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                       SECURITIES AND EXCHANGE COMMISSION 
                             WASHINGTON, DC  20549        
                                 _____________            

                                   FORM 10-K              

(Mark One)              
/ / ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
    OF 1934.

For the fiscal year ended December 31, 1996

    OR

/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
  ACT OF 1934.

For the transition period from ___________ to ____________.

                        Commission file number 0-28068              

                      COLORADO GAMING & ENTERTAINMENT CO.           
            (Exact Name of Registrant as Specified in Its Charter)  

                DELAWARE                                  84-1242693     
      (State or Other Jurisdiction                     (I.R.S. Employer 
    of Incorporation or Organization)                 Identification No.)
             12596 WEST BAYAUD                              80228
             LAKEWOOD, COLORADO                           (Zip Code)
(Address of Principal Executive Offices)                 

                                (303) 716-5600                       
             (Registrant's Telephone Number, Including Area Code)    

          SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
                                    (None)                           

          SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
                    Common Stock (Par Value $0.01 Per Share)         
                                Title of Class                       

     Indicate by check mark whether the registrant: (1) has filed all reports 
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 
1934 during the preceding 12 months (or for such shorter period that the 
registrant was required to file such reports), and (2) has been subject to 
such filing requirements for the past 90 days  Yes    [X]     No ___

     Indicate by check mark if there are no delinquent filers to disclose herein
pursuant to Item 405 of Regulation S-K, and there will not be any delinquent 
filers to disclose, to the best of the 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. [ ]

               APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY 
                 PROCEEDINGS DURING THE PRECEDING FIVE YEARS:    

     Indicate by check mark whether the registrant has filed all documents 
and reports required to be filed by Section 12, 13 or 15(d) of the Securities 
Exchange Act of 1934 subsequent to the distribution of securities under a 
plan confirmed by a court. Yes  [X]   No ___

   Number of shares of common stock outstanding at March 26,1997:  5,138,888

                   DOCUMENTS INCORPORATED BY REFERENCE:

     Portions of the Proxy Statement relating to the 1996 Annual Meeting of 
Stockholders are incorporated by reference into Part III of this Report.
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                                    PART 1

ITEM 1.  BUSINESS

GENERAL

     Colorado Gaming & Entertainment Co. ("CG&E" or the "Company") develops, 
owns and operates gaming and related entertainment facilities.  The Company 
owns and operates, through wholly owned subsidiaries, BWBH, Inc. ("BWBH" or 
"Bullwhackers Black Hawk") and BWCC, Inc. ("BWCC" or "Bullwhackers Central 
City") two of the largest casinos in terms of number of slot machines in the 
historic mining towns of Black Hawk and Central City, Colorado, respectively. 
In addition, the Company owns and operates, through a wholly owned 
subsidiary, Silver Hawk Casino, Inc., a third gaming facility, in Black Hawk 
(the "Silver Hawk Casino"), which opened on June 26, 1996 (Bullwhacker's 
Black Hawk, Bullwhacker's Central City and Silver Hawk Casino are referred to 
as the "Colorado Casinos").  In addition, through a wholly owned subsidiary, 
Millsite 27 Inc. ("MS27"), the Company owns a parking lot with a capacity of 
approximately 375 cars, which is located directly between, and is used by, 
Bullwhackers Black Hawk and the Silver Hawk Casino.  References in this 
Annual Report on Form 10-K to Colorado Gaming & Entertainment Co. ("CG&E" or 
the "Company") include its subsidiaries unless the context requires 
otherwise. 

     Colorado law currently permits limited stakes gaming (with a maximum 
single bet of $5.00) in three historic mining towns:  Black Hawk and Central 
City, adjacent towns located approximately 35 miles from Denver, and Cripple 
Creek, located approximately 45 miles from Colorado Springs and 110 miles 
from Denver. Gaming operations also exist on two Native American reservations 
in Southwest Colorado.  Colorado law only permits casinos to offer slot 
machines and the table games of blackjack and poker.

REORGANIZATION

     As a result of the financial difficulties of a riverboat gaming project 
undertaken by a wholly owned subsidiary of the Predecessor Company in New 
Orleans, Grand Palais Riverboat, Inc. ("GPRI"), the Predecessor Company, 
BWBH, BWCC and MS27 sought protection under Chapter 11 of the United States 
Bankruptcy Code on November 7, 1995.  The First Amended Joint Plan of 
Reorganization (the "Reorganization") of the Company, BWBH, BWCC and MS27 was 
confirmed on April 8, 1996 and became effective on June 7, 1996 (the 
"Effective Date").  As a result, among other things, the Company has 
significantly reduced its consolidated debt and no longer has any interest in 
GPRI.  For purposes of the discussion within, references to the "Predecessor 
Company" refer to the Company prior to the Reorganization.

THE COLORADO CASINOS

     BULLWHACKERS BLACK HAWK.  Bullwhackers Black Hawk opened on July 17, 
1992 and is currently one of the largest gaming facilities, in terms of 
number of slot machines, in Black Hawk.  It is located on a prime site at the 
town's main intersection of Colorado State Highway 119 (the primary access 
road to Interstate 70, which leads to Denver) and Gregory Street (which 
connects Black Hawk to Central City).  Bullwhackers Black Hawk is housed in a 
36,000 square foot facility which contains approximately 12,000 square feet 
of gaming space on four levels.  The casino currently has approximately 600 
slot machines and fifteen tables games.  The facility has one bar on each 
level, a 176-seat full service restaurant and office space.  Bullwhackers 
Black Hawk utilizes a Victorian theme in its interior design, featuring a 
winding grand staircase and a glass-enclosed elevator connecting the various 
levels of the facility.

     In July, 1996, the Company entered into an agreement with New Horizons 
Kids Quest III, Inc.("Kids Quest") which provides that  Kids Quest will 
operate a day care facility adjacent to Bullwhackers Black Hawk that intends 
to meet or exceed all relevant license standards.  Kids Quest will be solely 
responsible for the day-to-day operations of the day care facility.  The 
Company will receive percentage rent from Kids Quest for the use of the 
facility which is being constructed by the Company.  Rent will consist of 10% 
of the first $500,000 in revenue and 15% thereafter from the Kids Quest 
operation.  The day-care facility will be for the exclusive use of the 
patrons of the Colorado Casinos.  The Company is in the process of 
constructing the day care facility for use by Kids Quest at an estimated cost 
of approximately $1.5 million.  The Company has entered into a guaranteed 
maximum price contract with the general contractor. The opening of the day 
care facility is currently scheduled for the Summer of 1997.  The Company 
pursued this project, in part, as a result of a new law in Colorado which 
prohibits children from lingering in the gaming areas of a casino.  The 
Company believes the day care facility will give it a competitive advantage 
with other casinos that do not have such a facility, although there can be no 
assurance that the day care facility will result in increased visitation and 
revenues at the Company's casinos. No other casinos in the Black Hawk-Central 
City market currently have, or have announced plans to build a day care 
facility.

                                       2
<PAGE>

     BULLWHACKERS CENTRAL CITY.  Bullwhackers Central City opened on June 15, 
1992 and is currently one of the largest gaming facilities, in terms of 
number of slot machines, in Central City.  It is located at one of the town's 
two main intersections, and is adjacent to a public parking facility and two 
of Central City's other large casinos.  This 31,000 square foot facility 
contains approximately 8,750 square feet of gaming space on four levels.  
Bullwhackers Central City currently has approximately 400 slot machines and 
four table games. The facility has one bar on each level, a 126-seat full 
service restaurant, a retail shop and office space.  Bullwhackers Central 
City also utilizes a Victorian theme in its interior design.

     The Company believes that proximity to parking is extremely important to 
Central City casinos and the Colorado market in general.  However, except for 
the largest casino in Central City, none of the casinos currently operating 
in Central City offer on-site parking for more than 50 cars immediately 
adjacent to their facilities. There are several public parking lots in 
Central City offering parking for a total of approximately 550 cars, 
including a 200-space public lot across from Bullwhackers Central City.  To 
alleviate the difficulties associated with a lack of adequate parking, the 
Company implemented several busing programs in conjunction with other Central 
City casino operators, which offer cash promotions and other incentives 
designed to enhance incremental patron visitation and play, particularly 
during off-peak periods.

     SILVER HAWK CASINO.  Silver Hawk Casino is an approximately 12,000 
square foot four-story building constructed in 1993, that was operated as a 
casino by an unaffiliated third party for less than 90 days in 1993 before it 
was closed. The Company purchased the Silver Hawk Casino on April 12, 1996.  
The Company completed minor interior remodeling, installed approximately 230 
slot machines and three table games and reopened the facility on June 26, 
1996.  

     The purchase price for the Silver Hawk land and building was $2.7 
million, of which $900,000 was paid in cash and the balance was financed by 
the seller and payable pursuant to a promissory note secured by a first deed 
of trust on the facility.  The initial cash portion of the purchase price was 
financed through borrowings under a Debtor-in-Possession credit facility 
("DIP Facility"), while the Company was in bankruptcy and was later 
refinanced through a $12.5 million credit facility ("Credit Facility").  The 
Company paid in full the outstanding balance owed to the seller with 
available cash on June 18, 1996.

      PARKING LOT.  The Company owns an approximately 3.25-acre parking lot 
located between Bullwhackers Black Hawk and Silver Hawk Casino.  The Company 
believes that proximity to parking is extremely important in Black Hawk and 
that on-site parking is currently inadequate for many Black Hawk casinos. 
Although the town of Black Hawk has developed an approximately 3,000-space 
public parking facility which serves all of the Black Hawk casinos by a 
low-cost shuttle service, the location of, and access to, the municipal 
parking facility are generally considered to be inadequate by most casino 
patrons.  The Company believes that the few gaming facilities that offer 
substantial parking at or close to the facility generate higher revenues per 
gaming device than gaming facilities that do not offer adequate parking.  The 
Company believes its parking lot gives Bullwhackers Black Hawk and Silver 
Hawk Casino a competitive advantage over casinos in Black Hawk that offer 
fewer parking spaces or less convenient parking. 

      Because of the importance of convenient close-in parking to maximize 
casino revenue, the Company completed development of the parking lot site 
into a paved and lighted parking facility staffed for valet service with 260 
parking spaces in April 1994.  Subsequently, the Company announced plans to 
construct, in phases, an approximate 500-space parking garage on the parking 
lot site for which it previously received the requisite local zoning 
approvals.  The parking garage was expected to cost approximately $6 million 
to build.  In preparation for construction of the parking garage, the Company 
completed environmental remediation and excavation work, which included the 
excavation of a substantial portion of the mountain located in the back of 
the 3.25 acre site, at a cost of approximately $1.3 million.

     Upon completion of the excavation work in June 1996 and the subsequent 
repaving of the parking lot, the number of cars which could be parked on the 
parking lot at any one time increased from 260 cars to approximately 375 
cars, a 45% increase in capacity.  The Company then analyzed whether the cost 
of constructing the parking garage was justified given the fact that it had 
achieved 75% of the desired parking capacity for only a fraction of the total 
capital cost anticipated to be spent on the parking garage and decided to 
delay indefinitely the construction of the parking garage.  

     In late 1996, the Company evaluated whether it could cost-effectively
excavate the remaining portion of the mountain  to its property line to further
expand the capacity of the parking lot.  The Company concluded that the
additional excavation would cost approximately $1.3 million and would add
approximately 120 additional parking spaces.  The Company has elected to
undertake this additional parking expansion project and as part of the project, 
has also elected to construct a new valet facility to increase customer
convenience at the parking lot 

                                       3

<PAGE>

and to enhance access to the Kids Quest child care facility.  The valet 
facility is expected to cost approximately $300,000. The entire parking 
expansion project, which commenced in early February 1997, is expected to be 
completed by June 1997.  During construction, the Company expects to 
experience some business disruption.

GROWTH STRATEGY

     CONSULTING AGREEMENT.  The Company has entered into a consulting 
agreement with another company in the business of providing gaming 
consulting/management services to Native American Indian tribes.  The 
companies will use their joint resources to pursue obtaining contractual 
arrangements with various Native American tribes to provide consulting 
services for new and existing Native American gaming projects.  As of 
December 31, 1996, the Company has expended $120,000 and has committed to 
expend a maximum of $220,000 over the next twelve months, under this 
agreement.  The Company expects to fund its on-going commitment through 
available working capital.   

     MEMORANDUM OF UNDERSTANDING.  In October 1996 the Company signed a 
memorandum of understanding with Gold Coin, Inc., a subsidiary of Lady Luck 
Gaming Corporation, to explore the possibility of combining the Bullwhackers 
Central City with the Lady Luck casino, which is adjacent to Bullwhackers 
Central City.  There are unresolved issues and negotiations have not been 
concluded.  The agreement is subject to numerous contingencies, including the 
negotiation  and execution of definitive agreements, completion of due 
diligence and approval by the appropriate regulatory agencies, including 
gaming and liquor agencies, and each company's board of directors. There can 
be no assurance that the companies will reach an agreement or that the 
necessary approvals will be obtained.  Under the proposed terms, the Company 
would manage the combined facility.

     OTHER.  Although the Company intends to focus on its existing 
operations, it continues to review and evaluate potential opportunities to 
apply existing management expertise to additional gaming operations in 
Colorado and in other jurisdictions such as those described above.  The 
Company's ability to acquire additional gaming facilities in Colorado without 
disposing of existing facilities is limited by the fact that no entity may 
hold more than three Colorado gaming licenses or more than three gaming 
tavern liquor licenses or more than one type of liquor license.  The Company 
currently holds, through its subsidiaries, the maximum number of gaming and 
liquor licenses allowed in Colorado.  See " - Colorado Gaming Regulations" 
and " - Non-Gaming Regulation." In evaluating potential opportunities the 
Company will look for opportunities with either a value orientation or 
sustainable rate of growth. Although the Company is currently exploring 
several potential opportunities, there can be no assurance that such 
opportunities will be available on terms acceptable by the Company or that if 
completed that such opportunities will be successful.

THE COLORADO GAMING MARKET

     GENERAL.  Black Hawk and Central City are historic mining towns made 
famous during the gold rush of 1859.  Prior to the advent of casino gaming in 
October 1991, Black Hawk, and, to a greater extent, Central City, were 
popular tourist towns, especially in the summer.  Casino gaming is currently 
the main draw to the towns and gaming establishments have displaced many of 
the former tourist-related businesses.

     Customers for casinos in Black Hawk and Central City are primarily "day 
trippers" from the Denver metropolitan area.  Approximately 2.1 million 
people live in the Denver metropolitan area, approximately 2.4 million people 
live within a 50-mile radius, and approximately 2.8 million people live 
within a 100-mile radius, of Black Hawk and Central City.  Black Hawk and 
Central City are located approximately 35 miles west of Denver and 
approximately ten miles from Interstate 70, the main east-west artery 
connecting Denver with many of Colorado's premier ski resorts.

     MARKETING STRATEGY.  The Company targets primarily customers in the 
Denver metropolitan area.  The Company seeks to attract customers to the 
Colorado Casinos by:  (i) offering first-class facilities with comfortable 
and efficient layouts; (ii) providing ample parking which is more convenient 
than that provided by many of its competitors; (iii) promoting customer 
awareness through marketing of the Bullwhackers name and theme; (iv) 
providing excellent customer service with a motivated staff; (v) utilizing 
strategic busing programs; (vi) offering customer promotions; (vii) providing 
desirable food products and refreshments; and (viii) providing incentives to 
higher-value repeat customers.

     In particular, the Company has used extensive marketing programs to build
customer awareness, including television, radio, print and direct mail.  The
Company believes that Bullwhackers enjoys among the highest name recognition of
all casinos located in Colorado, a fact which the Company attributes in part to
the success of its marketing campaigns.  The Company has also developed
promotional offerings centered around the Bullwhackers theme of offering a fun,
exciting gaming atmosphere, including providing gift items and a cash-back
reward system based upon level of play through membership in the "Bullwhackers
Five Star Players Club."  The 

                                       4

<PAGE>

Company also has instituted a popular busing program known as the "Bullride." 
 The Bullride operates at least four times per day from Golden, a western 
Denver suburb, to and from Black Hawk and Central City, and between the two 
towns, and carries an average of 2,500 patrons per week.

     The Company has upgraded most of its slot machines by installing bill 
validators or purchasing new slot machines with bill validators thereby 
increasing customer play.  Bill validators allow patrons to use paper 
currency rather than tokens or coins in slot machines.  This capital 
expenditure program is expected to increase the competitiveness of the 
Colorado Casinos within their markets by increasing the convenience and 
therefore the usage of the slot machines.  See "Management's Discussion and 
Analysis of Financial Condition and Results of Operations - Liquidity and 
Capital Resources."

COMPETITION

     Competition in the Black Hawk and Central City gaming market, which 
forms the primary gaming market in Colorado, is intense.  Bullwhackers 
Central City is located approximately one and one-half miles from 
Bullwhackers Black Hawk and the Silver Hawk Casino is located across the 
Company's parking lot from Bullwhackers Black Hawk.  Due to their proximity, 
the Colorado Casinos compete for some of the same target markets of customers 
in the Denver metropolitan area.  However, the Company believes that its 
primary competition for the Colorado Casinos are other casinos operating in 
Black Hawk and Central City, of which there are approximately 34 as of 
December 31, 1996, and, secondarily, casinos operating in Cripple Creek, of 
which there are approximately 25 as of December 31, 1996.  More experienced, 
nationally recognized casino operators from other areas of the country have 
entered, or have recently announced plans to enter, the Colorado gaming 
market, including Harvey's, Riviera Holdings, Inc., Harrahs's, Lady Luck, 
Bullseye Gaming, ITT Sheraton, Anchor Gaming, and Fitzgerald's, many of which 
have substantially greater financial and marketing resources than the 
Company.  Because Colorado does not limit the total number of gaming licenses 
available for issuance in Colorado and there are no minimum facility size 
requirements, the Company expects the number of gaming facilities and gaming 
devices to continue to increase.

     The Company believes that the primary competitive factors in the Black 
Hawk-Central City market are location, availability and convenience of 
parking, number of slot machines and gaming tables, types and pricing of 
amenities, name recognition, and overall atmosphere.  The Company believes it 
generally competes favorably on these factors, although Bullwhackers Central 
City offers less convenient parking than some of its competitors and Silver 
Hawk Casino is smaller and currently has less name recognition than some of 
its direct competitors.

     According to the Colorado Division of Gaming, there were 59 gaming 
facilities operating in Colorado at the end of 1996, with a total of 13,066 
slot machines and 253 table games.  Of these, 19 facilities, 5,225 slot 
machines and 111 table games were located in Black Hawk; 15 facilities, 3,259 
slot machines and 60 table games were located in Central City; and 25 
facilities, 4,582 slot machines and 87 table games were located in Cripple 
Creek.  For the year ended 1996, the average daily adjusted gross proceeds 
(determined by deducting the amount paid out to patrons from gross proceeds, 
and sometimes referred to as the casino's "win") per slot machine was $111.77 
in Black Hawk, $67.53 in Central City and $63.43 in Cripple Creek.  The 
cumulative win for slot machines in Black Hawk as a market was $181 million 
in 1995 and $204 million in 1996, compared with the cumulative win for slot 
machines in Central City as a market of $86 million and $83 million in 1995 
and 1996, respectively.  Central City facilities have not been able to 
compete effectively with facilities in Black Hawk, as demonstrated by the 
decline in the gross gaming win in Central City for 1995 to 1996.  Generally, 
Black Hawk casinos offer substantially more on-site parking and more 
convenient location and access, which is a significant competitive advantage 
in the Colorado market.

     The Company believes that since October 1991, approximately 12 casinos 
in Black Hawk and 20 casinos in Central City have ceased operations.  In 
addition, several operators, including the Company, have reduced staffing and 
others have closed temporarily or reduced their square footage and/or hours 
of operations. The Company believes that the casinos that failed did so for a 
variety of reasons, including inferior design, inconvenient parking, 
inadequate size, inexperienced management and undercapitalization.   

     Various published reports detailing additional gaming projects have been 
announced for the town of Black Hawk.  The majority of these projects are 
along the southern end of Black Hawk at the first major intersection off 
State Highway 119, providing these projects with the initial opportunity to 
capture visitors to Black Hawk from the Denver metropolitan area.  In 
contrast, Bullwhackers Black Hawk and Silver Hawk Casino are located at the 
northern end of Black Hawk at the second major intersection off State Highway 
119.  In addition, the Colorado Department of Transportation has begun  
construction on a third major intersection off State Highway 119 between the 
two current intersections.  This additional intersection will, when 
completed, provide the casinos south of Bullwhackers Black Hawk and Silver 
Hawk Casino with another opportunity to capture visitors to Black Hawk 

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from the Denver metropolitan area, thereby potentially reducing traffic flow 
and customer visits to Bullwhackers Black Hawk and Silver Hawk.  
     
     Among the projects currently under construction in Black Hawk are a 
joint venture of the Gilpin Hotel and Jacobs Entertainment of a new 35,000 
square foot casino, with 52 hotel rooms, 250 parking spaces and 750-1,000 
slot machines. Additionally, the Black Hawk Brewery, which is currently 
contemplating to commence construction in April 1997, developed by Bullseye 
Gaming, will offer 500 slot machines and 10 table games when open.  In 
Central City, Harvey's Wagon Wheel, currently the largest casino in Central 
City, is constructing a parking garage. The current casinos under 
construction or expected to commence construction in the near term, will 
provide an additional 25-30% in capacity, in terms of slot machines, in Black 
Hawk.  Such increase in capacity may dilute existing operators win per unit 
and revenue, including the Company's. Accordingly, such increase in capacity 
may have a material adverse effect on the Company's results of operations.
     
     In addition, a number of other casino projects have been announced and 
are in various planning stages, including a recently announced project 
between Rivera Holdings, Inc. and Eagle Gaming to construct the largest 
facility in Black Hawk to date.  While it is difficult to assess the 
development stage of each of the announced projects and the likelihood of 
whether any or all of the announced projects will eventually be built and at 
what size, it is reasonably likely that at least some of the new competitive 
projects may be completed and open to the public by mid-1998.  In addition, 
as the town of Black Hawk has expanded, both in terms of gaming device 
capacity and market share, the Central City market has contracted.  
Therefore, should several of the announced competitive projects open, the 
increased competition may adversely affect the Company's operations in both 
Black Hawk and Central City and, accordingly, may have a material adverse 
effect on the Company's consolidated results of operations and financial 
position.  

     Several lobbying groups placed initiatives for additional Colorado 
limited stakes gaming venues, including Denver, on the November 1992, 1994 
and 1996 statewide ballots.  Although each of these initiatives was defeated 
by a wide margin, similar initiatives, legislation or regulation could be 
introduced in the future.  The enactment of any initiatives, legislation, or 
regulations legalizing gaming elsewhere in Colorado could, and if gaming 
closer to Denver was legalized would, have a material adverse effect on the 
Company's consolidated results of operations and financial position.

     In addition to competing with other gaming facilities in Colorado, the 
Company competes to a lesser degree, both for customers and in potential 
future gaming sites, with gaming facilities nationwide, including casinos in 
Nevada and Atlantic City, many of which have substantially greater financial 
resources and experience in the gaming business.  The Company also competes 
with other forms of gaming on both a local and national level, including 
state-sponsored lotteries, charitable gaming and pari-mutuel wagering, among 
others, and competes for entertainment dollars generally with other forms of 
entertainment. The recent expansion of legalized casino gaming to new 
jurisdictions throughout the United States may also affect competitive 
conditions.  Although the Company's focus is the Colorado gaming market, it 
is considering gaming ventures in other locations that the Company believes 
present favorable opportunities, and may pursue such opportunities if its 
resources allow it to do so.  See "-Growth Strategy."  However, its ability 
to capitalize on such opportunities is expected to be limited due to 
competition for such opportunities from more experienced and financially 
stronger entities.

     A decline in the Denver economy, a decline in the Black Hawk-Central 
City gaming market, or increased competition for Denver metropolitan area 
residents from other gaming jurisdictions both inside and outside Colorado, 
could have a material adverse effect on the Company's consolidated results of 
operations, financial position and cash flows.

COLORADO GAMING REGULATIONS

     The State of Colorado created the Colorado Division of Gaming within the 
Department of Revenue to license, implement, regulate and supervise the 
conduct of limited stakes gaming.  The Director of the Division, under the 
supervision of the Colorado Limited Gaming Control Commission (the "Gaming 
Commission"), has been granted broad power to ensure compliance with Colorado 
law and regulations adopted thereunder (collectively, the "Colorado 
Regulations").  The Director of the Division (i) may inspect, without notice, 
premises where gaming is being conducted; (ii) may seize, impound or remove 
any gaming device; (iii) may examine and copy all of a licensee's records; 
(iv) may investigate the background and conduct of licensees and their 
employees; and (v) may bring disciplinary actions against licensees and their 
employees.  He may also conduct detailed background checks of persons who 
loan money to or invest money in a licensee.

     It is illegal to operate a gaming facility without a license issued by 
the Gaming Commission.  The Gaming Commission is empowered to issue five 
types of gaming and gaming-related-licenses.  The licenses are revocable and 
non-transferable.  The failure or inability of the Company, BWBH, BWCC, 
Silver Hawk, or 

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associated persons to maintain necessary gaming licenses will have a material 
adverse effect on the operations of the Company.

     The Gaming Commission closely regulates the suitability of persons 
owning or seeking to renew an interest in a gaming license, and the 
suitability of a licensee can be adversely affected by persons associated 
with the licensee. Additionally, any person or entity having any direct 
interest in the Company or any casino directly or indirectly owned by the 
Company may be subject to administrative action, including personal history 
and background investigations. The actions of persons associated with the 
Company and its management employees, over whom the Company may have no 
control, could jeopardize any licenses held by the Company in Colorado.

     Bullwhackers Black Hawk, Bullwhackers Central City and Silver Hawk 
Casino were granted retailer/operator licenses concurrently with their 
respective openings.  These licenses are subject to continued satisfaction of 
suitability requirements.  The current licenses for the Bullwhackers Casinos 
expire on December 2, 1997 and the license for the Silver Hawk expires on 
June 24, 1997. There can be no assurance that the Company will successfully 
renew its licenses in a timely manner or at all.  

     All persons employed by the Company who are involved, directly or 
indirectly, in gaming operations in Colorado also are required to obtain a 
support gaming license prior to commencing employment.  In addition, "Key" 
licenses are issued to "key employees," which include any executive, employee 
or agent of a licensee having the power to exercise a significant influence 
over decisions concerning any part of the operations of a licensee.  At least 
one key license holder must be on the premises of each Colorado Casino at all 
times. All licenses are revocable, non-transferable and valid only for the 
particular location initially authorized, except that support and key 
employee licenses move with the approved individual and are not location 
specific.  Messrs., Szapor, Mayer, Rabin, Stephens and the Company's four 
independent directors, among others, all hold key licenses in Colorado.

     As a general rule, under the Colorado Regulations, it is a criminal 
violation for any person to have a legal, beneficial, voting or equitable 
interest, or right to receive profits, in more than three retail/operator 
gaming licenses in Colorado.  The Company currently has three such licenses, 
one each for Bullwhackers Black Hawk, Bullwhackers Central City and the 
Silver Hawk Casino.  Accordingly, any expansion opportunities that the 
Company may have in Colorado are limited absent the disposition of one of the 
Colorado Casinos.  In addition, this limitation may affect the ability of 
certain persons to own the Company's stock.  Under the Colorado Regulations, 
the definition of an "interest" in a licensee excludes ownership of less than 
5% of a publicly traded company.  Pursuant to the Colorado Regulations, a 
licensee that elects to register its common stock under Section 12(g) of the 
Exchange Act is considered to be publicly traded.  The Company registered its 
common stock effective on the Effective Date and, accordingly, is considered  
a publicly traded company within the meaning of the Colorado Regulations.  
Any owner of any interest in a Colorado licensee, where such licensee is not 
publicly traded or of a 5% or more interest in a publicly traded licensee is 
precluded from owning more than 5% of the Company's stock.

     Under the Colorado Regulations, any person or entity having any direct 
or indirect interest in a gaming licensee or an applicant for a gaming 
license, including but not limited to the Company and stockholders of the 
Company, may be required to supply the Gaming Commission with substantial 
information, including but not limited to, personal background and financial 
information, source of funding information, a sworn statement that such 
person or entity is not holding his interest for any other party, and 
fingerprints.  Such information, investigation and licensing as an 
"associated person" is automatically required of all persons who directly or 
indirectly own 10% or more of a direct or indirect legal, beneficial or 
voting interest in the Colorado Casinos, through their ownership of the 
Company, as a publicly traded licensee.  Such persons (other than certain 
institutional investors discussed below) must report their interest and apply 
to the Gaming Commission for a finding of suitability within 45 days after 
acquiring such interest.  Persons directly or indirectly having an interest 
between 5% and 9.99% in a publicly held licensee must report their interest 
to the Gaming Commission within ten days after acquiring their interest and 
may be required to provide additional information and may be required to be 
found suitable by the Gaming Commission.  Institutional investors may be 
permitted to own up to 14.99% of the Colorado Casinos, through their 
ownership of the Company, before a finding of suitability will be required; 
provided, however, that such institutional investors must provide a 
certification within 45 days of acquiring such ownership of various matters 
relative to their ownership was acquired for investment purposes only.  The 
Gaming Commission maintains the right to request information from any person, 
directly or indirectly interested, regardless of their level of ownership, in 
or employed by a licensee.  An application for license or a finding of 
suitability may be denied for any reason deemed reasonable by the Gaming 
Commission or the Director of the Division.  All licensing and investigation 
fees must be paid by the person in question.  The associated person 
investigation fee currently is $48 per hour.

     If the Gaming Commission determines that a person or entity is not 
suitableto own a direct or indirect 

                                       7
<PAGE>

voting interest in the Company, the Company may be sanctioned unless the 
person or entity disposes of its voting interest. Sanctions may include the 
loss by any of the Colorado Casinos of their licenses. In addition, the 
Colorado Regulations prohibit a licensee or any affiliate of a licensee from 
paying dividends, interest or other remuneration to any person found to be 
unsuitable, or recognizing the exercise of any voting rights by any person 
found to be unsuitable.  The Colorado Regulations require an operating casino 
licensee to include in its corporate charter provisions which permit the 
repurchase of the voting interests of any person found to be unsuitable.  The 
Company's Certificate of Incorporation includes the required provisions.

     A person or entity may not sell, lease, purchase, convey, acquire or 
pledge an interest in an entity licensed to conduct limited stakes gaming in 
Colorado without the prior approval of the Gaming Commission, except for a 
less than 5% interest in a publicly traded corporation.

     The Gaming Commission also has the right to request information from any 
person directly or indirectly interested in, or employed by, a licensee, and 
to investigate the moral character, honesty, integrity, prior activities, 
criminal record, reputation, habits and associations of (i) all persons 
licensed pursuant to the Colorado Limited Gaming Act, (ii) all officers, 
directors and stockholders of a licensed privately held corporation, (iii) 
all officers, directors and stockholders holding either a 5% or greater 
interest or a controlling interests in a licensed publicly traded 
corporation, (iv) all general partners and all limited partners of a licensed 
partnership, (v) all persons which have a relationship similar to that of an 
officer, director or stockholder of a corporation (such as members and 
managers of a limited liability company), (vi) all persons supplying 
financing or loaning money to any licensee connected with the establishment 
or operation of limited gaming, and (vii) all persons having a contract, 
lease or ongoing financial or business arrangement with any licensee, where 
such contract, lease or arrangement relates to limited gaming operations, 
equipment, devices or premises.

     In addition, under the Colorado Regulations, every person who is a party 
to a "gaming contract" with an applicant for a license, or with a licensee, 
upon the request of the Gaming Commission or the Director, promptly must 
provide to the Gaming Commission or Director all information which may be 
requested concerning financial history, financial holdings, real and personal 
property ownership, interests in other companies, criminal history, personal 
history and associations, character, reputation in the community, and all 
other information which might be relevant to a determination whether a person 
would be suitable to be licensed by the Gaming Commission. Failure to provide 
all information requested constitutes sufficient grounds for the Director or 
the Gaming Commission to require a licensee or applicant to terminate its 
"gaming contract" (as defined below) with any person who failed to provide 
the information requested.  In addition, the Director or the Gaming 
Commission may require changes in "gaming contracts" before an application is 
approved or participation in the contract is allowed. A "gaming contract" is 
defined as an agreement in which a person does business with or on the 
premises of a licensed entity.

     An application for license or suitability may be denied for any cause 
deemed reasonable by the Gaming Commission or the Director, as appropriate, 
including the failure to disclose any arrest on the application.  If the 
Gaming Commission determines that a person or entity is unsuitable to own 
interests in the Company, then the Company, and/or any of the Colorado 
Casinos may be sanctioned, which may include the loss by the Company, and/or 
any of the Colorado Casinos of their respective approvals and licenses.

     The Gaming Commission does not require advance approval of a public 
offering of securities, but rather requires a filing of notice and additional 
documents with regard to such public offering prior to such public offering. 
Under the Colorado Regulations, the Gaming Commission may, at its discretion, 
require additional information and prior approval of such public offering.  
The Company may not sell any interest in any of the Colorado Casinos without 
the prior approval of the Gaming Commission.

     The Colorado Casinos may operate only between 8:00 a.m. and 2:00 a.m., 
and may permit only individuals 21 years or older to gamble in the casino.  
Slot machines, blackjack and poker are the only permitted games, with a 
maximum single bet of $5.00.  The Colorado Casinos may not provide credit to 
gaming patrons, although at the current time, there is no regulatory 
definition of "credit."  The Colorado Regulations restrict the percentage of 
space a casino may use for gaming to 50% of any floor and 35% of the overall 
square footage of the building in which the casino is located.  Effective 
October 1 of each year, the Gaming Commission establishes the gross gaming 
revenue tax rate for the ensuing twelve months.  Under the Colorado 
Constitution, the rate can be increased to as much as 40%.  Colorado has both 
raised and lowered gaming tax rates since they were initially set in 1991.  
Currently, the maximum gaming tax rate is 20%.  These regulations and taxes 
adversely affect the Colorado Casinos' ability to generate revenues and 
operating profits.  See "- Non-Gaming Regulation - Taxation."

     The Company believes that it is presently in material compliance with 
all applicable gaming rules and regulations.

                                       8
<PAGE>

NON-GAMING REGULATION

     LIQUOR REGULATION.  The sale of alcoholic beverages is subject to 
licensing, control and regulation by applicable state and local agencies (the 
"Liquor Agencies").  The current liquor licenses for BWBH and BWCC, which 
were recently renewed, expire in January and February, 1998, respectively.  
The Silver Hawk liquor license expires in June 1997 and is in the process of 
being renewed. 
     
     All liquor licenses are renewable, are revocable and are not 
transferable. The Liquor Agencies have full powers to limit, condition, 
suspend or revoke any liquor license.  Any such disciplinary action could, 
and any failure to renew or other revocation of any of its liquor licenses 
would, have a material adverse effect upon the operations of the Company.
     
     Under  Colorado law, it is a criminal violation for any person or entity 
to own a direct or indirect interest in more than one type of alcoholic 
beverage license or more than three gaming tavern liquor licenses.  Each 
Colorado Casino has a gaming tavern liquor license.  Accordingly, the 
Company's expansion opportunities in Colorado are limited by such licensing 
restriction. Furthermore, no person that holds an interest in the Company may 
hold any direct or indirect legal, equitable or voting interest in any other 
Colorado alcoholic beverage licensee, and vice versa.

     TAXATION.  Gaming operators in Colorado are subject to state and local 
taxes and fees in addition to ordinary federal and state income taxes.  Black 
Hawk and Central City have imposed annual license fees, currently $750 and 
$1,265, respectively, for each gaming device installed in a casino.  Colorado 
currently imposes an annual device fee of $75 for each gaming device 
installed in a casino. The Colorado Casinos operate as licensed gaming 
establishments pursuant to the Colorado Limited Gaming Act and, accordingly, 
are required to make monthly gaming tax payments to the State of Colorado.  
These rates are subject to annual revision with a maximum rate of 40%.  The 
latest annual revision, which became effective October 1, 1996, is calculated 
as a percentage of adjusted gross proceeds (casino net win).  The gaming tax 
rates for the previous three gaming years are set forth in the following 
table:

                                       Annual Tax        Annual Tax Rate 
                                       Rate from            Effective          
          Annual Gross Proceeds      10/94 to 9/96            10/96            
          ---------------------      -------------          ---------  
       First $2 million............        2%                   2% 
       Next $2 million.............        8%                   4% 
       Next $1 million.............       15%                  14% 
       Next $5 million.............       18%                  18% 
       Proceeds over $10 million...       18%                  20% 

EMPLOYEES

     The Company employs approximately 575 persons, including cashiers, 
dealers, food and beverage service, facilities maintenance, accounting, 
marketing and human resources personnel.  Several of the Company's employees 
hold key licenses in Colorado.  See "-Colorado Gaming Regulations."  No labor 
unions currently represent any employees of the Company.  A standard package 
of employee benefits is provided to full-time employees.  The Company 
believes that its employee relations are satisfactory.

SEASONALITY AND INCLEMENT WEATHER

     Because the Colorado Casinos are located in the Rocky Mountains, they 
are subject to sudden and severe winter storms.  Access to Central City and 
Black Hawk, which are both located ten miles from Interstate 70, is made via 
a two-lane secondary road.  In bad weather, and in the winter months 
generally, this access road is difficult to traverse, which reduces the 
number of patrons traveling to Black Hawk and Central City, and, accordingly, 
negatively affects the Company's operating results during these periods.  As 
a result, the Colorado Casinos' business tends to be seasonal, with the 
highest level of activity occurring during the summer months.

     The sites of Bullwhackers Black Hawk and Silver Hawk Casino are located 
in a 100-year flood plain.  To date, the Company has not experienced any 
flooding resulting in damage to the casino.  The Company believes it carries 
adequate flood insurance on Bullwhackers Black Hawk facility.  There can be 
no assurance that Bullwhackers Black Hawk will not suffer flood damage in the 
future or that any damage will be adequately covered by insurance.

PRIVATE SECURITIES LITIGATION REFORM ACT

                                       9

<PAGE>

     Certain statements in this Form 10-K which are not historical facts are 
forward-looking statements within the meaning of the Private Securities 
Litigation Reform Act of 1995, such as statements relating to future 
competition, financing and refinancing sources and availability, plans for 
future development or expansion activities and capital expenditures.  Such 
statements can be identified by the use of forward-looking terminology such 
as "might," "may," "will," "would," "could," "except," "anticipate," 
"estimate," "likely," "believe, "or "continue" or the negative thereof or 
other variations thereon or comparable terminology.  Such forward looking 
statements involve a number of risks and uncertainties that may significantly 
affect the Company's liquidity and results of operattions in the future and, 
accordingly, actual results may differ materially from those expressed in any 
forward-looking statements.  Such risks and uncertainties include, but are 
not limited to, those related to leverage and debt service and ability, 
financing and refinancing efforts, inclement weather, general economic 
conditions in the Denver metropolitan area, changes in gaming laws, 
regulations or tax rates and risks related to development and construction 
activities.

ITEM 2.  PROPERTIES

     The Company owns, through wholly owned subsidiaries, the Colorado 
Casinos and the parking lot including, with the exception of Bullwhackers 
Black Hawk, the land underlying the buildings.  The Company leases the land 
underlying Bullwhackers Black Hawk pursuant to a 23-year land lease expiring 
in 2014.  The terms of the land lease require base minimum payments for the 
calendar year 1996 through 1999 of $150,000 per quarter.  The base minimum 
quarterly payments increase thereafter for each five-year period for the 
balance of the lease term, up to a maximum of $195,000 per quarter.  
Additional rent in the amount of 1.9% of Bullwhackers Black Hawk's adjusted 
gross revenue is payable monthly in arrears throughout the term of the lease. 
The lease contains a buy-out provision which allows the Company to buy the 
land subject to the lease on or after November 1, 2001 at a price equal to 
nine times the annual base minimum rent payments in effect when the buy-out 
is exercised.

     During Bankruptcy, the Company entered into an amended sublease for 
approximately 19,500 square feet of office space located in Denver, Colorado 
and provided for interim rent of approximately $7,500 per month which the 
Company occupied as its corporate offices through February 1997.  In March, 
the Company relocated its corporate offices to Lakewood, Colorado pursuant to 
a new $10,000 a month lease, which expires April 2002, and the amended 
sublease was terminated upon execution of this new lease.

ITEM 3.  LEGAL PROCEEDINGS

     GENERAL.  The Company is or may become a defendant in pending or 
threatened legal proceedings in the ordinary course of business.  The 
Company's management believes that the ultimate resolution of all such 
currently pending legal proceedings will not have a material adverse impact 
on the Company's financial position or results of operations. 

     REORGANIZATION.  Pursuant to the Reorganization, certain claims by the 
Predecessor Company against third parties are assigned to the Litigation 
Trust established in connection with the Reorganization.  The Litigation 
Trust consists of the members of the Company's Board of Directors.  All legal 
proceedings pending against the Predecessor Company prior to the Effective 
Date was settled pursuant to the Reorganization.  The determination by the 
Litigation Trust whether or not to pursue any causes of action assigned to it 
will have no material impact on the Company or the Colorado subsidiaries.

      ENVIRONMENTAL MATTERS.  The Black Hawk and Central City gaming 
districts, including the Colorado Casino sites, are located generally within 
the Central City/Clear Creek Superfund site (the "Site") as designated by the 
Environmental Protection Agency (the "EPA"), pursuant to the Comprehensive 
Environmental Response, Compensation and Liability Act of 1980, as amended 
("CERCLA").  The Site includes numerous specifically identified areas of mine 
tailings and other waste piles from former gold mine operations that are the 
subject of ongoing investigation and clean-up by the EPA and the Colorado 
Department of Public Health and Environment (the "CDPHE").  CERCLA requires 
remediation of sites from which there has been a release or threatened 
release of hazardous substances and authorizes the EPA to take any necessary 
response actions at Superfund sites, including authorizing potentially 
responsible parties ("PRPs") to clean up or contribute to the clean-up of a 
Superfund site. PRPs are broadly defined under CERCLA, and include past and 
present owners and operators of a site.  CERCLA imposes strict liability on 
PRPs, and courts have commonly held PRPs to be jointly and severally liable 
for all response costs.

   Although the Colorado Casinos are not within any of the specific areas of the
Site currently identified by the EPA for investigation or remediation, the site
on which the parking lot was constructed was identified as requiring 

                                       10

<PAGE>

remediation in connection with the construction of the parking lot.  That 
remediation was completed in June 1994.  When the Company expanded the 
parking lot in June 1996, additional environmental remediation of hazardous 
soil was required.  Such additional remediation was completed, at the 
direction and approval of the EPA and CDPHE, prior to December 31, 1996.
   
   The Company, through independent environmental consultants, conducted both 
Phase I and Phase II environmental examinations of the real property 
underlying the Bullwhackers Casinos and obtained subsequent follow-up 
reports.  Based on these examinations, the Company is not aware of any 
environmental problems affecting the Bullwhackers Casinos which are likely to 
result in material costs to the Company.  Although the Company has not 
conducted environmental evaluations of the real property underlying the 
Silver Hawk Casino facility, it does not believe that there are any 
environmental problems affecting the Silver Hawk Casino site which are likely 
to result in material costs to the Company. No assurance can be given, 
however, that the Company will not subsequently discover significant 
environmental problems at any of its Colorado properties. Furthermore, the 
EPA or other governmental authorities could broaden their investigations and 
identify additional areas within the Site, including the Colorado Casino 
sites, for remediation.  If any of the Colorado Casinos were included in 
additional areas of concern within the Site, the Company could be identified 
as a PRP and any liability related thereto could have a material adverse 
effect on the Company.  Furthermore, environmental conditions at any of the 
Company's Colorado properties could have, or could in the future have, a 
detrimental impact on adjacent or nearby properties or persons.  No assurance 
can be given that no such impact on a third party will arise in the future, 
nor that such an impact, if it arises, will not have a material adverse 
impact on the Company.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF STOCKHOLDERS

   Not Applicable

ITEM 4A. EXECUTIVE  OFFICERS OF THE REGISTRANT
     
     Set forth below is certain information with respect to each individual 
who is an executive officer of the Company:

Name                         Age       Position(s)
----                         ---       -----------
Stephen J. Szapor, Jr.       37       Chief Executive Officer,
                                      President and Director

Alan L. Mayer                35       Senior Vice President,
                                      Chief Legal Officer and Secretary

Richard J. Rabin             50       Senior Vice President of Operations

Robert J. Stephens           29       Vice President of Finance and
                                      Treasurer    

Jack Breslin                 42       Vice President of Marketing

     STEPHEN J. SZAPOR, JR. has served as President and Chief Executive 
Officer of the Company since August 1995 and as a director since June 7, 
1996, the Effective Date.  Mr. Szapor served as Executive Vice President and 
Chief Financial Officer from March 1995 until August 1995.  From July 1994 
until joining the Company, he served as the Chief Operating Officer and a 
member of the board of directors of Sahara Gaming Corporation, and from June 
1993 until July 1994, he was the Executive Vice President/Chief Financial 
Officer of Sahara Gaming Corporation.  From October 1986 until June 1993, Mr. 
Szapor held several executive positions with Hollywood Casino Corporation 
including Assistant to the President and Vice President--Strategic Planning.  
Mr. Szapor has also held financial and accounting positions with Merrill 
Lynch & Co. and Arthur Andersen LLP. He holds a key license from the Gaming 
Commission and is a Certified Public Accountant.  Mr. Szapor's employment 
agreement with the Company provides that he shall serve as President and 
Chief Executive Officer and as a director during the term of his employment.  
See "-Employment and Consulting Agreements." 

     ALAN L. MAYER has served as Senior Vice President, Secretary and Chief
Legal Officer of the Company and its predecessors since September 1992 and as an
interim director from the Effective Date through January 1997.  From 1987 to
1992, Mr. Mayer was associated with Isaacson, Rosenbaum, Woods & Levy in Denver,
where he specialized in real estate, land use planning, finance, corporate and
gaming law.  Mr. Mayer is a 

                                       11

<PAGE>

member of the American Bar Association, the Colorado Bar Association, the 
California Bar Association and the International Association of Gaming 
Attorneys.  He is licensed to practice law in California and Colorado.  He 
holds a key license from the Gaming Commission and is President of the  
Casino Owners Association of Colorado.  See "-Employment and Consulting 
Agreements." 

     RICHARD J. RABIN has served as Senior Vice President of Operations of 
the Company since March 1996 and as an interim director from the Effective 
Date through October 1996.  Mr. Rabin served as Vice President, Finance & 
Administration of the Company from August 1995 until March 1996.  From 1994 
until joining the Company, he served as Chief Financial Officer of a 
riverboat gaming facility operated by Sahara Gaming Corporation in Missouri 
and then as General Manager of a gaming facility operated by Sahara Gaming 
Corporation in Nevada.  From 1991 to 1994, Mr. Rabin was Chief Financial 
Officer and Vice President and, beginning in 1993, also General Manager, of 
the Glory Hole Saloon and Gambling Hall in Central City, Colorado.  From 1985 
until 1991, Mr. Rabin served in various positions in the gaming industry in 
Reno, Nevada. Mr. Rabin holds a key license from the Gaming Commission and is 
a Certified Public Accountant.  See "-Employment and Consulting Agreements." 

     ROBERT J. STEPHENS has served as Vice President of Finance since 
September 1996.  He served as Controller, Chief Accounting Officer and 
Treasurer of the Company from August 1995 until September 1996.  Previously, 
Mr. Stephens served in various finance and accounting positions since joining 
the Company in May 1994.  From 1990 to 1994 Mr. Stephens was associated with 
Arthur Andersen LLP. Mr. Stephens is a Certified Public Accountant.

     JACK BRESLIN has served as Vice President of Marketing since February 
1997. Mr. Breslin served as President and Partner of CCI Advertising, Inc. in 
New Jersey, which produced campaigns for Horseshoe Casinos, Sands Hotel and 
Casino, Atlantic City, Santa Fe Casino, Las Vegas, Gold River in Laughlin, 
Nevada and several other casinos and riverboats throughout the country from 
1991 to February, 1997.  Prior to that, Mr. Breslin served as in-house 
Creative Director for Trump's Castle Casino Resort in New Jersey. 

                                   PART II.

ITEM 5.  MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED SECURITY 
         HOLDERS MATTER

 (a) MARKET INFORMATION.  The Company's Common Stock has traded on the NASDAQ 
Electronic bulletin board system, under the symbol "CGME" since October 1996. 
No established public trading market for the Company's Common Stock exists. 
There are only, limited sporadic and infrequent trades of the Common Stock, 
consequently there are no reliable quotations of trading prices.  Based upon 
information supplied to NASDAQ by the reporting brokers and information 
supplied to the Company by certain makers, NASDAQ Trading Market Services and 
such brokers reported the following range of high and low sales price for 
each quarter since the Common Stock became registered under the Securities 
Exchange Act of 1934 on the Effective Date:

   QUARTER ENDED                   HIGH      LOW 
   -------------                   ----      --- 
June 30, 1996                     $3.50     $2.50
September 30, 1996                 4.25      3.50
December 31, 1996                  5.00      4.00

     The most recent trade of the Company's Common Stock was $4.50 per share 
on January 13, 1997.

(b) HOLDERS.  The approximate number of record holders of the Company's 
Common Stock as of March 26, 1997 was approximately 50.

(c) DIVIDENDS.  Since the Effective Date, the Company has neither declared 
nor paid dividends on the Common Stock and does not anticipate paying 
dividends in the foreseeable future.  The Company intends to follow a policy 
of retaining any earnings either to repay borrowings under the Company's 
credit facility, finance the Company's growth, or for general corporate 
purposes.  In addition, the Company's credit facility and the Indenture 
restrict the Company from paying cash dividends.  Payment of dividends in the 
future will be determined by the Company's Board of Directors and will depend 
upon, among other things, the Company's future earnings, operations, capital 
requirements, contractual restrictions in the Company's debt or other 
instruments, and such other factors the Board of Directors may deem relevant. 
 

Item 6.  SELECTED FINANCIAL DATA

                                       12

<PAGE>

     The selected consolidated financial data set forth below for each of the 
last five fiscal years ended December 31 is derived from the Company's 
Consolidated Financial Statements and Notes.  Due to the Reorganization, 
comparisons of 1996 results to prior periods may be of limited use in 
determining operating or other financial trends in the Company's business.  
This data should be read in conjunction with the Consolidated Financial 
Statements of the Company and the Notes thereto and "Management's Discussion 
and Analysis of Financial Condition and Results of Operations" contained in 
this Form 10-K.
<TABLE>
<CAPTION>
                         IN THOUSANDS, EXCEPT SHARE DATA

                                                 Years Ended December 31,           
                                       ---------------------------------------------
                                       1992(a)       1993        1994(b)     1995(b)
                                       -------     --------     --------    --------
<S>                                    <C>         <C>           <C>        <C> 
STATEMENT OF OPERATIONS DATA: 
Net revenues  . . . . . . . . . . . .  $ 17,045    $ 38,468     $ 45,474   $  47,428 
Operating Expenses: 
   Impairment of assets and 
   predevelopment expense . . . . . .         -           -       10,804      11,347 
   Reorganization items . . . . . . .         -           -            -      17,910 
   Other operating expenses . . . . .    25,349      35,310       47,631      44,807 
Income (loss) from operations . . . .    (8,304)      3,158      (12,961)    (26,636)
Interest expense  . . . . . . . . . .     3,000       6,987       18,822      18,664 
Equity loss in unconsolidated 
   subsidiary . . . . . . . . . . . .         -           -       (2,323)    (70,277) 
                                        -------    --------     --------    --------
Net loss  . . . . . . . . . . . . . .  $(11,241)   $ (3,829)    $(32,331)  $(115,216) 
                                        -------    --------     --------    --------
                                        -------    --------     --------    --------
Net loss per common share(b)  . . . .       N/A         N/A          N/A         N/A 
                                        -------    --------     --------    --------
                                        -------    --------     --------    --------
Weighted average common 
   shares(b)  . . . . . . . . . . . .       N/A         N/A          N/A         N/A 

                                     Jan. 1,1996     June 7, 1996 (c) 
                                       through            through     
                                     June 6, 1996    December 31,1996 
                                     ------------    ---------------- 
STATEMENT OF 
OPERATIONS DATA: 
Net revenues  . . . . . . . . . . . .   $19,982         $30,680 
Operating Expenses: 
   Reorganization items . . . . . . .     2,290             308 
   Other operating expenses . . . . .    17,130          26,402 
Income from operations  . . . . . . .       562           3,970 
Interest expense  . . . . . . . . . .       579           3,867 
Extraordinary gain from 
  reorganization  . . . . . . . . . .   164,358              -- 
                                       --------         -------
Net income  . . . . . . . . . . . . .  $164,407         $   192 
                                       --------         -------
                                       --------         -------
Net income per common share(b)  . . .       N/A         $  0.04 
                                       --------         -------
                                       --------         -------
Weighted average common 
   shares(b)  . . . . . . . . . . . .       N/A       5,138,888 
</TABLE>
                                       13

<PAGE>
<TABLE>
                                                       As of December 31,         
                                                       ------------------
                               1992         1993        1994(d)      1995(b)     1996  
                              -------    ---------    ----------  ---------   ----------
<S>                           <C>        <C>           <C>          <C>        <C>
BALANCE SHEET DATA: 
Cash and cash                
equivalents.................. $ 1,676    $  12,944    $   7,977   $   3,623   $   5,758  
Total assets.................  35,181      143,622      141,093      37,680      67,048  
Long-term debt (excluding 
current portion).............  35,064      139,595      155,675           -      55,391   
Liabilities subject to       
compromise...................       -            -            -     186,460          --   
Total stockholders'                                                                       
equity (deficit)............. (10,002)      (4,693)     (36,824)   (153,137)       4,869  
</TABLE>


(a)  Reflects operating results for the period from June 15, 1992 to December
     31, 1992 for Bullwhackers Central City and the period from July 17, 1992 to
     December 31, 1992 for Bullwhackers Black Hawk.

(b)  The weighted average number of common shares outstanding and net income per
     common share for the Predecessor Company (periods through June 6, 1996)
     have not been presented because, due to the Reorganization and
     implementation of fresh start reporting, they are not comparable to
     subsequent periods and irrelevant.

(c)  Commencement of fresh-start reporting in connection with the
     Reorganization, effective June 7, 1996.

(d)  GPRI was consolidated with the Company and its other wholly owned
     subsidiaries for the Company's fiscal year ended December 31, 1994, but was
     not consolidated with the Company and its other wholly owned subsidiaries
     for the Company's fiscal year ended December 31, 1995 because the Company
     no longer "controlled" GPRI (as determined by generally accepted accounting
     principles) following the commencement of the GPRI Bankruptcy Case.  See
     Consolidated Financial Statements and Notes thereto. 

                                       14
<PAGE>
ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
         AND RESULTS OF OPERATION

OVERVIEW

     The Predecessor Company was formed to develop, own and operate the 
Bullwhackers casinos in Colorado and, subsequently, through its wholly owned 
subsidiary Grand Palais Riverboat, Inc. ("GPRI"), developed, owned and 
operated a riverboat gaming facility on the Mississippi River adjacent to 
downtown New Orleans.  The Predecessor Company's riverboat gaming facility 
commenced operations on March 29, 1995, and due to substantial operating 
losses, stopped operations on June 6, 1995.  In 1996, the Company purchased 
the Silver Hawk Casino to own and operate this casino in Black Hawk, Colorado.

     Prior to closing its riverboat gaming operations, GPRI had incurred 
substantial obligations, including construction costs overruns, equipment 
purchases, and trade payables, for which it had no funds available or 
financial ability to pay.  On July 26, 1995, three creditors of GPRI filed a 
Chapter 7 involuntary bankruptcy petition against GPRI in the United States 
Bankruptcy Court for the Eastern District of Louisiana (the "Court").  On 
July 27, 1995, GPRI converted the petition into a voluntary petition under 
Chapter 11 of the Federal Bankruptcy Code in the United States Bankruptcy 
Court for the Eastern District of Louisiana. On May 3, 1996 as part of the 
Company's overall restructuring, the Predecessor Company's equity interest in 
GPRI was sold to Casino America, Inc. pursuant to GPRI's bankruptcy 
reorganization. Consideration, consisting of cash, stock and notes, totaling 
approximately $59 million, was given to GPRI creditors, including the 
Predecessor Company's senior secured creditors.  Accordingly, the Company 
received no consideration from the sale of GPRI.  Concurrently with this 
stock sale, all claims against the Company related to GPRI were released.  
This transaction had no financial statement impact on the Company in the 1996 
period, as the Predecessor Company's investment in GPRI was reduced to zero 
in 1995.

     In June 1995,  the Predecessor Company received "Notices of Default" 
from the trustee of its $140 million Senior Secured Pay-In-Kind Notes (the 
"Old Notes"), alleging that the Predecessor Company was in default under 
various provisions of the Old Notes Indenture.  The alleged defaults 
included, among other matters, violations related to the issuance of certain 
additional indebtedness, the termination of riverboat gaming operations, the 
numerous liens filed against the Riverboat Project and the failure to file 
audited financial statements on a timely basis.  On November 7, 1995, the 
Predecessor Company and three of its wholly owned subsidiaries (BWBH, Inc. 
BWCC, Inc. and Millsite 27, Inc.), filed voluntary petitions for 
reorganization under Chapter 11 of the Federal Bankruptcy Code in the 
District of Delaware as contemplated by the negotiations with the Company's 
bondholders.  The Chapter 11 case subsequently was transferred to the Court.

     The Company's Reorganization became effective on June 7, 1996, the 
"Effective Date".  Pursuant to the Reorganization, the following events 
occurred:

     -    $176 million of outstanding senior secured debt was canceled and $50
          million in new debt, consisting of the Company's 12% Senior Secured
          Pay-In-Kind Notes Due 2003 (the "Notes"), was issued.

     -    All existing common stock and warrants of the Predecessor Company were
          canceled and 5 million newly authorized shares of common stock were
          issued to the Company's senior secured creditors.

     -    Certain unsecured indebtedness totaling approximately $1.2 million was
          canceled.

     -    The Company changed its name to Colorado Gaming & Entertainment Co.

     Also on the Effective Date, the Company adopted fresh-start accounting 
in accordance with AICPA Statement of Position SOP 90-7 resulting in 
adjustment of the Company's stockholders' equity and the carrying values of 
assets and liabilities.  Accordingly, the Company's post-Reorganization 
balance sheets and statements of operations are not prepared on a consistent 
basis of accounting with its pre-Reorganization balance sheets and statements 
of operations, a substantial amount of pre-bankruptcy liabilities of the 
Company was converted to equity or otherwise discharged and significant 
adjustments were made to reflect the resolution of certain liabilities.

RESULTS OF OPERATIONS    FOR THE YEAR ENDED DECEMBER 31, 1996 AS COMPARED TO 
THE YEAR ENDED DECEMBER 31, 1995.

     The Company's net revenue increased 7%, to $50.7 million in 1996, from 
$47.4 million in 1995.  The 

                                       15

<PAGE>

increase in revenue is primarily attributable to the addition of the Silver 
Hawk Casino.  Silver Hawk Casino, located in Black Hawk adjacent to the 
Company's expanded parking lot, opened for business on June 26, 1996 and 
contributed approximately $3.9 million in net revenue from that date through 
year end.  In addition, continued overall growth in the Black Hawk market and 
completion of the Company's expanded parking lot, which opened on June 7, 
1996, contributed to the increase in the Company's net revenue. Bullwhackers 
Black Hawk produced a 6% increase in revenues in 1996, despite the fact that 
Bullwhackers Black Hawk's operations were negatively affected by the 
construction activities relating to expansion of the parking lot which began 
April 1 and ended June 7.  The revenue gains in Black Hawk were offset by 
significant revenue declines at Bullwhackers Central City due to competition 
in an overall declining market.  The Central City market, which was down 
approximately 6% for the year, continues to struggle to compete with Black 
Hawk, which offers better access and parking convenience. Bullwhackers 
Central City has not been able to compete effectively with certain other 
competitors in Central City which offer substantially more amenities such as 
on-site parking and hotel rooms.
     
     Expenses directly related to casino operations, including casino labor 
expense, gaming taxes and food and beverage expense increased 3% to $25.3 
million in 1996, as compared to $24.5 million in 1995.  The increase is due 
to the addition of the Silver Hawk Casino operations and the increased 
business levels at Bullwhackers Black Hawk.  However, as a percentage of net 
revenue, casino expenses decreased to 50% in 1996 from 52% in 1995.  The 
decrease is due to certain labor efficiencies and other cost saving programs 
implemented in late 1995 and early 1996, particularly at Bullwhackers Central 
City in an effort to sustain profitability in light of the revenue decreases. 
 The decrease is also due to the benefit the Company received from the 
revised gaming tax rates of approximately $110,000 in the fourth quarter.  
However, as a result of the revised gaming tax rates, on a forward looking 
basis, the Company estimates gaming taxes could increase by approximately 
$300,000 to $400,000 based on the increase in the top tax rate.

     Marketing expense increased 10% to $6.4 million in 1996, as compared to 
$5.8 million in 1995.  This increase is due to marketing efforts related to 
introduction  of Silver Hawk Casino to the market and the implementation of 
additional customer busing programs and certain other promotions in an effort 
to sustain business levels at Bullwhackers Central City.
     
     Casino general and administrative expenses decreased 13% to $2.8 million 
in 1996, as compared to $3.2 million in 1995.  The decrease primarily relates 
to reductions in staffing at Bullwhackers Central City and decreased 
insurance costs.

     Corporate expense decreased 59% to $2.8 million in 1996, as compared to 
$6.9 million in 1995.  These reductions included the elimination of most 
corporate positions and terminating the use and subsidy of a corporate 
aircraft, all beginning in the second quarter of 1995.  Offsetting a portion 
of these corporate reductions for 1996 includes a charge for approximately 
$720,000 relating to incentive compensation expense for senior management 
based upon implementation of the Company's new Cash Bonus Plan and the Stock 
Incentive Plan subsequent to the Reorganization.  Of the $720,000 incurred, 
approximately $270,000 was a result of a noncash charge related to stock 
compensation.

     Depreciation and amortization increased 23% to $5.9 million in 1996 as 
compared to $4.8 million in 1995.  The increased depreciation charges are  
due to the increased book basis of the Company's assets, primarily the excess 
reorganization value at Bullwhackers Black Hawk.  The Company was required to 
adjust the carrying value of its assets to fair value when adopting 
fresh-start accounting.  Also, depreciation charges increased due to the 
addition of the Silver Hawk Casino.

     The Company incurred $362,000 in pre-opening expense in 1996 related to 
the Silver Hawk Casino.  

     Reorganization and other impairment charges totaled $2.6 million in 
1996, as compared to $28.9 million in 1995.  Reorganization expenses are 
costs directly related to the Company's Reorganization and consisted 
primarily of professional fees in the 1996 period.  Impairments are 
write-offs, primarily due to the write-off of affiliate receivables in the 
1995 period.

     Interest expense decreased 76% to $4.4 million in 1996, as compared to 
$18.7 million in 1995.  The decrease in interest expense is primarily due to 
the reduction of debt pursuant to the Reorganization.  Additionally, the 
Company did not record any interest expense during the Reorganization period 
November 1995 through June 6, 1996 on its debt obligations in default.  On a 
pro forma basis, based on the reorganized capital structure, interest for 
1996 would have been approximately $7 million.

     FOR THE YEAR ENDED DECEMBER 31, 1995 AS COMPARED TO THE YEAR ENDED 
DECEMBER 31, 1994.

     As of December 31, 1994, the accounts of GPRI were consolidated with 
those of the Predecessor 

                                       16

<PAGE>

Company.  Because of the GPRI Bankruptcy proceedings and Casino America 
Agreement in 1995, it was determined that the Predecessor Company did not 
"control" GPRI and, therefore, GPRI no longer met the consolidation criteria 
pursuant to Statement of Financial Accounting Standards No. 94, 
"Consolidation of All Majority-Owned Subsidiaries."  Accordingly, effective 
January 1, 1995, the Predecessor Company's investment in GPRI was accounted 
for under the equity method.  Under the equity method, original investments 
are recorded at cost and adjusted by the Company's share of undistributed 
losses of the investee.  Although GPRI's results of operations were 
consolidated with the results of operations of the Company and its other 
wholly owned subsidiaries for the Company's fiscal year ended December 31, 
1994, and were not consolidated for the Company's fiscal year ended December 
31, 1995, GPRI's only operating item in 1994 was the preopening expense of 
$2.6 million discussed below.  Therefore, with the exception of this item, 
the Company's 1995 results of operations which do not include GPRI are 
comparable to the Company's 1994 results of operations which do include GPRI.

     The Company's net revenue increased to $47.4 million in 1995 as compared 
with $45.5 million in 1994, representing a 4% increase in net revenues.  The 
growth is primarily attributable to increased revenues at Bullwhackers Black 
Hawk resulting from the fact that Bullwhackers Black Hawk had the benefit of 
the parking lot, which opened in April 1994, for all of 1995, as opposed to 
only eight months during 1994. Additionally, Bullwhackers Black Hawk 
benefited from the overall market growth in Black Hawk of 14% in 1995.  The 
revenue growth at Bullwhackers Black Hawk was offset by a slight decrease in 
Bullwhackers Central City net revenues.

     Expenses directly related to the casinos, including casino labor 
expense, gaming taxes and food and beverage expense decreased by 3% to an 
aggregate of $24.5 million for 1995 as compared to an aggregate $25.6 million 
for 1994. Casino expense was 52% of net revenue at the Bullwhackers Casinos 
for 1995 as compared 56% of net revenue at the Bullwhackers Casinos for 1994.

     Casino general and administrative expenses decreased 3% to $3.2 million 
in 1995, as compared to $3.3 million in 1994, due to cost reductions as part 
of the Company's restructuring implemented in the fourth quarter of 1995. 
     
     Corporate expense decreased 43% to $6.9 million in 1995, as compared to 
$12.0 million in 1994.  The decrease is due to the Company's reduced 
corporate group during the second half of 1995.  During the second quarter of 
1995, the Company began to implement significant cost reductions at the 
corporate level as part of the Company's restructuring.  Most corporate 
positions were eliminated, the use and subsidy of a corporate airplane was 
terminated and professional and consulting fees were eliminated. In addition, 
the Company substantially reduced its predevelopment activity in early 1995 
due to the Company's lack of financial resources.

     Marketing expense increased 53%, to $5.8 million for 1995 as compared to 
$3.8 million for 1994.  The increase primarily relates to the increased 
promotional costs due to increased business volume and the increasingly 
competitive nature of the market.

     Depreciation and amortization expense increased to $4.8 million for 1995 
as compared to $4.3 million for 1994, representing a 9% increase.  The 
increase primarily reflects a full year of depreciation on the improvements 
of the parking lot in 1995.

     There were no pre-opening costs for 1995 as compared to $2.6 million of 
pre-opening costs for 1994.  Pre-opening costs in 1994 consisted of 
expenditures incurred to prepare the New Orleans riverboat gaming facility 
for opening.

     Impairment of asset charges were $10.9 million for 1995 as compared to 
$6.9 million for 1994.  In 1995, the impairment charges resulted primarily 
from approximately $6.4 million reserve established for affiliate company 
receivables determined to be uncollectible, $2.7 million of capitalized 
interest related to construction of the Riverboat Project. which was 
written-off subsequent to the closure of the riverboat operations, and $1.5 
million of capitalized offering costs which were written-off once certain 
initial public offering and debt registration efforts were abandoned.  In the 
1994 period, these charges related to a $5.9 million charge for the write-off 
of the Company's Mexican Investment and a $1 million allowance for affiliate 
receivables.

     Reorganization expense in 1995 totaled approximately $17.9 million as 
compared to none in 1994.  Reorganization expenses are costs directly related 
to the Company's Chapter 11 reorganization and consist primarily of 
professional fees and the write-off of unamortized debt placement costs.

     Interest expense totaled $18.7 million for 1995 as compared to $18.8 
million for 1994.  The Company ceased accruing interest on the Old Notes and 
on certain of its Bullwhackers Casino equipment financing as of 

                                       17

<PAGE>

November 7, 1995 because of the Predecessor Company's Bankruptcy filing.

     LIQUIDITY AND CAPITAL RESOURCES 
     
     On the Effective Date, the Company's outstanding Old Notes totaling $174 
million, and certain notes payable to an affiliate totaling $2 million, were 
canceled and $50 million in Notes were issued on a pro rata basis to the 
holders of the Old Notes and the notes payable to an affiliate.  The Notes 
are secured by substantially all the assets of the Company and require 
semi-annual interest payments commencing on December 1, 1996.  On the first 
two interest payment dates, December 1, 1996 and June 1, 1997, interest on 
the Notes may, at the Company's option, be paid by issuing additional notes 
in lieu of cash interest payments.  On December 1, 1996, the Company elected 
to make its first interest payment by issuing $2.9 million of additional 
Notes.

     Also on the Effective Date, the Company closed on a credit facility (the 
"Credit Facility") with Foothill Capital Corporation.  The Credit Facility 
provides for loans up to $12.5 million in the form of several sub facilities 
including a construction line of $5 million, an equipment financing line of 
$5 million and a revolving working capital line for up to $3.5 million.  At 
no point may the aggregate borrowings exceed $12.5 million.  Borrowings under 
the Credit Facility are subject to a 1% financing fee and accrue interest at 
prime plus 2.375%.  The loans have varying terms, ranging from three to five 
years from the date funds are borrowed, but in no event past June 7, 2001.  
The Credit Facility is secured by first liens on substantially all the 
Company's assets and are senior, in terms of lien rights, to the Notes.  As 
of December 31, 1996, the Company had an outstanding balance of approximately 
$2.4 million under the equipment financing line.  The Credit Facility 
replaced a $7 million Debtor-in-Possession ("DIP") facility also provided by 
Foothill Capital Corporation on the Effective Date.

     Certain other equipment financing, with a principal balance totaling 
$3.9 million, was retired prior to and on the Effective Date in accordance 
with the Reorganization for $3.1 million (realizing an $800,000 discount) 
with proceeds from the DIP Facility and Credit Facility.  This equipment 
refinancing, the Silver Hawk Casino down payment, accrued interest and 
certain borrowing expenses, altogether totaling approximately $4.3 million, 
were replaced or borrowed on the Effective Date from the Credit Facility.  
Subsequently, the Company repaid $1.9 million of this amount from operating 
cash flows, resulting in an outstanding debt balance under the Credit 
Facility to $2.4 million as of December 31, 1996.

     In April 1996, the Company purchased the Silver Hawk Casino, which had 
not been operating for several years, for $2.7 million.  Of the $2.7 million 
purchase price, $900,000 was borrowed under the DIP Facility and $1.8 million 
was financed by a note payable to the seller accrued interest at 9.5% per 
annum, and provided for monthly principal and interest payments on a 20-year 
amortization schedule.  The Company retired the seller's note from available 
cash on June 18, 1996.  

     The Company opened the Silver Hawk Casino on June 26, 1996.  Prior to 
opening, the Company refurbished the interior, outfitted the facility with 
equipment (including slot machines) and incurred certain other pre-opening 
expenses.  The Company paid for these costs, totaling $2.0 million by 
financing $1.1 million in slot machines from funds available under the Credit 
Facility and paid the remaining costs from available cash.   Subsequently, 
the Company repaid the $1.1 million from available cash flows.

     Upon completion of the excavation work in June 1996 and the subsequent 
repaving of the parking lot, the number of cars which could be parked on the 
parking lot at any one time increased from 260 cars to approximately 375 
cars, a 45% increase in capacity.  The Company then analyzed whether the cost 
of constructing the parking garage was justified given the fact that it had 
achieved 75% of the desired parking capacity for only a fraction of the total 
capital cost anticipated to be spent on the parking garage and decided to 
delay indefinitely the construction of the parking garage.  
     
     In late 1996, the Company evaluated whether it could cost-effectively 
excavate the remaining portion of the mountain  to its property line to 
further expand the capacity of the parking lot.  The Company concluded that 
the additional excavation would cost approximately $1.3 million and would add 
approximately 120 additional parking spaces.  The Company has elected to 
undertake this additional parking expansion project and as part of the 
project, has also elected to construct a new valet facility to increase 
customer convenience at the parking lot and to enhance access to the Kids 
Quest child care facility.  The valet facility is expected to cost 
approximately $300,000. The entire parking expansion project, which commenced 
in early February 1997, is expected to be completed by June 1997.  During 
construction, the Company expects to experience some business disruption.
     
     In July, 1996, the Company entered into an agreement with New Horizons 
Kids Quest III, Inc.("Kids Quest") which provides that  Kids Quest will 
operate a day care facility adjacent to Bullwhackers Black Hawk that intends 
to meet or exceed all relevant license standards.  Kids Quest will be solely 
responsible for the day-to-day operations of the day care facility.  The 
Company will receive percentage rent from Kids Quest for the use of the 

                                       18

<PAGE>

facility which is being constructed by the Company.  Rent will consist of 10% 
of the first $500,000 in revenue and 15% thereafter from the Kids Quest 
operation.  The day-care facility will be for the exclusive use of the 
patrons of the Colorado Casinos.  The Company is in the process of 
constructing the day care facility for use by Kids Quest at an estimated cost 
of approximately $1.5 million.  The Company has entered into a guaranteed 
maximum price contract with the general contractor. The opening of the day 
care facility is currently scheduled for the Summer of 1997.  The Company 
pursued this project, in part, as a result of a new law in Colorado which 
prohibits children from lingering in the gaming areas of a casino.  The 
Company believes the day care facility will give it a competitive advantage 
with other casinos that do not have such a facility, although there can be no 
assurance that the day care facility will result in increased visitation and 
revenues at the Company's casinos. No other casinos in the Black Hawk-Central 
City market currently have, or have announced plans to build a day care 
facility.  The Company expects to fund this project through available working 
capital.   

     The Company has entered into a consulting agreement with another company 
in the business of providing gaming consulting/management services to Native 
American Indian tribes.  The companies will use their joint resources to 
pursue obtaining contractual arrangements with various Native American tribes 
to provide consulting services for new and existing Native American gaming 
projects.  As of December 31, 1996, the Company has expensed $120,000 and has 
committed to expend a maximum of approximately $220,000 in additional funding 
over the next twelve months, under this agreement.  The Company expects to 
fund its ongoing commitment through available working capital.

     The Company believes that the Credit Facility and its operating cash 
flows will provide sufficient liquidity and capital resources for the 
Company's operations.  However, there can be no assurance the Company's 
estimate of its need for liquidity and capital resources is accurate or that 
new business developments or other unforeseen events will not occur which 
will increase those needs.  Although no additional financings are 
contemplated at this time, the Company may seek additional debt or equity 
financing if necessary.   There can be no assurance that additional financing 
will be available, or if available, will be on terms favorable to the 
Company.  Additionally, debt or equity financing may require consent from the 
holders of the Notes and the lender under the Credit Facility.  

     INCOME TAX CONSIDERATIONS

     The Company's Reorganization had a significant effect on the Company's 
tax position.  Historically, the Predecessor Company had generated a 
significant amount of net operating loss carryforwards, of which, the vast 
majority will be eliminated pursuant to the cancellation of indebtedness 
event effected by the Reorganization.  Additionally, the net operating loss 
carryforwards which survive the cancellation event will be limited by the 
ownership change, which was also effected by the Reorganization.  Going 
forward, it is likely that the Company will generate taxable income and 
accordingly, will recognize income tax expense and be subject to pay income 
tax to the extent that the Company's net operating loss carryforwards and 
certain other tax assets are limited or not available to mitigate the payment 
of such taxes (see Note 7 in the Notes to the consolidated financial 
statements for more detailed discussion concerning the Company's tax 
position).

ITEM 8.  FINANCIAL STATEMENTS

     The Consolidated Financial Statements and Notes that constitute Item 8 
are attached at the end of this Annual Report on Form 10-K.  An index to 
these Consolidated Financial Statements and Notes is also included in Item 
14(a) of this Report on Form 10-K.

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

     Not Applicable

                                   PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     Information relating to the directors of the Company, including 
directors who are executive officers of the Company, is set forth under the 
caption "Election of Directors" in, and is incorporated herein by reference 
to Part I, Item 4A, the Company's proxy statement for the June 9, 1997 Annual 
Meeting of Stockholders.  Information relating to the executive officers of 
the Company is set forth under the caption "Executive Officers of the 
Registrant" in Part I, Item 4A of this report.

ITEM 11.  EXECUTIVE COMPENSATION

                                       19

<PAGE>

     Incorporated herein by reference to the Company's proxy statement for 
the June 9, 1997 Annual Meeting of Stockholders under the caption " Executive 
Compensation".

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     Incorporated herein by reference to the Company's proxy statement for 
the June 9, 1997 Annual Meeting of Stockholders under the caption "Security 
Ownership of Certain Beneficial Owners and Management".

ITEM 13.  CERTAIN RELATIONSHIP AND RELATED TRANSACTIONS

     Incorporated herein by reference to the Company's proxy statement for 
the June 9, 1997 Annual Meeting of Stockholders under the caption " Executive 
Compensation".

                                       20

<PAGE>

                                    PART IV

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

     (a) (1) and (a)(2) Financial Statements and Financial Statement Schedules

                                       
                         INDEX TO FINANCIAL STATEMENTS

                                                                        Page    
                                                                        ----
CONSOLIDATED FINANCIAL STATEMENTS            

Report of Independent Public Accountants.................................22
Consolidated Balance Sheets..............................................23
Consolidated Statements of Operations....................................24
Consolidated Statements of Stockholders' Equity (Deficit)................25
Consolidated Statements of Cash Flows....................................26
Notes to Consolidated Financial Statements...............................28


     All other schedules are omitted because the required information is not 
present in amounts sufficient to require submission of the schedule or 
because the information required is included in the Consolidated Financial 
Statements and Notes thereto.  

     (a)(3)    Exhibits

          See Index to Exhibits on page 44.
     
     (b)  Reports on Form 8-K
     
          None 

                                       21
<PAGE>

                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Colorado Gaming & Entertainment Co.
 
We have audited the accompanying consolidated balance sheets of Colorado 
Gaming & Entertainment Co (formerly Hemmeter Enterprises, Inc.) and 
subsidiaries (the "Company") as of December 31, 1996 and 1995, and the 
related consolidated statements of operations, stockholders' equity (deficit) 
and cash flows for the period from June 7, 1996 through December 31, 1996, 
the period from January 1, 1996 through June 6, 1996 and the two years in the 
period ended December 31, 1995.  These consolidated financial statements are 
the responsibility of the Company's management.  Our responsibility is to 
express an opinion on these consolidated financial statements based on our 
audits.
 
We conducted our audits in accordance with generally accepted auditing 
standards.  Those standards 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.  
An audit also includes assessing the accounting principles used and 
significant estimates made by management, as well as evaluating the overall 
financial statement presentation. We believe that our audits provide a 
reasonable basis for our opinion.
 
In our opinion, the financial statements referred to above present fairly, in 
all material respects, the consolidated financial position of Colorado Gaming 
& Entertainment Co. and subsidiaries as of December 31, 1996 and 1995, and 
the results of their operations and their cash flows for the period from June 
7, 1996 through December 31, 1996, the period from January 1, 1996 through 
June 6, 1996 and the two years in the period ended December 31, 1995, in 
conformity with generally accepted accounting principles.  


Denver, Colorado
      March 21, 1997.

                                       22

<PAGE>

                 COLORADO GAMING & ENTERTAINMENT CO.
                     CONSOLIDATED BALANCE SHEETS
                  (in thousands, except share data)

                                    Predecessor Company  Reorganized Company (a)
                                     December 31, 1995      December 31, 1996   
                                    -------------------  -----------------------
               ASSETS 
CURRENT ASSETS: 
   Cash and cash equivalents  . . .       $    3,623         $     5,758 
   Accounts receivable, net . . . .              226                 217 
   Inventories  . . . . . . . . . .               85                 106 
   Prepaid expenses . . . . . . . .              638                 406 
                                          ----------         ----------- 
      Total current assets  . . . .            4,572               6,487 
                                          ----------         ----------- 
PROPERTY, EQUIPMENT AND LEASEHOLD 
 IMPROVEMENTS, net. . . . . . . . .           32,127              41,322 

EXCESS REORGANIZATION VALUE, net
 (Note 2) . . . . . . . . . . . . .               --              18,256 

OTHER ASSETS, net of accumulated 
 amortization of $239 and $370,
 respectively . . . . . . . . . . .              981                 983 
                                          ----------         ----------- 
                                          $   37,680         $    67,048 
                                          ----------         ----------- 
                                          ----------         ----------- 

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

CURRENT LIABILITIES: 
   Accounts payable . . . . . . . .       $      404         $       804 
   Accrued expenses (Note 2)  . . .            3,953               4,025 
   Current portion of credit             
    facility  . . . . . . . . . . .               --               1,308 
   Current portion of other notes 
    payable and capital leases  . .               --                 651 
                                          ----------         ----------- 
      Total current liabilities . .            4,357               6,788 
                                          ----------         ----------- 
NOTES PAYABLE, net of current 
 portion: 
   Senior secured notes payable . .               --              52,883 
   Credit facility  . . . . . . . .               --               1,136 
   Other notes payable and capital                
    leases  . . . . . . . . . . . .               --               1,372 
                                          ----------         ----------- 
                                                  --              55,391 
                                          ----------         ----------- 
LIABILITIES SUBJECT TO COMPROMISE .          186,460                  -- 
                                          ----------         ----------- 
      Total liabilities . . . . . .          190,817              62,179 
                                          ----------         ----------- 
COMMITMENTS AND CONTINGENCIES (NOTE 10)

STOCKHOLDERS' EQUITY (DEFICIT): 
   Preferred stock, $.01 par value, 
    2,000,000 shares authorized, none 
    issued at December 31, 1995, 
    canceled on June  6, 1996 . . .               --                  -- 
   Common stock, $.01 par value, 
    50,000,000 shares authorized, 
    11,786,235 shares issued and 
    outstanding at December 31, 1995, 
    canceled on  June 6, 1996 . . .              118                  -- 
   Warrants issued, canceled on  
    June 6, 1996  . . . . . . . . .            7,000                  -- 
   Common stock, $.01 par value, 
    20,000,000 shares authorized, 
    5,138,888  shares issued and 
    outstanding at December 31, 
    1996. . . . . . . . . . . . . .               --                  51 
   Additional paid-in capital . . .            2,162               4,626 
   Retained earnings (deficit). . .         (162,417)                192 
                                          ----------         ----------- 
      Total stockholders' equity           
       (deficit). . . . . . . . . .         (153,137)              4,869 
                                          ----------         ----------- 
                                          $   37,680         $    67,048 
                                          ----------         ----------- 
                                          ----------         ----------- 

(a)  Due to the Reorganization and implementation of fresh-start reporting, 
financial statements for the Reorganized Company (period starting June 7, 
1996) are not comparable to those of the Predecessor Company.  See Notes to 
the Financial Statements for additional information.  

The accompanying notes are an integral part of these consolidated balance 
sheets. 

                                       23
<PAGE>
                       COLORADO GAMING & ENTERTAINMENT CO.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                    (in thousands, except per share amounts)
<TABLE>
                                                          January 1,
                                                             1996        June 7, 1996 
                                Years Ended December 31, through June  through December 
                                   1994         1995       6, 1996        31, 1996(a)  
                                ---------    ---------  -----------      ---------- 
<S>                             <C>          <C>        <C>            <C>      
      REVENUES: 
      Casino . . . .. . . . . . $  42,724    $  44,854  $    19,126    $  29,398 
      Food and beverage . . . .     3,571        3,737        1,288        1,998 
      Other . . . . . . . . . .       389          286           32          117 
                                ---------    ---------  -----------    ---------
       Gross revenues . . . . .    46,684       48,877       20,446       31,513 
   Less: promotional. . . . . .    (1,210)      (1,449)        (464)        (833) 
                                ---------    ---------  -----------    ---------
       Net revenues . . . . . .    45,474       47,428       19,982       30,680 
                                ---------    ---------  -----------    ---------
    OPERATING EXPENSES: 
    Casino  . . . . . . . . . .    14,247       13,087        5,788        7,884 
    Gaming taxes and             
     device fees. . . . . . . .     8,178        8,277        3,614        4,564 
    Food and beverage . . . . .     3,140        3,173        1,299        2,111 
    General and administrative: 
       Casino . . . . . . . . .     3,281        3,223        1,249        1,557 
       Corporate. . . . . . . .    12,037        6,872          902        1,926 
    Marketing . . . . . . . . .     3,776        5,806        2,349        4,001 
    Depreciation and                
     amortization . . . . . . .     4,307        4,771        1,882        4,044 
    Pre-opening . . . . . . . .     2,594           --           47          315 
    Reorganization items 
     (Note 1) . . . . . . . . .        --       17,910        2,290          308 
    Impairment of assets. . . .     6,875       10,945           --           -- 
                                ---------    ---------  -----------    ---------
        Total operating 
         expenses . . . . . . .    58,435       74,064       19,420       26,710 
                                ---------    ---------  -----------    ---------
    INCOME (LOSS) FROM 
     OPERATIONS . . . . . . . .   (12,961)     (26,636)         562        3,970 
    Interest expense (Note 5) .   (18,822)     (18,664)        (579)      (3,867)
      Interest income . . . . .     1,976          361           66           89 
      Equity loss of uncon-
       solidated subsidiary . .    (2,324)     (70,277)         --           --
                                ---------    ---------  -----------    ---------
    INCOME (LOSS) BEFORE INCOME
     TAX PROVISION. . . . . . .   (32,131)    (115,216)         49           192
    Provision for income taxes.        --           --          --            -- 
                                ---------    ---------  -----------    ---------
    Net income (loss) before 
     extraordinary gain . . . .   (32,131)    (115,216)         49           192
    Extraordinary gain from 
     reorganization items . . .        --           --     164,358            --
                                ---------    ---------  -----------    ---------
   NET INCOME (LOSS). . . . . . $ (32,131)  $ (115,216)   $164,407          $192 
                                ---------    ---------  -----------    ---------
                                ---------    ---------  -----------    ---------
   NET INCOME PER SHARE(b)  . .       N/A          N/A         N/A      $   0.04
                                ---------    ---------  -----------    ---------
                                ---------    ---------  -----------    ---------
     WEIGHTED AVERAGE COMMON 
      AND EQUIVALENT SHARES 
      OUTSTANDING . . . . . . .       N/A          N/A         N/A     5,138,888
                                ---------    ---------  -----------    ---------
                                ---------    ---------  -----------    ---------
</TABLE>
(a) Due to the Reorganization and implementation of fresh-start reporting, 
financial statements for the Reorganized Company (period starting June 7, 
1996) are not comparable to those of the Predecessor Company.  See Notes to 
the Financial Statements for additional information.  

(b)  The weighted average number of common shares outstanding and net income 
per common share for the Predecessor Company have not been presented because, 
due to the Reorganization and implementation of fresh-start reporting, they 
are not comparable to subsequent periods.  

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

                                       24
<PAGE>
                                       
                      COLORADO GAMING & ENTERTAINMENT CO.
           CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
                    (in thousands, except number of shares) 


<TABLE>
                                                               Common Stock
                                                          ---------------------
                                                                                             Additional   Retained
                                                                                   Warrants    Paid-in    Earnings
                                                            Shares       Amount    Issued      Capital    (Deficit)        Total
                                                         -----------     ------    --------    -------    ---------      ---------
<S>                                                      <C>             <C>       <C>         <C>        <C>            <C>
BALANCES, December 31, 1993............................   10,269,641     $ 103     $ 8,266     $2,008     $ (15,070)     $  (4,693)
Conversion of common stock to warrants.................     (421,854)       (4)         --          4            --             -- 
Net Loss...............................................           --        --          --         --       (32,131)       (32,131)
                                                         -----------     -----     -------     ------     ---------      ---------

BALANCES, December 31, 1994............................    9,847,787        99       8,266      2,012       (47,201)       (36,824)
Vesting of common stock grants to officers 
  and directors........................................       88,667         1          --        168            --            169
Warrants of deconsolidated subsidiary 
  excluded in 1995 period..............................           --        --      (1,266)        --            --         (1,266)
Conversion of warrants to common stock.................    1,849,781        18          --        (18)           --             -- 
Net Loss...............................................           --        --          --         --      (115,216)      (115,216) 
                                                         -----------     -----     -------     ------     ---------      ---------

BALANCES, December 31, 1995............................   11,786,235       118       7,000      2,162      (162,417)      (153,137) 

Cancellation of Predecessor Company common 
  stock and warrants and elimination of deficit........  (11,786,235)     (118)     (7,000)     1,951       162,417        157,250
                                                         -----------     -----     -------     ------     ---------      ---------

BALANCES, June 6, 1996.................................           --        --          --      4,113            --          4,113 

Issuance of new common stock...........................    5,000,000        50          --         --            --             50 
Restricted stock grants to officers 
  and directors........................................      138,888         1          --        513            --            514 
Net income June 7 through December 31, 1996............           --        --          --         --           192            192 
                                                         -----------     -----     -------     ------     ---------      ---------
BALANCES, December 31, 1996............................    5,138,888     $  51     $    --     $4,626     $     192      $   4,869
                                                         -----------     -----     -------     ------     ---------      ---------
                                                         -----------     -----     -------     ------     ---------      ---------
</TABLE>


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



                                       25

<PAGE>
                                       
                      COLORADO GAMING & ENTERTAINMENT CO.
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                (in thousands)


<TABLE>
                                                                                    January 1,
                                                                                      1996         June 7, 1996
                                                      Years Ended December 31,    through June   through December
                                                        1994           1995         6, 1996         31, 1996(a)
                                                      --------      ---------     ------------   ----------------
<S>                                                   <C>           <C>            <C>               <C>
CASH FLOWS FROM OPERATING ACTIVITIES: 
Net income (loss)................................     $(32,131)     $(115,216)     $ 164,407         $   192 
Adjustments to reconcile net income (loss) to 
  net cash provided by operating activities: 
Depreciation and amortization....................        4,307          4,771          1,882           4,044 
Loss on retirements of property and equipment....           --            127            244             150 
Equity in loss of unconsolidated subsidiaries....        2,324         70,277             --              -- 
Noncash compensation.............................           --            169             --             513 
Predevelopment costs.............................        3,929             --             --              -- 
Impairment of assets.............................        6,875         11,347             --              -- 
Noncash interest expense.........................       17,909         17,895            495           3,443 
Extraordinary gain from reorganization...........           --             --       (164,358)             -- 
Change in working capital and other..............         (499)         1,315            822          (3,110) 
Noncash reorganization items.....................           --         15,317          1,825              --    
                                                      --------      ---------      ---------         -------
Net cash provided by operating activities........        2,714          6,002          5,317           5,232 
                                                      --------      ---------      ---------         -------

CASH FLOWS FROM INVESTING ACTIVITIES: 
Expenditures for property, equipment 
  and leasehold improvements.....................      (31,560)        (1,508)        (3,885)         (3,224) 
Investment in development projects...............       (3,358)            --             --              -- 
Net restricted funds (placed in) disbursed 
  from escrow....................................       52,552          4,209           (507)            244 
Investment in unconsolidated subsidiaries........      (20,334)        (9,270)            --              -- 
Advances to PRIGSA...............................       (5,875)          (289)            --              -- 
(Increase) decrease in other assets..............       (5,174)            59             --              -- 
Advances to affiliates, net......................       (4,402)        (1,257)            --              -- 
                                                      --------      ---------      ---------         -------
Net cash used in investing activities............      (18,151)        (8,056)        (4,392)         (2,980) 
                                                      --------      ---------      ---------         -------

CASH FLOWS FROM FINANCING ACTIVITIES: 
Proceeds from notes payable to affiliate.........           --          2,000             --              -- 
Proceeds from debt financing.....................       13,048             --          5,824           2,392 
Payment of debt placement costs, 
  net of accrued liabilities.....................          (38)          (315)            --            (445) 
Repayments of debt financing.....................       (2,540)        (1,651)        (3,304)         (5,509) 
                                                      --------      ---------      ---------         -------
Net cash provided by (used in) 
  financing activities...........................       10,470             34          2,520          (3,562) 
                                                      --------      ---------      ---------         -------

  NET INCREASE (DECREASE) IN CASH 
    AND CASH EQUIVALENTS.........................       (4,967)        (2,020)         3,445          (1,310) 
  CASH AND CASH EQUIVALENTS, 
    at beginning of period (less $2,334 
    of cash in subsidiary deconsolidated 
    in 1995 period)..............................       12,944          5,643          3,623           7,068 
                                                      --------      ---------      ---------         -------
  CASH AND CASH EQUIVALENTS, 
    at end of period.............................     $  7,977      $   3,623      $   7,068         $ 5,758 
                                                      --------      ---------      ---------         -------
                                                      --------      ---------      ---------         -------
</TABLE>


(a)  Due to the Reorganization and implementation of fresh-start reporting, 
financial statements for the new Reorganized Company (period starting June 7, 
1996) are not comparable to those of the Predecessor Company.  See Notes to 
the Financial Statements for additional information.  

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



                                      26

<PAGE>
                                       
                      COLORADO GAMING & ENTERTAINMENT CO.
                    CONSOLIDATED STATEMENTS OF CASH FLOWS
                                (in thousands)


<TABLE>
                                                                                    January 1,
                                                                                      1996         June 7, 1996
                                                      Years Ended December 31,    through June   through December
                                                        1994           1995         6, 1996         31, 1996(a)
                                                      --------      ---------     ------------   ----------------
<S>                                                   <C>           <C>            <C>               <C>
SUPPLEMENTAL DISCLOSURE OF 
  CASH FLOW INFORMATION: 
Cash paid for interest, net of 
  amounts capitalized............................     $    965      $     579      $      19         $ 1,020 
                                                      --------      ---------      ---------         -------
                                                      --------      ---------      ---------         -------
SUPPLEMENTAL SCHEDULE OF NONCASH 
INVESTING AND FINANCING ACTIVITIES: 
Issuance of senior secured notes payable 
  and other notes payable pursuant to 
  the Reorganization (Note 1)....................     $     --      $      --      $      --         $52,300 
                                                      --------      ---------      ---------         -------
                                                      --------      ---------      ---------         -------
Issuance of notes payable and capital 
  lease obligations for purchases of 
  property and equipment.........................     $    726      $     227      $      --         $    --
                                                      --------      ---------      ---------         -------
                                                      --------      ---------      ---------         -------
Issuance of notes payable for accrued 
  interest obligations...........................     $ 17,001      $   9,416      $      --         $ 2,883 
                                                      --------      ---------      ---------         -------
                                                      --------      ---------      ---------         -------
</TABLE>


(a)  Due to the Reorganization and implementation of fresh-start reporting, 
financial statements for the new Reorganized Company (period starting June 7, 
1996) are not comparable to those of the Predecessor Company.  See Notes to 
the Financial Statements for additional information.  

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










                                      27
<PAGE>

                         COLORADO GAMING & ENTERTAINMENT CO.
                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 1996


(1)  ORGANIZATION

ORGANIZATION

     Colorado Gaming & Entertainment Co. ("CG&E") and its subsidiaries 
(collectively referred to as the "Company"), formerly known as Hemmeter 
Enterprises, Inc. (referred to as the "Predecessor Company" or "HEI" for the 
period prior to June 7, 1996), was incorporated in August 1993 to develop, 
own and operate gaming and related entertainment facilities.  Three wholly 
owned subsidiaries, BWBH, Inc., BWCC, Inc., and Silver Hawk Casino, Inc., own 
and operate limited stakes gaming facilities in Colorado (collectively, the 
"Colorado Casinos").  Millsite 27, Inc., also a wholly owned subsidiary, owns 
a parking lot, opened in 1994 for the use by BWBH, Inc. and Silver Hawk 
Casino, Inc.  A wholly owned subsidiary of the Predecessor Company, Grand 
Palais Riverboat, Inc. ("GPRI"), developed and operated a riverboat gaming 
project in New Orleans, Louisiana (the "Riverboat Project").  GPRI's 
riverboat gaming operations commenced on March 29, 1995 and ceased on June 6, 
1995.  

GPRI BANKRUPTCY

     The Riverboat Project incurred construction cost overruns and had 
substantial operating losses as a result of the failure of the New Orleans 
gaming market to develop as anticipated and the resulting failure of the 
Riverboat Project to achieve projected revenues.  As a result, GPRI 
terminated riverboat gaming operations on June 6, 1995.  On July 26, 1995, 
certain creditors filed an involuntary petition under Chapter 7 of the 
Federal Bankruptcy Code against GPRI.  On July 27, 1995, GPRI converted its 
petition to a voluntary petition under Chapter 11 of the Federal Bankruptcy 
Code in the United States Bankruptcy Court for the Eastern District of 
Louisiana (the "Court").

     Following termination of GPRI operations, the Predecessor Company's 
management began assessing the possibility that all or part of the Riverboat 
Project could be sold to another gaming operator.  After evaluation and 
negotiation of potential transactions, the Predecessor Company, certain 
creditors and GPRI entered into a letter of intent with Casino America, Inc. 
("Casino America Agreement"). On May 3, 1996, as part of the Company's 
overall restructuring, the Predecessor Company's stock interest in GPRI was 
sold to Casino America, Inc. pursuant to the Predecessor Company's 
reorganization and therefore the GPRI bankruptcy case was effective.  
Consideration, consisting of cash, stock and notes totaling approximately $59 
million, was allocated among the GPRI creditors, which included the 
Predecessor Company's senior secured bond holders.  Accordingly, the 
Predecessor Company received no consideration from the sale of GPRI.  
Concurrently with this stock sale as provided by GPRI's reorganization, all 
claims against the Company related to GPRI were released. This transaction 
has no financial statement impact on the Company in the 1996 period, as the 
investment in GPRI was reduced to zero in the 1995 period by charging the 
$70.3 million  of equity in loss of unconsolidated subsidiary against the 
investment account.

HEI BANKRUPTCY

     In June 1995,  the Predecessor Company received "Notices of Default" 
from the trustee of its Senior Secured Pay-In-Kind Notes (the "Old Notes") 
(See Note 5), alleging that the Predecessor Company was in default under 
various provisions of the Old Notes Indenture.  The alleged defaults 
included, among other matters, violations related to the issuance of certain 
additional indebtedness, the termination of riverboat gaming operations, 
numerous liens filed against the Riverboat Project and the failure to file 
audited financial statements on a timely basis.  On November 7, 1995, the 
Predecessor Company and three of its wholly owned subsidiaries (BWBH, Inc. 
BWCC, Inc. and Millsite 27, Inc.) (collectively, the "Debtor"), filed 
voluntary petitions for reorganization under Chapter 11 of the Federal 
Bankruptcy Code in the District of Delaware as contemplated by the 
negotiations with the bondholders (the bankruptcy proceedings referred to as 
the "Reorganization").  The 

                                      28
<PAGE>

Chapter 11 case subsequently was transferred to the Court.

     On June 7, 1996 (the "Effective Date"), the Company and its three 
subsidiaries emerged from bankruptcy and the following events occurred 
pursuant to the Reorganization:

1.   The existing common stock and warrants of the Predecessor Company were 
canceled and 5 million newly authorized shares of common stock was issued to 
the Company's senior secured creditors.

2.   $176 million of outstanding senior secured debt was canceled and $50 
million in principal amount of 12% Senior Secured Pay-In-Kind Notes, due 2003 
(the "Notes") (Note 5), was issued.  

3.   Pursuant to the settlement of certain lawsuits against the Company and 
certain of its executive officers, the Company issued two promissory notes to 
Capital Associates, Inc. ("CAI"), a secured creditor on both the Predecessor 
Company's and GPRI's bankruptcy cases, in total principal amounts of $2.3 
million.

4.   The amounts outstanding under the DIP Facility (Note 5) was paid in full 
and the DIP Facility was terminated.  The Company replaced the DIP Facility 
with a new $12.5 million credit facility on the Effective Date.

5.   Certain unsecured indebtedness totaling $1.2 million was canceled.

6.   The Company changed its name to Colorado Gaming & Entertainment Co.

LIABILITIES SUBJECT TO COMPROMISE

     Prior to the Effective Date, the Predecessor Company reported certain 
secured and unsecured claims which were in existence prior to the bankruptcy 
filing under the heading "liabilities subject to compromise." Additional 
claims arose subsequent to the petition date resulting from the rejection of 
executory contracts and/or leases and from the allowance by the Court of 
contingent and/or disputed claims. Creditors and other parties in interest 
filed claims with the Court which were substantially in excess of the amounts 
recorded in the Predecessor Company's records.  These differences were 
primarily related to errors, duplicative claims and overstatement of claims. 

Liabilities subject to compromise consisted of the following as of December 
31, 1995 (in thousands):

          Senior Secured Pay-In-Kind Notes  . . .         $174,274 
          Notes payable to affiliate  . . . . . .            2,122 
          Equipment financing . . . . . . . . . .            4,169 
          HEI guarantee of subsidiary debt  . . .            4,600 
          HEI trade payables  . . . . . . . . . .            1,295 
                                                          --------
               Total  . . . . . . . . . . . . . .         $186,460 
                                                          --------
                                                          --------

FRESH START REPORTING

     In accordance with AICPA Statement of Position 90-7, "Financial 
Reporting by Entities in Reorganization Under the Bankruptcy Code" ("SOP 
90-7"), the Company was required to adopt "fresh-start" accounting on the 
Effective Date. The impact of the adoption of fresh-start reporting is 
reflected in the December 31, 1996 consolidated balance sheet.  In adopting 
fresh-start reporting, the Company, with the assistance of its financial 
advisors and third-party appraisals, estimated its reorganization value, 
which represents the fair value of the entities under Reorganization, before 
considering liabilities.  The estimated value for these entities totaled 
approximately $65 million.  The reorganization value of the Company was 
determined by consideration of several factors, including the discounted 
residual value of the Company's cash flows and comparable sales.   The excess 
of the reorganization value over the fair market value of the net assets, 
totaling $18.8 million, is reported as excess

                                      29
<PAGE>

reorganization value in the accompanying consolidated balance sheet and will 
be amortized over an 18.5-year period, which equals the remaining term of 
BWBH's land lease.

     The adjustments to reflect the consummation of the Reorganization 
(including the gain on extinguishment of debt and other pre-petition 
liabilities) and the adjustment to record assets and liabilities at their 
fair values have been reflected in the December 31, 1996 consolidated 
financial statements.  Accordingly, a vertical black line is shown in the 
consolidated financial statements to separate post-Reorganization operations 
from those prior to June 7, 1996.  As a result of adopting fresh start 
reporting, the Reorganized Company's consolidated financial statements are 
not comparable with those prepared before the Effective Date, including the 
historical consolidated financial statements included herein.

SILVER HAWK ACQUISITION  

     On March 27, 1996, Silver Hawk Casino, Inc. ("Silver Hawk") was 
incorporated in Delaware as a wholly owned subsidiary of the Predecessor 
Company, for purposes of acquiring and operating a limited stakes casino in 
Black Hawk, Colorado.  In April 1996, the Company purchased the Silver Hawk 
Casino, which was not operating at the time, for $2.7 million, of which 
$900,000 was borrowed under the DIP Facility.  The remaining $1.8 million was 
financed by a note payable to the seller, which accrued interest at 9.5% per 
annum, and provided for monthly principal and interest payments on a 20 year 
amortization schedule.  The Company retired the seller's note from available 
cash on June 18, 1996.  Additionally, the Company invested an additional $2 
million to equip and prepare the Silver Hawk Casino for opening.  The Company 
 commenced gaming operations at the Silver Hawk Casino on June 26, 1996.

(2)  SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION AND BASIS OF PRESENTATION

     The accompanying consolidated financial statements of the Reorganized 
Company (period beginning June 7, 1996) and the Predecessor Company (periods 
prior to June 7, 1996) include the accounts of CG&E and its wholly owned 
subsidiaries.  Intercompany balances and transactions have been eliminated.

     As of December 31, 1994, the accounts of GPRI are consolidated with 
those of the Predecessor Company.  Because of the GPRI bankruptcy proceedings 
and Casino America Agreement in 1995, it was determined that the Predecessor 
Company did not "control" GPRI and, therefore, GPRI no longer met the 
consolidation criteria pursuant to Statement of Financial Accounting 
Standards No. 94, "Consolidation of All Majority-Owned Subsidiaries."  
Accordingly, effective January 1, 1995, the Predecessor Company's investment 
in GPRI is accounted for under the equity method.  Under the equity method, 
original investments are recorded at cost and adjusted by the Company's share 
of undistributed losses of the investee.  Such investment had been reduced to 
zero as of December 31, 1995, due to the losses of GPRI.

USE OF ESTIMATES

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

CASH AND CASH EQUIVALENTS

     Cash and cash equivalents includes cash in banks, currency located in 
the casinos' vaults, coins located in the gaming device hoppers and other 
cash used in daily operations.  Included in cash and cash equivalents at 
December 31, 1995 and 1996 is restricted cash totaling $595,000 and $511,000 
respectively, which represents the portion of cash on hand that is required 
to be maintained by the Colorado Casinos based on regulations promulgated by 
the Colorado Limited Gaming Control Commission (the "Colorado Gaming 
Commission").

                                      30
<PAGE>

     The Company considers all highly-liquid investments purchased with an 
original maturity of three months or less to be cash equivalents.  The 
carrying amount of cash equivalents approximates fair value due to the 
short-term maturity of those investments.

INVENTORIES

     Inventories consist of food and beverage, retail and casino supplies. 
Inventories are stated at the lower of cost (first-in, first-out basis) or 
market.  

PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS

     In connection with the adoption of fresh-start reporting,  the Company 
was required to adjust property, equipment and leasehold improvements to fair 
value. Such adjustment resulted in an increase in net property,  equipment 
and leasehold improvements of approximately $8 million with no material 
change in the remaining useful lives.

     Otherwise, property, equipment and leasehold improvements are stated at 
cost.  Depreciation and amortization are computed using the straight-line 
method over the estimated useful lives of the assets.  Costs of major 
improvements are capitalized; costs of normal repairs and maintenance are 
charged to expense as incurred.

EXCESS REORGANIZATION VALUE

     Excess reorganization value is amortized on a straight-line basis over 
18.5 years.  Accumulated amortization of excess reorganization value was 
$577,000 at December 31, 1996.  The Company continually evaluates current 
events and circumstances in order to determine whether the recorded balance 
has been impaired.

ACCRUED EXPENSES

     Accrued expenses consisted of the following (in thousands):
     
                                                December 31, 
                                            1995           1996 
                                            ----           ---
     Gaming taxes payable  . . . . .        $ 537        $  521 
     Accrued payroll and 
        related expenses . . . . . .        1,048           991 
     Reorganization items  . . . . .        1,202            -- 
     Accrued interest  . . . . . . .           --           542 
     Incentive compensation. . . . .          --            454 
     Accrued gaming liabilities               437           624 
     Other accruals  . . . . . . . .          729           893 
                                           ------        ------
                                           $3,953        $4,025 
                                           ------        ------
                                           ------        ------

CASINO REVENUES AND PROMOTIONAL ALLOWANCES

     In accordance with industry practice, the Company recognizes as casino 
revenues the net win from gaming activities, which is the difference between 
gaming wins and losses.  The retail value of food and beverage furnished to 
customers on a complimentary basis is included in gross revenues and then 
deducted as promotional allowances.  The estimated cost of providing such 
promotional allowances is included in casino operating expenses in the 
accompanying consolidated statements of operations and totaled approximately 
$429,000, $605,000 and $508,000 for the years ended December 31, 1994, 1995 
and 1996, respectively.

                                       31
<PAGE>

PRE-OPENING EXPENSES

     The Company expenses pre-opening costs as incurred.  Pre-opening costs 
consist of expenditures incurred prior to the opening of the casinos to 
prepare the casinos for business and include labor costs, certain consulting, 
marketing and other direct costs.  Because GPRI was consolidated in 1994, 
pre-opening costs of $2.6 million incurred in 1994 in connection with the 
Riverboat Project are reflected in the accompanying 1994 consolidated 
statement of operations. The $362,000 reflected in the 1996 periods relate to 
pre-opening costs for the Silver Hawk Casino which opened on June 26, 1996.

REORGANIZATION ITEMS

     Reorganization items consist of income, expenses and other costs 
directly related to the reorganization of the Company since the Chapter 11 
filing and subsequent reorganization efforts.

     Reorganization items included in the consolidated statements of 
operations consisted of the following (in thousands):

<TABLE>
                                   For the Year 
                                       Ended        January 1,1996         June 7,1996  
                                    December 31,       through                through 
                                       1995          June 6,1996         December 31, 1996 
                                       ----          -----------         -----------------
  <S>                                 <C>             <C>                    <C>
    Charge-off of debt discount                                        
     and placement costs  . . . . .   $10,717          $  --                  $ --  
    Loss charged for guarantee                                              
     of subsidiary debt . . . . . .     4,600             --                  
    Professional fees . . . . . . .     2,593            2,290                  308 
                                      -------          -------                -----
                                      $17,910          $ 2,290                $ 308 
                                      -------          -------                -----
                                      -------          -------                -----
</TABLE>

INCOME TAXES

     The Company accounts for taxes pursuant to Statement of Financial 
Accounting Standards (SFAS) No. 109, "Accounting for Income Taxes".  SFAS No. 
109 requires the measurement of deferred tax assets for deductible temporary 
differences and operating loss carryforwards and of deferred tax liabilities 
for taxable differences.  Measurement of current and deferred tax liabilities 
and assets is based on provisions of enacted tax law; the effects of future 
changes in tax laws or rates are not anticipated.  Deferred tax assets 
primarily result from net operating loss carryforwards and impairment of 
assets recognized in different periods for financial reporting and tax 
purposes.

NET INCOME PER COMMON SHARE

     Net income per common share and common equivalent share is computed by 
dividing net income by the weighted average number of shares of common stock 
and common stock equivalents outstanding during the year. The weighted 
average number of common shares outstanding and net income per common share 
for the Predecessor Company have not been presented, due to the 
Reorganization and implementation of fresh start reporting, because they are 
not comparable to subsequent periods.

RECLASSIFICATIONS

     Certain prior period amounts have been reclassified to conform to the 
current year presentation.

 (3)  PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS, NET

     Property, equipment and leasehold improvements consisted of the following
(in thousands):

                                      32
<PAGE>

                                           December 31, 
                                       1995             1996 
                                       ----             ----
 Land and improvements . . . .     $  14,330        $  12,288 
 Building and improvements . .         5,764            5,359 
 Leasehold improvements  . . .         7,626           20,935 
 Gaming equipment, furniture            
  and fixtures . . . . . . . .        18,570           19,975 
 Construction-in-progress. . .          -                 335 
                                   ---------        ---------
                                      46,290           58,892 
 Less:  accumulated         
  depreciation . . . . . . . .       (14,163)         (17,570) 
                                   ----------       ----------
                                   $  32,127        $  41,322  
                                   ----------       ----------
                                   ----------       ----------
                                    
Depreciation and amortization are computed using the straight-line method 
over the following useful lives:

                                       Useful Lives 
                                       ------------
 Land improvements. . . . . .               15 years 
 Building and improvements. .         5 - 31.5 years 
 Leasehold improvements . . .           5 - 23 years 
 Gaming equipment, furniture 
  and fixtures. . . . . . . .         5 - 31.5 years 


(4)  NEW VENUE PROJECTS

     For the years ended December 31, 1994, 1995 and 1996, the Company 
expensed $3.9 million,  $402,000 and $120,000 respectively, for 
predevelopment costs related to various potential development opportunities 
in new gaming venues throughout North America.  The costs incurred 
represented design, presentation, research, consulting, regulatory and other 
costs associated with pursuing development opportunities in new gaming 
venues.  The Company expensed these costs as management determined that each 
of the potential new gaming venues were no longer viable development 
projects.  In early 1995, the Company ceased such activities due to its 
deteriorating financial condition. 
     
      In September 1994, the Predecessor Company entered into an agreement to 
invest $6.2 million for a 25% interest in Promociones e Inversiones de 
Guerrero S.A. de C.V. ("PRIGSA"), a Mexico based development and gaming 
company with operations in Acapulco.  As of December 31, 1994, the 
Predecessor Company had contributed $5.8 million towards its investment.  In 
1995, the Predecessor Company contributed its remaining commitment of 
approximately $289,000.  The Predecessor Company had an option to convert its 
contributions to shares of common stock in PRIGSA upon approval by the 
Mexican government.  Results of PRIGSA operations upon opening in the fall of 
1994 were substantially below expectations and, as a result, PRIGSA suffered 
significant operating losses. Because the majority of PRIGSA's other debt 
securities are in a senior position to PRIGSA's obligation to the Company, 
the Company has determined that it is unlikely that the Company's advances 
will be repaid or that the Company will otherwise realize its investment in 
PRIGSA.  Accordingly, as of December 31, 1994, the Company charged-off the 
full value of its investment to impairment of assets in the accompanying 
consolidated statements of operations.

(5)  NOTES PAYABLE

     Notes payable consisted of the following (in thousands):

                                                 December 31, 

                                      33
<PAGE>
                                         1995(1)            1996 
                                         -------            ----
 Secured Pay-In-Kind Notes . .         $  174,274        $  52,883 
 Credit facility . . . . . . .                  -            2,444 
 Notes payable to gaming 
   equipment vendors . . . . .              2,623                - 
 Notes payable to affiliate. .              2,122                - 
 Other . . . . . . . . . . . .              4,600            2,023 
                                       ----------        ---------
                                          183,619           57,350 
 Less:  current portion. . . .                  -            1,959 
                                       ----------        ---------
                                       $  183,619        $  55,391  
                                       ----------        ---------
                                       ----------        ---------

     (1)  These amounts are included in "liabilities subject to compromise" in
          the accompanying December 31, 1995 consolidated balance sheet.

DEBT AFTER THE REORGANIZATION

     CREDIT FACILITY

     On June 7, 1996, the Company entered into a $12.5 million revolving 
credit facility (the "Credit Facility") with Foothill Capital Corporation.  
The Credit Facility is segregated into several different facilities, 
including a $5 million construction line, a $5 million equipment financing 
line and up to a $3.5 million working capital line.  No more than $12.5 
million of borrowings may be outstanding at any time.  Borrowings under the 
Credit Facility are subject to a 1% financing fee and accrue interest at 
prime plus 2.375%( 10.625% as of December 31, 1996).  The loans have varying 
terms ranging from three to five years from when the funds are borrowed, but 
the entire facility matures on June 7, 2001.  As of December 31, 1996, the 
Company had an outstanding balance of approximately $2.4 million under the 
equipment financing line.  Borrowings are secured by a first priority lien 
and security interest in substantially all of the real and personal property 
owned or leased by the Company.  The Credit Facility replaced a 
Debtor-in-Possession facility ("DIP"), also provided by Foothill Capital 
Corporation. The carrying amount of the Credit Facility is a reasonable 
estimate of fair value, as terms of the line reflect current rates.

     SENIOR SECURED PAY-IN-KIND NOTES

     Pursuant to the Reorganization, the holders of the Old Notes, along with 
a senior secured affiliate lender, received, on a pro rata basis, the Notes 
having an aggregate principal amount of $50 million.  Interest on the Notes 
accrues at a rate of 12% per annum, and is payable semi-annually.  Through 
the first year, at the option of the Company, interest on the Notes will be 
payable either in cash or through the issuance of additional Notes.  
Thereafter, the Company will be required to pay interest on the Notes in 
cash.  On December 1, 1996 the Company made interest payments on the Notes by 
issuing $2.9 million of additional Notes.  The Notes are secured by 
substantially all the assets of the Company, including the common stock of 
the subsidiaries.  In addition, the Notes Indenture includes certain 
restrictive covenants.  As of December 31, 1996, the fair values of the Notes 
is approximately $50.7 million, which are based on quoted market prices.  The 
Notes are redeemable prior to maturity, in whole or part, at the election of 
the Company on or after June 1, 2000, at the redemption prices (expressed as 
percentages of principal amount) set forth below plus accrued and unpaid 
interest to the redemption date, if redeemed during the 12-month period 
beginning on the June 1st in the years indicated below:


        Year                              Redemption Price
        ----                              ----------------
        2000                                    104%
        2001                                    103%
        2002 and thereafter                     102%

                                     34
<PAGE>

OTHER NOTES

     Pursuant to the Reorganization, the Company issued two unsecured promissory
notes to Capital Associates International, Inc. ("CAI") in the respective
principal amounts of $1.6 million and $3 million, both accruing interest at the
rate of 9% per annum.  The $1.6 million note is due in 10 equal quarterly
installments which commenced September 7, 1996.  The second note in the amount
of $3 million is payable in 20 quarterly installments of principal and interest
(at 9% per annum).  Both notes are unsecured.  The $3 million note has been
reduced by $2.3 million  in funds received by CAI in respect of its claims filed
in the GPRI Bankruptcy.  Accordingly, the outstanding balance on the $3 million
note is approximately $700,000 as of December 31, 1996.  The Company considers
the estimated fair value of such notes to be the same as its carrying value
since the obligations were entered into as of the Effective Date, and no
significant interest rate fluctuations have occurred since that date.

     Aggregate annual maturities of long-term debt, are as follows:

     1997                           $ 1,959
     1998                             1,838
     1999                                --
     2000                               306
     2001                               364
     Thereafter                      52,883
                                    -------
     Total                          $57,350
                                    -------
                                    -------

DEBT BEFORE THE REORGANIZATION

     DEBTOR-IN-POSSESSION FINANCING

     On December 8, 1995, the Court approved certain financing and security
agreements (the "DIP Facility") designed to provide the Debtor with adequate
financing to operate its businesses during the bankruptcy period.  The aggregate
DIP Facility was $7.9 million in the form of revolving credit facilities to
provide up to $2.5 million for working capital purposes, $4.4 million for
equipment refinancing and $1 million to provide financing for the Debtor's
possible acquisition of strategic assets. The term of the DIP Facility was one
year subject to an accelerated maturity based on the Effective Date of the
Reorganization.  Upon the Effective Date, the amounts outstanding under the DIP
Facility were paid in full and the DIP Facility was terminated.

     Interest on borrowings under the DIP Facility accrued interest at prime
plus 2.75%.  Loan fees and other expenses totaling $300,000 were paid to the DIP
Lender and were written off as interest expense on the termination date of the
facility. 

     SENIOR SECURED PAY-IN-KIND NOTES

     On December 21, 1993, the Predecessor Company completed a private offering
of 140,000 units consisting of $140 million aggregate principal amount of the
Old Notes with detachable warrants to acquire 1,750,000 shares, or 10%, of
common stock of the Predecessor Company.  The net proceeds from the offering,
after deducting the commissions and other offering expenses were approximately
$131 million.  The net proceeds were used to repay construction financing for
the Bullwhackers Casinos and provide funds for the Riverboat Project and for
working capital purposes.  The offering expenses of approximately $9 million,
were capitalized as other assets, and were being amortized over the seven-year
term of the Old Notes using the effective interest rate method.  As of December
31, 1995, all remaining unamortized discount and offering expenses related to
the Old Notes were written-off as a reorganization item in accordance with SOP
90-7.

     Interest on the Old Notes accrued at 12% per annum and was payable
semiannually on June 15 and 


                                      35

<PAGE>

December 15, commencing June 15, 1994.  Through December 15, 1995, at the 
Predecessor Company's option, interest on the Old Notes was payable either in 
cash or through the issuance of additional Old Notes.  Thereafter, the 
Predecessor Company was required to pay interest on the Old Notes in cash.  
On June 15 and December 15, 1994, the Predecessor Company made interest 
payments on the Old Notes by issuing a total of $17 million of additional Old 
Notes.  On June 15, 1995, the Predecessor Company made interest payments on 
the Old Notes by issuing a total of $9.4 million of additional Old Notes.  No 
interest payment or issuance of additional Old Notes was made on December 15, 
1995, because of the Predecessor Company's bankruptcy filing.

     As discussed in Note 1, in June 1995, the Predecessor Company received
"Notices of Defaults" from the trustee of the Old Notes, alleging that
Predecessor Company was in default under various provisions of the Indenture. 
As a result of the defaults under the Indenture, the holders of the Old Notes
were entitled to all of the remedies contained in the Indenture, including but
not limited to acceleration of repayment of the Old Notes and foreclosing on the
security pledged by the Predecessor Company to the trustee.  

     On November 7, 1995, the Predecessor Company filed for Chapter 11
protection.  Accordingly, interest totaling approximately $3 million was not
accrued for the period November 7, 1995 to December 31, 1995.  Additionally, for
the period from January 1, 1996 through June 6, 1996, interest totaling
approximately $9 million was not recorded due to the Chapter 11 proceedings.  As
of December 31, 1995, the total amount of the Old Notes, plus accrued interest
through November 7, 1995, is $174.3 million which amount is included in
"liabilities subject to compromise" in the accompanying December 31, 1995
consolidated balance sheet.  On June 6, 1996 the Old Notes were canceled and $50
million of Notes were issued to the Old Note holders.

OTHER NOTES

     On May 15, 1995, the Predecessor Company entered into a $4 million working
capital credit facility with an affiliate of the Predecessor Company.  The
Predecessor Company borrowed $2 million under this facility, which proceeds were
then invested in GPRI.  Borrowings accrued interest at 12% and were due on
September 30, 1995.  The Company granted a security interest to the affiliate in
certain of the Company's assets including a subordinated interest in GPRI's
riverboat. The Predecessor Company was unable to repay the $2 million and thus
was in default under this facility.  Interest totaling $35,000 was not accrued
from the petition date, November 7, 1995 to December 31, 1995.  The $2 million,
plus accrued and unpaid interest through November 7, 1995 totaling $2.1 million,
is included in "liabilities subject to compromise" in the accompanying
consolidated balance sheet as of December 31, 1995.  Pursuant to the
Reorganization, the affiliate received Notes and shares of common stock of the
Company as discussed above.

     The Predecessor Company financed the acquisition of a portion of the
Bullwhackers Casinos' gaming equipment with notes payable to an equipment vendor
totaling $7 million.  Such notes were secured by the gaming equipment and the
proceeds from the gaming equipment and were guaranteed by certain of the
Predecessor Company's stockholders.  Monthly principal and interest payments of
$151,000 were required through April 1997.  As of the petition date, November 7,
1995, the Predecessor Company stopped accruing interest, totaling $38,000, for
the period from November 7, 1995 to December 31, 1995, and making any repayments
on these notes.   The Predecessor Company reached an agreement with the lender
to repay the $2.6 million outstanding balance on the notes for approximately $2
million with proceeds from the DIP Facility realizing a 23% discount for
retiring the notes.

(6)  CAPITAL STRUCTURE

     CAPITAL STRUCTURE AFTER THE REORGANIZATION

     Pursuant to the Reorganization, the Predecessor Company's preferred stock,
common stock and warrants were canceled on the Effective Date.  The
Reorganization also provided for the amendment and restatement of the Company's
certificate of incorporation and bylaws.  The new charter authorized 20 million
shares of $.01 par value common stock.  Upon the Effective Date, 5 million
shares of common stock of CG&E were issued on a pro rata basis to the
Predecessor Company's senior secured creditors.  In addition, the Company's
President and Chief 


                                      36

<PAGE>

Executive Officer was issued 138,888 shares of common stock on the Effective 
Date.  Also on the Effective Date, 416,667 shares were reserved to be issued 
to executive management pursuant to the Management Stock Incentive Plan (the 
"Stock Plan").  The Stock Plan provides for shares to be issued to certain 
management individuals annually, for the next three years based on the 
Company meeting certain performance criteria.  Once granted, the shares are 
fully vested.  The first grant will be on June 7, 1997.  The Company recorded 
$270,000 of compensation expense in the 1996 period related to the 
anticipated grants to be made June 7, 1997.

CAPITAL STRUCTURE PRIOR TO THE REORGANIZATION

     PREFERRED and COMMON STOCK

     Preferred stock of the Predecessor Company consisted of 2 million
authorized shares, of which none were issued.  Common stock of the Predecessor
Company consisted of 50 million authorized shares.  All common stock was
canceled under the Reorganization (Note 1).  In addition, warrants to purchase a
total of 7,130,359 shares of common stock were outstanding and were canceled
pursuant to the Reorganization.

     The Predecessor Company had adopted an Omnibus Stock and Incentive Plan and
a Non-Employee Director Stock Option Plan (the "Option Plans").  The Predecessor
Company recognized compensation expense of $169,000 in 1995 related to the
Option Plans.  No additional compensation expense was recognized after November
7, 1995 and all outstanding options were canceled pursuant to the
Reorganization. 

(7)  INCOME TAXES

     The Company has no provision for income taxes in 1994 and 1995, due to the
Company's significant loss position.  In 1996, although the Company had a
nominal level of pre-tax income, no income tax provision was recorded due to the
Company's significant tax losses generated in previous years.

     Effective January 1, 1997, as a result of the Company's Chapter 11
proceedings, the Company recorded significant tax changes.  Such changes are
reflected in the December 31, 1996 tax assets amounts set forth below.
Substantial net operating loss carryforwards("NOL's") generated in previous
years totaling approximately $46.5 million were eliminated, leaving the Company
with remaining NOL's totaling approximately $6.2 million,  Additionally, the
parent Company's basis in subsidiary stock and certain other tax assets of the
parent Company were reduced or eliminated.  Such tax asset reductions were a
result of cancellation of indebtedness income effected by the Reorganization. 
The net deferred tax asset as of December 31, 1995 and 1996 is comprised of the
following (in thousands):

                                                   December 31,
                                                -----------------
                                                  1995      1996
                                                -------    ------
CURRENT: 
Accrued vacation, gaming  liabilities 
and incentive compensation..................    $   184    $  458

NON-CURRENT: 
Difference in asset basis...................      3,053       458
Recognition of legal settlement.............         --       740
Impairment of assets........................      5,832     3,860
Reorganization items........................      4,287        --
Deferred interest for tax...................        404        --
Book tax difference of River Project........      8,646        --
Net operating loss carryforwards............     41,148     2,343
                                               --------   -------
Gross deferred tax asset....................     63,554     7,859
Valuation allowance.........................    (63,554)   (7,859)
                                               --------   -------
                                               $     --   $    --
                                               --------   -------
                                               --------   -------


                                      37

<PAGE>

     The net deferred tax asset valuation allowance is equal to the full amount
of the gross deferred tax asset because the realization of such asset is
dependent upon future taxable income, which is uncertain.  The Company currently
has NOL's totaling approximately $6.2 million, which expire beginning in 2008. 
Pursuant to the Reorganization, the old shares of common stock were canceled and
newly authorized common stock was issued to the Company's senior secured
creditors, effecting an ownership change as defined in section 382 of the
Internal Revenue Code.  The effect of this ownership change limits the
utilization of NOL's generated prior to the Effective Date to approximately
$520,000 annually.  NOL's generated subsequently to the Effective Date will be
unlimited 

(8) LEASES

CAPITAL LEASES

     On March 1, 1993, the Predecessor Company entered into a Master Lease
Agreement with CAI for lease financing totaling $2.2 million to provide working
capital.  Certain of the Predecessor Company 's equipment was pledged as
security for the borrowings.  The Predecessor Company, and certain of it's
stockholders also guaranteed repayment of the borrowings.  In 1995, the Master
Lease Agreement was amended to provide $2.8 million in additional lease
financing to be used for the Riverboat Project and to be repaid by GPRI.

     As a result of the termination of Riverboat Project operations, GPRI was
unable to make its required payments under the lease. Accordingly, CAI initiated
a lawsuit against the Predecessor Company (Note 12) to recover all amounts owing
under the Master Lease, as amended ("Lawsuit #1").  The finance company
initiated a second lawsuit against the Predecessor Company and certain of its
officers alleging that the finance company was misled into entering into the
amendment to the Master Lease Agreement ("Lawsuit #2").  In September 1995, a
judgment was entered against the Predecessor Company in Lawsuit #1 for $4.6
million.  This amount is reflected as a liability subject to compromise in the
accompanying December 31, 1995 consolidated balance sheet.  In February 1996,
the parties to the two lawsuits entered into a settlement agreement.  Pursuant
to the settlement agreement, both lawsuits were dismissed and the Predecessor
Company issued two notes payable to CAI (see Note 5).

     The Predecessor Company also had capital lease obligations related to
gaming devices and certain other equipment totaling $1.6 million as of December
31, 1995.  The interest rate for the various leases range from 12% to 15%.  As a
result of the bankruptcy proceedings, all capital lease obligations were
reclassified as "liabilities subject to compromise" in the accompanying December
31, 1995 consolidated balance sheet.  In fiscal year 1996, an agreement was
reached with such lessors to retire the remaining lease obligation for
approximately $1.2 million.

OPERATING LEASES

     The Company leases real property, on which the Bullwhackers Casino in Black
Hawk, Colorado, was constructed.  The lease is for a period through 2014 and
requires an annual base rent as specified below, payable quarterly.

     The land lease also requires monthly payments of additional rent equal to
1.9% of gross revenues, as defined. Total base rent plus additional rent
pursuant to the lease agreement for the years ended December 31, 1994, 1995 and
1996 was $1.1 million, $1.1 million and $1.1 million, respectively.  In addition
to the specified rental payments, the Company is also responsible for any and
all costs associated with the leased property, including but not limited to
taxes and assessments, utilities, insurance, maintenance and repairs.  The
Company has an option to purchase the leased land, beginning November 1, 2001,
for an amount equal to nine times the annual base minimum rent payment then in
effect, or $5.9 million.


                                      38

<PAGE>

     Future annual base rental payments for the land lease as of December 31,
1996 are as follows:

                   Year ending December 31 (in thousands): 
                   1997.........................   $   600
                   1998.........................       600
                   1999.........................       600
                   2000.........................       660
                   2001.........................       660
                   Thereafter...................     9,350
                                                   -------
                     Total......................   $12,470
                                                   -------
                                                   -------

     During Bankruptcy, the Company entered into an amended sublease for
approximately 19,500 square feet of office space located in Denver, Colorado and
provided for interim rent of approximately $7,500 per month which the Company
occupied as its corporate offices through February 1997.  In March, the Company
relocated its corporate offices to Lakewood, Colorado pursuant to a new $10,000
a month lease, which expires April 2002 and the amended sublease was terminated
upon execution of this new lease.

(9) OTHER RELATED PARTY TRANSACTIONS

DUE FROM AFFILIATES

     The Company has outstanding advances to the following affiliates (in
thousands):

                                                  December 31,
                                               -----------------
                                                1995       1996
                                               ------     ------
 Canadian Pavillon Limited
  Partnership...........................       $1,573     $1,573
 Outlaws Casino, Ltd. ..................        1,072      1,072
 RCH Investments, NV....................          259        259
 Hemmeter Partners......................          335        335
 Grand Palais Casino, Inc. .............          587        587
 Former officers........................          867        867
 Other..................................           78         78
                                               ------     ------
                                               $4,771     $4,771
                                               ------     ------
                                               ------     ------

     Canadian Pavilion Limited Partnership ("CPLP"), Outlaws Casino, Ltd.
("Outlaws"), RCH Investments, NV ("RCH") and Hemmeter Partners are majority
owned by certain of the Predecessor Company's controlling shareholders and
officers.  Grand Palais Casino, Inc. ("GPCI") is a wholly owned subsidiary of
Grand Palais Enterprises, Inc. ("GPEI"), of which certain stockholders were also
stockholders of Predecessor Company.  In 1994, two former officers were advanced
funds totaling $500,000, accruing interest at prime plus 2%, and due on demand. 
In 1995, an additional $373,000 was advanced to an officer on an interest free
basis, of which $110,000 was repaid.  All advances to affiliates were made on an
unsecured basis.  No repayments were made on any affiliate receivable in the
1996 period.

     Due to the continued deterioration in 1995 of the financial condition of
the affiliates and certain officers to which the Predecessor Company had
advanced funds, the Predecessor Company determined that it is unlikely that it
will collect any of the advances to affiliates and, accordingly, has provided a
reserve for the entire $4.8 million amounts owed the Company as of December 31,
1995.  These amounts are reflected as impairment of assets in the accompanying
consolidated statements of operations.


                                      39

<PAGE>

OTHER

     The Predecessor Company paid $1.3 million, $624,000 and $ 70,000 to the law
firm of Shefsky Froelich & Devine Ltd. for legal services rendered to the
Predecessor Company in 1994, 1995 and 1996, respectively.  Cezar M. Froelich, a
former director, owned 1.4% of the Predecessor Company's common stock on a fully
diluted basis, and is a managing partner of that firm.  Shefsky Froelich &
Devine Ltd. provided legal services to the Company until February 9, 1996.

(10) COMMITMENTS AND CONTINGENCIES

GAMING LICENSES

     The Colorado Casinos are required to comply with laws and regulations
promulgated by the Colorado Gaming Commission in order to maintain continued
operations.  The Bullwhackers Casinos operate under separate current annual
gaming licenses which expire in December 1997, whereas Silver Hawk Casino
license expires in June 1997.  Management anticipates that such gaming licenses
will be renewed. 

GAMING TAXES AND FEES

     The Colorado Casinos operate as licensed gaming establishments pursuant to
the Colorado Limited Gaming Act and, accordingly, are required to make monthly
gaming tax payments to the State of Colorado which are subject to annual
revisions with a maximum rate of 40%.  The latest annual revision, which became
effective October 1, 1996, is calculated as a percentage of adjusted gross
proceeds (casino net win).  The gaming tax rates for the previous three gaming
years are set forth in the following table:



                                         Annual Tax Rate from    Annual Tax Rate
               Annual Gross Proceeds        10/94 to 9/96        Effective 10/96
               ---------------------     --------------------    ---------------
            First $2 million.............          2%                   2%
            Next $2 million..............          8%                   4%
            Next $1 million..............         15%                  14%
            Next $5 million..............         18%                  18%
            Proceeds over $10 million....         18%                  20%

     Additionally, the city and state levy device fees ranging from $75 to
$1,265 per device per annum.  For the years ended December 31, 1994, 1995 and
1996 the Company recorded $8.2 million, $8.3 million and $8.2 million,
respectively, in total gaming taxes and device fees.

EMPLOYMENT AGREEMENTS

     The Company has entered into employment agreements with certain senior
executives of the Company.  These employment agreements are each for initial
term of three years, and renew thereafter for successive one year terms unless
terminated by each of the respective parties.

CONSULTING AGREEMENTS

     Pursuant to the Reorganization, the Company entered into a consulting
agreement with a former executive. These consulting services provided to the
Company include advice and services related to gaming regulatory issues and help
in identifying potential new business opportunities.  The agreement requires the
Company to pay $29,167 per month from the Effective Date through August 1997.

OTHER COMMITMENTS

     In July, 1996, Company entered into an agreement with New Horizons Kids
Quest III, Inc.("Kids Quest") which provides that Kids Quest will operate a day
care facility adjacent to Bullwhackers Black Hawk that 


                                      40

<PAGE>

intends to meet or exceed all relevant license standards.  Kids Quest will be 
solely responsible for the day-to-day operations of the day care facility.  
The Company will receive percentage rent from Kids Quest for the use of the 
facility which is being constructed by the Company.  Rent will consist of 10% 
of the first $500,000 in revenue and 15% thereafter from the Kids Quest 
operation.  The day-care facility will be for the exclusive use of the 
patrons of the Colorado Casinos.  The Company is in the process of 
constructing the day care facility for use by Kids Quest at an estimated cost 
of approximately $1.5 million.  The Company has entered into a guaranteed 
maximum price contract with the general contractor. The opening of the day 
care facility is currently scheduled for the Summer of 1997.  The Company 
pursued this project, in part, as a result of a new law in Colorado which 
prohibits children from lingering in the gaming areas of a casino.  The 
Company believes the day care facility will give it a competitive advantage 
with other casinos that do not have such a facility, although there can be no 
assurance that the day care facility will result in a matter that produces 
increased visitation and revenues at its casinos. No other casinos in the 
Black Hawk-Central City market currently have, or have announced plans to 
build a day care facility.

     Prior to December 31, 1996, the Company evaluated whether it could cost-
effectively excavate the remaining portion of the parking lot to its property
line to expand the capacity of the parking lot.  The Company concluded that the
additional excavation would cost approximately $1.3 million and would add
approximately 120 additional parking spaces.  Therefore, the Company elected to
undertake the parking expansion project.  As part of this project, the Company
also elected to construct a new valet facility to increase customer convenience
at the parking lot and enhance accessibility to Kids Quest.  The valet facility
is expected to cost approximately $300,000.  The overall parking expansion
project is expected to be completed by June 1997.  During construction, the
Company expects to experience some business disruption.

     The Company has also entered into an agreement with another company in
business of providing gaming consulting / management services to Native American
Indian tribes.  The companies will use their joint resources to pursue obtaining
contractual arrangements with various Native American tribes to provide
consulting services for new and existing Native American gaming projects.  As of
December 31, 1996, the Company has contributed $120,000, which has been expensed
in the accompanying statement of operations, and has committed $220,000 in
additional funding over the next twelve months, based on the initial term and /
or the extension of this agreement.  The Company expects to fund this commitment
through available working capital.

LEGAL PROCEEDINGS

     Pursuant to the Reorganization, certain claims by the Predecessor Company
against third parties are assigned to the Litigation Trust.  All legal
proceedings pending against the Predecessor Company prior to the Effective Date
were settled pursuant to the Reorganization.  As a result, there was no
litigation pending against the Company on the Effective Date.  The determination
by the Litigation Trust whether or not to pursue any causes of action assigned
to it will have no material impact on the Company or the Colorado subsidiaries.

     The Company is or may become a defendant in a number of pending or
threatened legal proceedings in the ordinary course of business.  The Company's
management believes that the ultimate resolution of currently pending legal
proceedings will not have a material adverse impact on the Company's financial
position or results of operations. 

(11) QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

     The following is a summary of unaudited quarterly information excluding any
reorganization or other impairment changes related to the Reorganization and
dispostion of assets.

         1996              1st Quarter   2nd Quarter  3rd Quarter  4th Quarter
         ----              -----------   -----------  -----------  -----------
Net Revenues                 $11,023       $12,204      $14,625      $12,810
Operating Expenses             7,789         8,446        9,780        8,008
                             -------       -------      -------      -------
Casino Operating Profit        3,234         3,758        4,845        4,802
Corporate Expenses               514           534          955          825
Pre-opening (Silver Hawk)         --           388          (26)          --
                             -------       -------      -------      -------
EBITDA                         2,720         2,836        3,916        3,977
                             -------       -------      -------      -------
                             -------       -------      -------      -------

         1995              1st Quarter   2nd Quarter  3rd Quarter  4th Quarter
         ----              -----------   -----------  -----------  -----------
Net Revenues                 $11,817       $11,850      $12,440      $11,321
Operating Expenses             8,384         8,808        8,828        7,418
                             -------       -------      -------      -------
Casino Operating Profit        3,433         3,042        3,612        3,903
Corporate Expenses             3,038         1,567        1,523          744
                             -------       -------      -------      -------
EBITDA                           797        1,475         2,089        3,159
                             -------       -------      -------      -------
                             -------       -------      -------      -------

     In the fourth quarter of 1996, the Company benefited from the revised 
gaming tax rates which became effective October 1, 1996 by approximately 
$110,000.  However, this amount was offset by approximately $233,000 relating 
to incentive compensation expense for senior management based upon 
implementation of the Company's new Cash Bonus Plan and Stock Incentive Plan 
subsequent to the Reorganization.


                                      41

<PAGE>

                                  SIGNATURES

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

                                    COLORADO GAMING & ENTERTAINMENT CO.
                                    -----------------------------------


                                    By:  /s/  Stephen J. Szapor, Jr.
                                       --------------------------------
                                       Stephen J. Szapor, Jr.
                                       President and Chief Executive Officer


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

        Signature                          Title                       Date
        ---------                          -----                       ----

/s/  Stephen J. Szapor, Jr.          President and Chief          March 26, 1997
------------------------------       Executive Officer
Stephen J. Szapor, Jr.               (Principal Executive
                                     Officer)

/s/  Robert J. Stephens              Vice President of Finance    March 26, 1997
------------------------------       (Principal Financial and
Robert J. Stephens                   Accounting Officer)

/s/ Philip J. DiBerardino
------------------------------       Director                     March 26, 1997
Philip J. DiBerardino


/s/  Steve Leonard
------------------------------       Director                     March 26, 1997
Steve Leonard

/s/  Franklin S. Wimer
------------------------------       Director                     March 26, 1997
Franklin S. Wimer

/s/ Mark Van Hartesvelt
------------------------------       Director                     March 26, 1997
Mark Van Hartesvelt





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<PAGE>
                               INDEX TO EXHIBITS

Exhibit No.    Description
----------     -----------

   2.1         Disclosure Statement for First Amended Joint Plan of 
               Reorganization of the Company, BWBH, Inc., BWCC, Inc. 
               and Millsite 27, Inc.*

   2.2         First Amended Joint Plan of Reorganization of the Company, 
               BWBH, Inc., BWCC, Inc. and Millsite 27, Inc. (included in 
               exhibit 2.1.).*

   3.1         Amended and Restated Articles of Incorporation of the Company.*

   3.2         Amended and Restated By laws of the Company.*

   4.1         Indenture between the Company and Fleet National Bank, as 
               Trustee.*

   4.2         Specimen Certificate of Common Stock.*

   4.3         Form of Note.*

   4.4         Registration Rights Agreement.*

  10.1         Loan and Security Agreement, dated as of November 1, 1995 by 
               and between BWBH, Inc., BWCC, Inc. and Millsite 27, Inc. and 
               Foothill Capital Corporation.*

  10.2         Amendment Number One to Loan and Security Agreement, dated as 
               of December 4, 1995.*

  10.3         Amendment Number Two to Loan and Security Agreement, dated as 
               of January 24, 1996.*

  10.4         Letter Agreement, dated as of December 18, 1995, from BWBH, 
               Inc., BWCC, Inc. and Millsite 27, Inc. to Foothill Credit 
               Corporation.*

  10.5         Security Agreement, dated as of November 1, 1995, between the 
               Company and Foothill Credit Corporation.*

  10.6         Trademark Security Agreement, dated as of November 1, 1995, 
               between the Company and Foothill Credit Corporation.*

  10.7         Continuing Guaranty, dated as of November 1, 1995 by the 
               Company and Foothill Credit Corporation.*

  10.8         Amended and Restated Loan and Security Agreement, dated as of 
               June 4, 1996 between Foothill Capital Corporation, BWBH, Inc., 
               BWCC, Inc., Millsite 27, Inc. and Silver Hawk Casino, Inc.*

  10.9         Lease Agreement, dated October 25, 1991 by and among Jerry L. 
               Brown and Harold Gene Reagin and HP Black Hawk, L.P.*

  10.10        Option to Purchase dated October 28, 1991 by and among Jerry 
               L. Brown and Harold Gene Reagin and HP Black Hawk, L.P.*

  10.11        Sublease Agreement by and between Marsh & McLennan, 
               Incorporated and the Company.*

  10.12        Amendment to Sublease Agreement, dated as of January 18, 1996 
               by and between Marsh & McLennan, Incorporated and the Company.*

                                       43

<PAGE>

  10.13        Guaranty, dated as of January 18, 1996, by BWBH, Inc., BWCC, 
               Inc. and Millsite 27, Inc.*

  10.14        Agreement for Sale of Real Estate, dated October 20, 1995, by 
               and between Millsite 20 Limited Liability Company, Iron City 
               Limited Liability Company and the Company.*

  10.15        First Amendment to Agreement for Sale of Real Estate, dated 
               December 21, 1995 by and between Millsite 20 Limited Liability 
               Company, Iron City Limited Liability Company and the Company.*

  10.16        Letter dated February 28, 1996 from the United States 
               Environmental Protection Agency.*

  10.17        Subdivision Agreement dated February 28, 1996 by and among the 
               City of Black Hawk, the Black Hawk/Central City Sanitation 
               District, Millsite 27, Inc. and Millsite 20 Limited Liability 
               Company.*

  10.18        State of Colorado, Department of Revenue, Limited Gaming 
               License issued to Bullwhackers Black Hawk Casino.*

  10.19        State of Colorado, Department of Revenue, Alcoholic Beverage 
               License issued to BWBH, Inc.*

  10.20        City of Black Hawk, Retail Liquor License with Extended Hours 
               issued to BWBH, Inc.*

  10.21        State of Colorado, Department of Revenue, Limited Gaming 
               License issued to Bullwhackers Central City Casino.*

  10.22        State of Colorado, Department of Revenue, Alcoholic Beverage 
               License issued to BWCC, Inc.*

  10.23        City of Central City, Retail Liquor License issued to BWCC, 
               Inc.*

  10.24        City of Central City, Extended Hours License issued to BWCC, 
               Inc.*

  10.25        Colorado Gaming & Entertainment Co. Management Stock Incentive 
               Plan.*

  10.26        Colorado Gaming & Entertainment Co. Management Cash Bonus 
               Plan.*

  10.27        Form of Consulting Agreement between the Company and 
               Christopher B. Hemmeter.*

  10.28        Form of Consulting Agreement between the Company and Mark M. 
               Hemmeter.*

  10.29        Employment Agreement between the Company and Stephen J. 
               Szapor, Jr.*

  10.30        Employment Agreement between the Company and Alan L. Mayer.*

  10.31        Employment Agreement between the Company and Richard Rabin.*

  21.1         List of Subsidiaries.*

  23.1         Consent of Arthur Andersen LLP.

  99.1         Statement of Eligibility under the Trust Indenture Act of 1939, 
               as amended of Fleet National Bank, as Trustee under the 
               Indenture.*

                                       44
<PAGE>

     * Incorporated by reference to the same exhibit number in the Company's 
Registration Statement on Form 10 (File No. 0 - 28068). 

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