         70,000         57,000
  Interest expense                      (1,353,000)   (1,415,000)    (4,137,000)    (4,161,000)
  Net gain on sale of investments                -         3,000              -          5,000
                                         _________     _________      _________      _________
Total other income (expense)            (1,327,000)   (1,393,000)    (4,067,000)    (4,099,000)
                                         _________     _________      _________      _________
Net loss                                (2,060,000)   (2,055,000)    (5,914,000)    (5,717,000)
                        
Dividends and accretion on 
preferred stock                            467,000       467,000      1,400,000      1,400,000
                                         _________     _________      __________     __________
Net loss for common stockholders      $ (2,527,000) $ (2,522,000)  $ (7,314,000)  $ (7,117,000)
                                      ============  ============   ============   ============
                        
Loss for common stockholders per 
common share                          $      (0.20) $      (0.20)  $      (0.58)   $     (0.57)
                                      ============   ===========   ============    ===========
Weighted average number of common                        
    shares outstanding                  12,532,102    12,532,102     12,532,102     12,532,102
                                      ============   ===========   ============    ===========
                        
See Notes to Consolidated Financial Statements                  
</TABLE>



<PAGE 5>

                    AMERICAN GAMING & ENTERTAINMENT, LTD.            
                    CONSOLIDATED STATEMENTS OF CASH FLOWS            
                                 (Unuadited)            
         
                                             Nine Months ended September 30,
                                                 1998                  1997
                                               ________              ________
Operating Activities         
Net loss                                   $ (5,914,000)         $ (5,717,000)
Adjustments to reconcile net loss to net 
cash used in operating activities:         
  Restricted proceeds from investment          (445,000)             (513,000)
  Depreciation and amortization               1,009,000               887,000
  Accrued interest                            4,199,000             4,157,000
  Interest income from restricted cash          (30,000)                    -
  Reversal of previously recorded 
    interest expense                            (62,000)                    -
Changes in operating assets and liabilities         
  Other current assets                           78,000               149,000
  Other non-current assets                       (4,000)               (6,000)
  Accounts payable, accrued expenses 
    and other current liabilities               721,000               142,000
                                              _________             _________
        Net cash used in operating activities  (448,000)             (901,000)
                                              _________             _________
         
Investing Activities         
Proceeds from asset dispositions                      -               110,000
                                              _________             _________
        Net cash provided by 
        investing activities                          -               110,000
                                              _________             _________

Financing Activities         
Proceeds from notes receivable and other 
long-term assets                                219,000               176,000
Utilization of proceeds from charter 
  of casino barge                                     -               822,000
Principal payments on notes payable and 
  other long-term obligations                         -              (119,000)
                                              _________             _________
        Net cash provided by 
        financing activities                    219,000               879,000
                                              _________             _________
         
Increase (decrease) in cash                    (229,000)               88,000
Cash at beginning of year                       381,000               265,000
                                              _________             _________
Cash at end of period                      $    152,000          $    353,000
                                           ============          ============

See Notes to Consolidated Financial Statements         


<PAGE 6>
AMERICAN GAMING & ENTERTAINMENT, LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)

NOTE 1:  BASIS OF PRESENTATION

The accompanying unaudited Consolidated Interim Financial Statements have 
been prepared in accordance with generally accepted accounting principles 
for interim financial information and the instructions to Form 10-QSB and 
Article 10 of Regulation S-X.  The unaudited Consolidated Interim Financial 
Statements include the accounts of American Gaming & Entertainment, Ltd. 
and its subsidiaries (collectively, the "Company"). The unaudited 
Consolidated Interim Financial Statements do not include all of the 
information and footnotes required by generally accepted accounting 
principles for complete financial statements. In the opinion of the 
Company, all adjustments (including normal recurring accruals) and 
disclosures (including events occurring subsequent to September 30, 1998) 
considered necessary for a fair presentation have been included.  Operating 
results for the three and nine month periods ended September 30, 1998 may 
not be indicative of the results that may be expected for the year ending 
December 31, 1998. For further information, reference is also made to the 
Consolidated Financial Statements contained in the Company's Annual Report 
on Form 10-KSB for the year ended December 31, 1997.

The accompanying unaudited Consolidated Interim Financial Statements have 
been prepared on a going concern basis, which contemplates continuity of 
operations, realization of assets and liquidation of liabilities in the 
ordinary course of business. As further described in Note 2, the Company 
has sustained recurring operating losses since its inception. The Company 
has also had a history of insufficient liquidity and has been dependent 
upon its largest stockholder, Shamrock Holdings Group, Inc. ("Shamrock"), 
and certain related entities (The Bennett Funding Group, Inc. ("Bennett 
Funding") and Bennett Management and Development Corp. ("Bennett 
Management"), collectively with Shamrock, the "Bennett Entities") for both 
working capital and project related financing. As a result, the Company's 
recurring losses, negative working capital, stockholders' deficiency, 
defaults under its debt agreements, uncertainties relating to the ability 
to consummate the liquidation of certain of its subsidiaries (see Notes 2 
and 3) and uncertainties relating to the bankruptcy filings of the Bennett 
Entities and securities fraud charges by the federal government against 
Bennett Funding and Bennett Management raise substantial doubt about the 
ability of the Company to continue as a going concern. Management's plans 
concerning these matters are discussed in Note 2. The accompanying 
unaudited Consolidated Interim Financial Statements do not include any 
additional adjustments that might result from the outcome of these 
uncertainties.

NOTE 2:  LIQUIDITY AND CONTINUATION OF BUSINESS

Given the Company's present financial and liquidity position, the legal 
problems described above relating to the Bennett Entities (see Note 1) and 
the Company's other litigation described below (see Note 8), the business 
of the Company is unlikely to continue to be the ownership of equity 
interests in casino gaming ventures. Additionally, the Company's ability to 
continue in business is dependent upon numerous factors, discussed below.


<PAGE 7>

The Company had available cash of approximately $152,000 as of September 
30, 1998. The Company believes that such cash is sufficient to fund the 
Company's operations, excluding the Company's obligations to Shamrock and, 
if applicable, Bennett Management, through the end of 1998, based on the 
Company's current level of operations and projected expenditures.

The Company's only current significant source of cash receipts is payments 
of $25,000 per month through August 2000 under a note (the "Keno Note") 
issued by American Heartland Corporation ("AHC") to the Company in 
connection with the sale of its keno operations. On September 22, 1998, AHC 
asserted set offs against the Keno Note aggregating approximately $198,000 
(see Note 8).

Pursuant to a Charter Agreement (the "Charter Agreement") dated as of 
February 17, 1995 between the Company and President Mississippi Charter 
Corporation ("PMCC"), PMCC is leasing the Gold Coast Barge from the 
Company. On November 6, 1998, PMCC and the Company entered into a First 
Amendment to Charter (the "Charter Amendment", collectively with the 
Charter Agreement, the "Charter") (see Note 3). Pursuant to the Charter 
Amendment, among other things, (i) PMCC paid $4,105,000 into an escrow 
account (the "Escrow Account") for the benefit of the creditors of AMGAM 
Associates ("AMGAM") and American Gaming and Resorts of Mississippi, Inc. 
("AGRM"), each a wholly-owned subsidiary of the Company, (ii) PMCC shall 
pay into the Escrow Account a monthly charter payment of $215,000 (the 
"PMCC Payments") for 16 1/2 months, commencing December 1, 1998 and ending on 
April 15, 2000 (the "Remaining Charter Term"). Pursuant to a settlement 
agreement (the "Settlement Agreement") agreed to by the Company, AMGAM, 
AGRM, Shamrock and the Committees, the Company and Shamrock, collectively, 
(a) should receive approximately $2,997,000 from the payment made by PMCC 
into the Escrow Account and (b) should receive approximately $161,000 per 
month from the PMCC Payments (the "AGEL/Shamrock Payments"). However, the 
Settlement Agreement is subject to the approval of the United States 
Bankruptcy Court, Southern District of Mississippi (the "Mississippi 
Bankruptcy Court"), and there can be no assurance that the Settlement 
Agreement will be approved or that AGEL and/or Shamrock will receive any 
payments from the Escrow Account.

Notwithstanding a prior agreement which provided that the Company would 
receive 20% of any AGEL/Shamrock Payments (the "Escrow Allocation 
Agreement"), the Company and the Bennett Entities agreed on October 21, 
1998 that any AGEL/Shamrock Payments would be escrowed and disbursed only 
upon the order of the United States Bankruptcy Court, Northern District of 
New York (the "New York Bankruptcy Court").

The Company expects that it will not have sufficient cash to operate beyond 
December 31, 1998 if it does not receive payments under the Keno Note, the 
Mississippi Bankruptcy Court and the New York Bankruptcy Court do not 
approve disbursements to AGEL of any portion of the PMCC Payments and the 
Company is unable to generate additional cash through the sales of assets, 
or otherwise. The Company would then need to pursue a formal plan of 
reorganization or liquidation of the Company.

The Company's ability to continue in business is also dependent upon (i) 
obtaining Shamrock's and, if necessary, Bennett Management's agreement to 
modify, terminate or restructure on terms


<PAGE 8>

 acceptable to the Company all obligations due from the Company to Shamrock 
and, if applicable, Bennett Management, (ii) consummating the liquidations 
under Chapter 11 of the Code of AMGAM and AGRM, under plans acceptable to 
the Company, resulting in a liquidation of the various trade and debt 
obligations of those entities, and (iii) satisfactorily resolving 
litigation filed against the Company. (See Note 8 for material developments 
in legal proceedings). However, there can be no assurance the Company will 
be successful in those efforts. If the Company is unsuccessful in these 
efforts, the Company would then need to pursue a formal plan of 
reorganization or liquidation of the Company.

Either reorganization or liquidation would generally result in the sale of 
the Company's assets to satisfy outstanding obligations. If either such 
action is necessary, all of the Company's obligations would probably not be 
completely satisfied and the stockholders of the Company would probably not 
recover any of their investment in the Company.

For a discussion of specific factors affecting the Company's liquidity and 
continuation of business, see the Company's Annual Report on Form 10-KSB 
for the year ended December 31, 1997.

As of September 30, 1998, the Company had recorded as "Restricted Cash" in 
the accompanying unaudited Consolidated Interim Financial Statements 
approximately $1,105,000 (the "Restricted Cash") attributable to profit 
distributions and interest thereon received by the Company relating to the 
Company's 24.5% beneficial equity interest (the "RSR Interest") in RSR, LLC 
("RSR"), a limited liability company formed by the Company and a group of 
non-affiliated individuals, representing the equivalent of a 4.9% equity 
interest in a riverboat gaming and entertainment complex in the City of 
Rising Sun, Indiana on the Ohio River (the "Rising Sun Project"). The 
Company has transferred legal title to the RSR Interest to NBD Bank, N.A., 
as trustee ("NBD"). NBD is holding the distributions received in respect of 
the RSR Interest in trust until such time as NBD sells the RSR Interest, 
for the benefit of the Company (see Note 3).

NOTE 3:  SIGNIFICANT DEVELOPMENTS WITH RESPECT TO INVESTMENTS


Mississippi

On November 6, 1998, PMCC and the Company entered into the Charter 
Amendment. The Charter Amendment was entered into with the concurrence of 
AMGAM, AGRM, the Official Committee of Unsecured Creditors of AMGAM 
Associates, the Official Committee of Unsecured Creditors of American 
Gaming and Resorts of Mississippi, Inc. (collectively, the "Committees") 
and Shamrock (collectively with the Company, the "AMGAM Group"). Pursuant 
to the Charter Amendment, among other things, (i) PMCC paid $4,105,000 into 
the Escrow Account, (ii) PMCC shall pay into the Escrow Account the PMCC 
Payments for the Remaining Charter Term, (iii) PMCC shall pay into the 
Escrow Account a late fee of $21,500 for each PMCC Payment which is paid 
later than the tenth of such month, (iv) PMCC and the AMGAM Group will fund 
equally an escrow account not to exceed $1,000,000 to remove the Gold Coast 
Barge from PMCC's Biloxi, Mississippi site at the end of the Remaining 
Charter Term, (v) at any time during the Remaining Charter Term, PMCC has 
the right to make a written offer to purchase the Gold Coast Barge, which 
offer shall be deemed accepted unless rejected by the


<PAGE 9>

AMGAM Group within thirty days of receipt of such offer, (vi) the Charter 
or the Gold Coast Barge may be assigned or sold, subject to PMCC's written 
consent, which may not be unreasonably withheld, (vii) during the Remaining 
Charter Term, PMCC has a right of first refusal to purchase the Gold Coast 
Barge on the same terms and conditions set forth in any offer acceptable to 
the AMGAM Group and (viii) PMCC and the AMGAM Group executed mutual 
releases and are filing appropriate pleadings seeking dismissal, with 
prejudice, of all lawsuits and counterclaims, including suits brought by 
the Company against PMCC and President Riverboat Casino - Mississippi, Inc. 
and counterclaims filed by PMCC against the Company alleging various 
respective breaches of the Charter Agreement.

On August 21, 1998, AMGAM, AGRM, the Committees and the Company filed a 
disclosure statement (the "Disclosure Statement") and joint plan of 
liquidation (the "Plan") for AMGAM and AGRM in the Mississippi Bankruptcy 
Court. The Mississippi Bankruptcy Court has scheduled a preliminary hearing 
on the Disclosure Statement on December 18, 1998.

The Plan incorporates the Settlement Agreement. Pursuant to the Plan, the 
Company would transfer to a creditors trust for the holders of allowed 
claims in the bankruptcy proceedings of AMGAM and AGRM (excluding the 
Company and Shamrock) (a) an undivided 25% ownership interest in the Gold 
Coast Barge and (b) the Charter. Such assets will be held by a trustee (the 
"Mississippi Trustee"). The Mississippi Trustee would receive and disburse 
in accordance with the terms of the Plan (a) all PMCC Payments and (b) with 
respect to the acquisition by PMCC from AMGAM of substantially all of the 
furniture, fixtures and equipment, including certain slot machines, 
formerly used in the operation of the Gold Shore Casino (the "FF&E 
Payments").

Pursuant to the Plan, each administrative and priority claim, as defined in 
the U.S. Bankruptcy Code (the "Code"), incurred in connection with the 
bankruptcy proceedings of AMGAM and AGRM would be paid in full from the 
respective estates of AMGAM and AGRM in accordance with statutory 
priorities pursuant to the Code. 

Pursuant to the Plan, each secured claim (excluding a first preferred ship 
mortgage (the "Ship Mortgage") held by Shamrock on the Gold Coast Barge) 
would be either paid in full from the sale of the related collateral or 
satisfied in full by abandoning the collateral to the secured creditor. 

Pursuant to the Plan, each unsecured claim, excluding any claims of the 
Company and Shamrock ("Third Party Claims"), would be paid from the assets 
of the respective estates of AMGAM and AGRM, including (a) the funds 
remaining in an escrow account for the benefit of the creditors of AMGAM 
and AGRM, (b) all FF&E Payments made since October 1, 1995, (c) 
approximately $1,108,000 from the payment made by PMCC into the Escrow 
Account pursuant to the Charter Amendment, (d) approximately $54,000 from 
the PMCC Payments for the Remaining Charter Term, and (e) 25% of the net 
proceeds of a sale of the Gold Coast Barge, if any. Most Third Party Claims 
would be paid on a pro rata basis, however, certain Third Party Claims 
would only be paid after all other Third Party Claims are paid. 

Pursuant to the Plan, the Company's and Shamrock's unsecured claims and the 
Ship Mortgage (in the collective claimed amount of $33,000,000) would be 
paid from (a) the AGEL/Shamrock 


<PAGE 10>

Payments and (b) 75% of the net proceeds of a sale of the Gold Coast Barge, 
if any. As discussed above, the Company and the Bennett Entities agreed 
that any AGEL/Shamrock Payments would be escrowed and disbursed only upon 
the order of the New York Bankruptcy Court (see Note 2).

Pursuant to the Plan, all equity interests in AMGAM and AGRM would be 
canceled as of the effective date of the Plan.

The amounts to be paid to creditors would be subject to the claim allowance 
process in the AMGAM and AGRM bankruptcies, pursuant to which all allowed 
claim amounts, in the order set forth above, would be fixed for purposes of 
distributions under the Plan.

There can be no assurance that that the creditors in the AMGAM and AGRM 
bankruptcy proceedings will approve the Plan in accordance with the 
provisions of the Code or that the Plan will thereafter be confirmed by the 
Mississippi Bankruptcy Court.

Harolds Club Casino

Prior to 1996, Shamrock assumed responsibility for all carrying costs of 
the Harolds Club property in Reno, Nevada including, but not limited to, 
lease payments under certain land leases held by the Company related to the 
Harolds Club, taxes, insurance and utilities. Such land leases were 
assigned by the Company to Shamrock as of September 29, 1998. The Company 
could still be ultimately obligated under such leases, pursuant to certain 
guaranties of lease executed by the Company. The Company has been informed 
by Shamrock and the lessors under such leases that Shamrock has not made 
any lease payments from April 1996 through September 1998 due under such 
leases or quarterly property taxes due under such leases, collectively 
totaling approximately $2,462,000. The lessors have, among other rights, 
the right to terminate the respective leases and hold the Company 
responsible for all obligations under such leases through the end of the 
respective lease terms. The Company has recorded the unpaid lease payments 
and property taxes from April 1996 through September 1998  (the "Unpaid 
Harolds Obligations") as current liabilities as of September 30, 1998. The 
Company has also recorded the amounts of the Unpaid Harolds Obligations as 
a receivable due from Shamrock, but, as a result of the Company's 
determination that there is a substantial likelihood that such amounts will 
be uncollectible, the Company has fully reserved for such amounts at the 
same time such amounts have been recorded as a receivable.

On October 8, 1998, the New York Bankruptcy Court, authorized the sale by 
Shamrock of the Harolds Club. Shamrock advised the Company that such sale 
is scheduled to close by October 30, 1998. However, the Company understands 
that the closing has been delayed, although anticipated to occur shortly.  
The leases discussed above shall terminate at closing, and the Company 
shall be released from all obligations under such leases, except for 
environmental conditions resulting from the Company's intentional or 
negligent conduct. Additionally, lawsuits filed against the Company by the 
five lessors of the Harolds Club property and cross-claims filed against 
the Company by co-defendants will be dismissed upon closing.


<PAGE 11>

Rising Sun

The other members of RSR are currently obligated to purchase the RSR 
Interest at an average appraised fair market value. The Company and the 
other members of RSR are in the process of obtaining separate appraisals of 
the RSR Interest. Upon the closing of the sale of the RSR Interest, the 
Restricted Cash and the proceeds from such sale shall be distributed by NBD 
to the Company.

Sioux City Sue 

During 1995, the Company leased the "Sioux City Sue" riverboat vessel and 
supporting barge (collectively, the "Vessels") from Bennett Management. The 
Company, pursuant to such lease, insured the Vessels and named Bennett 
Management as an additional insured party. In or about September 1995, the 
Vessels were vandalized and burglarized and in or about December 1995, the 
supporting barge was grounded (collectively, the "Claims"). Effective 
August 10, 1998, the Company assigned to Bennett Management the Company's 
right to proceed against the underwriters who issued the marine insurance 
policy covering the Vessels and the right to collect insurance proceeds 
from the Claims. 

NOTE 4:  AMOUNTS DUE TO RELATED PARTIES AND LONG-TERM DEBT

The Company is delinquent in the payment of (i) interest due under the 
Company's various loan agreements with Shamrock and (ii) rent which was due 
under an operating lease between the Company and Bennett Management (the 
"SCS Lease") with respect to the Vessels, which SCS Lease Shamrock orally 
represented to the Company that Bennett Management, prior to its bankruptcy 
filing, assigned to Shamrock. The Company has therefore classified all 
indebtedness due to Shamrock as current liabilities in the accompanying 
unaudited Consolidated Interim Financial Statements. At September 30, 1998 
and December 31, 1997, the Company had accrued for financial statement 
purposes outstanding amounts due Shamrock of approximately $66,601,000 and 
$61,952,000, respectively, including accrued interest of approximately 
$20,987,000 and $16,788,000, respectively.


Such amounts due Shamrock also include approximately $2,701,000 due under 
the SCS Lease and accrued dividends of approximately $2,403,000 and 
$1,953,000 at September 30, 1998 and December 31, 1997, respectively, on 
the Company's Series C Cumulative Preferred Stock ("Series C Preferred 
Stock") and Series D Cumulative Preferred Stock ("Series D Preferred 
Stock").

The balance of accrued long-term debt due Shamrock at September 30, 1998 
and December 31, 1997 is comprised of approximately (i) $1,066,000, at the 
end of each period, related to a working capital line of credit, (ii) 
$2,041,000, at the end of each period, related to a term loan to assist the 
Company in financing pertaining to a casino in Biloxi, Mississippi which 
the Company owned, managed and operated in prior years (the "Gold Shore 
Casino"), (iii) $5,917,000, at the end of each period, of indebtedness 
recorded by the Company relating to payments received pursuant to the 
Charter Agreement to which Shamrock asserted it was entitled, (iv) 
$384,000, at the end of each period, related to the Company's utilization 
of slot machine sales proceeds, 


<PAGE 12>

which slot machines were beneficially owned by Bennett Management and which 
slot machine proceeds Shamrock orally represented to the Company that 
Bennett Management, prior to its bankruptcy filing, assigned to Shamrock 
and (v) $31,101,000, at the end of each period, related to project 
financing for the Gold Shore Casino.

The accrued outstanding amount due Shamrock at September 30, 1998 
represents approximately 91% of the Company's liabilities in the 
accompanying unaudited Consolidated Interim Financial Statements as of such 
date and is substantially in excess of the Company's estimates of the fair 
value of the Company's assets.
 
The Company has entered into the Escrow Allocation Agreement, under which 
amounts received by Shamrock will reduce the Company's indebtedness to 
Shamrock (see Note 3).  The Company has also agreed to repay indebtedness 
to Shamrock of $125,000 from the sale in 1997 of certain securities, which 
amount has not yet been paid to Shamrock.

NOTE 5:  OTHER RELATED PARTY ISSUES

Shamrock, of which Richard C. Breeden, the bankruptcy trustee (the 
"Trustee") is the sole stockholder, owns (i) 4,423,454 shares of Common 
Stock, and (ii) all of the Company's outstanding Series A Preferred Stock, 
convertible into, and voting as, 1,399,565 shares of Common Stock. 
Additionally, the Trustee owns (i) an additional 1,500,000 shares of Common 
Stock and (ii) all of the Company's outstanding Series C Preferred Stock, 
Series D Preferred Stock and Series E Preferred Stock, convertible as of 
September 30, 1998 into 1,327,131,307 shares of Common Stock. The Company 
does not have a sufficient number of authorized shares of Common Stock to 
enable the conversion of all of the Series C Preferred Stock, the Series D 
Preferred Stock and the Series E Preferred Stock. On April 1, 1996 the 
Board of Directors voted to request the stockholders of the Company to 
approve an amendment to the Company's Restated Certificate of Incorporation 
increasing the number of authorized shares of Common Stock to 500,000,000 
shares no later than the next annual meeting of the Company's stockholders. 
The Board of Directors has not set a date for such annual meeting. Assuming 
the Trustee converted as of September 30, 1998 that number of shares of the 
Series C Preferred Stock, the Series D Preferred Stock and the Series E 
Preferred Stock convertible into the total number of the Company's 
presently authorized but unissued shares of Common Stock (i.e. 37,467,898 
shares), the Trustee, on behalf of the estates of certain Bennett Entities 
and Shamrock, would own approximately 86.8% of the total outstanding shares 
of Common Stock and approximately 87.1% of the total voting power 
represented by the total outstanding voting securities of the Company. 
Assuming the Company's stockholders approve an amendment to the Company's 
Restated Certificate of Incorporation increasing the number of authorized 
shares of Common Stock to 500,000,000 shares and the Trustee converted as 
of September 30, 1998 that number of shares of the Series C Preferred 
Stock, the Series D Preferred Stock and the Series E Preferred Stock 
convertible into the total number of the Company's authorized but unissued 
shares of Common Stock immediately after giving effect to such amendment 
(i.e. resulting in a total of 487,467,898 shares of Common Stock being 
issued to the Trustee as of such date), the Trustee, on behalf of the 
estates of certain Bennett Entities and Shamrock, would own approximately 
98.7% of both the total outstanding shares of Common Stock and the total 
voting power represented by the total outstanding voting securities of the 
Company.


<PAGE 13>

NOTE 6:  DECONSOLIDATION OF AMGAM AND AGRM

As a result of the bankruptcy proceedings under Chapter 11 of the Code with 
respect to AMGAM and AGRM, and the expected liquidation of these 
subsidiaries in the near future, the Company's control of these entities is 
likely to be temporary. In accordance with generally accepted accounting 
principles, the Company has elected to deconsolidate AMGAM and AGRM and 
present the results of operations for AMGAM and AGRM on the equity basis of 
accounting as a single line item in the accompanying unaudited Consolidated 
Interim Statements of Operations for financial reporting purposes. A 
combined unaudited condensed balance sheet of these entities as of 
September 30, 1998 and December 31, 1997 is as follows:


                                   September           December 
                                    30, 1998           31, 1997
                                  __________          _________
Assets

  Current Assets and Other        $3,796,000          $3,767,000
  Property and Equipment, Net         41,000              41,000
                                  __________          __________
          Total Assets            $3,837,000          $3,808,000
                                  ==========          ==========


Liabilities and Stockholders' Deficiency

  Current Liabilities            $29,912,000         $27,862,000
  Amounts Due to Parent           12,147,000          12,147,000
  Stockholders' Deficiency       (38,222,000)        (36,201,000)
                                  __________          __________
       Total Liabilities and 
       Stockholders' Deficiency $  3,837,000        $  3,808,000
                                  ==========          ==========
NOTE 7:  RECENT ACCOUNTING PRONOUNCEMENTS

In June 1997, the FASB issued SFAS No. 130, "Reporting Comprehensive 
Income." This statement establishes standards for reporting and disclosure 
of comprehensive income. Reclassification of financial information for 
earlier periods presented for comparative periods is required under SFAS 
No. 130. The Company adopted SFAS No. 130 effective January 1, 1998. This 
statement only requires additional disclosures in the Company's 
consolidated financial statements and its adoption did not have any impact 
on the Company's consolidated financial position or results of operations. 
Currently the Company has no components of other comprehensive income.

In June 1997, the FASB issued SFAS No. 131, "Disclosures about Segments of 
an Enterprise and Related Information." This statement establishes 
standards for the reporting of information about operating segments and 
requires the reporting of selected information about operating segments in 
interim financial statements. Reclassification of segment information for 
earlier periods presented for comparative periods is required under SFAS 
No. 131. The Company adopted SFAS No. 131 effective January 1, 1998 
although presentation for interim periods in the initial year of adoption 
is not required. Adoption of this statement is not expected to result in 
any changes to the Company's presentation of financial information for the 
year ending December 31, 1998.


<PAGE 14>

NOTE 8:  CONTINGENCIES

On September 22, 1998, AHC asserted various set offs against the Keno Note 
aggregating approximately $198,000. AHC has asserted that the Company 
improperly repaired a computer used for generating keno tickets and is 
seeking indemnification from the Company of approximately $131,000 
resulting from its defense of an action brought by an individual alleging 
receipt of a winning keno ticket. AHC is also seeking reimbursement of 
approximately $62,000 as a result of the Company's alleged breach of 
representations and warranties regarding two keno computer systems. The 
Company has advised AHC that it disputes the set offs alleged by AHC. The 
Company also advised AHC that any non-payment of the Keno Note would 
constitute an event of default under the Keno Note, enabling the Company to 
declare the entire unpaid principal balance of the Keno Note, together with 
accrued interest, immediately due and payable. However, if the Company is 
unable to prevent AHC from setting off the payments due under the Keno 
Note, the Company's business and financial condition would be materially 
adversely effected. The Company would then need to pursue a formal plan of 
reorganization or liquidation which would generally result in the sale of 
the Company's assets to satisfy outstanding obligations. There can be no 
assurance that if either action is required to be pursued that all such 
obligations would be completely satisfied. Further, in the event of either 
action, it is unlikely that stockholders of the Company will recover any of 
their investment in the Company.

As previously disclosed in the Company's Quarterly Report on Form 10-QSB 
for the period ended September 30, 1997, on November 2, 1995 IGT filed a 
complaint against the Company in the Circuit Court of Harrison County, 
Mississippi, Second Judicial District (the "IGT Complaint") seeking a 
judgment against the Company under a guaranty agreement (the "IGT 
Guaranty") by the Company to IGT of (i) the principal amount of 
approximately $3,306,000 plus accrued interest of approximately $864,000 
and (ii) attorneys fees of approximately $108,000. On October 13, 1997 the 
Company paid IGT $375,000, which amount had been previously accrued, to 
settle such lawsuit.

IGT has alleged that such settlement was contingent on the Company and 
Shamrock and related entities waiving any claim to payments made by PMCC to 
AMGAM relating to the purchase of IGT slot machines from AMGAM. The Company 
and Shamrock have agreed to waive such claim and are negotiating the form 
of waiver of such claim with IGT. If the New York Bankruptcy Court does not 
approve the execution of the waiver by Shamrock, then, to the extent (i) 
funds are not paid to IGT pursuant to a plan of liquidation in the 
bankruptcy proceeding of AMGAM and (ii) the IGT Guaranty is enforceable 
against the Company, the Company's business and financial condition would 
be materially adversely affected. Management is unable, with any degree of 
certainty, to predict the outcome, or to estimate the amount of liability, 
if any, that may result from this action. However, should the plaintiff 
prevail, this litigation would have a material adverse effect on the 
Company's business and financial condition. The Company would then need to 
pursue a formal plan of reorganization or liquidation which would generally 
result in the sale of the Company's assets to satisfy outstanding 
obligations. There can be no assurance that if either action is required to 
be pursued that all such obligations would be completely satisfied. 
Further, in the event of either action, it is unlikely that stockholders of 
the Company will recover any of their investment in the Company.



<PAGE 15>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS

Results of Operations:  Comparison of the three month periods ended 
September 30, 1998 and September 30, 1997

Revenues

The Company did not record any revenues for the three months ended 
September 30, 1998. The Company currently receives an annual distribution 
equal to (i) 4.9% of the first $10,000,000 of annual net cash flow from the 
operations of the Rising Sun Project, if any, and (ii) 1.63% of annual net 
cash flow in excess of $45,000,000 from such operations, if any. Through 
the six months ended June 30, 1998, the Company had received substantially 
all of its anticipated annual distribution for 1998.  For the three months 
ended September 30, 1997, the Company recorded revenues of approximately 
$133,000 attributable to the RSR Interest. Cash received from the Rising 
Sun Project is recorded as "Restricted Cash" in the accompanying unaudited 
Consolidated Balance Sheets (see Note 2).

Costs and Expenses

Selling, general and administrative expenses were approximately $485,000 
for the three months ended September 30, 1998, representing an decrease of 
approximately $106,000 or approximately 21% when compared to the three 
months ended September 30, 1997. Such decrease was primarily due to 
decreases in compensation, rent, insurance and consulting expenses. 

Depreciation and amortization costs were approximately $336,000 for the 
three months ended September 30, 1998, representing an increase of 
approximately $41,000 or approximately 14% when compared to the three 
months ended September 30, 1997. The furniture, fixtures and equipment on 
the Gold Coast Barge were being depreciated over a useful life of 15 years 
for the three months ended September 30, 1997; the Company reevaluated the 
useful life of such assets in the fourth quarter of 1997 and determined 
that such assets have a useful life of 10 years. Accordingly, for the three 
months ended September 30, 1998, the Company depreciated such assets based 
on a remaining useful life of six years.

Net interest expense for the three months ended September 30, 1998 was 
approximately $1,327,000, a decrease of approximately $69,000 or 
approximately 5% compared to the three months ended September 30, 1997. 
Interest expense decreased approximately $62,000 while interest income 
increased approximately $7,000 during the three months ended September 30, 
1998 compared to the three months ended September 30, 1997. Interest 
expense for the three months ended September 30, 1998 included a reversal 
of previously recorded interest expense in the amount of approximately 
$62,000 due to a refund of such interest pursuant to a legal settlement.

The Company recorded a net gain of approximately $3,000 for the three 
months ended September 30, 1997 related to the sale of certain furniture, 
fixtures and equipment. No such gain was recorded for the three months 
ended September 30, 1998.


<PAGE 16>

Results of Operations:  Comparison of the nine month periods ended 
September 30, 1998 and September 30, 1997

Revenues

Revenues for the three months ended September 30, 1998 were approximately 
$445,000, a decrease of approximately $71,000 or approximately 14% when 
compared to the nine months ended September 30, 1997. For the nine months 
ended September 30, 1998 and September 30, 1997, the Company recorded 
revenues of approximately $445,000 and $513,000, respectively, attributable 
to the RSR Interest. Cash received from the Rising Sun Project is recorded 
as "Restricted Cash" in the accompanying unaudited Consolidated Balance 
Sheets (see Note 2).

Costs and Expenses

Selling, general and administrative expenses were approximately $1,283,000 
for the nine months ended September 30, 1998, representing an increase of 
approximately $122,000 or approximately 14% when compared to the nine 
months ended September 30, 1997. However, selling, general and 
administrative expenses for the nine months ended September 30, 1997 
included the reversal of a previously recorded consulting expense in the 
amount of approximately $195,000 due to a consulting firm advising the 
Company that such firm was not seeking payment of such unpaid amount and a 
reversal of previously recorded state taxes in the amount of approximately 
$188,000 due to a tax refund. Exclusive of such reversals, selling, general 
and administrative expenses decreased approximately $347,000 for the nine 
months ended September 30, 1998 as compared to the nine months ended 
September 30, 1997. Such decrease was primarily due to decreases in 
compensation, rent, insurance, consulting expense and expenses related to 
real property in Alabama and the Harolds Club in Nevada.

Depreciation and amortization costs were approximately $1,009,000 for the 
nine months ended September 30, 1998, representing an increase of 
approximately $81,000 or approximately 14% when compared to the nine months 
ended September 30, 1997. The furniture, fixtures and equipment on the Gold 
Coast Barge were being depreciated over a useful life of 15 years for the 
nine months ended September 30, 1997; the Company reevaluated the useful 
life of such assets in the fourth quarter of 1997 and determined that such 
assets have a useful life of 10 years. Accordingly, for the nine months 
ended September 30, 1998, the Company depreciated such assets based on a 
remaining useful life of six and a half years.

Net interest expense for the nine months ended September 30, 1998 was 
approximately $4,067,000, a decrease of approximately $37,000 or 
approximately 1% compared to the nine months ended September 30, 1997. 
Interest expense decreased approximately $24,000 while interest income 
increased approximately $13,000 during the nine months ended September 30, 
1998 compared to the nine months ended September 30, 1997. Interest expense 
for the nine months ended September 30, 1998 included a reversal of 
previously recorded interest expense in the amount of approximately $62,000 
due to a refund of such interest pursuant to a legal settlement.


<PAGE 17>

The Company recorded a net gain of approximately $5,000 for the nine months 
ended September 30, 1997 related to the sale of certain furniture, fixtures 
and equipment.  No such gain was recorded for the nine months ended 
September 30, 1998.

Changes in Financial Condition, Liquidity and Capital Resources

As of September 30, 1998, the Company had no committed financing 
arrangements and a working capital deficiency of approximately $68,667,000. 
For a discussion of liquidity and capital resources, see Note 2 to the 
unaudited Consolidated Interim Financial Statements.

Risk Factors; Forward Looking Statements

Management's Discussion and Analysis contains forward-looking statements 
regarding the Company's future plans, objectives and expected performance. 
These statements are based on assumptions that the Company believes are 
reasonable, but are subject to a wide range of risks and uncertainties, and 
a number of factors could cause the Company's actual results to differ 
materially from those expressed in the forward-looking statements. These 
factors include, among others, the uncertainties related to (i) the 
Company's ability to obtain sufficient funds for its operations, through 
payments to be received under the Keno Note, the charter of the Gold Coast 
Barge, sales of assets, or otherwise, (ii) obtaining Shamrock's and, if 
necessary, Bennett Management's agreement to modify, terminate or 
restructure on terms acceptable to the Company all obligations due from the 
Company to Shamrock and, if applicable, Bennett Management, (iii) 
consummating the liquidations under Chapter 11 of the Code of AMGAM and 
AGRM under plans acceptable to the Company, resulting in a liquidation of 
the various trade and debt obligations of those entities, (iv) 
satisfactorily resolving the legal proceedings filed against the Company 
(see Note 8 to the unaudited Consolidated Interim Financial Statements), 
and (v) the legal problems described above relating to certain Bennett 
Entities (see Notes 1 and 2 to the unaudited Consolidated Interim Financial 
Statements).


<PAGE 18>

PART II.      OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

For a discussion of legal proceedings, see Note 8 to the unaudited 
Consolidated Interim Financial Statements.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

For a discussion of defaults with respect to the Company's indebtedness due 
to Shamrock, see Notes 2 and 4 to the unaudited Consolidated Interim 
Financial Statements.

The Company has accrued and declared, but has not paid as of September 30, 
1998, dividends totaling approximately $152,000 which were due and payable 
on the outstanding shares of its Series C Preferred Stock as of December 
31, 1994. The Company has accrued and declared, but has not paid as of 
September 30, 1998, dividends totaling approximately $152,000 which were 
due and payable on the outstanding shares of its Series D Preferred Stock 
as of December 31, 1994.

Additionally, the Company has accrued, but has not declared or paid as of 
September 30, 1998, dividends totaling approximately $1,100,000 which were 
due and payable on the outstanding shares of its Series C Preferred Stock 
from January 1, 1995 through September 30, 1998. The Company has accrued, 
but has not declared or paid as of September 30, 1998, dividends totaling 
approximately $1,000,000 which were due and payable on the outstanding 
shares of its Series D Preferred Stock from January 1, 1995 through 
September 30, 1998. Although such dividends do not constitute actual 
liabilities of the Company until declared, the Company has accrued for such 
dividends because, under the terms of the Series C Preferred Stock and the 
Series D Preferred Stock, dividends are cumulative whether or not declared 
and the Company is prohibited from paying dividends on, purchasing or 
redeeming any of its Series A Preferred Stock or Common Stock so long as 
any such cumulated dividends are unpaid. The Company is prohibited under 
the General Corporation Law of Delaware from declaring such dividends 
unless the Company has (i) capital surplus or (ii) net profits in the 
fiscal year in which such dividends are declared and/or the preceding 
fiscal year.



<PAGE 19>

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K  

(a)     Exhibits

Exhibit 
Number  Description

10.12   Settlement Agreement dated as of August 21, 1998 by and 
        between the Company, AMGAM Associates, American Gaming 
        and Resorts of Mississippi, Inc., Shamrock Holdings 
        Group, Inc., Bennett Management and Development Co., the 
        Official Committee of Unsecured Creditors of AMGAM 
        Associates, and the Official Unsecured Creditors 
        Committee of American Gaming and Resorts of Mississippi, 
        Inc.

10.25   Form of First Amendment to Charter, amending the Charter dated 
        as of February 17, 1995, made and entered into November 6, 
        1998 (effective as of December 1, 1998) by President 
        Mississippi Charter Corporation and the Company, with the 
        concurrence of AMGAM Associates, American Gaming and 
        Resorts of Mississippi, Inc., the Official Committee of 
        Unsecured Creditors of AMGAM Associates, the Official 
        Committee of Unsecured Creditors of American Gaming and 
        Resorts of Mississippi, Inc., and Shamrock Holdings 
        Group, Inc.

10.26   Letter agreement dated October 21, 1998 by and between 
        Shamrock Holdings Group, Inc., Bennett Management and
        Development Co., AMGAM Associates, American Gaming and
        Resorts of Mississippi, Inc., and the Company


11      Computation of Earnings Per Share.

27      Financial Data Schedule


(b)     Reports on Form 8-K. The following reports were filed by the 
Company during the second quarter of 1995:

        (1)   Form 8-K dated August 21, 1998 with respect to the filing of 
a joint plan of liquidation in the AMGAM and AGRM bankruptcy proceedings 
(see Note 3 to the unaudited Consolidated Interim Financial Statements).


<PAGE 20>

SIGNATURES

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




                         American Gaming & Entertainment, Ltd.




Date:      11/13/98    By:     J. DOUGLAS WELLINGTON 
                          _____________________________________
                           J. Douglas Wellington
                           President and Chief Executive Officer,
                           and Principal Accounting Officer

     



<PAGE 21>

EXHIBIT INDEX  

EXHIBIT
  NO.     DESCRIPTION                                      PAGE NO.
                    
10.12  Settlement Agreement dated as of August 21, 1998 
       by and between the Company, AMGAM Associates, 
       American Gaming and Resorts of Mississippi, Inc., 
       Shamrock Holdings Group, Inc., Bennett Management 
       and Development Co., the Official Committee of 
       Unsecured Creditors of AMGAM Associates, and the 
       Official Committee of Unsecured Creditors of 
       American Gaming and Resorts of Mississippi, Inc.        22
                    
10.25  Form of First Amendment to Charter, amending the 
       Charter dated as of February 17, 1995, made and 
       entered into November 6, 1998 (effective as of December 
       1, 1998) by President Mississippi Charter Corporation 
       and the Company, with the concurrence of AMGAM 
       Associates, American Gaming and Resorts of 
       Mississippi, Inc., the Official Committee of 
       Unsecured Creditors of AMGAM Associates, the 
       Official Committee of Unsecured Creditors of 
       American Gaming and Resorts of Mississippi, Inc., 
       and Shamrock Holdings Group, Inc.                        35

10.26   Letter agreement dated October 21, 1998 by and between
       Shamrock Holdings Group, Inc., Bennett Management and 
       Development Co., AMGAM Associates, American Gaming and
       Resorts of Mississippi, Inc., and the Company            46

11     Computation of Earnings Per Share.                       49

27     Financial Data Schedule.                                 50