SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D. C. 20549

                                    FORM 10-K

      (Mark One)

[x] ANNUAL REPORT  PURSUANT TO SECTION 13 OR 15(D) OF THE  SECURITIES  EXCHANGE
ACT OF 1934

                  FOR THE FISCAL YEAR ENDED NOVEMBER 30, 2000
                                       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 N/A

                         LOUISIANA CASINO CRUISES, INC.
               ------------------------------------------------
            (Exact name of registrant as specified in its charter)

      LOUISIANA                              72-1196619
      -------------------                 ----------------------
      (State or other jurisdiction of     (IRS Employer Identification No.)
      incorporation or organization)

      1717 River Road North
      Baton Rouge, Louisiana                     70802
      -----------------------------            --------
      (Address of principal executive offices) (Zip Code)

      Registrant's telephone number, including area code: (225) 709-7777
                                                         -----------------
      Securities registered pursuant to Section 12(b) of the Act: None
                                                                 --------
      Securities registered pursuant to Section 12(g) of the Act: None
                                                                 --------
      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  reports),  and (2) has been  subject to such
filing requirements for the past 90 days. YES   X       NO
                                              -----       -----
      Indicate by check mark if  disclosure of  delinquent  filers  pursuant to
Item  405  of  Registration  S-K is  not  contained  herein,  and  will  not be
contained,  to the  best of  registrant's  knowledge,  in  definitive  proxy or
information  statements  incorporated  by  reference  in Part III of this  Form
10-K or any amendment to this Form 10-K. [X]

      As of February 15, 2001,  the  aggregate  market value of the voting stock
held by  non-affiliates  of the registrant was $0.  (Calculated by excluding all
shares  that may be  deemed  to be  beneficially  owned by  executive  officers,
directors and greater than 10% shareholders of the registrant, without conceding
that all such persons are  "affiliates"  of the  registrant  for purposes of the
federal securities laws.)

      As of  February  15,  2001,  the  number  of  outstanding  shares  of  the
registrant's common stock was 982,783.

           DOCUMENTS INCORPORATED BY REFERENCE
None


<PAGE>
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995

      Except for historical  information contained herein, the matters discussed
herein  are  forward  looking  statements  made  pursuant  to  the  safe  harbor
provisions  of the  Private  Securities  Litigation  Reform  Act of  1995.  Such
statements involve risks and  uncertainties,  including but not limited to local
and  regional  economic  and  business  conditions,  changes in interest  rates,
changes or  developments in laws,  regulations or taxes,  actions taken or to be
taken by third  parties,  competition,  the  unpredictability  of the effects of
increased  competition,  the loss of any  licenses  or permits or the failure to
obtain an  unconditional  renewal of its gaming  license on a timely  basis,  or
other  factors  discussed  elsewhere in this report and the  documents  filed by
Louisiana Casino Cruises, Inc., a Louisiana corporation (the "Company") with the
Securities  and  Exchange  Commission.  These  factors  may cause the  Company's
results  to  differ  materially  from  the  statements  made in this  report  or
otherwise made by or on behalf of the Company.

                               PART I
ITEM 1.         BUSINESS

GENERAL

      The Company owns and operates one of two  riverboat  gaming  facilities in
Baton Rouge,  Louisiana  (the "Casino  Rouge").  Current  Louisiana  legislation
authorizes  15  riverboat  casinos  statewide  and one land based  casino in New
Orleans. In addition, three casinos operate in Louisiana on Native American land
under compact with the state.  The Casino Rouge opened on December 28, 1994. The
Casino  Rouge is managed by CRC  Holdings,  Inc.,  doing  business  as  Carnival
Resorts and Casinos ("CRC"),  an experienced  operator of gaming  facilities and
owner of  approximately  60% of the  Company's  common  stock,  no par value per
share.  For the year ended November 30, 2000,  the Company's  share of the Baton
Rouge gaming  market was 56.2% of casino  revenues and 56.2% of  admissions,  as
reported by the Louisiana State Police.

      On July  31,  2000,  the  Company  announced  that  CRC and the  Company's
minority  shareholders had signed definitive  agreements for CRC and the Company
to be acquired by Penn  National  Gaming,  Inc.  ("Penn")  (NASDAQ:  PENN).  The
definitive agreements provide for the acquisition to be consummated on or before
October 31, 2001,  although there can be no assurances that the transaction will
ever be  consummated.  The  transaction  is  subject  to  regulatory  and  other
approvals, financing and other customary closing conditions. Penn owns, operates
and conducts  wagering at its Penn National  Racecourse,  Pocono Downs Racetrack
and ten off-track  wagering ("OTW")  facilities in Pennsylvania.  Penn also owns
and  operates  Charles  Town  Races,  a live  thoroughbred  racing  facility  in
Jefferson  County,  West Virginia,  which also features 2,000 slot machines.  On
August 8, 2000,  Penn acquired the Casino Magic hotel,  casino,  golf resort and
marina in Bay St. Louis,  Mississippi  and the Boomtown Biloxi casino in Biloxi,
Mississippi from Pinnacle  Entertainment,  Inc. (NYSE:  PNK). Penn serves as the
exclusive  U.S.   wagering  hub  operator  for  the  TrackPower   direct-to-home
pari-mutual  digital  satellite  service (Dish Network),  which also distributes
races conducted at Penn facilities and certain races simulcast through Penn.

FACILITIES

      The Casino  Rouge  features a  four-story,  47,000  square foot  riverboat
casino,  replicating a 19th century Mississippi River paddlewheel steamboat, and
a two-story, 58,000 square foot dockside embarkation building. The riverboat has
a capacity of 1,800  customers and emphasizes  spaciousness  and excitement with
its ample aisle space,  15-foot  ceilings,  a large central atrium and specially
designed  lighting.  The overall effect avoids the cramped  atmosphere  found in
many riverboat  casinos.  Patrons are offered a selection of 957 gaming machines
and 44 table  games in 28,000  square  feet of gaming  space  spread  over three
decks.  The  dockside  embarkation  facility  offers  a  panoramic  view  of the
Mississippi River and features a variety of amenities,  including (i) a 268-seat
"International Marketplace Buffet," (ii) an array of food outlets, (iii) a newly
remodeled nightclub/bar,  "Rhythms," (iv) meeting space and (v) a gift shop. The
Company has begun  construction  of a 94-seat  steakhouse  and lounge,  which is
scheduled to open for business in mid 2001. All of the facilities are open seven
days a week, 24 hours a day, with eight cruises scheduled daily.

      The  Casino  Rouge's  23-acre  site is  located  on the  east  bank of the
Mississippi  River in the East Baton Rouge  Downtown  Development  District less
than  one-quarter  mile  from the  state  capital  complex.  The site is  within
approximately one mile of both Interstate 10 and Interstate 110, and the Company
believes  that the site's access to major  highways is an important  competitive
advantage  over  casinos  that  lack  such  access.  In  addition,  the site has
convenient  parking for  approximately  1,600 cars  adjacent to the  embarkation
facility.

                                       2
<PAGE>
COMPETITION

      General.  The Company  faces  competition  from  land-based  and riverboat
casinos  statewide,  casinos  on  Native  American  lands,  casinos  located  in
Mississippi  (particularly  those on the Gulf Coast) and from non-casino  gaming
opportunities  within  Louisiana  such  as  the  state  lottery,  horse  racing,
charitable bingo and video poker. The Louisiana  Riverboat Economic  Development
and Gaming Control Act (the "Louisiana Act") limits the number of gaming casinos
in Louisiana to 15 riverboat  casinos statewide and one land-based casino in New
Orleans. Absent further state legislation and local option referenda, additional
licenses cannot be granted.  Fourteen of the 15 available riverboat licenses are
currently issued and outstanding: two for Baton Rouge; three for the greater New
Orleans  area,   approximately   75  miles  from  Baton  Rouge;   five  for  the
Shreveport/Bossier  City area in the northwest part of the state,  approximately
235 miles from Baton Rouge and four for Lake  Charles in the  southwest  part of
the state,  approximately 120 miles from Baton Rouge. Three applicants,  none of
who plan to place the riverboat in Baton Rouge,  are currently  applying for the
fifteenth  license.  The Company does not know when, or if, the Louisiana Gaming
Control Board (the "Louisiana Board") will issue the fifteenth license.

      Baton Rouge Casinos. The Company's principal competitor is the other Baton
Rouge riverboat casino, Argosy Casino ("Argosy"),  which opened on September 30,
1994,  and is owned and  operated by Argosy  Gaming  Company.  Since  commencing
operations  on December  28,  1994,  the Casino Rouge has achieved an average of
59.0% of the market-share of gaming win for Baton Rouge riverboats,  as reported
by the Louisiana State Police. The Argosy property includes a 50,000 square foot
glass-enclosed  atrium and approximately 150,000 square feet of retail space. On
February 5, 2001, Argosy opened a 300-room hotel.

      New  Orleans  Casinos.  New Orleans  has three  riverboat  casinos and one
land-based  casino.  In January 2001, the only land-based  casino in New Orleans
filed for bankruptcy protection under Chapter 11.

      Native American Casinos. Gaming is also permitted on Native American lands
in Louisiana and other  states,  and there are  currently  three such  operating
Native  American  casinos in Louisiana.  The closest such casino is a land-based
facility  located  on  the  Chitimacha  reservation  in  Charenton,   Louisiana,
approximately 45 miles southwest of Baton Rouge.  However,  it is not accessible
by a major  highway,  which the  Company  believes  places  it at a  competitive
disadvantage.  The  closest  Native  American  casino to Baton  Rouge with major
highway  accessibility  is a land-based  facility  located on the  Tunica-Biloxi
reservation in Mansura,  Louisiana,  approximately  65 miles  northwest of Baton
Rouge.

      Mississippi Casinos. An emerging trend in Mississippi gaming, particularly
on the Gulf Coast (approximately 125 miles from Baton Rouge), is the development
of  large-scale  destination  resort  projects.  As of December  31,  2000,  the
Mississippi  Gaming  Commission had granted 45 gaming licenses.  Of these, 30 of
the licensees  have opened and are operating  casinos,  the remaining  licensees
represent entities that have either consolidated or closed casinos.

      Other  Competition.  From time to time proposals have been introduced into
the Louisiana  legislature to increase the number of gaming facilities permitted
in  Louisiana.  However,  to date no such  legislation  has  been  approved  and
currently there are no proposals in the legislature to issue new licenses. There
can be no assurance,  however, that such legislation will not be approved in the
future.  Alternative  forms of gaming are  available  in  Louisiana to potential
customers.  Louisiana  State law allows the operation of a state lottery,  horse
racing and charitable bingo. In July 1991,  Louisiana also authorized  operation
of video poker terminals at various types of facilities in the state,  including
taverns,  restaurants,  hotels/motels,  truck  stops and racing  facilities.  On
November 5, 1996, a statewide  local  option  referendum  was placed  before the
voters concerning the banning of video poker. As a result of this referendum, on
July 1, 1999, 33 parishes,  including  East Baton Rouge Parish,  the location of
the Casino Rouge, and three adjacent parishes banned video poker, and a total of
1,395 video  poker  machines  were shut down in East Baton Rouge  Parish and the
three adjacent  parishes.  As of November 30, 2000,  approximately  12,600 video
poker terminals at approximately  2,800  non-casino  locations were in operation
throughout the state. The non-casino locations are widely distributed throughout
the state,  and the Company believes that they have had no greater impact on the
Baton Rouge riverboat casinos than on other Louisiana riverboats.

      Competition  in the gaming  industry  is  intense in the market  where the
Company operates its gaming facility.  As new gaming  opportunities arise in new
or existing gaming  jurisdictions  and on Native  American-owned  lands,  new or
expanded  operations by others can be expected to increase  competition  for the
Company's operations and could limit new opportunities for the Company or result
in the saturation of certain gaming markets.  Casino gaming does not have a long
operating  history in the  jurisdiction  where the Company  operates  its gaming
facility  and  other  nearby  jurisdictions  and,  therefore,   the  effects  of
competition  in these  jurisdictions  cannot  be  predicted  with any  degree of
certainty.  Many of the Company's competitors outside of the greater Baton Rouge
area have more gaming industry experience, are larger and have greater financial
resources than the Company. In addition, Native American casinos have advantages
                                       3
<PAGE>
because they do not pay Louisiana  gaming taxes or admission  fees. As a result,
increased competition both inside and outside of the Company's market could have
a material adverse effect on the Company.

MANAGEMENT AGREEMENT

      CRC and the  Company  are parties to a Casino  Consulting  and  Management
Agreement,  dated  December 11, 1992, as amended (the  "Management  Agreement"),
pursuant to which, CRC handles all aspects of the Casino Rouge's management. The
Management  Agreement  expires in December  2004,  subject to  extension  at the
option of CRC for an  additional  10-year  period.  CRC is entitled to an annual
management  fee equal to 2% of the Casino  Rouge's net  revenues  plus 5% of its
total operating income (as such terms are defined in the Management  Agreement).
By separate  agreement,  CRC has agreed to pay one-half of the 5% fee payable to
CRC with respect to the Company's total operating income to Dan S. Meadows,  the
Company's  President and Vice Chairman of the Board,  Jerry L. Bayles and Thomas
L. Meehan,  one of the Company's  directors,  aggregate holders of approximately
40% of the Company's common stock. For the fiscal years ended November 30, 2000,
1999 and 1998, the amount earned by CRC pursuant to the Management Agreement was
$3,030,000, $2,758,000 and $2,195,000,  respectively. For the fiscal years ended
November 30, 2000,  1999 and 1998,  the aggregate  amount paid by CRC to Messrs.
Meadows, Bayles and Meehan was $600,000, $533,000 and $369,000, respectively.
See "Certain Relationships and Related Transactions."

      In addition to the Casino Rouge,  CRC operates Casino Rama,  located north
of Toronto,  Canada,  for the  Chippewas  of  Mnjikaning  First  Nations and the
Ontario  Lottery and Gaming  Corporation.  CRC also  develops  other casinos and
hotels.

EMPLOYEES

      The Company  maintains a staff of approximately  850 full-time  equivalent
employees.  None  of  the  employees  are  covered  by a  collective  bargaining
agreement. The Company believes that its employee relations are good.

REGULATORY MATTERS

General

      The Company is subject to regulation  by the State of Louisiana  and, to a
lesser extent,  by federal law. The Company is subject to regulations that apply
specifically  to the gaming  industry  and  casinos and  regulations  that apply
specifically  to operators of cruising  riverboats,  in addition to  regulations
applicable to businesses  generally.  Failure to comply with detailed regulatory
requirements may be grounds for the suspension or revocation of a license, which
would have a materially adverse effect upon the Company.  Below is a description
of  certain  regulations  to  which  the  Company  is  subject.  Legislative  or
administrative  changes in applicable legal requirements have been proposed from
time to time.  It is  possible  that the  applicable  requirements  to operate a
Louisiana  gaming facility will become more stringent and  burdensome,  and that
taxes, fees and expenses may increase,  as the state gains further experience in
regulating  gaming.  There can be no assurance that the existing  regulatory and
taxing framework under which the Company operates will not become more stringent
and burdensome.

Louisiana Riverboat Gaming Regulation

      In July 1991, the Louisiana  legislature  adopted  legislation  permitting
certain types of gaming  activity on certain  rivers and waterways in Louisiana.
Since May 1, 1996, the Louisiana Board has regulated gaming activities.

      The Louisiana Act  authorized the issuance of up to 15 licenses to conduct
gaming  activities  on a  riverboat  of  new  construction  in  accordance  with
applicable law. However,  no more than six licenses may be granted to riverboats
operating from any one parish. Of the 15 available licenses, currently 14 are in
operation and one has been returned to the state.

      Riverboat gaming licenses in Louisiana are issued for an initial five-year
term with annual  renewals  thereafter.  In issuing or  renewing a license,  the
Louisiana  Board  must find that the  applicant  is a person of good  character,
honesty and integrity and that the applicant is a person whose prior activities,
criminal  record,  if any,  reputation,  habits and  associations  do not pose a
threat to the public  interest  of the State of  Louisiana  or to the  effective
regulation  and  control  of  gaming,  or  create  or  enhance  the  dangers  of
unsuitable,  unfair or illegal practices,  methods and activities in the conduct
of  gaming  or  the  carrying  on of  business  and  financial  arrangements  in
connection  therewith.  The Louisiana  Board will grant or renew a license if it
finds that: (a) the applicant can  demonstrate  the  capability,  either through
training,  education,  business  experience,  or a combination of the above,  to
operate a gaming  casino;  (b) the proposed  financing of the  riverboat and the
gaming operations is adequate for the nature of the proposed  operation and from
a source  suitable and  acceptable  to the  Louisiana  Board;  (c) the applicant
demonstrates a proven ability to operate a vessel of comparable size, capacity
                                       4
<PAGE>
and complexity to a riverboat so as to ensure the safety of its passengers, with
each  employee  being  appropriately  Coast Guard  certified;  (d) the applicant
submits a detailed  plan of design of the  riverboat  in its  application  for a
license;  (e) the applicant  designates the docking facilities to be used by the
riverboat;  (f) the applicant shows adequate  financial ability to construct and
maintain a riverboat;  and (g) the  applicant  has a good faith plan to recruit,
train and upgrade minorities in all employment classifications.

      The Company's  original  five-year gaming license for the Casino Rouge was
up for renewal in July 1999. On June 15, 1999, the Company received  conditional
license  approval  from  the  Louisiana  Board  until  the  completion  of their
investigation. On or about July 25, 2000, the Division of the Louisiana Attorney
General's  Office (the  "Division")  submitted a Report on  Conditional  License
Renewal of the Company,  in which the Division  and the  Louisiana  State Police
recommended placing three conditions on the license renewal of the Company.  The
first condition  involved the Company's  minority  shareholder Jerry Bayles. The
Division  recommended that in order to renew the license of the Company that Mr.
Bayles has no more direct  involvement  in the  management  or operations of the
Company  than he  currently  maintained.  The  second  condition  related to CRC
President Robert Sturges. The Division suggested that the Company's license also
be  conditioned  upon  the  status  quo  relating  to  Mr.  Sturges'  day to day
management and operation of the Company.  The third condition  discussed Capitol
Lake Properties,  Inc. ("CLP"), the landlord of the leased property where Casino
Rouge is located  which  currently  receives rent based upon 1.25% of gross cash
revenue, as defined. The Division's report contained a proposed condition on the
license  renewal  of the  Company,  that  CLP  submit  itself  to a  suitability
investigation.  The report  has not been  formally  acted upon by the  Louisiana
Board. Attorneys for the Louisiana Board have indicated that the Louisiana Board
will decide the issue of renewal of the  Company's  license,  and any  potential
conditions,  along with the  decision  to allow the  transfer  of the  Company's
common stock to Penn.  On or about  November 29,  2000,  the Company  filed suit
against CLP for  declaratory  judgement in the 19th Judicial  District  Court of
Louisiana  seeking a determination  whether CLP, as a matter of law, must submit
to a suitability  investigation  and what, if any  obligations CLP has under the
lease  agreement,  to submit to suitability.  It is expected that the litigation
will,  when  complete,  decide  whether the Louisiana  Board will  condition the
Company's license on the suitability of CLP. It is not expected that the Company
will challenge the conditions relating to the day to day involvement of Mr.
Bayles or Mr. Sturges.

      In connection with the Company's  renewal  application each of the Company
and its officers, directors, managers, principal shareholders and their officers
and directors and key gaming  employees  will be subject to strict  scrutiny and
full  suitability  and  approval by the  Louisiana  Board.  The factors that the
Louisiana Board has stated it will consider, among others, in order to renew the
Company's license, include the Company's compliance with all the requirements of
the  Louisiana  Act,  the  approval  of  various  systems  and  procedures,  the
demonstration of good character  (including an examination of criminal and civil
records)  and methods of business  practice.  It is not possible to predict when
the Louisiana Board will complete its  investigation,  and no time line for such
completion  has been  given.  The  Company  believes  it will be  successful  in
receiving a renewal of its license from the  Louisiana  Board,  but no assurance
can be given as to whether or when the license will be  extended,  or the extent
of any restrictions  that may be imposed as a condition to the issuance thereof.
The loss,  suspension  or failure to obtain a renewal  of such  license,  or the
renewal of the license subject to burdensome  conditions,  would have a material
adverse effect on the Company.

      Other  regulations  imposed by the Louisiana Act or rules adopted pursuant
thereto  include,  but are not limited to, the  following:  (a) the Company must
periodically  submit financial and operating reports to the Louisiana Board; (b)
owners holding  greater than a 5% interest in the Company must be found suitable
by the  Louisiana  Board;  (c) any  individual  who is found to have a  material
relationship  to,  or  involvement  with,  the  Company  may be  required  to be
investigated for suitability;  (d) if a director,  officer, or key employee were
found to be unsuitable,  the Company would have to sever all relationships  with
that person; (e) the transfer of a license or permit or an interest in a license
or permit is prohibited without prior approval;  (f) the Company must notify the
Louisiana Board of any withdrawals of capital, loans, advances, or distributions
in excess of 5% of retained  earnings upon completion of such  transaction;  and
(g) the  Company  must give  prior  notification  to the  Louisiana  Board if it
applies  or  receives,  accepts  or  modifies  the  terms  of any  loan or other
financing  transaction.  In some cases,  the Louisiana Board will be required to
investigate  the reported  transaction  and to either  approve or disapprove the
transaction.

      The  Louisiana  Act  or  rules  adopted  pursuant  thereto  place  certain
restrictions  and  conditions  relating to the  operation of  riverboat  gaming,
including  the  following:  (a) gaming is not  permitted  while a  riverboat  is
docked,  other than the forty-five minutes between excursions,  and during times
when  dangerous   weather  or  water  conditions  exist,  as  certified  by  the
riverboat's  master;  (b) each round-trip  riverboat cruise may not be less than
three nor more than eight hours in duration,  subject to  specified  exceptions;
(c) agents of the Louisiana Board are permitted on board at any time during
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<PAGE>
gaming  operations;  (d) gaming  devices,  equipment  and  supplies  may only be
purchased or leased from permitted suppliers;  (e) gaming may only take place in
the  designated  gaming area while the  riverboat is upon a designated  river or
waterway; (f) gaming equipment may not be possessed,  maintained or exhibited by
any person on a riverboat except in the specifically  designated gaming area, or
a secure  area used for  inspection,  repair or storage of such  equipment;  (g)
wagers may be received only from a person present on a licensed  riverboat;  (h)
persons  under 21 are not  permitted  on gaming  vessels;  (i)  except  for slot
machine play,  wagers may be made only with tokens,  chips or  electronic  cards
purchased  from the licensee  aboard a  riverboat;  (j)  licensees  may only use
docking facilities and routes for which they are licensed and may only board and
discharge  passengers at the riverboat's licensed berth; (k) licensees must have
adequate  protection  and  indemnity  insurance;  (l)  licensees  must  have all
necessary  federal  and  state  licenses,   certificates  and  other  regulatory
approvals  prior to operating a riverboat;  and (m) gaming may only be conducted
in accordance with the terms of the license, the Louisiana Act and the rules and
regulations adopted by the Louisiana Board.

      Fees for  conducting  gaming  activities  on a  riverboat  pursuant to the
Louisiana  Act include (i) $50,000 per riverboat for the first year of operation
and $100,000  per year per  riverboat  thereafter  plus (ii) 18.5% of net gaming
proceeds. The Louisiana Act also authorizes the local governing body to assess a
boarding fee of up to $2.50 in East Baton Rouge Parish.  The City of Baton Rouge
has imposed an admission fee of $2.50 for each patron  boarding the vessel.  For
the fiscal year ended November 30, 2000, the Company's  boarding fee expense was
$3,944,000.  For competitive reasons, the Company and its Baton Rouge competitor
have  elected not to collect  boarding  fees from  patrons and instead pay those
fees from their respective earnings.

      Proposals  to  amend  or  supplement  the  Louisiana  Act  are  frequently
introduced  in  the  Louisiana  State  legislature.   In  addition,   the  state
legislature  from time to time considers  proposals to repeal the Louisiana Act,
which would  effectively  prohibit  riverboat  gaming in the State of Louisiana.
Although the Company does not believe that a prohibition of riverboat  gaming in
Louisiana  is likely,  no assurance  can be given that changes in the  Louisiana
gaming law will not occur or that such changes will not have a material  adverse
affect on the Company's business.

       Legislation  may be proposed that could involve the expansion of cruising
requirements;  the creation of "phantom" cruises; the establishment of a minimum
number  of  annual  cruises  a  vessel  must  take;  or  the   authorization  of
unrestricted dockside gaming. An expansion of cruising requirements could have a
negative impact on future gaming revenue and state tax revenue.

      On January 24, 2001,  Governor Foster announced he will seek tax increases
at a special legislative session in March. The special session will focus on two
options which may increase  gaming taxes:  (i) increase the state taxes on gross
gambling  revenue from  riverboats to 21.5% from the current 18.5%,  in exchange
for allowing the state's  riverboats  to stay  dockside  (ii) taxing  waterfront
gambling  establishments  23.5% if they switch from  paddlewheelers  to building
stationary  barges.  It is not possible to predict whether either or both of the
proposed measures will be adopted or whether any other proposals will be adopted
by the legislature or, if any such proposals are adopted,  what their impact may
be.

      In August  1996,  President  Clinton  signed a bill  creating the National
Gambling  Impact  Study  Commission  (the  "NGISC"),   composed  of  individuals
associated  with the  gaming  industry  as well as  individuals  who are  openly
opposed to  legalized  gaming,  to examine  the  economic  and social  impact of
gaming.  The NGISC began a series of hearings on June 20,  1997,  and released a
report on its findings, together with recommended legislation and administrative
action, on June 18, 1999.  Although no  administrative  actions have been taken,
any  additional  regulation of the gaming  industry  resulting  from the NGISC's
recommendations  could have a material  adverse  impact on the gaming  industry,
including the Company.

United States Coast Guard

      Each  cruising  riverboat  also is  regulated  by the United  States Coast
Guard, whose regulations  affect boat design and stipulate on-board  facilities,
equipment and personnel (including  requirements that each vessel be operated by
a minimum  complement of licensed  personnel),  in addition to  restricting  the
number of  persons  who can be aboard  the boat at any one time.  The  Company's
riverboat must hold, and currently possesses, a Certificate of Inspection.  Loss
of a vessel's  Certificate of Inspection  would preclude its use as an operating
riverboat. For vessels of the Casino Rouge's type, the Certificate of Inspection
is renewed on an annual basis,  after a successful U.S. Coast Guard  Inspection.
The Casino Rouge has a current  Certificate of Inspection,  which was renewed in
November 2000.

      All shipboard employees of the Company,  even those who have nothing to do
with the actual operation of the vessel, such as dealers, cocktail hostesses and
                                       6
<PAGE>
security  personnel,  may be subject to the Merchant Marine Act of 1920,  which,
among  other  things,  exempts  those  employees  from state  limits on workers'
compensation  awards.  The Company  believes  that it has adequate  insurance to
cover employee claims.

The Shipping Act of 1916; The Merchant Marine Act of 1936

      The Shipping Act of 1916, as amended, and the Merchant Marine Act of 1936,
as amended, and applicable regulations thereunder contain provisions which would
prevent  persons who are not  citizens of the United  States from holding in the
aggregate more than 25% of the outstanding shares of the Company's common stock.
The  Company's  by-laws  provide that,  in the event a  shareholder's  ownership
prevents the Company from complying with the foreign  shareholder limits imposed
by these Acts, such shareholder  will be required,  within 30 days, to cure such
problem,  including through the sale of a requisite  percentage of its ownership
interest  in the  Company,  or the Company  will be  entitled  to purchase  such
requisite  percentage from such shareholder at the price the shareholder paid to
acquire  it.  Such  payment  from  the  Company  may be made in  cash,  notes or
preferred  stock  which,  in the opinion of a nationally  recognized  investment
banking firm,  have a value equal to the amount required to be paid. See "Market
for  Registrant's  Common  Equity  and  Related  Stockholder  Matters - Required
Divestiture  of Common  Stock."  There can be no  assurance,  however that these
restrictions  will be effective in ensuring  that the Company  complies with the
foreign ownership requirements of those Acts.

General Non-Gaming Regulation

      The  Company is  subject to  federal,  state and local  environmental  and
safety and health laws,  regulations  and  ordinances  that apply to  non-gaming
business  generally,  such as the Clean Air Act, Federal Water Pollution Control
Act, Occupational Safety and Health Act, Resource Conservation Recovery Act, Oil
Pollution  Act  and  Comprehensive  Environmental  Response,   Compensation  and
Liability  Act,  each as amended.  The Company  has not  incurred,  and does not
expect to incur material expenditures with respect to such laws. There can be no
assurances, however, that the Company will not incur material liability pursuant
to such laws or any other applicable laws in the future.

Discouragement of Share Accumulations

      Louisiana  State  law  requiring   approval  by  the  Louisiana  Board  of
shareholders  over certain  thresholds  may discourage  accumulations  over such
limits and  therefore  may  discourage  changes in control of the  Company.  See
"Market for Registrant's Common Equity and Related Stockholder Matters -Required
Divestiture  of Common  Stock".  The  federal  laws  referred  to above may also
discourage ownership by shareholders that are not United States citizens.

ITEM 2.         PROPERTIES

      The Casino Rouge is located on the east bank of the  Mississippi  River in
Baton Rouge,  Louisiana on a 23-acre  site which  consists of an 18-acre  leased
site and five acres owned by the  Company.  The Company  leases the 18-acre site
pursuant to a 10-year lease entered into in January 1994,  the term of which may
be extended at the Company's option for four successive  five-year periods.  The
annual  rent is equal to the  greater  of (a)  1.25% of all gross  cash  revenue
generated  on or by the leased  premises or any  riverboat  docked  there or (b)
$33,333 per month.  In  addition,  the  Company  prepaid  rent of  approximately
$1,756,000  in  connection  with the lessor's  acquisition  of nine acres of the
18-acre site subject to the lease.  Pursuant to the lease, the Company must also
pay all property taxes. For the year ended November 30, 2000, the rental expense
for the 18-acre site was $1,169,000  (excluding  amortization of prepaid rent of
$176,000).  The Company has the option to purchase the entire 18-acre site on or
after the fifteenth  anniversary  of the date of the lease for a purchase  price
equal to the then  appraised  value of the  original  nine acres  subject to the
lease  (excluding  improvements).  In January 2000,  the Company  completed land
improvements  to add  550  parking  spaces  to its  5-acre  parcel  at a cost of
$1,125,000.

      The  Company  also owns  approximately  1.3 acres of land  which  includes
facilities  of  81,600  square  feet for  general  warehousing,  office  use and
employee  parking.  In  addition,  the  Company  leases  45,700  square  feet of
warehouse,  office space and employee parking for a monthly rent of $7,999.  The
lease grants the Company a right of first refusal to purchase the property.  For
the  year  ended   November  30,  2000,  the  rental  expense  for  the  general
warehousing, office use and employee parking sites was $91,000.

ITEM 3.         LEGAL PROCEEDINGS

      The Company is a party to pending legal proceedings  arising in the normal
course of its  business,  none of which the Company  believes is material to its
financial position or results of operations.

ITEM 4.         SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

      Not applicable.
                                       7
<PAGE>


                                     PART II

ITEM 5.    MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

      There is no established  public  trading  market for the Company's  common
stock.  CRC and three  individual  shareholders  currently own over  ninety-nine
percent of the  outstanding  common stock.  See  "Security  Ownership of Certain
Beneficial Owners and Management" and "Certain Relationships and Related
Transactions."

      On January  27,  1999,  the  Company  issued $55 million of its 11% Senior
Secured   Notes  due  December  1,  2005,   (the  "1999   Notes")  to  qualified
institutional buyers and institutional  accredited investors in reliance on Rule
144A and pursuant to  exemptions  from  registration  under  Section 4(2) of the
Securities  Act of 1933, as amended.  In May 1999,  the Company  consummated  an
exchange  offer for the  privately  issued  1999  Notes,  which  resulted in the
Company issuing new,  publicly tradable 1999 Notes in exchange for the privately
issued 1999 Notes. The new 1999 Notes are identical in all material  respects to
the  privately  issued  1999 Notes  other than  certain  provisions  relating to
registration rights and related liquidated damages. On May 28, 1999, the Company
repurchased  $2,000,000  of the  Notes  at a cost  of  $2,010,000  plus  accrued
interest.

      The 1999 Notes are secured by substantially  all of the Company's  assets,
other than certain excluded  assets.  The indenture dated as of January 27, 1999
(the "1999  Indenture")  under which the Company  issued the 1999 Notes includes
certain  covenants  which limit the  ability of the  Company and its  restricted
subsidiaries (as defined in the 1999 Indenture),  subject to certain exceptions,
to:  (i)  incur   additional   indebtedness;   (ii)  pay   dividends   or  other
distributions,   repurchase   capital   stock  or  other  equity   interests  or
subordinated   indebtedness;   (iii)  enter  into  certain   transactions   with
affiliates; (iv) create certain liens or sell certain assets; and (v) enter into
certain mergers and consolidations.

      Under the terms of the 1999 Indenture, after December 1, 2002, the Company
may, at its option,  redeem all or some of the 1999 Notes at a premium that will
decrease  over time from 105.5% to 100% of their face  amount,  plus accrued but
unpaid  interest.  Prior to December 1, 2001,  if the  Company  publicly  offers
certain equity  securities the Company may, at its option,  apply certain of the
net proceeds from those transactions to the redemption of up to one-third of the
principal amount of the 1999 Notes at 111% of their face amount,  plus interest.
If the Company goes through a change in control  (which for these  purposes will
include the proposed  transaction  involving the Company and Penn), it must give
holders  of the 1999  Notes the  opportunity  to sell  their  1999  Notes to the
Company at 101% of their face amount, plus interest.

      During  the  year  ended   November  30,  2000,  the  Board  of  Directors
authorized,  and the Company  paid,  a total of  $3,398,000  in dividends to the
holders of the Company's  common stock.  The Company  intends to declare and pay
dividends from funds available to the extent permitted based on future earnings,
the 1999 Indenture, legal limitations and available cash balances.

REQUIRED DIVESTITURE OF COMMON STOCK

      As noted herein,  there are various state and federal  regulations  on the
ownership of the Company's  common stock.  See "Business - Regulatory  Matters."
The Company's  By-laws provide that if any governmental  commission,  regulatory
authority,  entity,  agency or  instrumentality  (collectively,  an "Authority")
having  jurisdiction  over the Company or any  affiliate of the Company that has
granted a license,  certificate  of  authority,  franchise  or similar  approval
(collectively,  a  "License")  to the  Company or any  affiliate  of the Company
orders or requires any  shareholder  to divest any or all of the shares owned by
such shareholder (a "Divestiture  Order") and the shareholder  fails to do so by
the date  required by the  Divestiture  Order (unless the  Divestiture  Order is
stayed),  the Company  will have the right to acquire from the  shareholder  the
shares that the  shareholder  failed to divest as  required by such  Divestiture
Order. If, after reasonable notice and an opportunity for affected parties to be
heard, any Authority determines that continued ownership of the Company's common
stock by any  shareholder  shall be grounds  for the  revocation,  cancellation,
non-renewal, restriction or withholding of any License granted to or applied for
by the Company or any affiliate of the Company,  such  shareholder  shall divest
the  shares  that  provide  the  basis  for  such  determination,  and  if  such
shareholder  fails to  divest  such  shares  within  10 days  after the date the
Authority's   determination  becomes  effective  (unless  the  determination  is
stayed),  the  Company  shall have the right to  acquire  such  shares  from the
shareholder.


                                       8
<PAGE>
     If the Company  determines  that persons who are not citizens of the United
States as determined  under the Shipping Act of 1916 or the Merchant  Marine Act
of 1936 (the "Foreign Citizens") own more than 25% of the Company's  outstanding
common stock,  the Company may require the Foreign  Citizen(s) who most recently
acquired the shares that bring total  foreign  ownership to more than 25% of the
outstanding  common stock (the "Excess  Shares") to divest the Excess  Shares to
persons who are United States  citizens.  If the Foreign  Citizen(s) so directed
fail to divest the Excess Shares to United States  citizens within 30 days after
the date on which the Company gives a written  notice to the Foreign  Citizen(s)
to divest the Excess  Shares,  the  Company  shall have the right to acquire the
shares that the Foreign Citizen(s) failed to divest as required by the Company's
notice.  Such acquisition from the Foreign Citizen(s) need not be preceded by an
order  or  requirement  by an  Authority,  nor  is  there  any  requirement  for
notification within a specified period.

      Whenever the Company has the right to acquire  shares of common stock from
a shareholder pursuant to the provisions described in the preceding  paragraphs,
the Company  will pay the  shareholder  a price per share equal to the price per
share paid by the  shareholder  to acquire such common stock.  Such payment from
the Company may be made by cash,  notes or preferred stock which, in the opinion
of a  nationally  recognized  banking  firm,  have a value  equal to the  amount
required to be paid.

      When any  Divestiture  Order is entered or when the  Company  tenders  the
consideration for which it may acquire shares, as described above, the shares in
question  shall no longer be entitled to any  voting,  dividend or other  rights
until  such  time  as they  have  been  appropriately  divested.  The  foregoing
provisions of the By-laws  relating to required  divestiture are in addition to,
and not in replacement of, any applicable requirements.

      The  provisions  of  the  by-laws  described  above  are  uncommon  and no
controlling  precedent  has  been  found  to  determine  how  such  by-laws  (or
comparable  provisions  in the Articles of  Incorporation)  would be enforced or
whether they are  enforceable.  There can be no assurance these  provisions will
prove  enforceable  or that,  even if they are  enforceable,  that  they will be
effective in ensuring that the Company  complies with the applicable  regulatory
requirements.

REDEEMABLE PREFERRED STOCK

      The  Company's  Articles  of  Incorporation  authorize  50,000  shares  of
preferred stock, of which 11,000 shares were designated as redeemable  preferred
stock  and  issued  to and  held  by  Thomas  L.  Meehan,  one of the  Company's
directors. The redeemable preferred stock received non-cash cumulative dividends
at the rate of 12% per annum.  On November 30, 1998,  the  redeemable  preferred
stock was redeemed and all accrued and unpaid dividends were paid. Currently, no
shares of preferred stock are outstanding.


                                       9
<PAGE>

ITEM 6.    SELECTED FINANCIAL DATA

      The following selected financial  information for each of the fiscal years
presented below has been derived from the Company's  financial  statements which
are  included   elsewhere  in  this  report  and  which  have  been  audited  by
PricewaterhouseCoopers   LLP,  the  Company's   independent   certified   public
accountants. The information presented below should be read in conjunction with,
and is qualified in its entirety by reference to,  "Management's  Discussion and
Analysis of Financial  Condition  and Results of  Operations"  and the Company's
financial statements and the notes thereto appearing elsewhere in this report.

                                           Fiscal Year Ended November 30,
                                        --------------------------------------
                                        2000     1999    1998    1997    1996
                                        -----   ------- ------  ------ -------
Statement of Operations Data:             (dollars in thousands, except per
                                                     share data)
Revenues:
  Casino                               $89,564 $82,250 $68,845 $67,694 $74,615
  Food and beverage                      6,913   6,636   5,501   6,253   6,242
  Other                                    824      828    673   1,013   1,062
                                         -----  ------- ------  ------ -------
                                        97,301  89,714  75,019  74,960  81,919
  Less: promotional allowances           5,746   5,057   4,174   5,216   5,159
                                         -----  ------- ------  ------ -------
  Net revenues                          91,555  84,657  70,845  69,744  76,760
                                         -----  ------- ------  ------ -------
Costs and expenses:
  Casino                                41,991  38,439  33,302  31,826  33,947
  Food and beverage                      1,150   1,659   1,538   1,318   1,293
  Selling, general and administrative   25,627  24,316  20,948  21,039  21,954
  Depreciation and amortization          4,806   5,382   4,762   4,334   4,162
                                         -----  ------- ------  ------ -------
Total operating expenses                73,574  69,796  60,550  58,517  61,356
                                         -----  ------- ------  ------ -------
  Operating income                      17,981  14,861  10,295  11,227  15,404
Other income (expense):
  Interest income                          657     671     428     280     241
  Interest expense                      (6,046) (6,768) (6,376) (5,955) (7,002)
                                         -----  ------- ------  ------ -------
Income before  provision for income
  taxes and extraordinary loss          12,592   8,764   4,347   5,552   8,643
Provision for income taxes               4,935   3,474   1,666   2,045   1,340
                                         -----  ------- ------  ------ -------
Income before extraordinary loss         7,657   5,290  2,681    3,507   7,303
Extraordinary loss on early
  extinguishment of debt                   -     1,731      -       -       -
                                         =====  ======= ======  ====== =======
Net income                              $7,657  $3,559  $2,681  $3,507  $7,303
                                         =====  ======= ======  ====== =======

Ratio of earnings to fixed charges (a)    2.97x   2.20x  1.83x   1.95x    2.25x

Share and Per Share Data (b):
  Basic earnings per share
   Earnings before extraordinary loss
     per share                           $7.78   $5.32  $2.57   $3.37    $6.70
   Extraordinary loss per share             -    (1.74)     -       -        -
                                         -----  ------- ------  ------  -------
   Basic earnings per share              $7.78   $3.58  $2.57   $3.37    $6.70
                                         =====  ======= ======  ======  =======
  Diluted earnings per share
   Earnings before extraordinary loss
     per share                           $7.78   $5.32  $2.46   $2.97    $6.31
   Extraordinary loss per share             -    (1.74)     -       -        -
                                         -----  ------- ------  ------  -------
   Diluted earnings  per share           $7.78   $3.58  $2.46   $2.97    $6.31
                                         =====  ======= ======  ======  =======
Cash dividends declared on common
  stock and common equivalent shares     $3.45   $3.52  $1.76   $0.42    $3.82
                                         =====  ======= ======  ======  =======

Weighted average common shares
  outstanding                     984,755 994,549   982,783   982,783   982,783
Weighted average common equivalent
  shares outstanding              984,755 994,549 1,135,783 1,135,783 1,135,783

                                       10
<PAGE>

                                               At November 30,
                               ------------------------------------------------
                                2000     1999      1998      1997     1996
                               -------- --------  -------- --------- ----------
                                            (dollars in thousands)
Balance Sheet Data:
Current assets                 $27,077  $21,474   $16,531   $16,807  $11,630
Total assets                    71,257   65,764    62,023    59,757   58,438
Current liabilities (c)          9,289    8,594     4,890    11,625   12,612
Long-term obligations           53,000   53,000    50,000    40,732   42,656
Redeemable preferred stock
and commonstock warrants (d)         -        -     4,131     6,004    5,872
Shareholders' equity (deficit)   4,211      126         8      (790)  (3,683)


(a) Operating  income divided by fixed charges which include  interest  charges,
    amortization  of debt expense and discounts,  and the change to the accreted
    value of the Company's outstanding common stock purchase warrants.

(b) Earnings per share  amounts have been  restated to conform to the  Financial
    Accounting  Standards  Board  Statement  No. 128 "Earnings per Share." Basic
    earnings per share are calculated by dividing net income  assigned to common
    shareholders by weighted average common shares outstanding. Diluted earnings
    per  share  are  calculated  by  dividing  net  income  assigned  to  common
    shareholders  before  distributions  to  warrantholders  by weighted average
    common equivalent shares outstanding.

(c) Amounts as of November 30, 1997 and 1996,  include  $1,700,000 for estimated
    dispute resolution cost.

(d) Such  amounts  include  preferred  stock  of  approximately  $1,628,000  and
    $1,496,000 as of November 30, 1997 and 1996, respectively,  and the assigned
    value of the warrants of  approximately  $4,131,000  as of November 30, 1998
    and $4,376,000 as of November 30, 1997 and 1996.


                                     11
<PAGE>
ITEM 7.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
           RESULTS OF OPERATIONS

      On December 28, 1994,  the Company  commenced  operations of its riverboat
gaming  facility  in Baton  Rouge,  Louisiana.  The  Company's  activities  from
inception have been financed from (i) cash flow from operations, (ii) equity and
other  capital  contributions  of  the  shareholders,  (iii)  secured  equipment
financing,  (iv) a  December  1993  debt  offering  of 51,000  units,  each unit
consisting  of $1,000  principal  amount  of a Senior  Secured  Note (the  "1993
Notes") and three  warrants to purchase one share each of the  Company's  common
stock, (v) a November 1998 offering  consisting of $50,000,000 of Senior Secured
Increasing  Rate Notes (the "1998  Notes"),  the  proceeds of which were used to
repay the 1993 Notes and (vi) the 1999 Notes, the proceeds of which were used to
redeem the 1998 Notes and for general corporate purposes.

RESULTS OF OPERATIONS

Year ended November 30, 2000, compared to year ended November 30, 1999.

      According  to publicly  filed  reports  with the  Louisiana  Board,  total
taxable  casino  revenue for the two riverboats in the Baton Rouge gaming market
for  the  years  ended  November  30,  2000  and  1999,  were  $162,419,000  and
$138,033,000,  respectively.  Riverboat  casino patron counts in Baton Rouge for
the same respective periods were 2,808,000 and 2,655,000.  The Company's taxable
casino revenues and customer counts increased 6.9% and 0.5%,  respectively,  for
the year ended  November  30,  2000,  compared to the same  period in 1999.  The
Company's  competitor's  riverboat  taxable casino  revenues and customer counts
increased 35.2%, and 13.4%, respectively,  for the year ended November 30, 2000,
compared  to the same  period in 1999.  The  Company's  share of the Baton Rouge
gaming  market  was 56.2% and  61.9% of casino  revenues  and 56.2% and 59.1% of
admissions for the years ended November 30, 2000 and 1999, respectively.

      Casino  revenues for the Company were  $89,564,000 and $82,250,000 for the
years ended November 30, 2000, and 1999,  respectively.  Casino revenues consist
of gaming machine and table revenues. Revenues from casino operations were 82.8%
from gaming  machines  and 17.2% from table games in 2000  compared to 81.0% and
19.0%, respectively, for 1999. Such mix for gaming machines and gaming table win
is  attributable  to the  continuing  popularity  of gaming  machines  among the
Company's  base casino  patrons and generally  conforms to that  experienced  by
riverboats throughout Louisiana. Gaming machine revenues increased 11.3% in 2000
compared to 1999  primarily due to a 21.3%  increase in coin in. Table  revenues
decreased 1.5% in 2000 compared to 1999 due to a decrease in hold  percentage on
an annual  basis,  offset by an increase in table game drop.  For the year ended
November 30, 2000,  the  Company's win per  passenger  increased  8.3% to $56.77
compared to $52.40 in the same period of 1999.

      Casino  expenses  for the years ended  November  30,  2000 and 1999,  were
$41,991,000 and $38,439,000,  respectively,  which represents 46.9% and 46.7% of
casino revenues for each period, respectively. Overall casino expenses increased
during 2000  primarily  due to the market's  increased  gaming  activity and the
Company's  increase  in both  casino  revenue  and  patrons,  which  resulted in
increased gaming and patron taxes.

      Selling,   general  and  administrative   expenses  were  $25,627,000  and
$24,316,000  for the years ended November 30, 2000 and 1999,  respectively.  The
increase in selling,  general and  administrative  expenses was mainly due to an
increase in revenue based rent and management  fees,  increased  legal fees, and
marketing costs.

      Depreciation and amortization  expenses were $4,806,000 and $5,382,000 for
the years  ended  November  30,  2000 and 1999,  respectively.  The  decrease in
depreciation and  amortization  expenses was mainly due to equipment being fully
depreciated.

        Net interest  expense was  $5,389,000 and $6,097,000 for the years ended
November  30, 2000 and 1999,  respectively.  The  decrease  was due to the early
extingushment of the 1998 Notes during the 1999 period.

Year ended November 30, 1999, compared to year ended November 30, 1998.

      According  to publicly  filed  reports  with the  Louisiana  Board,  total
taxable  casino  revenue for the two riverboats in the Baton Rouge gaming market
for  the  years  ended  November  30,  1999  and  1998,  were  $138,033,000  and
$118,806,000,  respectively.  Riverboat  casino patron counts in Baton Rouge for
the same respective periods were 2,655,000 and 2,571,000.  The Company's taxable
casino revenues and customer counts increased 21.4% and 12.8%, respectively, for
the year ended  November  30,  1999,  compared to the same  period in 1998.  The
Company's competitor's riverboat taxable casino revenues increased 8.6% while

                                       12
<PAGE>
their  customer  counts  declined  7.9%,  for the year ended  November 30, 1999,
compared  to the same  period in 1998.  The  Company's  share of the Baton Rouge
gaming  market  was 61.9% and  59.3% of casino  revenues  and 59.1% and 54.2% of
admissions for the years ended November 30, 1999 and 1998, respectively.

      Casino  revenues for the Company were  $82,250,000 and $68,845,000 for the
years ended November 30, 1999, and 1998,  respectively.  Casino revenues consist
of gaming machine and table revenues. Revenues from casino operations were 81.0%
from gaming  machines  and 19.0% from table games in 1999  compared to 78.0% and
22.0%, respectively, for 1998. Such mix for gaming machines and gaming table win
is  attributable  to the  continuing  popularity  of gaming  machines  among the
Company's  base casino  patrons and generally  conforms to that  experienced  by
riverboats throughout Louisiana. Gaming machine revenues increased 24.1% in 1999
compared to 1998  primarily due to a 22.8%  increase in coin in. Table  revenues
increased  3.1% in 1999  compared to 1998 due to an increase in table game drop.
For the year ended November 30, 1999, the Company's win per passenger  increased
5.9% to $52.40 compared to $49.46 in the same period of 1998.

      Casino  expenses  for the  years  ended  November  30,  1999 and 1998 were
$38,439,000 and $33,302,000,  respectively,  which represents 46.7% and 48.4% of
casino revenues for each period, respectively. Overall casino expenses increased
during 1999  primarily  due to the market's  increased  gaming  activity and the
Company's  increase in market share in both casino  revenue and  patrons,  which
resulted in increased  gaming and patron  taxes.  Overall  casino  expenses as a
percent of casino revenue decreased during 1999 primarily due to the elimination
of various special events and promotions.

      Selling,   general  and  administrative   expenses  were  $24,316,000  and
$20,948,000  for the years ended November 30, 1999 and 1998,  respectively.  The
increase in selling,  general and  administrative  expenses was mainly due to an
increase in revenue based rent and management fees and increased legal fees.

      Depreciation and amortization  expenses were $5,382,000 and $4,762,000 for
the years  ended  November  30,  1999 and 1998,  respectively.  The  increase in
depreciation  and  amortization  expense was mainly due to additions to property
and equipment.

      Net interest  expense was  $6,097,000  and  $5,948,000 for the years ended
November  30, 1999 and 1998,  respectively.  The  increase  was due to the early
extingushment of the 1998 Notes and additional debt outstanding during 1999.

      The Company recorded a market value warrant adjustment of $245,000 for the
year ended  November 30, 1998, to reduce the accreted  value of its  outstanding
redeemable  common stock  warrants to  $4,131,000.  Pursuant to the terms of the
warrants,  the Company was obligated to purchase the warrants during fiscal 1999
to the extent the  holders  exercised  their put  rights.  Initially  holders of
138,900 warrants  exercised their put rights.  The actual purchase price for the
138,900 warrants,  as determined by two independent  investment banking firms in
accordance  with the original  agreements  issued in 1993,  was  $3,750,000.  On
September 21, 1999, at a former  warrantholder's  request, the Company purchased
from such  warrantholder  12,000 shares of the Company's common stock, that were
issued in respect to the warrants that such  warrantholder  held,  for $324,000,
the price originally offered for the warrants.

LIQUIDITY AND CAPITAL RESOURCES

      During the year ended November 30, 2000, the Company generated $16,324,000
in cash flows from  operations  as  compared to  $16,067,000  for the year ended
November 30, 1999. The increase in cash flows from  operations was primarily due
to an increase in net income.

      Cash flows used for investing  activities  were $5,290,000 and $6,165,000,
for the years ended  November  30,  2000 and 1999,  respectively.  In 2000,  the
Company  spent  $600,000  on vessel  renovations,  $853,000  on the  parking lot
expansion  and $651,000 on remodeling  the first floor  pavilion.  In 1999,  the
Company  purchased,  for $793,000,  approximately 1.3 acres of previously leased
land,  consisting  of 81,600  square feet of offices,  a warehouse  and employee
parking.  In addition,  approximately  $1,492,000 was spent on vessel remodeling
and $272,000 on the parking lot expansion  during 1999.  The  remaining  uses of
funds  for  each  of  the  periods  were  primarily  for   maintenance   capital
expenditures.

      Cash flows used for financing  activities for the years ended November 30,
2000 and 1999,  were  $3,572,000  and  $5,730,000,  respectively.  In 2000,  the
Company used cash flows for dividend  payments to shareholders of $3,398,000 and
for the  repurchase of common stock of $174,000.  In 1999, the Company used such
cash flows for dividend payments to shareholders of $3,498,000,  the purchase of
common stock warrants and related common stock of $4,074,000 and the purchase of
$2,000,000  of the  outstanding  1999 Notes offset by the net proceeds  from the
issuance of the 1999 Notes.

      In January 1999, the Company  issued the 1999 Notes.  The Company used the

                                       13
<PAGE>
proceeds to redeem the 1998 Notes and for general corporate  purposes.  The 1999
Indenture  includes certain covenants which limit the ability of the Company and
its  restricted  subsidiaries  (as  defined in the 1999  Indenture),  subject to
certain exceptions, to: (i) incur additional indebtedness; (ii) pay dividends or
other  distributions,  repurchase  capital  stock or other  equity  interests or
subordinated   indebtedness;   (iii)  enter  into  certain   transactions   with
affiliates; (iv) create certain liens or sell certain assets; and (v) enter into
certain mergers and consolidations. As a result of the restrictions, the ability
of the Company to incur  additional  indebtedness  to fund operations or to make
capital expenditures is limited. To the extent that cash flow from operations is
insufficient  to cover cash  requirements,  the  Company  would be  required  to
curtail or defer certain capital expenditures, which, under those circumstances,
could have an adverse effect on the Company's operations.

      Historically,   the  Company  has  incurred  annual  maintenance   capital
expenditures of approximately  $3,000,000.  The Company anticipates  maintenance
capital  expenditures  in 2001 of  $2,600,000.  However,  the  Company's  actual
maintenance  capital  expenditures may be materially  higher or lower based upon
circumstances which are largely beyond the Company's control.  In addition,  the
Company may incur  additional  discretionary  capital  expenditures.  Management
believes that cash on hand and cash generated from operations will be sufficient
to satisfy working capital requirements and maintenance capital expenditures for
the foreseeable future. However, there can be no assurance that the Company will
be able to generate sufficient cash flow.

ITEM 7A.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

      The  market  risk  inherent  in  the  Company's   market  risk   sensitive
instruments  and positions is the  potential  change  arising from  increases or
decreases in interest rates as discussed below. Generally,  the Company's market
risk  sensitive  instruments  and  positions  are  characterized  as "other than
trading." The discussion of the Company's  exposure to market risk represents an
estimate of possible  changes in fair value or future  earnings that would occur
assuming hypothetical future movements in interest rates. The Company's views on
market risk are not necessarily  indicative of actual results that may occur and
do not represent  the maximum  possible  gains and losses that may occur,  since
actual  gains and  losses  will  differ  from those  estimated,  based on actual
fluctuations in interest rates and the timing of transactions.

      The Company has entered into fixed-rate debt  obligations.  As of November
30, 2000 and 1999,  the carrying  values of the Company's  long-term  fixed-rate
debt, including accrued interest, was approximately $55,915,000 and $55,915,000,
respectively,   compared  to  fair  values  of  $59,500,000   and   $57,500,000,
respectively.  Fair values were  determined  using quoted market  prices,  where
applicable,  or future cash flow discounted at market rates for similar types of
borrowing arrangements. Each approximate 10 percent change in the interest rates
applicable  to  such  debt  for  2000  and  1999  would  result  in  changes  of
approximately  $5,700,000 and  $4,800,000,  respectively,  in the fair values of
these instruments.  If these instruments are held to maturity, no change in fair
value will be realized.

ITEM 8.         FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

      Reference is made to the Index to Financial Statements on page 22.

ITEM 9.    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
           FINANCIAL DISCLOSURE

      Not applicable.


                                       14
<PAGE>
                                    PART III

ITEM 10.   DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Set forth  below is  certain  information  with  respect  to the  directors  and
executive officers of the Company.

NAME                      AGE  POSITION
Sherwood M. Weiser......   69  Chairman of the Board of Directors
Dan S. Meadows..........   54  President  and  Vice  Chairman  of the  Board  of
                               Directors
Thomas L. Meehan........   56  Director
Leon R. Tarver II.......   58  Director
W. Peter Temling........   53  Chief  Financial  Officer,  Secretary,  Treasurer
                               and Director
Dale A. Darrough........   53  General Manager

The following information summarizes the business experience during at least the
past five years of each director and executive officer of the Company.

      Sherwood M. Weiser has been the  Chairman  of the Board of  Directors  of
the Company since  September  1998. Mr. Weiser also is Chairman of the Board of
Directors,  President  and  Chief  Executive  Officer  of CRC and held the same
positions  with CHC  International,  Inc.  ("CHC"),  a predecessor of CRC, from
March 1994  until June 1998.  From 1990 to March  1994,  Mr.  Weiser  served as
Chairman and Chief  Executive  Officer of TCC, a predecessor of CHC. Mr. Weiser
is a member  of the  Board of  Directors  of  Carnival  Corp.  (NYSE:  CCL) and
serves  as  a  member  of  the   Nominating   Committee  and  Chairman  of  the
Compensation  Committee  and  Plan  Administration  Committee  of the  Board of
Directors  of  Carnival  Corp.  Mr.  Weiser  is also a member  of the  Board of
Directors of Mellon  United  National  Bank, a subsidiary of Mellon Bank (NYSE:
MEL),   Wyndham   International,   Inc.  (NYSE:   WYN)  and  Interstate  Hotels
Corporation (NASDAQ:IHCO) and a trustee of the University of Miami.

      Dan S.  Meadows has been  President  and a director of the Company  since
October  1993 and Vice  Chairman  of the  Board of  Directors  since  September
1998.  From the  incorporation  of the Company until October 1993, he served as
Secretary/Treasurer.  He was elected a director  in July 1993.  From April 1993
to  April  1995,  Mr.  Meadows  was  based  in  Baton  Rouge  and was  directly
responsible  for  the  development  and  licensing  of the  Casino  Rouge.  Mr.
Meadows  and  Mr.  Thomas  L.  Meehan  are  the   co-owners  of  Synura,   Inc.
("Synura"),  which provided  funding for two  corporations  in which they own a
significant interest:  Sportlite,  Inc., an Arizona corporation involved in the
development  and  marketing of energy  saving  lighting,  and the Company.  Mr.
Meadows is currently  the  President and a Director of Synura and a Director of
Sportlite,  Inc. Prior to co-founding  Synura, Mr. Meadows was involved in real
estate development and marketing for 19 years.

      Thomas L.  Meehan  has been a director  of the  Company  since  September
1998.  Mr.  Meehan also served as the Chairman of the Board of Directors of the
Company from its  inception  until  October  1993.  Mr. Meehan is President and
Chairman of the Board of  Sportlite,  Inc. and Chairman of the Board of Synura.
In 1979, Mr. Meehan co-founded  National  Electric,  Inc. ("NEI") and served as
President and Director  from 1979 until 1989. In 1987,  NEI merged its business
with  Westinghouse  Electric  Corporation to become Aptus. Mr. Meehan presently
is a member of the Board of Directors of Manchester  Commercial Finance,  ATTA,
L.L.C., LTM LTD., and Intergenerational Living and Health Care.

      Leon R.  Tarver II has been a  director  of the  Company  since  December
1994.  Since  January  1997,  he has been  President,  and since  January 1992,
Professor  of Public  Administration,  of Southern  University  in Baton Rouge.
From  February  1994 through  December  1996,  Mr.  Tarver was  Chancellor  for
Administration  of Southern  University.  From August 1989 to January 1992, Mr.
Tarver  served as the  Secretary  of the  Louisiana  Department  of Revenue and
Taxation.

      W. Peter Temling has been Chief Financial Officer, Secretary and Treasurer
of the Company  since May 1998 and became a director of the Company in September
1998. From October 1993 to May 1998 he was Acting Chief Financial Officer of the
Company.  He was a director of the Company from November  1993 through  November
1994. He also is Executive Vice  President/Finance  and Chief Financial  Officer
and a director of CRC and held the same  positions with CHC from 1994 until June
1998.  Prior to the  formation  of CHC in March 1994,  Mr.  Temling held similar
positions  with TCC. Mr.  Temling joined TCC in 1981 after serving 12 years with
the Sheraton Corporation,  where his responsibilities included business planning
for more than 100 hotels,  the opening of hotels  worldwide  and  directing  the
financial  functions  for the  franchise  division  consisting of 400 hotels and
inns. Mr. Temling also is a certified public accountant.

                                       15
<PAGE>
      Dale A. Darrough has been General  Manager of the Company  since  February
1996. From October 1995 to February 1996, he served as Executive Vice President,
Operations,  with Shuffle Master Gaming,  Inc. Prior thereto,  from August 1995,
Mr. Darrough was a Consultant to Hyatt  Development Corp. He held positions with
Bally's Casino Resort from April 1991 to July 1995, most recently as Senior Vice
President, Casino Operations.

ITEM 11.   EXECUTIVE COMPENSATION

     The following table provides a summary of the  compensation  for the fiscal
years ended  November 30, 2000,  1999 and 1998,  of the President of the Company
and the other  executive  officers who received cash  compensation  in excess of
$100,000 during fiscal 2000 from the Company.

                           SUMMARY COMPENSATION TABLE

                                                                    Other Annual
Name and Position     Year    Salary          Bonus          Compensation (1)

Dan S. Meadows (2)    2000    $   --          $  --          $      --
President and Vice    1999    $   --          $  --          $      --
Chairman of the Board 1998    $   --          $  --          $      --

Dale A. Darrough      2000    $256,000        $ 50,000       $200,000 (3)
General Manager       1999    $240,000        $115,000       $      --
                      1998    $182,000        $ 40,000       $      --

(1) Aggregate amount of other annual  compensation does not exceed the lesser of
$50,000 or 10% of  executive  officer's  salary  and  bonuses.  (2) Mr.  Meadows
together with Mr. John R. Rauen, Senior Vice  President/Operations of CRC, serve
as the only members of the Executive  Committee of the Board of Directors.  They
do not receive any  compensation  from the Company.  They are  reimbursed  their
reasonable  expenses for Board of Directors meetings attended as explained below
in "Compensation of Directors".  See "Security  Ownership of Certain  Beneficial
Owners and Management" and "Certain Relationships and Related Transactions." (3)
See "Executive Employment Agreement."

COMPENSATION OF DIRECTORS

      Directors  of the  Company  who are  either  employees  of the  Company or
elected  pursuant  to the  Shareholder  Agreement,  dated  October 8,  1993,  as
amended, by and among the Company, CRC, Jerry L. Bayles, Dan S. Meadows, Leon R.
Tarver II and Thomas L. Meehan (the  "Shareholder  Agreement"),  are  reimbursed
their reasonable  expenses for meetings attended but do not receive any separate
compensation.  As a director,  Mr. Tarver receives an annual retainer of $10,000
and reimbursement of reasonable  expenses for meetings attended.  On December 1,
1994, the Company  issued 2,450 shares of common stock to Mr. Tarver,  which are
now fully vested. In addition,  Mr. Tarver receives $24,000 annually to serve as
Chairman of the Company's Minority Business and Economic Advisory Committee. The
Company's Audit Committee consists of Messrs.  Meadows,  Rauen, Temling,  Meehan
and Tarver.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

      The  Company  has no  standing  Compensation  Committee  of the  Board  of
Directors;  therefore,  all  members of the Board of  Directors  participate  in
deliberations concerning executive officer compensation.

EXECUTIVE EMPLOYMENT AGREEMENT

       The Company is a party to an employment agreement effective September 21,
1999,  with Dale A. Darrough,  under which Mr.  Darrough serves as the Company's
General  Manager.  The agreement has an initial  two-year term,  with a two-year
extension at Mr.  Darrough's  option.  Under the agreement,  Mr.  Darrough shall
receive  $250,000 in salary  during the first year of the agreement and $275,000
during  the  second  year.  During  any  year  of the  two-year  extension,  Mr.
Darrough's salary shall be determined by the Executive Committee of the Board of
Directors in its sole and absolute discretion. In addition, the agreement states
that upon  termination,  without cause,  or change of control of the Company (as
defined) Mr. Darrough is entitled to two years salary and two times his average

                                       16
<PAGE>
bonus for the prior two years.  In July 2000, Mr.  Darrough waived the change of
control  clause,  as it applies to the proposed  transaction  involving Penn and
received a special  payment of $200,000 from the Company.  In the event that the
Penn  transaction is consummated,  the initial two-year term will be extended to
the later of September  21, 2002 or one year  following  the closing of the Penn
transaction.

ITEM 12.   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

      The following table sets forth certain  information  regarding  beneficial
ownership of the  Company's  common  stock as of February 15, 2001:  (a) by each
person who  beneficially  owned more than five percent of the  Company's  common
stock,  (b) by each of the Company's  directors,  (c) by each executive  officer
listed in the Summary  Compensation Table who is not a director,  and (d) by all
executive officers and directors as a group.

                                       Common Stock            Percent
Name and Address of Beneficial Owner   Beneficially Owned (1)  of Class

CRC Holdings, Inc., (3).............   588,200                   59.9%
d/b/a Carnival Resorts and Casinos
3250 Mary Street
Miami, FL 33133

Dan S. Meadows....................     130,711                   13.3%
3500 E. Lincoln Drive
Phoenix, AZ 85018

Jerry L. Bayles....................    130,711                   13.3%
2236 Estate Road
Baton Rouge, LA 70808

Thomas L. Meehan..................     130,711                  1 3.3%
7331 Tilden Lane
Naples, FL 34108

Sherwood M. Weiser (3)................ 588,200                   59.9%
CRC Holdings, Inc.
3250 Mary Street
Miami, FL 33133

W. Peter Temling (3)................       --                     --
CRC Holdings, Inc.
3250 Mary Street
Miami, FL 33133

Leon R. Tarver, II...................    2,450                    (2)
16215 Chadsford Avenue
Baton Rouge, LA 70817

Dale A. Darrough....................       --                     --
Louisiana Casino Cruises, Inc.
1717 River Road North
Baton Rouge, LA 70802

All directors and executive officers
as a group (six persons)(3).........    852,072                  86.7%

(1) The voting and  investment  power with regard to the shares of common  stock
beneficially  owned  by  all  shareholders  is  restricted  by  the  Shareholder
Agreement.  (2) Less than 1%.  (3) Mr.  Weiser  and Mr.  Temling  are  principal
shareholders  and officers of CRC. Mr. Weiser has the right to vote in excess of
50% of the outstanding  common stock of CRC. Mr. Weiser and Mr. Temling disclaim
beneficial ownership of all shares of the Company's common stock held by CRC.


                                       17
<PAGE>

ITEM 13    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

      CRC and the Company are parties to the Management  Agreement,  pursuant to
which,  CRC handles all aspects of Casino  Rouge's  management.  The  Management
Agreement  expires in December  2004,  subject to extension at the option of CRC
for an additional  10-year period.  CRC is entitled to an annual  management fee
equal to 2% of the Company's net revenues plus 5% of its total operating  income
(as such terms are defined in the Management Agreement).  By separate agreement,
CRC has agreed to pay  one-half of the 5% fee payable to CRC with respect to the
Company's total operating income to Dan S. Meadows,  the Company's President and
Vice  Chairman of the Board,  Jerry L. Bayles and Thomas L.  Meehan,  one of the
Company's  directors,  aggregate  holders of approximately  40% of the Company's
common stock.  For the fiscal years ended November 30, 2000,  1999 and 1998, the
amount  earned by CRC  pursuant  to the  Management  Agreement  was  $3,030,000,
$2,758,000 and $2,195,000, respectively. For the fiscal years ended November 30,
2000, 1999 and 1998, the aggregate amount paid by CRC to Messrs. Meadows, Bayles
and Meehan was $600,000, $533,000 and $369,000, respectively.

      All shareholders  are parties to the Shareholder  Agreement with regard to
the ongoing operation,  management and financing of the Company. Pursuant to the
Shareholder  Agreement,  all actions by the Company's Board of Directors require
the majority approval of the directors.  The Shareholder Agreement also provides
for an Executive  Committee of the Board,  consisting  of one nominee of CRC and
one nominee of the individual shareholders,  who currently are Mr. Rauen and Mr.
Meadows,  respectively.  All  actions of the  Executive  Committee  require  the
unanimous approval of both members. Unless rescinded by a vote of the holders of
51% of the outstanding common stock, the Shareholder Agreement provides that the
Executive  Committee is delegated all of the duties and  responsibilities of the
Board of Directors. The Shareholder Agreement also provides that certain actions
cannot be taken  without the approval of the holders of either 51% or 67% of the
outstanding  common stock, as the case may be, including:  (a) the authorization
or issuance of any additional  common stock (or any securities  convertible into
or rights to acquire common stock);  (b) the sale,  lease,  transfer,  mortgage,
pledge or other  disposition of or the acquisition of any assets of the Company,
other than in the ordinary  course of  developing or operating the Casino Rouge;
(c) the authorization or execution of contracts for major landsite improvements,
any amendment to the landsite lease and contracts for acquiring  additional land
as part of the Casino Rouge;  (d) all submissions to the Louisiana Board and any
modification  or amendment of any  approvals  or licenses;  (e) the  redemption,
retirement, purchase or other acquisition by the Company of any common stock and
the  declaration of any dividend or distribution on account of any capital stock
or any  merger,  consolidation,  split,  reverse  split or other  change  of the
capitalization of the Company; (f) the election of any additional members of the
Board of Directors;  (g) the approval of the  operational  budget for the Casino
Rouge presented by CRC pursuant to the Management Agreement;  (h) the resolution
of any  deadlock  between  the  members  of the  Executive  Committee;  (i)  any
amendment to the Articles of  Incorporation  or By-laws of the Company;  and (j)
the  initiation or settlement of any material  litigation or other dispute by or
against the Company.

      The  Shareholder  Agreement  also limits the  transfer of the common stock
owned by the  shareholders  party  thereto.  The shares of the Company's  common
stock issued in connection  with the 1999 exercise of certain  warrants were not
subject to the  transfer  or other  restrictions  contained  in the  Shareholder
Agreement.  Such  restrictions will also lapse upon the consummation of a public
offering of the  Company's  common  stock.  Additionally,  any transfer  must be
subject to any required regulatory approvals.  The transferee must agree to hold
its shares subject to the terms of the Shareholder Agreement and must be of such
character and reputation so as not to jeopardize any regulatory approval held by
the Company or the shareholders and affiliates thereof. Any transfer, other than
to Permitted Transferees (as defined in the Shareholder  Agreement),  is subject
to a right of first refusal by the other parties.  If the  Management  Agreement
terminates for any reason,  CRC shall have the right to make an offer to sell to
the other  shareholders  party to the  Shareholder  Agreement  all of its common
stock or to purchase from such other  shareholders  all of their common stock on
the terms set forth in the offer.  The Shareholder  Agreement also requires CRC,
to the extent  required by any individual  vendor or supplier,  to negotiate and
enter into a guaranty of the Company's  payment  obligations under agreements to
lease or  purchase  gaming  equipment.  The  terms of such  guaranties  shall be
subject to the approval of CRC.


                                       18
<PAGE>


      ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
                FORM 8-K

           a.   (1) Financial Statements

           The  following  financial  statements  of the  Company  and report of
           independent accountants are included on pages 23 through 36 hereto.

           Report of Independent Accountants.

           Balance Sheets- November 30, 2000 and 1999.

           Statements of  Operations-  Years ended  November 30, 2000,  1999 and
           1998.

           Statements of Changes in  Shareholders'  Equity (Deficit) Years ended
           November 30, 2000, 1999 and 1998.

           Statements  of Cash Flows- Years ended  November  30, 2000,  1999 and
           1998.

           Notes to Financial Statements.

                (2) Financial Statement Schedules

           The  following  schedule and report of  independent  accountants  are
           included on pages 37 through 38 attached hereto and should be read in
           conjunction with the related financial statements and notes thereto.

           Schedules  not listed  above have been  omitted  because they are not
           applicable or are not required or the information  required to be set
           forth  therein  is  included  in the  financial  statements  or notes
           thereto.

           Schedule II- Valuation and Qualifying Accounts.

                (3) Exhibits

           3.1  Amended and Restated Articles of
                Incorporation of the Company, as of September 15, 1998. (1)

           3.2  By-laws of the Company, as amended as of
                September 15, 1998. (1)

           4.1  Form of Certificate for Common Stock. (3)

           4.2  Indenture, dated January 27, 1999, by and between the
                Company and U.S. Bank Trust National Association, as
                Trustee. (1)

           10.1 Casino Consulting and Management Agreement, dated
                December 11, 1992, between CRC and the Company,
                as amended. (2)

                                       19
<PAGE>

           10.2 Shareholder Agreement, dated October 8,
                1993, among the Company, Jerry L. Bayles,
                Dan S. Meadows, Thomas L. Meehan, Leon R.
                Tarver II and CSMC- Management Services,
                Inc., as amended. (2)

           10.3 Ground Lease Agreement between the Company
                and Capitol Lake Properties, Inc., dated
                June 16, 1993, as amended. (2)

           10.4 Mortgage, Leasehold Mortgage, Assignment of Rents,
                Fixture Filing, Security Agreement and Financing Statement,
                dated January 27, 1999, by and between the
                Company and U.S. Bank Trust National Association, as
                Trustee. (1)

           10.5 First Preferred Ship Mortgage, dated January 27, 1999, by
                and between the Company and U.S. Bank Trust National
                Association, as Trustee. (1)

           10.6 Security Agreement dated January 27, 1999,
                by and between the Company and U.S. Bank
                Trust National Association, as Trustee. (1)

           10.7 Employee Agreement dated September 21, 1999,
                between Dale A. Darrough and the Company. (5)

           23.  Consent of PricewaterhouseCoopers LLP.

           27.1 Financial Data Schedule.

           b. Reports on Form 8-K.

                On August 2, 2000,  the  Company  filed a report  dated July 31,
                2000,  under  Item 5, of Form  8-K  reporting  that  CRC and the
                Company's  minority  shareholders  had entered  into  definitive
                agreements to be acquired by Penn.

(1)Incorporated by reference from the Company's Registration Statement on
   Form S-4 (No. 333-74971).

(2)Incorporated by reference from the Company's  Registration Statement on Form
   S-4 (No. 33-73536).

(3)Incorporated by reference from the Company's  Registration Statement on Form
   S-1 (No. 33-73534).

(4)Incorporated  by reference from the Company's  Annual Report on Form 10-K for
   the fiscal year ended November 30, 1994.

(5)Incorporated  by reference from the Company's  Annual Report on Form 10-K for
   the fiscal year ended November 30, 1999.


                                       20
<PAGE>


                                   SIGNATURES

      Pursuant  to the  requirements  of Section  13 or 15(d) of the  Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                                LOUISIANA CASINO CRUISES, INC.

Dated: February 15, 2001            By: /s/ Dan S. Meadows
                                    -----------------------------
                                    Dan S. Meadows, President and
                                    Vice Chairman of the Board of Directors

      Pursuant to the requirements of the Securities  Exchange Act of 1934, this
report  has  been  signed  below  by the  following  persons  on  behalf  of the
registrant and on the dates indicated.

Dated: February 15, 2001            /s/ Sherwood M. Weiser
                                    -------------------------
                                    Sherwood M. Weiser
                                    Chairman of the Board of Directors

Dated: February 15, 2001            /s/ Dan S. Meadows
                                    ------------------------
                                    Dan S. Meadows, President and
                                    Vice Chairman of the Board of Directors
                                   (Principal Executive Officer)

Dated: February 15, 2001            /s/ Thomas L. Meehan
                                    ------------------------
                                    Thomas L. Meehan, Director

Dated: February 15, 2001            /s/ Leon R. Tarver, II
                                    -------------------------
                                    Leon R. Tarver, II, Director

Dated: February 15, 2001            /s/ W. Peter Temling
                                    -------------------------
                                    W. Peter Temling, Chief
                                    Financial Officer, Secretary, Treasurer
                                    and Director (Principal Financial and
                                    Accounting Officer)













                                       21
<PAGE>



                          INDEX TO FINANCIAL STATEMENTS

Report of Independent Accountants..................................... 23

Balance Sheets- November 30, 2000 and 1999............................ 24

Statements of Operations-
Years ended November 30, 2000, 1999 and 1998.......................... 25

Statements of Changes in Shareholders' Equity (Deficit)-
Years ended November 30, 2000, 1999 and 1998.......................... 26

Statements of Cash Flows-
Years ended November 30, 2000, 1999 and 1998.......................... 27

Notes to Financial Statements......................................... 29




















                                       22
<PAGE>


                        Report of Independent Accountants

To the Board of Directors and Shareholders
of Louisiana Casino Cruises, Inc.

      In our opinion,  the financial  statements  listed in the index  appearing
under Item 14. (a) (1) present fairly, in all material  respects,  the financial
position of Louisiana  Casino  Cruises,  Inc. at November 30, 2000 and 1999, and
the results of its  operations and its cash flows for each of the three years in
the period ended  November 30, 2000 in  conformity  with  accounting  principles
generally accepted in the United States of America.  These financial  statements
are the  responsibility of the Company's  management;  our  responsibility is to
express  an  opinion  on these  financial  statements  based on our  audits.  We
conducted our audits of these  statements in accordance with auditing  standards
generally  accepted in the United States of America,  which require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements,  assessing the accounting  principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP
New Orleans, Louisiana
December 27, 2000















                                       23
<PAGE>

                         LOUISIANA CASINO CRUISES, INC.
                                 BALANCE SHEETS
                    (dollars in thousands, except share data)
                                                    November 30,
                                             ---------------------------
                                                 2000           1999
                                             --------------  -----------
ASSETS
Current assets:
   Cash and cash equivalents                 $      25,159    $  17,697
   Receivables, less allowance for doubtful
     accounts of  $235 and $152 at 2000 and
     1999, respectively                                466          468
   Prepaid expenses and other current assets           825        1,214
   Income tax receivable                                 -          487
   Inventories                                         143          134
   Deferred tax asset - current                        484        1,474
                                             --------------  -----------
          Total current assets                      27,077       21,474
Property and equipment, net                         42,887       42,403
Other assets                                         1,293        1,887
                                             --------------  -----------
Total assets                                 $      71,257    $  65,764
                                             ==============  ===========

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
   Accounts payable                          $       2,132    $   1,948
   Accrued liabilities                               3,932        3,417
   Accrued interest                                  2,915        2,915
   Other current liabilities                           310          314
                                             --------------  -----------
Total current liabilities                            9,289        8,594
Senior secured notes                                53,000       53,000
Deferred tax liability                               4,757        4,044
                                             --------------  -----------
          Total liabilities                         67,046       65,638
                                             --------------  -----------
Commitments and contingencies:

Shareholders' equity:
     Common stock, no par value:
     10,000,000 shares authorized: 982,783
       and 984,883 shares issued and
       outstanding at 2000 and 1999,
       respectively                                      1            1
     Preferred stock:
     50,000 shares authorized: no shares
       issued and outstanding at 2000 and 1999           -            -
     Additional paid-in capital                          -            -
     Retained earnings                               4,210          125
                                             --------------  -----------
Total shareholders' equity                           4,211          126
                                             ==============  ===========
Total liabilities and shareholders' equity    $     71,257    $  65,764
                                             ==============  ===========










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


                                       24
<PAGE>

                   LOUISIANA CASINO CRUISES, INC.
                      STATEMENTS OF OPERATIONS
              (dollars in thousands, except share data)

                                            Year Ended November 30,
                                         -----------------------------
                                           2000      1999      1998
                                         ---------- -------- ---------
Revenues:
    Casino                                 $89,564  $82,250   $68,845
    Food and beverage                        6,913    6,636     5,501
    Other                                      824      828       673
                                         ---------- -------- ---------
                                            97,301   89,714    75,019
    Less: promotional allowances             5,746    5,057     4,174
                                         ---------- -------- ---------
    Net revenues                            91,555   84,657    70,845
                                         ---------- -------- ---------
Costs and expenses:
    Casino                                  41,991   38,439    33,302
    Food and beverage                        1,150    1,659     1,538
    Selling, general and administrative     25,627   24,316    20,948
    Depreciation and amortization            4,806    5,382     4,762
                                         ---------- -------- ---------
Total operating expenses                    73,574   69,796    60,550
                                         ---------- -------- ---------
    Operating income                        17,981   14,861    10,295
Other income (expense):
    Interest income                            657      671       428
    Interest expense                        (6,046)  (6,768)   (6,376)
                                         ---------- -------- ---------
Income before provision for income
  taxes and extraordinary loss              12,592    8,764     4,347
Provision for income taxes                   4,935    3,474     1,666
                                         ---------- -------- ---------
Income before extraordinary loss             7,657    5,290     2,681
Extraordinary loss on early
  extinguishment of debt, net                    -    1,731         -
                                         ---------- -------- ---------
Net income                                   7,657    3,559     2,681
Dividend requirement on redeemable
    preferred stock                              -        -       132
Market value warrant adjustment                  -        -      (245)
Distributions paid to common stock
    warrantholders                               -        -       269
                                         ---------- -------- ---------
Net income assigned to common
    shareholders                           $ 7,657  $ 3,559   $ 2,525
                                         ========== ======== =========

Basic earnings per share:
    Earnings before extraordinary loss
      per share                              $7.78    $5.32     $2.57
    Extraordinary loss per share                 -    (1.74)        -
                                         ---------- -------- ---------
    Basic earnings per share                 $7.78    $3.58     $2.57
                                         ========== ======== =========
Diluted earnings per share:
    Earnings before extraordinary loss
      per share                              $7.78    $5.32     $2.46
    Extraordinary loss per share                 -    (1.74)        -
                                         ---------- --------- --------
    Diluted earnings per share               $7.78    $3.58     $2.46
                                         ========== ======== =========

Weighted average common shares
  outstanding                              984,755  994,549    982,783
                                         ========== ======== =========
Weighted average common equivalent
  shares outstanding                       984,755  994,549  1,135,783
                                         ========== ======== =========

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


                                       25
<PAGE>



                      LOUISIANA CASINO CRUISES, INC.
          STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (DEFICIT)
                 (dollars in thousands, except share data)


                             Common Stock    Additional    Retained
                                                          Earnings/
                                             Paid-In    (Accumulated
                           Shares   Amount   Capital     Deficit)     Total
                           -------  -------  ---------  ------------  -------

Balance at November 30,
  1997                     982,783   $    1  $      -    $    (791)   $ (790)
                           -------  -------  ---------  ------------  -------
Dividend requirements on
  redeemable preferred stock    -        -          -         (132)     (132)
Market value warrant
  adjustment                    -        -          -          245       245
Dividends paid to holders
  of common stock and
  distributions to common
  stock warrantholders          -        -          -       (1,996)   (1,996)
Net income                      -        -          -        2,681     2,681
                           -------  -------  ---------  ------------  -------
Balance at November 30,
  1998                     982,783       1          -            7         8
                           -------  -------  ---------  ------------  -------
Warrants converted to
  common shares             14,100       -        381            -       381
Purchase of common shares  (12,000)      -          -         (324)     (324)
Dividends paid to holders
  of common stock               -        -       (381)      (3,117)   (3,498)
Net income                      -        -          -         3,559    3,559
                           -------  -------  ---------  ------------  -------
Balance at November 30,
  1999                     984,883       1          -           125      126
                           -------  -------  ---------  ------------  -------
Purchase of common shares  (2,100)       -          -          (174)    (174)
Dividends paid to holders
  of common stock               -        -          -        (3,398)  (3,398)
Net income                      -        -          -         7,657    7,657
                           =======  =======  =========  ============  =======
Balance at November 30,
  2000                     982,783   $   1   $      -    $    4,210   $4,211
                           =======  =======  =========  ============  =======

























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

                                       26
<PAGE>

                         LOUISIANA CASINO CRUISES, INC.
                            STATEMENTS OF CASH FLOWS
                                   Page 1 of 2
                             (dollars in thousands)

                                               Year Ended November 30,
                                             -----------------------------
                                              2000      1999       1998
                                             --------  --------  ---------
Net income                                   $ 7,657   $ 3,559    $ 2,681
Net cash flows from operating activities:
     Extraordinary loss on early
       extinguishment of debt                      -     1,731          -
     Depreciation and amortization             4,806     5,382      4,762
     Amortization of deferred costs              165       183        958

     Loss on note repurchase and warrant
       valuation reserve                           -         -        282
     Provision for doubtful accounts             117        98         52
     (Increase) decrease in receivables         (115)     (234)        95
     (Increase) decrease  in inventories          (9)      318         (9)
     Decrease in prepaid and other assets        818       771        264
     (Increase) decrease in income taxes
       receivable                                487      (487)         -
     (Increase) decrease in deferred tax
       assets                                    990        (8)       585
     Increase (decrease) in accrued interest       -     2,813     (2,425)
     Increase (decrease) in accounts
       payable and other liabilities           1,408     1,941       (552)
                                             --------  --------  ---------
        Net cash provided by operating
          activities                          16,324    16.067      6,693
                                             --------  --------  ---------

Cash flows from investing activities:
     Capital expenditures                     (5,324)   (6,165)    (5,321)
     Proceeds from sale of fixed assets           34         -         42
     Decrease in restricted cash                   -         -      4,807
                                             --------  --------  ---------
        Net cash used by investing activities (5,290)   (6,165)      (472)
                                             --------  --------  ---------

Cash flows from financing activities:
     Repayment of first mortgage notes and
       notes payable                               -   (52,000)   (43,964)
     Proceeds from issuance of first
       mortgage notes                              -    55,000     50,000
     Payment of  deferred financing costs          -    (1,158)    (2,900)
     Redemption of preferred stock and
       payment of accrued dividends                -         -     (1,760)
     Purchase of common stock warrants and
       common stock                             (174)   (4,074)         -
     Dividends paid to holders of common
       stock and distributions to common
       stock warrantholders                   (3,398)   (3,498)    (1,996)
                                             --------  --------  ---------
        Net cash used by financing
          activities                          (3,572)   (5,730)      (620)
                                             --------  --------  ---------
Net increase in cash and cash equivalents      7,462     4,172      5,601
Cash and cash equivalents at beginning of
  year                                        17,697    13,525      7,924
                                             --------  --------  ---------
Cash and cash equivalents at end of year     $25,159   $17,697    $13,525
                                             ========  ========  =========







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


                                       27
<PAGE>


                         LOUISIANA CASINO CRUISES, INC.
                            STATEMENTS OF CASH FLOWS
                                   Page 2 of 2
                             (dollars in thousands)

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

                                           Year Ended November 30,
                                          --------------------------
                                           2000      1999     1998
                                          --------  -------  -------
Cash paid for interest                     $5,882   $3,920   $7,567
                                          ========  =======  =======
Cash paid for income taxes                 $2,704   $1,817   $   30
                                          ========  =======  =======



SUPPLEMENTAL DISCLOSURE OF NONCASH OPERATING, INVESTING AND FINANCING
ACTIVITIES:

      Redeemable  preferred stock dividends of $132,000 were accrued in the year
ended November 30, 1998.

      On December 1, 1998,  holders of 14,100  redeemable  common stock warrants
exercised  their right to purchase  14,100 shares of the Company's  common stock
for a price of one cent per  share,  which  warrants  had an  accreted  value of
$381,000.































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

                                       28
<PAGE>


                         LOUISIANA CASINO CRUISES, INC.

                          NOTES TO FINANCIAL STATEMENTS


NOTE 1- ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

      Louisiana Casino Cruises,  Inc., a Louisiana  corporation (the "Company"),
was formed in August 1991 for the purpose of  developing  and  operating  gaming
activities in Louisiana.  The Louisiana  Gaming  Control Board (the "Board") has
granted  the  Company a license  to conduct  riverboat  gaming  activities.  The
Company owns and operates a riverboat gaming facility in Baton Rouge,  Louisiana
(the "Casino Rouge").  The Casino Rouge opened on December 24, 1994. The Company
is in the process of renewing its gaming  license (see Note 6). The Casino Rouge
is managed by CRC Holdings Inc. doing  business as Carnival  Resorts and Casinos
("CRC"), an experienced operator of gaming facilities and owner of approximately
60% of the Company's common stock, no par value per share.

      Financing  for the  project  included  an  issuance  of  common  stock for
$3,000,000  to CRC,  a credit  facility  from CRC for  $2,000,000  (subsequently
converted to equity),  pre-opening  expenditures  by Synura,  Inc. of $2,200,000
(converted to redeemable preferred stock and equity),  secured bank financing of
approximately  $6,000,000  and a private  placement  offering of  $51,000,000 in
first  mortgage  notes (the "1993  Notes").  The 1993  Notes  were  issued  with
detachable  warrants to purchase up to an aggregate  amount of 153,000 shares of
the Company's  common stock at a price of $0.01 per share. On November 25, 1998,
the Company  issued  $50,000,000 of Senior  Secured  Increasing  Rate Notes (the
"1998  Notes"),  the proceeds from which were used to repay the 1993 Notes.  The
1998 Notes were redeemed on January 27, 1999, from the proceeds of a $55,000,000
offering of 11% Senior  Secured  Notes due December 1, 2005 (the "1999"  Notes")
(see Note 3).

      On July  31,  2000,  the  Company  announced  that  CRC and the  Company's
minority  shareholders had signed definitive  agreements for CRC and the Company
to be acquired by Penn  National  Gaming,  Inc.  ("Penn")  (NASDAQ:  PENN).  The
definitive agreements provide for the acquisition to be consummated on or before
October 31, 2001,  although there can be no assurances that the transaction will
ever be  consummated.  The  transaction  is  subject  to  regulatory  and  other
approvals, financing and other customary closing conditions. Penn owns, operates
and conducts  wagering at its Penn National  Racecourse,  Pocono Downs Racetrack
and ten off-track  wagering ("OTW")  facilities in Pennsylvania.  Penn also owns
and  operates  Charles  Town  Races,  a live  thoroughbred  racing  facility  in
Jefferson  County,  West Virginia,  which also features 2,000 slot machines.  On
August 8, 2000,  Penn acquired the Casino Magic hotel,  casino,  golf resort and
marina in Bay St. Louis,  Mississippi  and the Boomtown Biloxi casino in Biloxi,
Mississippi from Pinnacle  Entertainment,  Inc. (NYSE:  PNK). Penn serves as the
exclusive  U.S.   wagering  hub  operator  for  the  TrackPower   direct-to-home
pari-mutual  digital  satellite  service (Dish Network),  which also distributes
races conducted at Penn facilities and certain races simulcast through Penn.

CASH AND CASH EQUIVALENTS

      The  Company  considers  cash and all highly  liquid  investments  with an
original maturity of three months or less to be cash equivalents.

INVENTORIES

      Inventories  consist of food,  beverage and supplies and are stated at the
lower  of cost  or net  realizable  value.  Cost is  determined  on a  first-in,
first-out basis.

LICENSING AND FINANCING COSTS

      All costs incurred  which relate to obtaining the regulatory  approval for
the Baton Rouge riverboat  facility are recorded as deferred  licensing  charges
and are  amortized  on a  straight-line  basis over the  license  period.  Costs
incurred in connection  with debt  offerings  are recorded as deferred  offering
costs and are being amortized on the effective  interest method over the term of
the  related  debt.  Deferred  licensing  charges  and debt  offering  costs are
classified  under prepaid and other assets in the  accompanying  balance sheets.
Unamortized  deferred licensing charges were $0 and $100,000 for the years ended
November 30, 2000 and 1999,  respectively.  Unamortized debt offering costs were
$824,000  and  $988,000  for  the  years  ended  November  30,  2000  and  1999,
respectively.


                                       29
<PAGE>
PROPERTY AND EQUIPMENT

      Property  and  equipment  are  stated  at cost.  Depreciation  expense  is
calculated on the straight-line  basis over the following estimated useful lives
or the  expected  term of the land  lease  (including  renewals),  whichever  is
shorter:

                Vessel                                 18 years
                Building                               30 years
                Furniture and Fixtures               5-10 years
                Gaming Equipment                     5-15 years
                Other Equipment                       4-7 years

       Expenditures  for  repairs  and  maintenance  are  charged to expenses as
incurred.  Expenditures for major renewals and betterments,  which significantly
extend the useful lives of existing equipment, are capitalized and depreciated.

IMPAIRMENT OF LONG-LIVED ASSETS

      When  events  or  circumstances  indicate  that  the  carrying  amount  of
long-lived  assets to be held and used might not be  recoverable,  the  expected
future  undiscounted  cash flows from the assets is estimated  and compared with
the carrying amount of the assets. If the sum of the estimated undiscounted cash
flows is less than the  carrying  amount of the assets,  an  impairment  loss is
recorded.  The  impairment  loss is measured by comparing  the fair value of the
assets with their carrying amount.  Long-lived assets that are held for disposal
are  reported  at the lower of the  assets'  carrying  amount or fair value less
costs related to the assets' disposition.

FAIR VALUE OF FINANCIAL INSTRUMENTS

      The Company's financial  instruments include cash and cash equivalents and
notes payable. The fair value of the 1999 Notes was approximately $56,585,000 at
November  30,  2000.  The fair value of cash and cash  equivalent,  approximates
carrying value.

INCOME TAXES

      The Company accounts for income taxes using the provisions of Statement of
Financial  Accounting Standards ("SFAS") No. 109, "Accounting for Income Taxes,"
which  recognizes the amount of taxes payable or refundable for the current year
and recognizes  deferred tax liabilities and assets for future tax  consequences
of events that have been recognized in the Company's financial statements or tax
returns based on currently enacted rates.

REVENUES AND PROMOTIONAL ALLOWANCES

      The  Company  recognizes  as  casino  revenue  the  net  win  from  gaming
activities  which is the  difference  between  gaming  wins and  losses.  Casino
revenues are net of accruals for  anticipated  payouts of progressive  jackpots.
Food, beverage and other revenues are recognized at the time the related service
is performed.

      The estimated direct cost of providing promotional allowances for food and
beverages  and other  items have been  classified  as casino  costs and  totaled
$3,250,000,  $3,104,000  and  $2,793,000  for the years ended November 30, 2000,
1999 and 1998, respectively.

NEW ACCOUNTING STANDARDS

      In June 1998, the Financial  Accounting  Standards Board issued SFAS, No.
133,  "Accounting  for Derivative  Instruments  and Hedging  Activities".  SFAS
No.  133  establishes   accounting  and  reporting   standards  for  derivative
instruments  and is, as amended,  effective  for all fiscal  quarters of fiscal
years  beginning  after June 15,  2000.  The Company has  evaluated  the impact
SFAS No. 133 and believes it has no effect on its financial statements.

      The Company is reviewing SEC Staff  Accounting  Bulletin  ("SAB") No. 101,
"Revenue Recognition in Financial Statements".  The Company is required to adopt
SAB No.101  during the year ended  November  30,  2001,  and does not expect the
effect of the pronouncement on its financial condition and results of operations
to be material.


                                       30
<PAGE>
ACCOUNTING ESTIMATES

      The  preparation  of financial  statements in conformity  with  accounting
principles   generally  accepted  in  the  United  States  of  America  requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities  and disclosures of contingent  assets and liabilities at
the date of the  financial  statements  and the reported  amounts of revenue and
expenses  during the reporting  period.  Actual  results could differ from those
estimates.

RECLASSIFICATIONS

      Certain  amounts in the financial  statements for the years ended November
30, 1999 and 1998, have been  reclassified to conform to the presentation of the
financial   statements   for  the  year   ended   November   30,   2000.   These
reclassifications have no impact on net income,  retained earnings or cash flows
for the years ended November 30, 1999 and 1998.


NOTE 2- PROPERTY AND EQUIPMENT

      Property and equipment consists of the following :
                                              As of November 30,
                                           (dollars in thousands)
                                               2000      1999
                                             --------- ----------
Land                                          $ 1,403  $ 1,385
Vessel                                         17,463   17,138
Building                                       20,588   19,840
Furniture and fixtures                          7,103    6,365
Gaming equipment                               12,345   11,282
Other equipment                                 7,827    7,132
Construction in progress                          729      272
                                             --------- ----------
                                               67,458   63,414
Less: accumulated depreciation                (24,571) (21,011)
                                             --------- ----------
                                              $42,887  $42,403
                                             ========= ==========

      Capitalized  interest  included in the cost of property  and  equipment at
November 30, 2000 and 1999, was $1,628,000.  Unamortized capitalized interest at
November  30,  2000 and  1999,  are  $1,025,000  and  $1,099,000,  respectively.
Depreciation  expense was  $4,732,000,  $5,100,000  and $4,522,000 for the years
ended November 30, 2000, 1999 and 1998, respectively,  which includes net losses
on disposals  of fixed  assets of  $314,000,  $69,000 and $125,000 for the years
ended November 30, 2000, 1999 and 1998, respectively.

NOTE 3- SENIOR SECURED NOTES, NOTES PAYABLE AND REDEEMABLE COMMON STOCK
WARRANTS

1999 NOTES

      Pursuant  to the  indenture,  dated as of January  27,  1999,  between the
Company  and U.S.  Bank  Trust  National  Association,  as  Trustee  (the  "1999
Indenture"),  the  Company  issued in a  private  placement  the 1999  Notes due
December 1, 2005,  with interest due  semi-annually  beginning June 1, 1999. The
Company exchanged the privately issued 1999 Notes in May 1999 for $55,000,000 in
aggregate principal of new, publicly tradable 1999 Notes. The new 1999 Notes are
identical in all material  respects to the  privately  issued 1999 Notes,  other
than certain provisions  relating to registration  rights and related liquidated
damages.  The Company used the proceeds to redeem the 1998 Notes (see below) and
for  general  corporate  purposes.  On May 28,  1999,  the  Company  repurchased
$2,000,000 of the 1999 Notes at a cost of $2,010,000 plus accrued interest.

      The 1999 Notes are  collateralized  by substantially  all of the Company's
assets,  other than  certain  identified  excluded  assets.  The 1999  Indenture
includes  certain  covenants  which  limit the  ability of the  Company  and its
restricted  subsidiaries,  (as defined in the 1999 Indenture) subject to certain
exceptions,  to: (i) incur additional indebtedness;  (ii) pay dividends or other
distributions, repurchase capital stock or other equity interest or subordinated
indebtedness; (iii) enter into certain transactions with affiliates; (iv) create
certain  liens or sell certain  assets;  and (v) enter into certain  mergers and
consolidations.



                                       31
<PAGE>
      Under the terms of the 1999 Indenture, after December 1, 2002, the Company
may, at its option,  redeem all or some of the 1999 Notes at a premium that will
decrease  over time from 105.5% to 100% of their face  amount,  plus accrued but
unpaid  interest.  Prior to December 1, 2001,  if the  Company  publicly  offers
certain equity  securities the Company may, at its option,  apply certain of the
net proceeds from those transactions to the redemption of up to one-third of the
principal  amount of the notes at 111% of their face amount,  plus interest.  If
the Company goes  through a change in control  (which for these  purposes  would
include the proposed transactions  involving the Company and Penn), it must give
holders of the notes the  opportunity to sell their notes to the Company at 101%
of their face amount, plus interest.

1998 NOTES

      On November 25, 1998, the Company  issued in a private  placement the 1998
Notes due December 1, 2001. The proceeds from the offering were placed in escrow
with The Bank of New York,  as  successor  Trustee,  to repay upon  maturity the
aggregate  principal amount of $43,827,000 and accrued  interest  outstanding on
the 1993 Notes (see below).

      The 1998  Notes were  collateralized  by  substantially  all assets of the
Company, bore interest at an initial increasing rate of 12.25% and were redeemed
on February 24, 1999, from the proceeds of the 1999 Notes.


1993 NOTES AND REDEEMABLE COMMON STOCK WARRANTS

      On December 1, 1993, the Company issued the 1993 Notes.  The proceeds from
the  offering  of the 1993  Notes  were  used to  finance  the  development  and
construction  of the Baton Rouge riverboat  facility.  Interest was payable each
June 1 and December 1,  commencing  June 1, 1994. The 1993 Notes were redeemable
at the option of the  Company,  in whole or in part after  December 1, 1997,  at
par.

      The 1993 Notes  offering was made in units,  with each unit  consisting of
$1,000  principal  amount of 1993 Notes and three warrants to purchase one share
each of the Company's no par value common stock ("Common Stock") at the price of
$0.01 per share.  The  original  issue  discount  on the private  placement  was
$1,301,000,  the amount  assigned  to the value of the  warrants  at December 1,
1993. The  amortization of the original issue discount was $281,000 for the year
ended November 30, 1998.  The original  issue discount was fully  amortized upon
repayment of the 1993 Notes (see above).

      As required,  the Company made tender offers to  repurchase  1993 Notes at
par from Cumulative  Excess Cash Flow (as defined).  The repurchased  amount for
the year ended November 30, 1998 was $119,000.

      The terms of the 153,000  warrants issued with the 1993 Notes provided for
put rights whereby the Company had an obligation to purchase those warrants upon
the holder's  request,  at the value of the Common Stock as of December 1, 1998,
as determined by two  independent  investment  banking firms.  The warrants were
classified  as  redeemable  equity  due to the put right  feature  and,  at each
balance sheet date, were accreted to the amount at which the Company expected to
repurchase  the  warrants.  The  estimated  accreted  value  attributed  to  the
redeemable common stock warrants as of November 30, 1998, was $4,131,000.

      On March 1, 1999, the Company received  valuations from the two investment
banking firms. Based upon the average of the values determined by the investment
banking firms,  the Company paid  $3,750,000 to the holders of 138,900  warrants
who exercised  their put rights.  The holders of the remaining  14,100  warrants
elected to exercise their rights to purchase an equal number of shares of Common
Stock at a price  per share of $0.01.  On  September  21,  1999,  at a  previous
warrantholder's  request,  the Company  purchased  and retired  12,000 shares of
Common   Stock  that  were  issued  in  respect  to  the   warrants   that  such
warrantholders  held,  for  $324,000,  the  price  originally  offered  for  the
warrants. As of November 30, 2000 and 1999, there were no outstanding warrants.

NOTE 4- EARNINGS PER COMMON SHARE

      For the years ended  November 30, 2000,  1999 and 1998,  basic and diluted
earnings per share are calculated,  in accordance  with SFAS No. 128,  "Earnings
Per  Share," by  dividing  net income  assigned  to common  shareholders  by the
weighted average common shares  outstanding.  In 1998,  common equivalent shares
consisted of redeemable common stock warrants with the right to purchase 153,000
share of the Company's common stock (see Note 3).


                                       32
<PAGE>
NOTE 5- RELATED PARTY TRANSACTIONS

      The Company and CRC are parties to a separate  consulting  and  management
agreement dated December 11, 1992, as amended,  whereby CRC provides  consulting
and technical  services to the Company in connection with the riverboat facility
and management of the casino  operations.  CRC receives an annual management fee
of 2% of net  revenues,  plus 5% of total  operating  income,  as such terms are
defined  in the  agreement.  The term of the  agreement  is ten  years  from the
commencement of casino operations,  renewable for an additional ten years at the
option of CRC.  CRC  entered  into a separate  agreement  with three  individual
shareholders  including the  Company's  President and Vice Chairman of the Board
and one of its directors, whereby the three individual shareholders receive half
of the fee of 5% of total operating  income.  The amount earned by CRC under the
management  agreement  and  expensed  for  management  fees by the  Company  was
$3,030,000,  $2,758,000,  and  $2,195,000 for the years ended November 30, 2000,
1999 and 1998,  respectively.  Of the amount earned and  expensed,  $202,000 and
$208,000  was payable and included in current  liabilities  at November 30, 2000
and 1999, respectively.

NOTE 6- COMMITMENTS AND CONTINGENCIES

LEGAL MATTERS

      At November  30,  1993,  the Company was  involved in a dispute  regarding
consulting services.  Although a formal demand had not been made to the Company,
management  believed the dispute could lead to litigation and accrued $1,700,000
for the estimated cost of resolution.  The Company settled litigation related to
this  dispute  on May 12,  1998.  As a result  of the  settlement,  the  Company
recognized  a  net   reduction   of  $400,000   within   selling,   general  and
administrative expenses in the year ended November 30, 1998.

      The Company is also involved in other legal proceedings. In the opinion of
management,  the  resolution  of these matters are not likely to have a material
effect on the financial  statements,  the results of operations or cash flows of
the Company.

LEASE AGREEMENTS

      The Company has an  operating  lease  agreement  for property on which the
Company  constructed the riverboat  facility and parking  facility.  The initial
lease term is ten years  beginning  January 1994. The terms of the lease include
payment  of  monthly  rent  equal  to the  greater  of  $33,333  or 1.25% of the
Company's  gross  cash  revenue.  In  addition,  the  Company  prepaid  rent  of
approximately  $1,756,000  in  connection  with the lessor's  acquisition  of an
additional  parcel of land. The prepaid rent is being amortized over the initial
lease term and the remaining unamortized portion was $541,000 and $717,000 as of
November 30, 2000 and 1999, respectively. The Company has the option to purchase
the entire site on or after  fifteen years for the then  appraised  value of the
original parcel, excluding improvements.

      The Company also leases a total of  approximately  45,700  square feet for
general  warehouse,  office and employee  parking.  The term of the lease is one
year  beginning  September  2000,  for $7,999 per  month.  The lease  grants the
Company a right of first  refusal to purchase the  property.  For the year ended
November 30, 2000, the rental expense was $91,000.

      Rental expense for the years ended  November 30, 2000,  1999 and 1998, was
$1,436,000, $1,468,000 and $1,266,000 respectively. Rental expense for the years
ended  November  30,  2000,  1999 and  1998,  includes  $769,000,  $698,000  and
$509,000,  respectively, of contingent rental payments above the monthly minimum
rent with respect to the land lease for the  riverboat  and parking  facilities.
Future minimum lease payments for all leases with non-cancelable terms in excess
of one year as of November 30, 2000, are as follows:


             Year Ending            (dollars in
             November 30,             thousands)
              ----------            -------------
              2001                  $    400
              2002                       400
              2003                       400
              2004                        33
              2005                         -
                                      -------
              Total                 $  1,233
                                      =======

                                       33
<PAGE>
RELICENSING

      The Company's  original  five-year gaming license for the Casino Rouge was
up for renewal in July 1999. On June 15, 1999, the Company received  conditional
license  approval  from  the  Louisiana  Board  until  the  completion  of their
investigation. On or about July 25, 2000, the Division of the Louisiana Attorney
General's  Office (the  "Division")  submitted a Report on  Conditional  License
Renewal of the Company,  in which the Division  and the  Louisiana  State Police
recommended placing three conditions on the license renewal of the Company.  The
first condition  involved the Company's  minority  shareholder Jerry Bayles. The
Division  recommended that in order to renew the license of the Company that Mr.
Bayles has no more direct  involvement  in the  management  or operations of the
Company  than he  currently  maintained.  The  second  condition  related to CRC
President Robert Sturges. The Division suggested that the Company's license also
be  conditioned  upon  the  status  quo  relating  to  Mr.  Sturges'  day to day
management and operation of the Company.  The third condition  discussed Capitol
Lake Properties,  Inc. ("CLP"), the landlord of the leased property where Casino
Rouge is located  which  currently  receives rent based upon 1.25% of gross cash
revenue, as defined. The Division's report contained a proposed condition on the
license  renewal  of the  Company,  that  CLP  submit  itself  to a  suitability
investigation.  The report  has not been  formally  acted upon by the  Louisiana
Board. Attorneys for the Louisiana Board have indicated that the Louisiana Board
will decide the issue of renewal of the  Company's  license,  and any  potential
conditions,  along with the  decision  to allow the  transfer  of the  Company's
common stock to Penn.  On or about  November 29,  2000,  the Company  filed suit
against CLP for  declaratory  judgement in the 19th Judicial  District  Court of
Louisiana  seeking a determination  whether CLP, as a matter of law, must submit
to a suitability  investigation  and what, if any  obligations CLP has under the
lease  agreement,  to submit to suitability.  It is expected that the litigation
will,  when  complete,  decide  whether the Louisiana  Board will  condition the
Company's license on the suitability of CLP. It is not expected that the Company
will challenge the conditions relating to the day to day involvement of Mr.
Bayles or Mr. Sturges.

      In connection with the Company's  renewal  application each of the Company
and its officers, directors, managers, principal shareholders and their officers
and directors and key gaming  employees  will be subject to strict  scrutiny and
full  suitability  and  approval by the  Louisiana  Board.  The factors that the
Louisiana Board has stated it will consider, among others, in order to renew the
Company's license, include the Company's compliance with all the requirements of
the  Louisiana  Act,  the  approval  of  various  systems  and  procedures,  the
demonstration of good character  (including an examination of criminal and civil
records)  and methods of business  practice.  It is not possible to predict when
the Louisiana Board will complete its  investigation,  and no time line for such
completion  has been  given.  The  Company  believes  it will be  successful  in
receiving a renewal of its license from the  Louisiana  Board,  but no assurance
can be given as to whether or when the license will be  extended,  or the extent
of any restrictions  that may be imposed as a condition to the issuance thereof.
The loss,  suspension  or failure to obtain a renewal  of such  license,  or the
renewal of the license subject to burdensome  conditions,  would have a material
adverse effect on the Company.


NOTE 7- INCOME TAXES

      The components of the provision for income taxes were as follows:

                                    Year Ended November 30,
                                    (dollars in thousands)
                                 ------------------------------
                                      2000      1999      1998
                                 ---------- --------- ---------
Current income taxes:

  Federal                         $  2,490   $ 2,234   $   271
   State                               742       198         2
                                 ---------- --------- ---------
Total current tax expense            3,232     2,432       273
Deferred income taxes:
   Federal                           1,623       908     1,214
   State                                80       134       179
                                 ---------- --------- ---------
Total deferred tax provision         1,703     1,042     1,393
                                 ---------- --------- ---------

Total provision for income tax    $  4,935   $ 3,474   $ 1,666
                                 ========== ========= =========



                                       34
<PAGE>
      The  following  table  reconciles  the  statutory  rate  to the  Company's
      effective tax rate:

                                    Year Ended November 30,
                                 ------------------------------
                                      2000      1999      1998
                                 ----------  --------  --------
Statutory tax rate                    34.0 %    34.0 %    34.0 %
State tax expense, net of
federal benefit                        4.2       4.3       4.9
Other, net                             1.0       1.3      (0.6)
                                 ----------  --------  --------
Effective tax rate                    39.2 %    39.6 %    38.3 %
                                 ==========  ========  ========

      The components of the Company's  deferred tax assets and liabilities  were
      as follows:

                                    Year Ended November 30,
                                    (dollars in thousands)
                                 ------------------------------
                                      2000      1999      1998
                                 ----------  --------  --------
Deferred tax assets-current:
   Deferred pre-opening costs    $       -   $     -    $  602
   Alternative minimum tax
     credit carry forward                -       851       414
   Other, net                          484       623       450
                                 ==========  ========  ========
Total deferred tax assets-
  current                        $     484   $ 1,474   $ 1,466
                                 ==========  ========  ========

Deferred tax liabilities-non current:
   Depreciation                  $  (4,757)  $(4,359)  $(4,084)
   Deferred pre-opening costs            -         -        50
   Alternative minimum tax
     credit carry forward                -       295     1,064
   Other, net                            -        20       (24)
                                 ==========  ========  ========
Total deferred tax
  liabilities-non current        $  (4,757)  $(4,044)  $(2,994)
                                 ==========  ========  ========



NOTE 8-DIVIDENDS

      The Company paid the following  dividends during the years ending November
30:


                  Payment         Dividend      Aggregate
                    Date          Per Share      Payment
                -------------     ----------   -------------

                    2000
                January 14, 2000    $0.54         $ 532,000
                March 24, 2000      $0.98           965,000
                June 19, 2000       $1.08         1,064,000
                September 15, 2000  $0.85           837,000
                                               -------------
                                                 $3,398,000
                                               =============
                    1999
                April 15, 1999      $1.74        $1,735,000
                June 22, 1999       $0.83           827,000
                September 28, 1999  $0.95           936,000
                                               -------------
                                                 $3,498,000
                                               =============
                    1998
                March 27, 1998      $1.06        $1,201,000
                July 2, 1998        $0.70           795,000
                                               -------------
                                                 $1,996,000
                                               =============


      On December 6, 2000, the Company paid a dividend of $0.90 per share for an
aggregate payment of $885,000.


                                       35
<PAGE>

NOTE 9- EMPLOYEE BENEFIT PLANS

      On July 1, 1998,  the  Company  formed the  Carnival  Resorts  and Casinos
401(k) Plan-Casino Rouge (the "Plan"), a defined  contribution plan covering all
eligible  employees of the Company.  Prior to the  commencement of the Plan, the
employees of the Company participated in the CRC Holdings, Inc. Carnival Resorts
and Casinos 401(k) Plan  (formerly the Criterion  Hotel  Management  Corporation
Carnival Hotels and Resorts 401(k) Plan) (the "CRC Plan").  On February 1, 1999,
the Plan's  participants'  net assets available for benefits  accumulated in the
CRC Plan were  transferred to the Plan at equal value,  including their original
vesting  terms.  The provisions of the CRC Plan were  substantially  the same as
those of the Plan.  Contributions  to the CRC Plan by the Company  were based on
the  participants'  contributions.  For the years ended November 30, 2000, 1999,
and 1998, the Company contributed $171,000, $166,000 and $114,000,  respectively
to  the  plans.   The  Company  paid  certain   expenses   associated  with  the
administration of the plans.

      Effective  December 1, 1998, the Company adopted a  non-qualified  defined
contribution deferred compensation plan (the "Deferred Compensation Plan") which
covers most management employees. Benefits accumulate by participants based on a
percentage of their annual  compensation  and generally  vest 20% per year.  The
Deferred  Compensation  Plan's costs,  net of  forfeitures,  for the years ended
November  30, 2000 and 1999,  were  $70,000  and  $23,000,  respectively.  As of
November 30, 2000, the unfunded balance equals $74,000.


NOTE 10- SELECTED QUARTERLY FINANCIAL INFORMATION (UNAUDITED)
                                     Quarter
                                   -------------------------------------------
                                   First     Second  Third    Fourth    Total
                                   -------------------------------------------
                                  (dollars in thousands, except per share data)
                                            per share data)
Fiscal 2000:
Net revenues                       $23,403  $23,308  $22,616  $22,228  $91,555
Operating income                     4,746    4,823    4,271    4,141   17,981
Net income                           2,023    2,132    1,668    1,834    7,657
Basic and diluted earnings per       $2.05    $2.16    $1.69    $1.88    $7.78
share (Note 4)

Fiscal 1999:
Net revenues                        $19,794 $22,032  $21,998  $20,833  $84,657
Operating income                      3,166   4,655    3,978    3,062   14,861
Income before extraordinary loss        799   1,942    1,589      960    5,290
Extraordinary (loss) on early
extinguishment of debt, net          (1,731)      -       -        -    (1,731)
Net income (loss)                      (932)  1,942    1,589     960     3,559
Basic and diluted earnings
(loss) per share (Note 4)            $(0.93)  $1.95    $1.59   $0.97     $3.58



                                       36
<PAGE>


                      Report of Independent Accountants on
                          Financial Statement Schedule


To the Board of Directors and Shareholders
of Louisiana Casino Cruises, Inc.

      Our report on the financial  statements of Louisiana Casino Cruises,  Inc.
is included in this Form 10-K. In connection  with our audits of such  financial
statements, we have also audited the financial statement schedule listed in Item
14(a)(2) of this Form 10-K. In our opinion,  this financial  statement  schedule
presents  fairly,  in all material  respects,  the information set forth therein
when read in conjunction with the related financial statements.



PricewaterhouseCoopers LLP
New Orleans, Louisiana
December 27, 2000





















                                       37
<PAGE>



                                                                     SCHEDULE II

                         LOUISIANA CASINO CRUISES, INC.
                        VALUATION AND QUALIFYING ACCOUNTS
                             (dollars in thousands)

                                           Additions
                          Balance at       Charged to               Balance at
                         Beginning of      Costs and     Deduction    End of
                            Period          Expense                   Period
                        ----------------  -------------  ---------- -----------

Year ended November 30, 1998
----------------------------
Allowance for doubtful
  accounts                $         298    $        52     $  (227)  $     123
                        ================  =============  ========== ===========

Year ended November 30, 1999
----------------------------
Allowance for doubtful
  accounts                $         123    $        98     $   (69)  $     152
                        ================  =============  ========== ===========

Year ended November 30, 2000
----------------------------
Allowance for doubtful
  accounts                $         152    $       117     $   (34)  $     235
                        ================  =============  ========== ===========



                                       38