<TABLE>

                                                           UNITED STATES

                                                 SECURITIES AND EXCHANGE COMMISSION

                                                        Washington, DC 20549

                                                             FORM 10-Q


                                      |X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                                                THE SECURITIES EXCHANGE ACT OF 1934
                                         For the quarterly period ended: September 30, 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 No. 0-22436

<CAPTION>
<S>                                      <C>                                                                 <C>

            Delaware                                  Lady Luck Gaming Corporation                                88-0295602
(State or other jurisdiction of          (Exact name of Registrant as specified in its charter)                (I.R.S. employer
 incorporation or organization)                                                                              identification number)
            Delaware                              Lady Luck Gaming Finance Corporation                            88-0295603
(State or other jurisdiction of          (Exact name of Registrant as specified in its charter)                (I.R.S. employer
 incorporation or organization)                                                                              identification number)
           Mississippi                                   Lady Luck Tunica, Inc.                                   88-0289742
(State or other jurisdiction of          (Exact name of Registrant as specified in its charter)                (I.R.S. employer
 incorporation or organization)                                                                              identification number)
           Mississippi                                   Lady Luck Biloxi, Inc.                                   88-0285242
(State or other jurisdiction of          (Exact name of Registrant as specified in its charter)                (I.R.S. employer
 incorporation or organization)                                                                              identification number)
            Delaware                                     Gold Coin Incorporated                                   88-1223906
(State or other jurisdiction of          (Exact name of Registrant as specified in its charter)                (I.R.S. employer
 incorporation or organization)                                                                              identification number)
           Mississippi                                     Magnolia Lady, Inc.                                    88-0301634
(State or other jurisdiction of          (Exact name of Registrant as specified in its charter)                (I.R.S. employer
 incorporation or organization)                                                                              identification number)
           Mississippi                                 Old River Development, Inc.                                64-0837159
(State or other jurisdiction of          (Exact name of Registrant as specified in its charter)                (I.R.S. employer
 incorporation or organization)                                                                              identification number)
            Missouri                                    Lady Luck Kimmswick, Inc.                                 43-1653661
(State or other jurisdiction of          (Exact name of Registrant as specified in its charter)                (I.R.S. employer
 incorporation or organization)                                                                              identification number)
              Iowa                                     Lady Luck Quad Cities, Inc.                                42-1426966
(State or other jurisdiction of          (Exact name of Registrant as specified in its charter)                (I.R.S. employer
 incorporation or organization)                                                                              identification number)
           Mississippi                                 Lady Luck Mississippi, Inc.                                88-0277687
(State or other jurisdiction of          (Exact name of Registrant as specified in its charter)                (I.R.S. employer
 incorporation or organization)                                                                              identification number)
           Mississippi                                  Lady Luck Vicksburg, Inc.                                 88-0284406
(State or other jurisdiction of          (Exact name of Registrant as specified in its charter)                (I.R.S. employer
 incorporation or organization)                                                                              identification number)


                                                                 1

<PAGE>


           Mississippi                                  Lady Luck Gulfport, Inc.                                  88-0289741
(State or other jurisdiction of          (Exact name of Registrant as specified in its charter)                (I.R.S. employer
 incorporation or organization)                                                                              identification number)

                                          206 North Third Street, Las Vegas, Nevada 89101
                                         (Address of principal executive offices)(Zip code)
                                 Registrant's telephone number, including area code: (702) 477-3000

         Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d)
of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes     X         No            

                                         APPLICABLE ONLY TO 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 Sections
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               No            

         Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest
practicable date.  As of November 12, 1996, there were 29,285,698 shares of common stock, $.001 par value per share,
outstanding.

</TABLE>


                                                                 2
<PAGE>
PART I            FINANCIAL INFORMATION

         Item 1.           FINANCIAL STATEMENTS

<TABLE>
                                                    LADY LUCK GAMING CORPORATION
                                               CONDENSED CONSOLIDATED BALANCE SHEETS
                                                           (in thousands)
                                                            (Unaudited)

                                                               ASSETS
<CAPTION>
<S>                                                               <C>                       <C>

                                                                  September 30, 1996        December  31, 1995
Current assets:
     Cash and cash equivalents................................        $       17,317             $      22,148
     Restricted cash..........................................                     -                     8,858
     Accounts receivable, net.................................                 1,026                       597
     Inventories..............................................                 1,129                       885
     Prepaid expenses.........................................                 2,556                     2,731
                                                                      --------------             -------------
         Total current assets.................................                22,028                    35,219
                                                                      --------------             -------------
Property and equipment, net of accumulated
     depreciation and amortization of $25,812 and
     $17,611 as of September 30, 1996 and
     December 31, 1995, respectively..........................               174,036                   155,664
 

Other assets:
     Pre-opening costs........................................                 1,328                     1,100
     Deferred financing fees and costs, net of
         accumulated amortization of $2,256 and
         $1,607 as of September 30, 1996 and
         December 31, 1995, respectively......................                 3,821                     4,470
     Investment in unconsolidated affiliates, net.............                21,079                    17,619
     Other....................................................                 3,777                     3,209
                                                                      --------------            --------------
                                                                              30,005                    26,398
                                                                      --------------            --------------
TOTAL ASSETS..................................................        $      226,069            $      217,281
                                                                      ==============            ==============
</TABLE>



















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


                                                                 3
<PAGE>
<TABLE>

                                                   LADY LUCK GAMING CORPORATION
                                         CONDENSED CONSOLIDATED BALANCE SHEETS (continued)
                                                          (in thousands)
                                                            (Unaudited)


                                               LIABILITIES AND STOCKHOLDERS' EQUITY
<CAPTION>
<S>                                                               <C>                        <C>

                                                                  September 30, 1996         December 31, 1995
 
Current liabilities:
     Current portion of long-term debt........................        $        3,350             $       5,624
     Accrued interest.........................................                 1,802                     2,326
     Accounts payable.........................................                 5,050                     3,240
     Construction and retention payables......................                 1,957                     3,126
     Income taxes payable.....................................                    42                       195
     Other accrued liabilities................................                 8,293                     9,191
                                                                      --------------              ------------
         Total current liabilities............................                20,494                    23,702
                                                                      --------------              ------------

Long-term debt:
     Mortgage notes payable...................................               173,500                   173,500
     Other long-term debt.....................................                 8,357                     3,473
                                                                      --------------              ------------
         Total long-term debt.................................               181,857                   176,973
                                                                      --------------              ------------

              Total liabilities...............................               202,351                   200,675
                                                                      --------------              ------------

Commitments and contingencies (Notes 7, 8, 9 and 10)

Series A mandatory cumulative redeemable preferred
     stock, $36.83 and $33.83, as of
     September 30, 1996 and December 31, 1995,
     respectively per share liquidation value,
     1,800,000 shares authorized, 433,638 shares
     issued and outstanding...................................                15,971                    14,669
                                                                      --------------             -------------

Stockholders' equity:
     Common stock, $.001 par value, 75,000,000
         shares authorized, 29,285,698 shares issued
         and outstanding .....................................                    29                        29
     Additional paid-in capital...............................                31,382                    31,382
     Accumulated deficit......................................               (23,664)                  (29,474)
                                                                      --------------             --------------
         Total stockholders' equity...........................                 7,747                     1,937
                                                                      --------------             -------------
TOTAL LIABILITIES AND
     STOCKHOLDERS' EQUITY......................................       $      226,069             $     217,281
                                                                      ==============             =============


</TABLE>









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

                                                                 4
<PAGE>
<TABLE>

                                                   LADY LUCK GAMING CORPORATION
                                          CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                        (in thousands, except share and per share amounts)
                                                            (Unaudited)

<CAPTION>

                                                                  Three Months Ended               Nine Months Ended
                                                                    September 30,                    September 30,
                                                               1996              1995           1996                1995
<S>                                                      <C>               <C>            <C>               <C>
Revenues:
     Casino..........................................    $   38,319        $   37,180     $  109,664         $   103,698
     Food and beverage...............................         4,790             3,906         12,602              10,921
     Hotel...........................................         1,299               578          2,879               2,103
     Equity in net income (loss) of unconsolidated
         affiliates..................................           789              (122)         3,450              (1,162)
     Other...........................................         2,053             1,255          4,377               2,695
                                                         ----------        ----------     ----------         -----------
         Gross revenues..............................        47,250            42,797        132,972             118,255
         Less: Promotional allowances................        (3,520)           (2,290)        (9,079)             (6,585)
                                                         ----------        ----------     ----------         -----------
         Net revenues................................        43,730            40,507        123,893             111,670

Costs and expenses:
     Casino..........................................        15,454            13,389         42,248              36,799
     Food and beverage...............................         1,975             2,080          5,358               6,192
     Hotel...........................................           643               341          1,358               1,376
     Other...........................................            16                83            159                 231
     Selling, general and
         administrative..............................        14,546            12,485         40,696              37,738
     Related party management/license fees...........           881             1,602          1,924               4,141
     Depreciation and amortization...................         2,955             2,563          8,348               7,184
     Settlement of claim.............................         1,100                 -          1,100                   -
     Pre-opening expenses............................             -                 -            247                   -
                                                         ----------        ----------     ----------         -----------
         Total costs and expenses....................        37,570            32,543        101,438              93,661
                                                         ----------        ----------     ----------         -----------

Operating income ....................................         6,160             7,964         22,455              18,009

Other income (expense):
     Interest income.................................           191               328            829                 896
     Interest expense................................        (5,695)           (5,139)       (16,356)            (14,813)
     Other...........................................           156                40            253                (360)
                                                         ----------        ----------     ----------         ----------- 
 

Income before income tax (benefit)
     provision and extraordinary item................           812             3,193          7,181               3,732
                                                         ----------        ----------     ----------         -----------






</TABLE>







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

                                                                    5
<PAGE>
<TABLE>

                                                      LADY LUCK GAMING CORPORATION
                                       CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (continued)
                                           (in thousands, except share and per share amounts)
                                                               (Unaudited)

<CAPTION>
 
                                                                   Three Months Ended                 Nine Months Ended
                                                                   September 30,                        September 30,
                                                                1996            1995                1996               1995
<S>                                                      <C>             <C>                 <C>                <C>

Income before income tax (benefit)
     provision and extraordinary item................           812            3,193               7,181              3,732

Income tax (benefit) provision.......................          (175)               -                  69                  -
                                                           --------         --------            --------           --------

Income before extraordinary
     item............................................           987            3,193               7,112              3,732
Extraordinary gain on early
     extinguishment of debt..........................             -                -                   -              2,257
                                                           --------         --------            --------           --------

NET INCOME...........................................           987            3,193               7,112              5,989

Preferred stock dividends............................          (446)            (399)             (1,302)            (1,162)
                                                           --------         --------            --------           -------- 
Income applicable to
     common stockholders.............................      $    541         $  2,794            $  5,810           $  4,827
                                                           ========         ========            ========           ========

NET INCOME PER SHARE

     Before extraordinary item.......................      $    .03         $    .11            $    .24           $   0.13
                                                           ========         ========            ========           ========
     Extraordinary item..............................      $      -         $      -            $      -           $   0.08
                                                           ========         ========            ========           ========
     Applicable to common stockholders...............      $    .02         $   0.10            $    .20           $   0.17
                                                           ========         ========            ========           ========

Weighted average number of common
     shares outstanding..............................    29,285,698       29,285,698          29,285,698         28,841,254
                                                         ==========       ==========          ==========         ==========

</TABLE>





















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

                                                                    6
<PAGE>
<TABLE>

                                                      LADY LUCK GAMING CORPORATION
                                             CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                             (in thousands)
                                                               (Unaudited)


<CAPTION>

                                                            Nine Months Ended
                                                              September 30,
                                                        1996                1995

<S>                                                <C>                  <C>
Cash flows from operating activities:
   Net income...................................       7,112               5,989
   Adjustments to reconcile net
     income to net cash provided by
       (used in) operating activities:
     Depreciation and amortization..............       8,348               7,184
     Amortization of bond offering
       fees and costs...........................         649                 653
       Loss on disposition of assets............           -                 480
     Gain on early extinguishment
       of debt..................................           -              (2,257)
   Equity in net (income) loss of
     unconsolidated affiliates..................      (3,450)              1,162
   (Increase) decrease in assets:
     Accounts receivable........................        (429)                529
     Inventories................................        (244)                (90)
     Prepaid expenses...........................         175                 777
     Federal income tax receivable..............           -               2,308
   Increase (decrease) in liabilities:
     Accounts payable...........................       1,810              (2,149)
     Accrued interest...........................        (524)             (4,571)
     Other accrued liabilities..................        (898)              3,440
     Federal income taxes payable...............        (153)                  -
                                                    --------            --------
Net cash provided by (used in)
   operating activities.........................      12,396              13,455
                                                    --------            --------

Cash flows from investing activities:
   Purchase of property and equipment...........     (19,514)             (8,538)
   Construction and retention payables..........      (1,169)             (7,195)
   Pre-opening costs............................        (228)               (363)
   Investments in unconsolidated affiliates.....         (10)             (2,144)
   Restricted cash..............................       8,858                (105)
   Other assets.................................        (568)                (83)
                                                    --------            -------- 
Net cash provided by (used in) investing
   activities...................................     (12,631)            (18,428)
                                                    --------            -------- 

</TABLE>









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

                                                                    7
<PAGE>
<TABLE>

                                                      LADY LUCK GAMING CORPORATION
                                       CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
                                              (in thousands, except supplemental schedule)
                                                               (Unaudited)


<CAPTION>

                                                                  Nine Months Ended
                                                                    September 30,
                                                             1996                  1995
 
<S>                                                    <C>                     <C>
Cash flows from financing activities:
   Issuance of notes payable....................               40                 2,219
   Payments on debt and slot contracts..........           (4,636)               (4,893)
                                                        ---------              -------- 
 
Net cash provided by (used in) financing
   activities...................................           (4,596)               (2,674)
                                                        ---------              -------- 
 

Net increase (decrease) in cash and cash
   equivalents..................................           (4,831)               (7,647)
Cash and cash equivalents,
   beginning of period..........................           22,148                28,914
                                                        ---------              --------
Cash and cash equivalents, end of period                $  17,317              $ 21,267
                                                        =========              ========

Supplemental disclosures of cash flow
   information :
     Cash paid during the period for:
       Interest (net of amount capitalized
         of $514 and $519 for the nine months
         ended September 30, 1996 and 1995,
         respectively) ...............................  $  16,231              $ 18,865
                                                        ---------              --------
       Income taxes paid..............................  $     225              $ (2,103)
                                                        ---------              -------- 
</TABLE>

     Supplemental Schedule of Non-Cash Investing and Financing Activities:

     The  liquidation  value of the  Series A  mandatory  cumulative  redeemable
preferred  stock  increased by  approximately  $1,302,000 and $1,162,000 for the
periods ended September 30, 1996 and 1995, respectively.

     On April 15, 1996, Lady Luck Mississippi  acquired the River Park Hotel for
approximately $4,000,000, including approximately $1,000,000 cash and a mortgage
note for the balance.

     During  the second  quarter of 1996,  certain  subsidiaries  acquired  slot
machines in exchange for approximately $3,800,000 of indebtedness.

     On July 3, 1996,  Magnolia Lady,  Inc.  acquired the  Riverbluff  Hotel for
approximately   $1,000,000,   including   approximately   $600,000  cash  and  a
non-recourse mortgage note for the balance.

     In February  1995,  2,000,000  shares of common  stock were issued upon the
conversion of $6,500,000 of the 2001 Notes.

     On  March  31,  1995,   the  Company   contributed   net  assets   totaling
approximately $16,100,000 to the Bally's Joint Venture.

     In addition to net cash  investments  in and cash payments on behalf of the
Bettendorf  Joint Venture during 1995 of approximately  $2,100,000,  the Company
contributed non-cash assets of approximately $837,000.

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

                                                                 8
<PAGE>
                            LADY LUCK GAMING CORPORATION
                NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                     (Unaudited)



1.   The Company and Basis of Presentation

     Certain notes and other information have been condensed or omitted from the
interim  financial  statements  presented in this Quarterly Report on Form 10-Q.
Therefore,  these financial  statements  should be read in conjunction  with the
Company's  1995 Annual  Report on Form 10-K. In the opinion of  management,  all
adjustments  (consisting of normal recurring  adjustments)  considered necessary
for a fair presentation  have been included.  The results for the three and nine
month periods ended September 30, 1996 are not necessarily  indicative of future
financial  results.  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 these estimates.  Among the
estimates  made by management is the  evaluation  of the  recoverability  of the
carrying  values  of the  land  held  for  development  and the  projects  under
development  by Lady Luck  Vicksburg,  Inc.  and Lady Luck  Kimmswick,  Inc. The
Company has made  certain  reclassifications  to the three and nine months ended
September 30, 1995 in order to conform to current period presentation.

     The  consolidated  financial  statements  of Lady Luck  Gaming  Corporation
("LLGC"),  a  Delaware  corporation,  include  the  accounts  of  LLGC  and  its
subsidiaries  (collectively "the Company").  The Company's  operations primarily
include  those of LLGC,  Lady  Luck  Gaming  Finance  Corporation  ("LLGFC"),  a
Delaware  corporation;  Lady Luck Mississippi,  Inc. ("LLM"),  Lady Luck Biloxi,
Inc. ("LLB"), Lady Luck Gulfport, Inc. ("LLG"), Lady Luck Vicksburg, Inc.("LLV")
and Lady Luck Tunica, Inc. ("LLT"), each a Mississippi corporation (collectively
the  "Mississippi  Companies");  Gold  Coin  Incorporated  ("GCI"),  a  Delaware
corporation;   Lady  Luck  Kimmswick,   Inc.  ("LLK"),  a  93%  owned  Missouri
corporation;  Magnolia Lady, Inc. ("MLI"), a Mississippi corporation;  Lady Luck
Quad Cities, Inc. ("LLQC"), a Delaware  corporation;  and Old River Development,
Inc. ("ORD"),  a Mississippi  corporation.  The Company also owns investments in
joint  ventures with BRDC and Bally's (see Note 4) which are accounted for under
the equity  method.  LLGC and its  subsidiaries  were  organized  to develop and
operate gaming and hotel properties in emerging jurisdictions.

     LLGC and LLGFC were formed in  February  1993,  pursuant  to an  Investment
Agreement dated October 20, 1992 between Andrew H. Tompkins,  certain affiliates
of Mr.  Tompkins and certain  holders of equity and debt  securities of GCI (the
"Investment  Agreement").  Pursuant to the Investment  Agreement,  Mr.  Tompkins
indirectly contributed all outstanding common stock of the Mississippi Companies
to LLGFC in exchange for 550,000 shares of LLGC Class B Common Stock and 216,819
shares of LLGC Series A Mandatory Cumulative Redeemable Preferred Stock ("Series
A"), liquidation value of $5,420,000. In connection with the contribution of the
stock of the Mississippi  Companies,  Mr.  Tompkins  received  $3,734,000  which
represented  the  historical  carrying value of the net assets of $13,400,000 in
excess of the capital  contribution  required by the Investment  Agreement.  LLM
began dockside  casino  operations on February 26, 1993 in Natchez,  Mississippi
and  acquired and took over  operation  of the 148 room Best Western  River Park
Hotel in Natchez,  Mississippi  on April 15, 1996; GCI reopened on May 28, 1993;
LLT began dockside  casino  operations on September 18, 1993 in Southern  Tunica
County,  Mississippi and ceased operations on April 24, 1994; LLB began dockside
casino  operations on December 13, 1993 in Biloxi,  Mississippi;  and MLI, which
does business as Lady Luck Rhythm & Blues,  commenced dockside gaming operations
of Lady Luck  Rhythm & Blues on June 27,  1994 in Coahoma  County,  Mississippi,
commenced  operation of a 173-room  hotel on August 16, 1994,  commenced  gaming
operations of Country Casino and the Pavilion,  as described  below,  on May 21,
1996 and acquired and took over  operation of the 120-room  Riverbluff  Hotel in
Helena, Arkansas on July 3, 1996. ORD commenced operation of a 240-room hotel on
August 24, 1994 and  contributed  it to the Bally's  Joint Venture in March 1995
(see Note 4).  All of the other  Mississippi  Companies  and LLK are in  various
stages of development and have no operating history.



                                                                 9
<PAGE>
                        LADY LUCK GAMING CORPORATION
               NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)



     2. Certain Risks and Uncertainties  Applicable to Gaming Industry Licensing
and Concentration of Risk

     The Company's operations in Mississippi, Iowa and Colorado are dependent on
the  continued   licensability  or   qualifications   of  the  Company  and  its
subsidiaries  that  hold  the  gaming  licenses  in  these  jurisdictions.  Such
licensing and qualifications are reviewed periodically by the gaming authorities
in these states.

     Mississippi  Gaming  Commission  regulations  require  licensees  to invest
certain  minimum  amounts  in  land-based,   non-  gaming   infrastructure  (the
"Land-Based  Requirement").  While the  Company  believes  that its  Mississippi
operating  subsidiaries are in compliance with the Land-Based  Requirement,  the
Mississippi  Gaming  Commission (the  "Commission")  has expressed concern as to
whether  LLB  is in  compliance  with  such  requirements.  The  Commission  may
condition,  revoke, or suspend LLB's license if it ultimately determines that it
is not in compliance  with the Land-Based  Requirement  and the Company does not
take steps to cure such  noncompliance.  The  revocation  or suspension of LLB's
gaming  license  would  have a  material  adverse  impact  on LLB's  results  of
operations  or financial  position,  and may have a material  adverse  impact on
LLGC's results of operations or financial condition taken as a whole.

     A significant portion of the Company's  consolidated revenues and operating
income are generated by the Company's  Rhythm & Blues and Country  Casino gaming
operations in Coahoma County. These casinos are highly dependent on patronage by
residents in Arkansas. A change in general economic conditions or the extent and
nature of regulations  enabling casino gaming in Arkansas could adversely effect
these casinos' future operating results. On November 5, 1996, Arkansas residents
voted to defeat a ballot measure which would have allowed voters in Hot Springs,
Arkansas,  to decide  whether  to allow up to three  casinos  in the  city.  The
measure,  if  passed,  would also have  created a state  lottery  and  legalized
charitable bingo.

3.   Net Income Per Share

     Net income  per share is  computed  using the  weighted  average  number of
common shares and common stock equivalents,  if dilutive,  actually  outstanding
during the year.  Common stock  equivalents  represent  the shares that would be
outstanding  assuming  exercise  of  dilutive  stock  options.  No common  stock
equivalents are included in the computation for the three and nine month periods
ended September 30, 1996 and 1995, as the effect would be anti-dilutive or would
dilute earnings per share by less than one percent.

4.   Investment in Unconsolidated Affiliates

     The Company's  investments  in joint  ventures with  Bettendorf  Riverfront
Development Company ("BRDC") and Bally's Entertainment  Corporation  ("Bally's")
are accounted for under the equity method and the Company's portion of income or
loss from the joint  ventures  is  included  in Equity in Net  Income  (Loss) of
Unconsolidated  Affiliates in the accompanying Condensed Consolidated Statements
of Operations for the three and nine month periods ended  September 30, 1996 and
1995.

     In December 1994, the Company entered into a joint venture (the "Bettendorf
Joint  Venture") with BRDC to complete and operate a casino in Bettendorf,  Iowa
("Lady Luck Bettendorf").  The joint venture agreement required that the Company
and BRDC each contribute cash to the Bettendorf Joint Venture of $3.0 million in
return for a 50% ownership interest.  In addition,  BRDC is leasing certain real
property to the  Bettendorf  Joint Venture at a lease rate equal to $150,000 per
month.  The Company is leasing a gaming vessel to the  Bettendorf  Joint Venture
for  approximately  $200,000 per month,  which amount was determined  based upon
arms-length  negotiations  between  the  Company  and  BRDC.  Due to  delays  in
completing the Company's  Kimmswick,  Missouri project (the "Missouri Project"),
the gaming  vessel being leased is the gaming vessel which had  originally  been
intended for the Missouri Project.  In addition,  the Company is leasing certain
gaming  equipment to the  Bettendorf  Joint  Venture,  as discussed  below,  for
approximately $122,000 per month, its fair market rental value.

                                                                 10
<PAGE>
                            LADY LUCK GAMING CORPORATION
               NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                    (Unaudited)



     Lady Luck  Bettendorf  commenced  operations in April 1995. All net profits
and losses from all  operations of Lady Luck  Bettendorf  are allocated  equally
between  the Company  and BRDC.  The Company has also been  granted the right to
manage Lady Luck  Bettendorf with  substantially  the same terms and fees as the
Company's  wholly-owned  casinos,  less $37,500 per month, with a portion of the
fees received by the Company paid to BRDC as consultants.

     Summarized balance sheet information for the Bettendorf Joint Venture as of
September 30, 1996 and December 31, 1995 is as follows (in thousands):
<TABLE>
<CAPTION>

                                                   September 30, 1996           December 31, 1995
         <S>                                          <C>                         <C>

         Current assets                               $       4,445               $      3,142
         Property and equipment, net                         12,076                     11,435
         Other assets                                            14                          -
                                                      -------------               ------------
           Total assets                               $      16,535               $     14,577
                                                      =============               ============

         Current liabilities                          $       3,000               $      7,108
         Long-term liabilities                                2,786                      1,880
         Members' equity                                     10,749                      5,589
                                                      -------------               ------------
           Total liabilities and
              members' equity                         $      16,535               $     14,577
                                                      =============               ============

</TABLE>

     The  Bettendorf  Joint  Venture's net income for 1995 includes  pre-opening
expenses of $2.3 million.  Summarized  results of operations  for the Bettendorf
Joint Venture for the three and nine month periods ended  September 30, 1996 and
1995 are as follows (in thousands):
<TABLE>
<CAPTION>

                                                     Three Months Ended                  Nine Months Ended
                                                        September 30,                      September 30,
                                                   1996              1995             1996             1995
         <S>                                  <C>              <C>              <C>               <C>

         Net revenues                        $   17,192        $   13,267       $   48,869        $  23,395
         Costs and expenses                      15,281            12,081           43,709           23,974
                                             ----------        ----------       ----------        ---------
         Net income                          $    1,911        $    1,186       $    5,160        $    (579)
                                             ==========        ==========       ==========        =========

</TABLE>

     In March 1995,  the  Company  formed a joint  venture  with  affiliates  of
Bally's  to  complete  a  casino/hotel   project  in  Northern   Tunica  County,
Mississippi (the "Bally's Joint  Venture").  Upon formation of the Bally's Joint
Venture, ORD contributed its existing 240-room hotel in Northern Tunica County,
as well as other related assets and liabilities,  with a total net cost of $16.1
million, to the joint venture. Bally's contributed a closed dockside casino (the
"Dockside Casino") which was, at the time of such contribution, located at Mhoon
Landing  in  Southern  Tunica  County,  and  certain  other  assets to the joint
venture. The Dockside Casino has been relocated to the ORD hotel site. A Bally's
entity manages and controls the Bally's Joint Venture. The Bally's Joint Venture
is owned 58% by Bally's,  35% by ORD and 7% by D.J. Brata, a former 11% minority
shareholder of ORD. The Company is currently  negotiating  with Bally's and D.J.
Brata the final  amount of the  Company's  initial  capital  contribution  to be
credited to its partners'  capital  account and other matters in accordance with
the joint  venture  agreement  and,  in 1995,  provided  a reserve  of  $350,000
relating to any unfavorable  resolution of these matters. Hotel operations under
Bally's  commenced  in April 1995 and casino  operations  commenced  in December
1995.

                                                                 11
<PAGE>
                           LADY LUCK GAMING CORPORATION
               NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)



     Summarized  balance sheet  information  for the Bally's Joint Venture as of
September 30, 1996 and December 31, 1995 is as follows (in thousands):
<TABLE>
<CAPTION>

                                                     September 30, 1996         December 31, 1995
              <S>                                        <C>                        <C>

              Current assets                             $     7,544                $   10,110
              Property and equipment, net                     51,981                    51,511
              Other assets                                     1,300                     4,329
                                                         -----------                ----------
                  Total assets                           $    60,825                $   65,950
                                                         ===========                ==========

              Current liabilities                        $     6,145                $    6,148
              Long-term liabilities                            7,327                       485
              Partners' capital                               47,353                    59,317
                                                         -----------                ----------
                  Total liabilities and 
                      partners' capital                  $    60,825                $   65,950
                                                         ===========                ==========

</TABLE>

     Summarized  results of  operations  for the Bally's  Joint  Venture for the
three and nine month  periods  ended  September 30, 1996 and 1995 are as follows
(in thousands):
<TABLE>
<CAPTION>


                                                     Three Months Ended           Nine Months Ended
                                                        September 30,               September 30,
                                                      1996         1995           1996         1995
              <S>                                <C>            <C>             <C>           <C>

              Net revenues                       $  15,639      $     801       $ 54,875      $  1,323
              Costs and expenses                    16,067          2,844         52,340         3,817
                                                 ---------      ---------       --------      --------
              Net income                         $    (428)     $  (2,043)      $  2,535      $ (2,494)
                                                 =========      =========       ========      ======== 
</TABLE>


     Net income of the Bally's Joint Venture for the nine months ended September
30, 1996 includes pre-opening expenses of $3.3 million which were fully expensed
prior to the beginning of the quarter ended September 30, 1996.



                                                                 12
<PAGE>
                          LADY LUCK GAMING CORPORATION
               NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)



5.   Long-Term Debt

     At September 30, 1996 and December 31, 1995,  long-term  debt  consisted of
the following (in thousands):
<TABLE>
<CAPTION>

                                                                      September 30,             December 31, 1995
                                                                          1996
<S>                                                                  <C>                          <C>              
11 7/8% First Mortgage Notes; generally quarterly
      payments of interest only; due March 2001;
      collateralized by substantially all assets of the
      Company (the "2001 Notes")..........................           $     173,500                $    173,500
Note payable to a corporation; monthly payments of              
      interest only at 10%; principal due  July 2001,
      collateralized by a deed of trust...................                   2,750                       3,000
Note payable to a corporation; annual payments of               
      principal of $119,000 plus accrued interest at
      8%; due June 2003; collateralized by a land
      deed of trust.......................................                     833                         952
Notes payable to a corporation; non-interest bearing            
      through December 1996; thereafter at prime
      plus 7%; secured by the equipment...................                     962                       1,574
Notes payable to a corporation; monthly payments                
      of principal and interest at 13 1/4%; due
      February 1997; secured by the equipment.............                     207                         552
Note payable to a corporation; payment of principal             
      and accrued interest at 14%; due March 1996;
      secured by a gaming vessel..........................                       -                       2,219
Note payable to a corporation; payment of principal             
      and accrued interest at 13 1/4%; due January
      1997; secured by the equipment......................                      81                         294
Note payable to a corporation; non-interest bearing             
      through June 1997; thereafter at prime plus
      3%; secured by the equipment........................                     361                           -
Notes payable to a corporation; non-interest bearing            
      through May 1997; thereafter at prime plus
      7%; secured by the equipment........................                   2,677                           -
Mortgage note payable to a corporation; quarterly               
      payments of principal and interest at prime plus
      1 1/2% based on a 20 year amortization; due
      April 2006; collateralized by a deed of trust.......                   2,962                           -


                                                                 13
<PAGE>
                           LADY LUCK GAMING CORPORATION
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)




Note payable to a corporation; quarterly payments
      of principal and accrued interest at 9%;
      collateralized by a deed of trust...................                     385                           -
Other.....................................................                     489                         506
                                                                     -------------                ------------
                                                                           185,207                     182,597
Less current portion......................................                  (3,350)                     (5,624)
                                                                     -------------                ------------
      Total long-term debt................................           $     181,857                $    176,973
                                                                     =============                ============
</TABLE>

     The Indenture as  supplemented,  covering the 2001 Notes (the  "Indenture")
provides for, among other things,  restrictions  on the Company's and certain of
its subsidiaries'  abilities (a) to pay dividends or other  distributions on its
capital stock,  (b) to incur additional  indebtedness,  (c) to make asset sales,
(d) to  engage  in other  lines  of  business,  and (e) to  maintain  a  minimum
consolidated  net worth.  The  Company  believes  it is in  compliance  with the
Indenture.

6.    Hotel Acquisition and Remodeling Projects

      Riverbluff Hotel

     On July 3,  1996,  MLI which  operates  Lady Luck  Rhythm & Blues,  Country
Casino  and an  entertainment  complex  known  as  the  Pavilion,  acquired  the
Riverbluff  Hotel in Helena,  Arkansas.  The Riverbluff  Hotel is located at the
entrance  to the  bridge  which  crosses  the  Mississippi  River  and  provides
immediate  access to its Mississippi  facilities.  The Riverbluff Hotel features
120 guest rooms, adding to the existing 173 guest rooms at the Mississippi site.
The Company purchased the Riverbluff for approximately  $1.0 million,  comprised
of cash of $0.6 million and a mortgage note for the balance.

      Remodeling Projects

     The  Company  is  expending  approximately  $0.9  million  to  remodel  the
Riverbluff Hotel and portions of the River Park Hotel.  The remodeling  includes
replacement  of certain  furniture and equipment and is expected to be completed
by December 31, 1996.

7.    Employment Agreements

     On October 24, 1994,  LLGC entered Letter  Agreements with Alain J. Uboldi,
LLGC's President, Chief Operating Officer and Director, and Rory J. Reid, LLGC's
Senior   Vice-President,   General   Counsel,   Secretary   and  Director   (the
"Agreements").  The Agreements provide that in the event of a Change of Control,
as defined in the Agreements,  and the subsequent  termination of the employment
of either Mr.  Uboldi or Mr. Reid,  under certain  circumstances,  LLGC would be
required to pay to Mr. Uboldi and Mr. Reid a lump sum severance payment equal to
2.99 times the sum of their respective annual base salary plus the amount of any
bonus  paid  in the  year  preceding  such  termination.  In the  event  of such
termination,  Mr. Uboldi and Mr. Reid would also receive in cash an amount equal
to the product of the difference between  subtracting the exercise price of each
option held by Mr.  Uboldi or Mr. Reid (whether or not fully  exercisable)  from
the current  price of LLGC's common stock,  as defined.  Further,  in connection
with the  Agreements,  Mr. Uboldi and Mr. Reid would  receive life,  disability,
accident and health insurance benefits  substantially  similar to those they are
receiving  immediately  prior to their  termination  for a 36-month period after
such termination.



                                                                14
<PAGE>
                           LADY LUCK GAMING CORPORATION
               NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)



8.    Litigation

      Shareholder Class Action Lawsuit

     The Company has been named as a defendant in a purported  shareholder class
action lawsuit alleging  violations by the Company of the Securities Act of 1933
and the Securities Exchange Act of 1934 for alleged material  misrepresentations
and  omissions in  connection  with the Company's  1993  prospectus  and initial
public offering of Common Stock.  The complaint  seeks,  inter alia,  injunctive
relief,  rescission and  unspecified  compensatory  damages.  In addition to the
Company, the complaint also names as defendants Andrew H. Tompkins, Chairman and
Chief  Executive  Officer of LLGC,  Alain Uboldi,  Director and Chief  Operating
Officer of LLGC,  Michael Hlavsa,  the former Chief  Financial  Officer of LLGC,
Bear  Stearns  & Co.,  Inc.  and  Oppenheimer  & Co.,  Inc.,  who  acted as lead
underwriters for the initial public  offering.  The Company has retained outside
counsel to respond to the  complaint and while the outcome of this matter cannot
presently  be  determined,  the  Company  believes  based in part on  advice  of
counsel, that it has meritorious defenses.

      Greek Lawsuits

     The Company and certain of its joint venture  partners  (the  "Defendants")
have been named as defendants in two separate lawsuits brought by the country of
Greece and its Minister of Tourism before the Greek  Multi-Member Court of First
Instance.  Each  action  alleges  that the  Defendants  failed  to make  certain
payments in connection with the gaming license bid process for Loutraki,  Greece
and Patras,  Greece. The Company has been informed by its Greek counsel that the
lawsuit  regarding the gaming license bid process for Loutraki,  Greece has been
dismissed.  Accordingly,  the  payments  the  Company  is  alleged  to have been
required  to make  aggregate  approximately  2.1  billion  drachmae  (which  was
approximately  $8.8 million as of November 7, 1996 based upon published exchange
rates)  related to Patras,  Greece.  Although it is difficult  to determine  the
damages  being sought from the  lawsuit,  the action may seek damages up to such
aggregate amount. The Company's Greek counsel is defending the remaining lawsuit
and in  management's  opinion,  the  ultimate  outcome  of  this  matter  is not
presently known.

     Additionally,  a lawyer and a consultant  which were allegedly  retained by
the Company in connection  with the Company's bid for a gaming license in Greece
recently  threatened  litigation against the Company.  On or about September 24,
1996, the Company and the lawyer and consultant  reached an agreement whereby in
exchange for certain consideration mutual releases were executed.

     Also, a Greek architect  filed an action against the Company  alleging that
he was retained by the Company to provide professional  services with respect to
a casino in Loutraki,  Greece.  The  plaintiff  in such action seeks  damages of
approximately $800,000. On July 29, 1996, the Company's Greek counsel was served
with a decision by the Athens Court of First Instance in such matter.  The Greek
Court  entered  judgement  against  the  Company in the amount of  approximately
$375,000.  The Company  intends to appeal the Court's  decision  and has been
informed by its Greek counsel that it has meritorious  grounds to prosecute such
appeal.

      Other Matters

     On November 5, 1996,  the United States  Bankruptcy  Court for the Northern
District of  Mississippi  dismissed a lawsuit which had been brought by Superior
Boat Works,  Inc.  ("Superior")  against  LLM on or about  September  23,  1993.
Superior had  previously  done  construction  work for LLM on its Natchez  barge
("Lady Luck Natchez"), as well as some minor preparatory work on one other barge
of the Company. Such proceeding alleged damages of approximately $47,000,000, of
which approximately  $3,400,000 was alleged for additional  construction work on
Lady Luck Natchez and the  remaining  amount was alleged for unjust  enrichment,
for causing the bankruptcy of Superior and for future work Superior  expected to
perform  for the  Company.  The  decision is subject to  adjustment  for certain
additional  work  performed by  Superior.  The Company  believes the  additional
charges will be less than the credit to which the court ruled LLM is

                                                                 15
<PAGE>
                       LADY LUCK GAMING CORPORATION
            NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                (Unaudited)



entitled  to  for  excess  payments  made to Superior by LLM.  Superior also has
the right to appeal.  The  Company,  based in part on the advice of its counsel,
does not believe that Superior has meritorious grounds to prosecute an appeal.

9.    Commitments and Contingencies

      Lease Commitments

     LLGC on its own or through its operating  subsidiaries,  has entered into a
series of leases and options to lease in various locations where it is operating
or intends to develop and operate dockside casinos. The leases are primarily for
a term of 40 years from the date of execution  and are  cancelable at the option
of LLGC with a maximum period of notice of 60 days with the exception of certain
leases entered by LLB and LLG which are cancelable upon six months notice on the
fifth  anniversary of the  commencement  date of such leases and upon six months
notice on any fifth anniversary date thereafter.  In addition,  LLGC, on its own
or through its  operating  subsidiaries,  has entered  into  certain  options to
either lease or purchase additional property in other states. Most of the leases
are  contingent  upon  regulatory  approval of the lease and all leases  contain
certain periodic rent adjustments.

     Prior  to  suspending   development   of  a  planned  casino  in  Gulfport,
Mississippi, the Company entered into three leases for real property. The leases
currently  require  annual  payments of  approximately  $920,000 and provide for
future increases based on the Consumer Price Index. The Company is seeking joint
venture  partners  to assume  the  leases or to  invest in the  proposed  casino
project.  The  principal  lease (the  "Gulfport  Lease") is terminable by LLG in
November 1998 and requires an annual lease payment of approximately $550,000 per
year  through such date.  The Company was required to prepay the lease  payments
for the twelve months  ending  November  1998.  The Company was required to make
improvements to the leased property of at least $1.0 million on or before May 8,
1995 (the "Improvement  Requirement").  While the Company has spent in excess of
$1.0 million on its Gulfport project, the landlord,  while not now claiming that
the  Company is in  default,  has  reserved  the right to claim that LLG has not
satisfied the Improvement Requirement.  The Company has been in discussions with
third parties, including joint venture partners,  regarding an assumption of the
Gulfport Lease.  There can be no assurance that such negotiations or discussions
will be  successful.  Because  the  Company  has  suspended  development  of its
Gulfport  project and in order to conserve  its funds,  the Company may not make
the required  monthly lease  payments in the future.  Accordingly,  a reserve of
approximately $600,000 was provided as of December 31, 1995 to fully reserve the
prepaid lease payment for the twelve months ending November 1998.

      Construction Commitment

     The  Company  has  entered  into an  agreement  for the  construction  of a
cruising  gaming  vessel in the amount of $16.0  million and as of September 30,
1996,  approximately  $6.0  million  has  been  expended  under  this  contract,
approximately $1.9 million of which is included in construction  payables. It is
anticipated  that  this  vessel  will be  utilized  by LLK and,  therefore,  the
Missouri Project (as hereinafter defined) will be responsible for payment of the
remaining  amounts under the contract.  However,  if the Missouri Project is not
consummated,   the  Company  may  be  responsible   for  the  then   outstanding
obligations.

      Development Stage Projects

     In addition to its operating casinos, the Company has dockside or riverboat
casino  projects in various stages of  development,  in Kimmswick,  Missouri and
Vicksburg,  Mississippi.  The current status of each of these  development stage
projects is described below.


                                                                16
<PAGE>
                         LADY LUCK GAMING CORPORATION
             NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                 (Unaudited)



             Kimmswick, Missouri

     The Company and a local  investor had intended to develop a theme hotel and
entertainment  center,  including a casino on a cruising  vessel (the  "Missouri
Project"),  in  Jefferson  County,  Missouri,  located  just outside the city of
Kimmswick  and  approximately  20 miles south of St.  Louis.  The Company has an
option to lease an approximately 46 acre site (the "Kimmswick  Site") for a term
of 50 years.

     Construction  of the  Missouri  Project was delayed due to the  prohibition
against  games of chance (slot  machines and  roulette)  until  Missouri  voters
ratified a  constitutional  amendment in November  1994.  Through  September 30,
1996,  the  Company  had  expended  cash of  approximately  $8.4  million in the
Missouri  Project.  Such investment  consists of approximately  $6.0 million for
construction  of a partially  finished  cruising vessel and  approximately  $2.4
million in other costs  associated  with the  development  of the project.  This
investment  excludes the cost of the cruising  vessel which had  initially  been
intended  for use by the  Missouri  Project,  which is now  being  leased to the
Bettendorf Joint Venture.

     On November 30, 1995, the Company entered into a partnership agreement (the
"Kimmswick  Agreement")  with Davis Gaming  Company II ("Davis") to form a joint
venture (the  "Kimmswick  Joint  Venture") to construct  and operate a hotel and
casino on the Kimmswick Site. Pursuant to the Kimmswick  Agreement,  the Company
will contribute  certain assets with a book value of approximately $8 million to
the Kimmswick  Joint  Venture for a 40% interest in the Kimmswick  Joint Venture
(if the assets contributed by LLK are determined to have a value of less than $8
million,  LLK will be required to  contribute  additional  cash or assets in the
amount of such shortfall or its interest in the Kimmswick  Joint Venture will be
proportionately reduced) and Davis will contribute $15 million in cash for a 60%
interest  in the  Kimmswick  Joint  Venture.  Generally,  LLK's  interest in the
Kimmswick  Joint Venture will not be reduced below 20%. In addition,  Davis will
agree either to obtain  financing on behalf of the  Kimmswick  Joint  Venture or
provide additional capital to the Kimmswick Joint Venture in amounts aggregating
an additional $57 million.  Such additional capital contributions by Davis would
be, depending upon the  circumstances  under which such  contributions are made,
either treated as preferred  capital  contributions or result in Davis receiving
an increased  interest in the  Kimmswick  Joint  Venture.  In the event that the
costs of  completing  the first two phases of the  Missouri  Project  exceed $80
million,  LLK and Davis will have the right, but not the obligation,  to make an
additional capital  contribution to the Kimmswick Joint Venture based upon their
pro rata share of the additional amount of required funding. If only one of such
partners elects to contribute  additional capital,  the contributing partner may
elect to withdraw such contribution,  to advance the non-contributing  partners'
share and have the entire contribution treated as a loan to the joint venture or
to advance the non-contributing partners' share and have the entire contribution
treated  as  an  additional  capital   contribution  (which  will  result  in  a
proportionate  adjustment  of the  partners'  respective  interests in the joint
venture). The partners will have no other right or obligation to make additional
capital contributions to the joint venture.

     The obligations of Davis to contribute  capital or provide financing to the
Kimmswick  Joint  Venture are subject to  satisfaction  of numerous  conditions,
including  that  there  shall be no  governmental  regulation  that is likely to
increase the cost of, or diminish the EBITDA to be generated  by, the project in
amounts exceeding  certain  thresholds and that a gaming license shall have been
obtained from the Missouri Gaming Commission. There can be no assurance that any
of such conditions will be satisfied and,  therefore,  there can be no assurance
that the Kimmswick Joint Venture will be funded.

     Development  of the  Missouri  Project  is subject  to  approval  by gaming
authorities  in the State of  Missouri.  The  Company  has filed an  application
seeking such  approval.  The State of Missouri  investigates  applicants  at its
discretion and there can be no assurance that the Company's  application will be
actively reviewed in the next twelve months.  In addition,  a person owning real
property  adjacent to the site of the Kimmswick  Project was seeking to overturn
decisions by the Jefferson County Commission  ("Commission") with respect to the
zoning of such  site.  A trial  was  conducted  in April  1996 and the court has
decided to uphold the zoning decisions made by the Commission.


                                                                 17
<PAGE>
                       LADY LUCK GAMING CORPORATION
            NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                (Unaudited)



     Beginning  with the first  quarter in which the joint venture has operating
income,  the  joint  venture  will  distribute  80% of its  available  funds (as
defined) in each of the first three  fiscal  quarters of each fiscal year to the
partners and, at the end of each fiscal year, the joint venture will  distribute
an amount which,  together with all other amounts previously  distributed during
such  fiscal  year,  equals 90% of  available  funds for such fiscal  year.  All
distributions  of available  funds shall be made first to Davis to the extent of
its priority or preferred  interest  and then to the partners in  proportion  to
their  respective  interests  in the joint  venture.  The  Company  will also be
entitled  to  certain  additional  distributions  to the  extent  that  its  tax
liability  in  respect  of  the  joint  venture  exceeds  the  amount  otherwise
distributed to it.

     The Agreement  provides  that the Company will manage the  Kimmswick  Joint
Venture for a five-year term. The Company will be paid a management fee equal to
2% of gross revenues plus 7% of earnings before  interest,  taxes,  depreciation
and  amortization,  but such  management  fee will in no event  exceed 4% of the
joint venture's gross revenues and the aggregate management fee in any year plus
the amount of all  distributions  to the Company in such year generally will not
exceed  the  amount  of  distributions  to Davis  in such  year.  The  Company's
continued  engagement as manager will be dependent upon, among other things, the
achievement of certain performance standards.  In addition, upon meeting certain
other performance  criteria,  Lady Luck Kimmswick will have the unilateral right
to manage the Kimmswick Joint Venture for an additional five years.

     The Company  has  provided  no reserve  for the assets  designated  for the
Kimmswick Joint Venture. Management believes that the project is viable and that
the assets as of  September  30,  1996 are stated at  estimated  net  realizable
value. This assumption is based upon expected future economic, market and gaming
regulatory  conditions.  Changes in these assumptions could result in changes in
the estimated net realizable value of the property.

             Vicksburg, Mississippi

     The  Company's  planned  casino  project  in  Vicksburg,  Mississippi  (the
"Vicksburg  Project") is expected to be located on  approximately  23.9 acres of
land  owned  by the  Company  immediately  south of the I-20  bridge  along  the
Mississippi  River, with access to Washington Street (the "Vicksburg Site"). The
Vicksburg  Project is expected to have a "Monte  Carlo" theme and is expected to
consist of a 32,000 square foot dockside  casino,  a 250-room hotel, 934 parking
spaces, restaurant facilities and an arcade. A gaming license was granted to LLV
on August 18, 1994.  As of September 30, 1996,  approximately  $14.3 million has
been  spent  by  the  Company  to  develop  the  Vicksburg  Project   (including
approximately  $7.0 million to acquire the land).  Reserves of $3.8 million were
provided in 1994 to reduce the carrying value of the Vicksburg Project assets to
estimated net realizable  value.  The Company  currently  estimates that it will
cost an  additional  approximately  $48.0 million to complete  construction  and
commence  operations of LLV. The Company has ceased committing  material amounts
of capital to the Vicksburg Project and is considering alternatives to provide a
return on its investment in the Vicksburg Project, either through formation of a
joint  venture to  complete  and  operate  the  project,  or through the sale of
certain assets. During the quarter ended September 30, 1996, pursuant to certain
requirements,  the Company demolished certain structures that already existed at
the  site at the  time  it was  purchased.  The  cost  of  such  demolition  was
approximately $0.2 million.

     Management's  calculation of net realizable value is based upon assumptions
regarding future economic, market and gaming regulatory conditions including the
viability of the Vicksburg site for the development of a casino project. Changes
in these  assumptions  could result in changes in the estimated  net  realizable
value of the property.

      Environmental Matters

     The  Company's  operational  and  development  activities  are  subject  to
federal, state and local laws and various governmental  regulations that require
the Company to protect the  environment.  Failure to comply with the  applicable
laws and  regulations  can  result  in  delays in  operational  and  development
activities,  injunctive  actions  and  damages  as well as  civil  and  criminal
penalties.  To the extent that planned development of its properties is delayed,
interrupted or discontinued

                                                                 18
<PAGE>
                       LADY LUCK GAMING CORPORATION
           NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                (Unaudited)



because  of  regulation  or  the  economics of the  properties,  future earnings
of the Company could be adversely affected.  The Company believes its operations
are presently in substantial  compliance  with  applicable air and water quality
laws  and  regulations.   The  laws  and  regulations  governing   environmental
compliance are continually changing and generally are becoming more obstructive.

     The  Company's  Gold Coin  casino is located  generally  within the Central
City/Clear  Creek Superfund site as designated by the  Environmental  Protection
Agency ("EPA").  The Superfund site includes  numerous  specifically  identified
areas of mine tailings and other waste piles of former gold mine operations that
are  subject  to  ongoing  investigations  and  cleanup  by the  EPA  and  other
governmental agencies.  Generally,  the EPA can require potentially  responsible
parties ("PRP's") to cleanup or contribute to the cleanup of the Superfund site.
GCI is not included  within any of the specific  areas within the Superfund site
currently  identified  for  investigation  or  remediation.  The Company and the
predecessor owners of the GCI site have conducted  investigations at the site in
accordance with the  requirements of governmental  authorities as a prerequisite
to obtaining  development  permits.  Nonetheless,  the EPA or other governmental
agencies  could  broaden their  investigations  and identify  additional  areas,
including the GCI site, for cleanup. No other Company sites have been designated
as Superfund sites.

     The Vicksburg Site had been used as a bulk petroleum storage facility since
the early 1950's,  and contained  aboveground  storage tanks and barge and truck
loading  docks  associated  with that  operation.  Known  releases of  petroleum
products  from three of the seven tanks have  occurred  since  1986,  along with
other small releases at various locations on site. The Subsurface  Assessment of
the environmental  condition of the site by an outside environmental  consultant
indicated that certain of the soils at the site were contaminated with petroleum
hydrocarbons  and  associated   volatile  organic   compounds,   and  that  such
contamination  was present in  significant  concentrations  in some locations on
site.

     Remediation efforts at the Vicksburg Site are complete.  Under the terms of
the acquisition of the Vicksburg Site, the purchase price for the Vicksburg Site
of  $4.5 million  was placed in an escrow  account,  with all costs  required to
remediate environmental conditions on site paid out of such escrow account (with
any funds  remaining  after  remediation  going to the  seller of the  Vicksburg
Site). The Mississippi  Department of Environmental  Quality has determined that
the  environmental  remediation  conducted  by the seller  meets all federal and
state standards, and has stated that no further action is required.

     Although the Company knows no other pre-existing conditions at the intended
sites for its development or pre- development stage projects that will result in
any material  environmental  liability or delay,  there can be no assurance that
pre-existing  conditions will not be discovered and result in material liability
or delay to the Company.

     Other  than  those  described,  the  Company  has not  made  and  does  not
anticipate  making,  material  expenditures  with respect to such  environmental
protection, and health and safety laws and regulations;  accordingly, no accrual
for any costs has been made. However, the compliance or cleanup costs associated
with such laws, regulations and ordinances may result in future additional costs
to the Company's operations.

     For properties currently in operation or under development, the Company has
taken  extra   precautions  to  minimize  the   possibility   of   environmental
contamination.  The  Company  does  not  believe  that any  significant  capital
expenditures to monitor or reduce  hazardous  substances or other  environmental
impacts are currently required.  As a result, near term reclamation  obligations
are not expected to have a significant impact on the Company's liquidity.

     In the course of conducting the environmental investigation at the proposed
site for Lady Luck Gulfport, the Company identified certain contamination at the
site. Pursuant to an administrative  order issued by the Mississippi  Department
of Environmental  Quality, the Company undertook remedial activities,  including
soil  remediation  and the  installation  of groundwater  monitoring  wells.  No
additional  remediation is currently  required,  although some  additional  soil
remediation  may be  required  in the course of  obtaining  a  building  permit.
Although there can be no assurances,  the Company believes that the cost of such
additional soil remediation, if any, will not be material.

                                                                 19
<PAGE>
                        LADY LUCK GAMING CORPORATION
           NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                 (Unaudited)



10.   Subsequent Event

     During October 1996,  Gold Coin, Inc.  ("GCI"),  entered into a non-binding
Memorandum  of  Understanding  (the  "Memorandum")  with BWCC,  Inc.  which does
business  as  Bullwhackers  ("Bullwhackers").  The  Memorandum  provides  for  a
combination of the respective  companies' gaming  establishments which currently
operate on adjacent real property in Central City,  Colorado and the use of, but
not the title  transfer or assumption of debt,  related to the assets of GCI and
Bullwhackers.  Pursuant to the Memorandum,  Bullwhackers shall provide resources
and  expertise to manage the joint  operation  subsequent  to the  completion of
certain  capital  improvements  to be made by GCI to combine the  facilities and
improve GCI's gaming equipment.  Budgeted capital improvements shall in no event
exceed $1.5  million.  The  Memorandum  provides  for  distributions  to be made
quarterly  in  accordance  with certain  priorities  which first  recognize  the
capital improvements to be made by GCI. The Memorandum provides GCI an option to
purchase the assets of Bullwhackers  and  Bullwhackers an option to purchase the
assets of GCI upon advance  written  notice after the joint  facility  commences
gaming  operations.  In  addition,  the  Memorandum  provides  a put  option for
Bullwhackers  to sell its assets to GCI under  similar  terms.  The option price
shall be determined based on carrying amounts or earnings multiples and shall be
at  discounted  amounts  if the sale is within a certain  period and shall be in
exchange  for  certain  consideration,  a  portion  of  which, may  include  the
Company's stock. The transactions  contemplated by the Memorandum are subject to
various contingencies including,  inter alia, the due diligence investigation of
the parties,  governmental approvals, approval by the Boards of Directors of GCI
and Bullwhackers, and the negotiation and execution of definitive agreements. No
assurance can be provided that these contingencies will be satisfied.

11.   Summarized Financial Information

     Summarized  balance sheet  information of LLK, a partially owned subsidiary
of LLGC, as of September 30, 1996 and December 31, 1995, for which assets of the
subsidiary   collateralize  the  outstanding  2001  Notes,  is  as  follows  (in
thousands):
<TABLE>
<CAPTION>

                                                        September 30, 1996              December 31, 1995
              <S>                                           <C>                             <C>

              Current assets                                $        50                     $       50
              Property and equipment                                726                            726
              Other assets                                        1,378                          1,150
                                                            -----------                     ----------
                  Total assets                              $     2,154                     $    1,926
                                                            ===========                     ==========

              Current liabilities                           $         -                     $        -
              Long-term liabilities                               2,404                          2,176
              Stockholders' deficit                                (250)                          (250)
                                                            -----------                     ---------- 
                  Total liabilities and
                    stockholders' deficit                   $     2,154                     $    1,926
                                                            ===========                     ==========
</TABLE>

     LLK has no operations for the three and nine month periods ended  September
30, 1996 and 1995.  Stockholders'  deficit  represents the write-down of certain
project development costs during 1994.

     The following  subsidiaries  of the Company are not  guarantors of the 2001
Notes:  LLDC,  Lady  Luck  Cape  Girardeau  and  Lady  Luck  Lawrenceburg.  Each
subsidiary that is not a guarantor of the 2001 Notes is currently  inactive.  It
is the intent of the Company to wind down the  operations of these  subsidiaries
in the immediate future. Accordingly, no separate financial information is being
provided with respect to these non-guarantor subsidiaries.


                                                                 20
<PAGE>
                      LADY LUCK GAMING CORPORATION
           NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                               (Unaudited)



     The  following  presents  summarized  consolidated  balance  sheets  as  of
September 30, 1996 and December 31, 1995 and summarized  consolidated statements
of operations  for each of the three and nine month periods ended  September 30,
1996 and 1995, for Lady Luck Gaming Finance Corporation and subsidiaries.
<TABLE>
<CAPTION>

                                       LADY LUCK GAMING FINANCE CORPORATION AND SUBSIDIARIES
                                                           BALANCE SHEETS
                                           As of September 30, 1996 and December 31, 1995
                                                           (in thousands)

                                                               ASSETS

                                                                 September 30,             December 31,
<S>                                                             <C>                       <C> 
                                                                     1996                      1995
              Current assets:
                  Cash and cash equivalents.................    $    16,207               $    22,146
                  Restricted cash...........................              -                     8,858
                  Accounts receivable.......................            723                       396
                  Inventories...............................          1,129                       885
                  Prepaid expenses..........................          2,538                     2,418
                                                                -----------               -----------
                      Total current assets..................         20,597                    34,703
                                                                -----------               -----------

              Total property and equipment, net.............        173,537                   154,954
                                                                -----------               -----------

              Other assets:
                  Pre-opening costs.........................          1,328                     1,100
                  Deferred financing fees and costs, net              3,821                     4,470
                  Investment in unconsolidated
                      affiliates, net.......................         21,079                    17,619
                  Other.....................................          3,234                     2,491
                                                                -----------               -----------
                                                                     29,462                    25,680
                                                                -----------               -----------

              TOTAL ASSETS:.................................    $   223,596               $   215,337
                                                                ===========               ===========
</TABLE>

                                                                 21
<PAGE>
                            LADY LUCK GAMING CORPORATION
               NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                     (Unaudited)


<TABLE>
<CAPTION>

                                       LADY LUCK GAMING FINANCE CORPORATION AND SUBSIDIARIES
                                                           BALANCE SHEETS
                                           As of September 30, 1996 and December 31, 1995
                                                           (in thousands)

                                           LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

                                                                 September 30,             December 31,
                                                                     1996                      1995
              <S>                                                <C>                       <C>

              Current liabilities:
                  Current portion of long-term debt.........     $    3,349                $   5,622
                  Accrued interest..........................          1,797                    2,326
                  Accounts payable..........................          4,592                    2,234
                  Construction and retention payables.......          1,957                    3,126
                  Other accrued liabilities.................         23,703                   29,182
                                                                 ----------                ---------
                      Total current liabilities.............         35,398                   42,490
                                                                 ----------                ---------

                  Mortgage notes payable....................        173,500                  173,500
                  Other long-term debt......................          8,281                    3,338
                                                                 ----------                ---------
                           Total liabilities................        217,179                  219,328
                                                                 ----------                ---------

              Commitments and contingencies:

              Stockholders' equity (deficit):
                  Retained earnings/(accumulated
                      deficit)..............................          6,417                   (3,991)
                                                                 ----------                --------- 
                  Total stockholders' equity (deficit)......          6,417                   (3,991)
                                                                 ----------                --------- 

              TOTAL LIABILITIES AND
                  STOCKHOLDERS' EQUITY
                  (DEFICIT).................................     $  223,596                $ 215,337
                                                                 ==========                =========
</TABLE>

                                                                 22
<PAGE>
                      LADY LUCK GAMING CORPORATION
            NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                               (Unaudited)


<TABLE>
<CAPTION>

                                       LADY LUCK GAMING FINANCE CORPORATION AND SUBSIDIARIES
                                                      STATEMENTS OF OPERATIONS
                                                           (in thousands)

                                                                           Three Months Ended             Nine Months Ended
                                                                              September 30,                  September 30,
                                                                        1996                1995           1996            1995
                  <S>                                                 <C>                <C>              <C>             <C>

                  Revenues:
                      Gross revenues........................          $ 47,250            $ 42,797       $ 132,972     $ 118,255
                      Less: Promotional allowances..........            (3,520)             (2,290)         (9,079)       (6,586)
                                                                      --------            --------       ---------     --------- 
                      Net revenues..........................            43,730              40,507         123,893       111,669
                                                                      --------            --------       ---------     ---------

                  Expenses:
                      Operating department expenses.........            18,088              15,893          49,123        44,595
                      Selling, general and administrative               12,336              11,280          36,424        34,198
                      Related party management/license
                           fees.............................             1,384               1,602           4,142         4,141
                      Depreciation and amortization.........             2,928               2,537           8,264         7,105
                      Pre-opening expenses..................                 -                   -             247             -
                                                                      --------            --------       ---------     ---------
                           Total costs and expenses.........            34,736              31,312          98,200        90,039
                                                                      --------            --------       ---------     ---------

                      Operating income......................             8,994               9,195          25,693        21,630
 
                  Other income (expense):
                      Interest income.......................               183                 328             806           896
                      Interest expense......................            (5,695)             (5,139)        (16,353)      (14,813)
                      Other.................................               156                 490             262            48
                                                                      --------            --------       ---------     ---------
 
                  Income before extraordinary item..........             3,638               4,874          10,408         7,761
 
                  Extraordinary gain on early
                      extinguishment of debt, net...........                 -                   -               -         2,257
                                                                      --------           ---------       ---------     ---------

                  NET INCOME................................          $  3,638           $   4,874       $  10,408     $  10,018
                                                                      ========           =========       =========     =========

</TABLE>

                                                                 23
<PAGE>

     Item 2.  MANAGEMENT'S  DISCUSSION  AND ANALYSIS OF FINANCIAL  CONDITION AND
RESULTS OF OPERATIONS

     All statements  contained herein that are not historical  facts,  including
but  not  limited  to,  statements  regarding  the  Company's  current  business
strategy,  the Company's prospective joint ventures,  asset sales and expansions
of  existing  projects,  and the  Company's  plans for  future  development  and
operations,   are  based  upon  current   expectations.   These  statements  are
forward-looking  in nature  and  involve  a number  of risks and  uncertainties.
Generally,  the words  "anticipates," "believes,"  "estimates,"  "expects,"  and
similar  expressions  as they  relate  to the  Company  and its  management  are
intended to  identify  forward  looking  statements.  Actual  results may differ
materially.  Among  the  factors  that  could  cause  actual  results  to differ
materially are the following:  the availability of sufficient capital to finance
the Company's  business plan on terms  satisfactory to the Company;  competitive
factors,  such as legalization of gaming in jurisdictions from which the Company
draws  significant  numbers of patrons  and an increase in the number of casinos
serving  the markets in which the  Company's  casinos  are  located;  changes in
labor, equipment and capital costs; the ability of the Company to consummate its
contemplated  joint ventures on terms  satisfactory to the Company and to obtain
necessary regulatory approvals therefore;  changes in regulations  affecting the
gaming  industry;  the ability of the Company to comply with the  Indenture,  as
supplemented  by the Amendments and Waivers;  future  acquisitions  or strategic
partnerships;  general  business  and  economic  conditions;  and other  factors
described  from time to time in the Company's  reports filed with the Securities
and  Exchange  Commission.  The Company  wishes to caution  readers not to place
undue reliance on any such forward-  looking  statements,  which  statements are
made pursuant to the Private  Litigation  Reform Act of 1995 and, as such, speak
only as of the date made.

Results of Operations

     Three Months Ended  September  30, 1996  Compared to the Three Months Ended
September 30, 1995

     The Company's  gross revenues rose to $47.3 million in the third quarter of
1996 from  $42.8  million  in the third  quarter of 1995,  an  increase  of $4.5
million or 11%.  The  opening of Country  Casino  adjacent to Lady Luck Rhythm &
Blues in Coahoma  County,  Mississippi,  the  acquisition  of the 148-room  Best
Western River Park Hotel in Natchez,  Mississippi,  the opening of the casino at
the Company's  joint  venture with Bally's in  Robinsonville,  Mississippi,  and
improvements in the operations of Lady Luck Bettendorf in Bettendorf, Iowa, were
primarily  responsible  for the  increase in the  Company's  1996 third  quarter
revenues.

     Lady Luck Rhythm & Blues  generated  $2.5 million of the Company's  overall
$4.5 million increase in gross revenues. A 58% increase in the average number of
slot  machines  partially  offset by a 33% decrease in the average daily net win
per slot machine was  responsible  for $1.2 million of Lady Luck Rhythm & Blues'
increase in gross  revenues.  These  changes in slot machine  revenues  were due
primarily to the May 21, 1996 opening of Country Casino which currently operates
approximately  637  machines  including  certain slot  machines  which have been
relocated  from  the  existing  Rhythm  & Blues  casino.  Increases  in food and
beverage,  hotel and other revenues accounted for the balance of the increase in
gross revenues at Lady Luck Rhythm & Blues.

     LLM acquired and took over  operation  of the 148-room  Best Western  River
Park Hotel in Natchez,  Mississippi on April 15, 1996.  During the quarter ended
September  30,  1996,  the hotel  generated  $0.5  million in gross  revenues in
addition to revenues generated by the hotel's food and beverage outlets.

     The Bally's Joint Venture,  which was formed March 31, 1995,  included only
hotel operations until the December 18, 1995, opening of the casino.  During the
quarter  ended  September  30,  1996,  equity  in  net  loss  of  unconsolidated
affiliates from the Bally's Joint Venture was $0.2 million, a net improvement of
$0.5  million  over  the  $0.7  million  equity  in net  loss of  unconsolidated
affiliates  for the quarter ended  September 30, 1995.  The loss for the quarter
ended September 30, 1996 was adversely affected by increased  competition in the
Tunica market.

     During  the 1996  third  quarter,  the  Company's  equity in net  income of
unconsolidated affiliates from the Bettendorf Joint Venture was $1.0 million, an
increase  of $0.4  million  over  the  $0.6  million  equity  in net  income  of
unconsolidated  affiliates  for the 1995  third  quarter.  These  amounts do not
include the gross revenues recognized by the Company for the leasing of a gaming
vessel and equipment to the Bettendorf Joint Venture.

                                                                 24
<PAGE>

     Casino operating expenses as a percentage of casino revenues increased from
36% in the third quarter of 1995 to 40% in the third quarter of 1996,  primarily
due to the  following:  (i) a 0.8%  increase in cash  incentives to slot machine
players in relation to slot machine net  revenues,  (ii) a 2.1%  increase in the
cost of complimentary  rooms, food and beverage furnished to casino customers in
relation to casino revenues, and (iii) a 6% decrease in table and card games net
revenues while related payroll expenses increased 9%.

     Food and beverage revenues increased from $3.9 million in the third quarter
of 1995 to $4.8  million  in the third  quarter  of 1996,  an  increase  of $0.9
million or 23%. This increase was due to increased  customer counts at Lady Luck
Rhythm & Blues,  the  opening of Country  Casino and  improvements  at Lady Luck
Natchez  offset  partially by a decrease at Lady Luck Biloxi.  The costs of food
and beverage sales,  prior to reclassifying  the cost of  complementaries,  as a
percentage of related  revenues  remained  constant in the third quarter of 1995
compared  to the third  quarter  1996  while  other food and  beverage  expenses
decreased 6% in relation to food and beverage revenues.

     Hotel  operations  results  between  periods are not comparable  because on
April 15,  1996,  LLM  purchased  the River Park,  a 148-room  hotel in Natchez,
Mississippi and on July 3, 1996, MLI purchased the 120-room  Riverbluff Hotel in
Helena, Arkansas.
 
     Selling,  general  and  administrative  expenses as a  percentage  of gross
revenues  for the third  quarter of 1995 and the third  quarter of 1996 were 29%
and 31%, respectively.  This increase was due to the following:  (i) significant
increases  in  casino  marketing   expenses  by  MLI  and  LLM,  (ii)  increased
development costs due to expensing the cost of demolishing certain structures at
the  Vicksburg  site during the quarter  ended  September  30,  1996,  and (iii)
increased  corporate  overhead  costs due to expenses in connection  with,  and,
effective  January 1, 1996,  rent,  salary and  marketing  expenses  incurred in
conjunction  with changes to the Old  Management  Agreements,  as defined below.
These  increases were offset  partially by a reduction in fees and costs related
to the  solicitation  of the Amendments and Waivers which was completed in March
1996.

     Related party  management/license fees decreased from $1.6 million in third
quarter  1995 to $0.9  million in the third  quarter of 1996, a decrease of $0.7
million or 44%. This decrease was due to the Company entering into new marketing
agreements (the "New Marketing  Agreements")  which became effective  January 1,
1996 in replacement of its previous  management  agreements (the "Old Management
Agreements")  with Lady Luck  Casino,  Inc.  ("LLCI").  Under the New  Marketing
Agreements,  LLGC  pays an annual  licensing  fee  generally  equal to 9% of the
Company's  Earnings  Before  Interest,   Taxes,  Depreciation  and  Amortization
("EBITDA")  (calculated  as  EBITDA of LLGC and all its  subsidiaries  and joint
ventures  (multiplied,  in the  case of the  Bettendorf  Joint  Venture  and its
Kimmswick,  Missouri Joint Venture, by the interest owned by the Company in such
joint  ventures),  excluding,  among other  things,  all  revenues  and expenses
arising from any casino or  casino/hotel  for which LLGC is not the operator and
which  does not  utilize  LLCI's  mailing  list or Lady Luck name and  excluding
revenues  from  the  lease  of  property  and  equipment  owned by LLGC to third
parties).  With respect to the Bettendorf  Joint Venture,  LLCI assigned to LLGC
its rights to receive a management  fee and its  obligation  to pay part of that
fee to its joint venture partner.  In addition,  included in selling general and
administrative  expenses  are items that were  formerly  included  under the Old
Management  Agreements.  LLGC  now  pays a  related  party,  Gemini,  the sum of
$300,000 per year as adjusted  based on the Consumer  Price Index for  corporate
office  facilities and  certain services  with respect to such corporate  office
facilities. The Company now reimburses LLCI for certain marketing costs and pays
a salary to Andrew H. Tompkins, CEO and Chairman of the Board of the Company.

     Operating  income was $8.0 million and $6.2 million for the third  quarters
of 1995 and 1996, respectively, a decrease of $1.8 million or 23%. This decrease
was due to reduced operating income by MLI and LLM and a $1.1 million settlement
of a  claim  offset  partially  by an  increase  in  equity  in  net  income  of
unconsolidated affiliates.

     Interest  expense,  net of any  capitalized  interest,  increased from $5.1
million  in the third  quarter of 1995 to $5.7  million in the third  quarter of
1996. This $0.6 million increase is primarily  attributable to a 1 3/8% increase
in the interest rate on the 2001 Notes.

     The net income applicable to common  stockholders was $2.8 million or $0.10
per share in the third  quarter  1995  compared  with $0.5  million or $0.02 per
share  for the  third  quarter  of  1996.  This  decrease  was due to  decreased
operating

                                                                 25
<PAGE>

income  as   described   above,   a $1.1  million  settlement  of a claim,  and
increases in interest  expense  offset  partially by a decrease in the provision
for income taxes.

     Nine Months  Ended  September  30, 1996  Compared to the Nine Months  Ended
September 30, 1995

     The Company's  gross  revenues  increased  from $118.3 million in the first
nine months of 1995 to $133.0  million  during the first nine months of 1996, an
increase of $14.7 million or 12%. The opening of Country Casino adjacent to Lady
Luck  Rhythm & Blues in Coahoma  County,  Mississippi,  the  acquisition  of the
148-room Best Western River Park Hotel in Natchez,  Mississippi,  the opening of
the  casino at the  Company's  joint  venture  with  Bally's  in  Robinsonville,
Mississippi,   the  opening  of  Lady  Luck  Bettendorf,  in  Bettendorf,  Iowa,
improvements  in its  operations  and income  from  leasing a gaming  vessel and
certain  equipment to Lady Luck Bettendorf  were primarily  responsible for this
increase in the Company's  September 30, 1996 year-to-date gross revenues,  over
the comparable prior-year period.

     Lady Luck Rhythm & Blues  generated  $7.7 million of the Company's  overall
$14.7 million  increase in gross revenues.  A 38% increase in the average number
of slot machines partially offset by a 19% decrease in the average daily net win
per slot machine  originated  $5.8 million of Lady Luck Rhythm & Blues' increase
in gross revenues.  These changes,  when analyzed quarterly,  indicate,  for the
first quarter of 1996,  an  approximately  consistent  average daily net win per
slot machine while the average number of slot machines in operation increased by
14%,  and for the six months  ended  September  30,  1996, a 48% increase in the
average number of slot machines in operation  partially offset by a 32% decrease
in the average  daily net win per slot  machine.  The strong  demand  during the
first quarter of 1996,  the May 21, 1996 opening of Country Casino and increased
competition from the casinos in Tunica, Mississippi, during the third quarter of
1996 were primarily  responsible  for the changes  noted.  Increases in food and
beverage,  hotel and other revenues  offset  partially by a 2% decrease in table
and card games  revenues  accounted  for the  balance of the  increase  in gross
revenues at Lady Luck Rhythm & Blues.

     LLM's gross  revenues  increased  $2.1  million in the first nine months of
1996 compared to the same period in 1995.  LLM acquired and took over  operation
of the 148-room Best Western River Park Hotel in Natchez,  Mississippi  on April
15, 1996.  During the period from April 15, 1996 through September 30, 1996, the
hotel's gross room revenues were $0.9 million.  The remainder of LLM's  increase
in gross revenues was primarily  from increases in food and beverage  operations
on the barge in addition to the increase in food and beverage revenues from food
and beverage sold at the hotel site.

     The Bally's Joint Venture,  which was formed March 31, 1995,  included only
hotel operations  until the December 18, 1995 opening of the casino.  During the
nine months ended  September  30, 1996,  the  Company's  equity in net income of
unconsolidated affiliates from the Bally's Joint Venture was $0.9 million, after
deducting the Company's  share of pre- opening  expenses of $1.1 million,  a net
increase of $1.8 million over the Company's  $0.9 million  equity in net loss of
unconsolidated affiliates in the nine months ended September 30, 1995.

     During the first nine months of 1996, the Company's equity in net income of
unconsolidated affiliates from the Bettendorf Joint Venture was $2.6 million, an
increase of $2.9 million over the Company's  $0.3 million  equity in net loss of
unconsolidated  affiliates for the first nine months of 1995. The Company's $0.3
million loss for 1995 is after  deducting  the  Company's  share of  pre-opening
expenses of $1.1 million upon  commencement  of operations on April 21, 1995. In
addition,  for the leasing of a gaming  vessel and  equipment to the  Bettendorf
Joint Venture,  the Company  recognized  revenue of $3.1 million, a $1.5 million
increase  over the $1.6  million of revenue  recognized  during the period  from
commencement of operations through September 30, 1995.

     Casino operating expenses as a percentage of casino revenues increased from
35% in the  nine  months  of 1995  to 39% in the  first  nine  months  of  1996,
primarily due to the following:  (i) a 1.2% increase in cash  incentives to slot
machine  players in relation to slot machine net revenues,  (ii) a 0.9% increase
in the cost of  complimentary  rooms,  food and  beverage  furnished  to  casino
customers in relation to casino revenues, (iii) a 7% decrease in table and card
games net revenues and an 8% increase in related expenses,  and (iv) an increase
in the local gaming tax rate paid by LLM.

     Food and beverage  revenues  increased from $10.9 million in the first nine
months of 1995 to $12.6 million in the first nine months of 1996, an increase of
$1.7 million or 16%. This increase was due to increased  customer counts at Lady
Luck Rhythm & Blues and  improvements  at Lady Luck Natchez offset  partially by
changes in outlets at Lady Luck Biloxi.

                                                                 26

Food  and  beverage  costs  and  expenses,  prior to  reclassifying  the cost of
complementaries,  as a percentage of related revenues declined from 102% for the
nine months ended  September 30, 1995 to 90% for the nine months ended September
30, 1996,  continuing a trend of lowering costs of sales and labor expenses as a
percentage of food and beverage revenues which was partially offset by the costs
associated with outlet changes at Lady Luck Biloxi.

     Hotel operating  results  between periods are not comparable  because ORD's
hotel  operations,  which  commenced  August 25, 1994,  were  contributed to the
Bally's Joint Venture  effective  March 31, 1995, and because on April 15, 1996,
LLM purchased the River Park, a 148-room hotel in Natchez, Mississippi.

     Selling,  general  and  administrative  expenses as a  percentage  of gross
revenues for the nine months  ended  September  30, 1995 and 1996,  were 32% and
31%,  respectively.  This decrease was due to the following:  (i) a reduction in
fees and costs related to the  solicitation  of the Amendments and Waivers which
was  completed in March 1996,  and (ii) a 12% increase in gross  revenues  while
certain selling, general and administrative expenses remained fixed. These items
were offset partially by the following:  (i) increased  corporate overhead costs
due to expenses in connection with, and, effective January 1, 1996, rent, salary
and  marketing  expenses  incurred  in  conjunction  with  changes  to  the  Old
Management Agreements,  (ii) increased marketing expenses incurred in the second
and third quarters of 1996 related to the Country  Casino and the Pavilion,  and
(iii)  increased  development  costs due to  expensing  the cost of  demolishing
certain  pre-existing  structures at the Vicksburg site during the quarter ended
September 30, 1996.

     Related party  management/license  fees  decreased from $4.1 million during
the first nine months of 1995 to $1.9  during the first nine  months of 1996,  a
decrease of $2.2 million or 54%. This  decrease was due to the Company  entering
into  the  New  Marketing  Agreements  in  replacement  of  the  Old  Management
Agreements as described above.

     For the first nine months,  operating  income was $18.0 and $22.5  million,
for 1995 and 1996,  respectively.  This increase is due to the following:  (i) a
$4.6 million increase in equity in net income of unconsolidated affiliates, (ii)
the acquisition of two additional hotel operations,  (iii) reduced related party
management  fees, and (iv)  increased  food and beverage  revenues and operating
margins,  offset  partially by: (i)  increased  casino  operating  expenses as a
percentage   of  casino   revenues,   (ii)   increased   selling,   general  and
administrative  expenses as a  percentage  of gross  revenues,  and (iii) a $1.1
million settlement of a claim.

     Interest  expense,  net of any capitalized  interest,  increased from $14.8
million in the nine months ended  September 30, 1995 to $16.4 in the nine months
ended  September  30, 1996, an increase of $1.6 million or 11%. This increase is
primarily  attributable  to a 1 3/8%  increase in the interest  rate on the 2001
Notes offset  partially by a $6.5 million  higher  balance  outstanding  of 2001
Notes for a portion of the first nine months of 1995.

     The net income applicable to common  stockholders was $4.8 million or $0.17
per share in the nine months ended  September  30, 1995 compared with net income
applicable  to common  stockholders  of $5.8  million or $0.20 per share for the
nine months  ended  September  30,  1996.  This  increase  was due to  increased
operating  income as described  above offset  partially by increases in interest
expense and preferred stock  dividends.  In addition,  net income  applicable to
common  stockholders  for the nine months ended September 30, 1995 also included
an  extraordinary  gain of $2.3  million  or $0.8 per  share  resulting  from an
exchange of common stock for indebtedness.

     Certain Risks and Uncertainties Applicable to Gaming Industry Licensing and
Concentration of Risk

     The Company's operations in Mississippi, Iowa and Colorado are dependent on
the continued licensability or qualification of the Company and its subsidiaries
that  hold the  gaming  licenses  in these  jurisdictions.  Such  licensing  and
qualifications  are reviewed  periodically  by the gaming  authorities  in those
states.

     Mississippi  Gaming  Commission  regulations  require  licensees  to invest
certain  minimum   amounts  in  land-based,   non-gaming   infrastructure   (the
"Land-Based  Requirement").  While the  Company  believes  that its  Mississippi
operating  subsidiaries are in compliance with the Land-Based  Requirement,  the
Mississippi  Gaming  Commission (the  "Commission")  has expressed concern as to
whether  LLB  is in  compliance  with  such  requirements.  The  Commission  may
condition,  revoke, or suspend LLB's license if it ultimately determines that it
is not in compliance  with the Land-Based  Requirement  and the Company does not
take steps to cure such  noncompliance.  The  revocation  or suspension of LLB's
gaming license

                                                                 27

would  have  a  material   adverse   impact on LLB's  results of  operations  or
financial position,  and may have a material adverse impact on LLGC's results of
operations or financial condition taken as a whole.

     A significant portion of the Company's  consolidated revenues and operating
income are generated by the Company's  Rhythm & Blues and Country  Casino gaming
operations in Coahoma County. These casinos are highly dependent on patronage by
residents in Arkansas. A change in general economic conditions or the extent and
nature of regulations  enabling casino gaming in Arkansas could adversely effect
these casinos' future operating results. On November 5, 1996, Arkansas residents
voted to defeat a ballot measure which would have allowed voters in Hot Springs,
Arkansas,  to decide  whether  to allow up to three  casinos  in the  city.  The
measure,  if  passed,  would also have  created a state  lottery  and  legalized
charitable bingo.

                                                                 28
<PAGE>
                         LADY LUCK GAMING CORPORATION
            MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                          AND RESULTS OF OPERATIONS



Operating Casinos

     None of the Company's  subsidiaries that are registrants  hereunder,  other
than the  companies  for  which  results  of  operations  are set  forth  below,
currently  has any  operations.  Amounts  shown in the  following  tables are in
millions, except percentage amounts.

     LLGC manages and charges fees to its  wholly-owned  operating  subsidiaries
with  substantially  the same terms as the Old Management  Agreements with LLCI.
LLGC does not  separately  allocate the fees under the New Marketing  Agreement,
certain selling general and administrative  expenses,  rent for corporate office
facilities and certain services with respect to such corporate office facilities
and a salary to the  Chairman  of the Board of the  Company  that were  formerly
included under the Old Management  Agreements (all capitalized terms are defined
below).
<TABLE>
<CAPTION>

      Lady Luck Rhythm & Blues
                                                                                 % Increase                              % Increase
                                                 Three months ended              (Decrease)       Nine months ended(Decrease)
                                                     September 30,                1996 vs.          September 30,          1996 vs.
                                               1996                1995          1995         1996              1995        1995
<S>                                            <C>                <C>            <C>         <C>               <C>         <C>
         Gross revenues....................    $25.8              $23.3           11         $72.5             $64.8         12
         Net revenues......................     23.9               22.2            8          68.0              61.5         11
         Management/license fee............      0.8                0.9          (11)          2.3               2.3          0
         Operating income..................      5.8                7.5          (23)         18.5              20.7        (11)
         Operating margin (a)..............     24%                 34%          (10)pts       27%               34%         (7) pts
</TABLE>
____________________

     (a) Operating income divided by net revenues.

     Three months ended  September 30, 1996 versus three months ended  September
30, 1995

     MLI's gross  revenues  rose from $23.3  million  during the  quarter  ended
September 30, 1995 to $25.8 million during the quarter ended September 30, 1996,
an increase of $2.5 million or 11%. Slot machines generated $1.2 million of this
increase  due  primarily  to the May 21, 1996  opening of Country  Casino  which
currently  operates 637 machines  including  certain  slot  machines  which were
relocated  from  the  existing  Rhythm  & Blues  casino.  Increases  in food and
beverage,  hotel and other revenues accounted for the balance of the increase in
gross revenues at MLI.

     Comparatively, from the third quarter of 1995 to the third quarter of 1996,
there was a 58% increase in the average number of slot machines partially offset
by a 33%  decrease in the  average  daily net win per slot  machine.  During the
quarter ended  September 30, 1996,  MLI operated an average number of 1,323 slot
machines,  an increase of 488 over the 835  average  number of slot  machines in
operation  during the third quarter of 1995. This increase was partially  offset
by a $75 decrease in the average daily net win per slot machine from $229 during
the third quarter of 1995 to $154 during the quarter ended September 30, 1996.

     During the quarter  ended  September 30, 1996 compared to the quarter ended
September  30, 1995,  table games  revenues  decreased 6% primarily  because the
average daily net win per table game  decreased  from $1,166 to $708, a decrease
of $458 or 39% and the hold  percentage  decreased 2  percentage  points.  These
decreases  were offset  partially by an increase in the average  number of table
games in operation  from 32 during the quarter  ended  September  30, 1995 to 50
during the quarter ended September 30, 1996.

     MLI's operating  income  decreased from $7.5 million to $5.8 million during
the quarters ended September 30, 1995 and 1996, respectively, a decrease of $1.7
million or 23%. Contrary to the increase in gross and net revenues, operating

                                                                 29
<PAGE>
                         LADY LUCK GAMING CORPORATION
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                          AND RESULTS OF OPERATIONS



income   decreased   due   primarily   to  the  following:  (i) a 5% increase in
casino marketing expenses in relation to casino revenues,  (ii) a 4% increase in
casino expenses, prior to reclassifying the cost of complementaries, in relation
to casino  revenues,  and (iii) an increase in  depreciation  expense due to the
addition of Country Casino, the Pavilion and the Riverbluff Hotel. These expense
increases were offset partially by a 15% decrease in food and beverage costs and
expenses,  prior to reclassifying  the cost of  complementaries,  in relation to
food and beverage revenues.

     Nine months ended September 30, 1996 versus nine months ended September 30,
1995

     MLI's gross  revenues rose from $64.8 million  during the nine months ended
September 30, 1995 to $72.5 million  during the nine months ended  September 30,
1996, an increase of $7.7 million or 12%. Slot machines  generated  $5.8 million
of this  increase.  Increases  in food and  beverage,  hotel and other  revenues
offset partially by a 2% decrease in table and card games revenues accounted for
the balance of the increase in gross revenues at MLI.

     There was a 38% increase in the average  number of slot  machines  from the
first nine months of 1995 to the first nine  months of 1996 which was  partially
offset by a 18% decrease in the average daily net win per slot  machine.  During
the nine months  ended  September  30, 1996,  MLI operated an average  number of
1,076 slot  machines,  an increase  of 295 over the 781  average  number of slot
machines in operation  during the first nine months of 1995.  This  increase was
partially offset by a $41 decrease in the average daily net win per slot machine
from $224  during the first nine  months of 1995 to $183  during the nine months
ended  September  30, 1996.  This decrease in the average daily net win per slot
machine for the  comparative  nine month periods  occurred during the second and
third  quarters as the average daily net win per slot machine was  approximately
constant  during the  comparative  first quarter periods even though the average
number of slot  machines in  operation  during the  comparative  first  quarters
increased 14%.

     Despite  only a 2%  decrease  in the table  games  hold  percentage  and an
increase in the average  number of tables in  operation  from 33 during the nine
months  ended  September  30,  1995 to 40 during the first nine  months of 1996,
table games  revenues  decreased 5% primarily  because the average daily net win
per table game decreased from $1,176 to $905, a decrease of $271 or 23%.

     MLI's operating income decreased from $20.7 million to $18.5 million during
the first  nine  months  ended  September  30,  1995 and 1996,  respectively,  a
decrease of $2.2 million or 11%.  Operating income decreased despite an increase
in gross and net revenues due primarily to the following:  (i) additional  fixed
rent of  $150,000  per month from July 1, 1995  until May 31,  1996 prior to the
opening of Country  Casino at which time rent  reverted to a lesser amount based
on a percentage,  (ii) from disruption attributable to construction,  (iii) from
the operations of Country  Casino and the Pavilion  which  contributed to a $3.9
million  increase in  selling,  general and  administrative  expenses  including
casino  marketing,  rent and  other  expenses,  and (iv) $0.2  million  of other
pre-opening expenses for the opening of Country Casino and the Pavilion.

Other factors

     Additional  casino  capacity  has  been  added to the  Tunica,  Mississippi
market,  which competition,  the Company believes has adversly affected revenues
and operating results at MLI, the extent of which is not presently known.

     MLI's casinos are highly dependent on patronage by residents in Arkansas. A
change in general  economic  conditions or the extent and nature of  regulations
enabling casino gaming in Arkansas could adversely  effect these casinos' future
operating  results.  On November 5, 1996,  Arkansas  residents voted to defeat a
ballot  measure  which would have allowed  voters in Hot Springs,  Arkansas,  to
decide whether to allow up to three casinos in the city. The measure, if passed,
would also have created a state lottery and legalized charitable bingo.




                                                                 30
<PAGE>
                       LADY LUCK GAMING CORPORATION
        MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                         AND RESULTS OF OPERATIONS


<TABLE>
<CAPTION>

              Lady Luck Natchez
                                                                                 % Increase                               %Increase
                                                 Three months ended              (Decrease)       Nine months ended       (Decrease)
                                                     September 30,                1996 vs.          September 30,          1996 vs.
                                               1996                1995          1995         1996              1995        1995
         <S>                                   <C>                 <C>           <C>          <C>               <C>         <C>
         Gross revenues....................    $ 8.7               $8.1            7          $25.2             $23.1        9
         Net revenues......................      7.9                7.6            4           23.1              21.8        6
         Management/license fee............      0.3                0.3            -            0.8               0.8        -
         Operating income..................      1.0                1.4          (29)           4.2               4.3       (2)
         Operating margin (a)..............     13%                18%            (5)pts       18%               20%        (2) pts
</TABLE>

____________________

(a)  Operating income divided by net revenues.

     Three months ended  September 30, 1996 versus three months ended  September
30, 1995

     During the third quarter of 1996, LLM had operating  income of $1.0 million
compared with operating income of $1.4 million for the prior year period, a $0.4
million decrease or 29%. This decrease is primarily due to an increase in casino
marketing expenses.

     LLM's gross revenues increased from $8.1 million to $8.7 million during the
quarters ended  September 30, 1995 and 1996,  respectively,  an increase of $0.6
million or 7%. The increase  was from an increase in slot  machines and food and
beverage  revenues  and the  addition of hotel  revenue  offset  partially  by a
decrease in table games revenues.  Slot machine revenues  increased during these
comparative  periods due to the  average  number of slot  machines in  operation
increasing from 533 to 593, an increase of 60 or 11%, which was partially offset
by a decrease in average  daily net win per slot  machine  from $121 to $109,  a
decrease of $12 or 10%.  The  decrease  in net table game  revenue is due to the
average number of table games  decreasing from 20 in the quarter ended September
30, 1995 to 16 in the quarter  ended  September 30, 1996, a decrease of 4 tables
or 20%. This was  partially  offset by an increase in the average net table game
win per day. For the quarter  ended  September  30, 1996,  the average net table
game win was  $810,  an  increase  of $33 or 4% from the  $777  achieved  in the
quarter ended  September 30, 1995.  During the quarter ended September 30, 1996,
the hotel  generated  $0.5  million in gross  revenues  in  addition to revenues
generated by the hotel's food and beverage outlets.

     Nine months ended September 30, 1996 versus nine months ended September 30,
1995

     During  the first nine  months of 1996,  LLM had  operating  income of $4.2
million  compared  with  operating  income of $4.3  million  for the prior  year
period, a $0.1 million decrease or 2%.

     LLM's gross  revenues  increased from $23.1 million to $25.2 million during
the nine months ended September 30, 1995 and 1996, respectively,  an increase of
$2.1 million or 9%. The increase was from an increase in slot  machines and food
and beverage  revenues and the addition of hotel revenue  offset  partially by a
decrease in table games revenues.  During these comparative periods, the average
number of slot machines in operation  increased  from 534 to 577, an increase of
43, or 8%. The  decrease in the table games  revenues was  primarily  due to the
average  number  of table  games in  operation  during  the  nine  months  ended
September 30, 1995 and 1996, respectively,  decreasing from 19 to 17, a decrease
of 11%.  During the period from April 15, 1996 through  September 30, 1996,  the
hotel's gross room revenues were $0.9 million.





                                                                 31
<PAGE>
                           LADY LUCK GAMING CORPORATION
            MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS



Other factors

     The Company  believes the  purchase of the River Park will  enhance  casino
marketing  efforts at Lady Luck Natchez by enabling it to offer casino customers
rooms at a Company operated hotel facility.

     While other gaming projects have been announced in the Natchez market, none
are being  developed at this time.  If this or additional  gaming  projects were
developed in the Natchez market, LLM would be materially affected.

     If the Company  develops its Vicksburg  Project,  the Company believes that
the revenues of LLM would not be materially  affected but, rather,  the revenues
for the  Vicksburg  Project  would be taken  from  the four  existing  Vicksburg
casinos.




                                                                 32
<PAGE>
                          LADY LUCK GAMING CORPORATION
          MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                           AND RESULTS OF OPERATIONS



     Lady Luck Bettendorf (a)

<TABLE>
<CAPTION>
 
                                                                                 % Increase
                                                 Three months ended              (Decrease)            Nine months ended
                                                     September 30,                1996 vs                September 30,
                                               1996                1995           1995                 1996         1995
         <S>                                   <C>                <C>              <C>                <C>           <C>
 
         Gross revenues....................    $18.2              $13.6              34               $51.3         $24.0
         Net revenues......................     17.2               13.3              29                48.9          23.4
         Management/license fee............      0.4                0.3              33                 1.3           0.5
         Operating income..................      2.0                1.3              54                 5.4          (0.4)
         Operating margin (b)..............      12%                 10%          2 pts                  11%           (2)%
</TABLE>

____________________

     (a) Lady Luck Bettendorf  commenced  operations April 21, 1995;  therefore,
1995  figures  may lack  comparability  with  1996  amounts.  Due to the lack of
comparability, changes between nine month periods have not been presented.

     (b) Operating income divided by net revenues.

     The Bettendorf  Joint Venture  commenced  operations April 21, 1995 and has
generated steadily increasing average daily net win per slot machine. During the
third quarter of 1995, the Bettendorf Joint Venture  generated average daily net
win per slot machine of $130.  By the first  quarter of 1996,  average daily net
win per slot  machine  had  increased  to $159.  By the second  quarter of 1996,
average  daily net win per slot  machine had  increased to $179.  Moreover,  the
third quarter of 1996 generated  average daily net win per slot machine of $184,
a $54 increase or 42%, over the third quarter of 1995.  This increase in average
daily net win per slot was achieved  despite a 3% increase in the average number
of slot machines.  For the three months ended September 30, 1996,  average daily
net win per table was $603.  This is a $267  decrease,  or 31%, from the average
daily net win per table of $870  achieved in the  quarter  ended  September  30,
1995.  This was  partially  offset by the 21% increase in the average  number of
table games.

     Operating  income for 1995 includes  pre-opening  expenses of $2.3 million.
Lady Luck Bettendorf is 50% owned by LLQC. The Company includes 50% of Lady Luck
Bettendorf's  net  income as equity in net income of  unconsolidated  affiliates
using the equity method of accounting.

 





 
 

                                                                 33
<PAGE>
                          LADY LUCK GAMING CORPORATION
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                           AND RESULTS OF OPERATIONS



         Lady Luck Biloxi
<TABLE>
<CAPTION>
                                                                          % Increase                                % Increase
                                                 Three months ended      (Decrease)         Nine months ended        (Decrease)
                                                     September 30,         1996 vs.           September 30,           1996 vs.
                                                  1996         1995          1995         1996              1995        1995
         <S>                                   <C>                <C>        <C>          <C>              <C>          <C>
         Gross revenues....................     $8.7           $8.8           (1)         $23.5            $23.8         (1)
         Net revenues......................      7.9            8.4           (6)          21.5             22.2         (3)
         Management/license fee............      0.3            0.3            -            0.8              0.9        (11)
         Operating (loss) income...........      0.2            0.3          (33)          (0.6)            (0.5)       (20)
         Operating margin (a)..............       3%              4%          (1)pts         (3)%             (2)%       (1) pts
</TABLE>
____________________

     (a) Operating income divided by net revenues.

     Three months ended  September 30, 1996 versus three months ended  September
30, 1995

     LLB's  operating  income of $0.3 million during the quarter ended September
30, 1995 decreased to $0.2 million for the third quarter of 1996.  This decrease
in  operating  income was  primarily  due to a decrease in total net revenues of
$0.5 million offset by a decrease in expenses of $0.4 million.

     Total casino revenues  increased from $7.2 million during the quarter ended
September  30, 1995 to $7.3 million for the quarter  ended  September  30, 1996.
Slot machine revenues increased,  however, the increase was offset by a decrease
in table games revenues. The average number of slot machines in operation during
these comparative  quarters increased from 591 to 648, an increase of 57 or 10%.
This  increase was  partially  offset by a decrease in the average daily net win
per slot  machine  from $106 to $100,  a decrease  of $6 or 6%. The  decrease in
table games  revenues were  primarily due to a decrease in the average number of
table games in operation  from 26 during the three months  ended  September  30,
1995 to 23 during the third  quarter of 1996, a decrease of 3 or 12%,  while the
average daily net win per table game increased from $609 to $638, an increase of
5%.

     Nine months ended September 30, 1996 versus nine months ended September 30,
1995

     LLB had an  operating  loss of $0.6  million  for  the  nine  months  ended
September  30, 1996  compared to a $0.5  million  loss for the nine months ended
September 30, 1995.  While total net revenues have decreased $0.7 million during
the first three quarters of 1996 as compared to 1995,  total operating  expenses
have decreased $0.6 million, primarily due to a reduction of casino expenses.

     During  the nine  months  ended  September  30,  1995 and  1996,  total net
revenues  decreased from $22.2 million to $21.5 million.  Slot machine  revenues
increased  $1.0  million,  however,  the  increase  was offset by a $0.6 million
decrease  in table  games  revenues  and a $0.6  decrease  in food and  beverage
revenues.  This  increase in slot revenues was due to an increase in the average
number of slot machines in operation during these  comparative nine months which
increased  from  588 to 623,  an  increase  of 35 or 6% and an  increase  in the
average daily net win per slot machine from $91 to $92, an increase of $1 or 1%.
The decrease in table games revenues during these comparative periods was due to
a decrease  in the  average  daily net win per table  game from $631 to $606,  a
decrease of $25 or 4%, and a decrease  in the  average  number of table games in
operation  from 26 to 23, a decrease  of 3 or 12%.  Food and  beverage  revenues
decreased  due to changes in the outlets  and a temporary  closing of one outlet
during remodeling.



                                                                34
<PAGE>
                       LADY LUCK GAMING CORPORATION
        MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                         AND RESULTS OF OPERATIONS



Other Factors

     Subsequent  to the first  quarter of 1995,  900 new hotel  rooms  opened in
close  proximity  to LLB.  In  addition,  400 more  rooms  are  currently  being
constructed in close  proximity to LLB. Due to these room  additions,  announced
closings or consolidation of existing competitors' gaming facilities, and future
project openings,  the Company believes the Gulf Coast gaming market will remain
at least constant in the near term.

                                                                 35
<PAGE>
                      LADY LUCK GAMING CORPORATION
       MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                       AND RESULTS OF OPERATIONS


<TABLE>
<CAPTION>

     Lady Luck Central City
                                                                              % Increase                                 % Increase
                                                 Three months ended           (Decrease)        Nine months ended        (Decrease)
                                                     September 30,             1996 vs.           September 30,          1996 vs.
                                               1996                1995          1995         1996              1995        1995
         <S>                                    <C>                <C>           <C>          <C>               <C>          <C>
         Gross revenues....................     $1.9               $1.9            -          $5.1              $5.5         (7)
         Net revenues......................      1.8                1.7            6           4.8               5.1         (6)
         Management/license fee............      0.1                0.1            -           0.2               0.2          -
         Operating loss....................     (0.3)              (0.4)          25          (0.8)             (0.8)         -
         Operating margin (a)..............      (17)%              (24)%        7 pts         (17)%            (16)%        (1) pt

</TABLE>

____________________

(a)      Operating income divided by net revenues.

     Three months ended  September 30, 1996 versus three months ended  September
30, 1995

     For the three months ended  September  30, 1996,  GCI  generated an average
daily net win per slot machine of approximately  $56 as compared with an average
daily net win per slot machine of  approximately  $52 for the three months ended
September 30, 1995,  an increase of $4 daily per slot or 8%. The average  number
of slot machines  increased from 289 in the quarter ended  September 30, 1995 to
300 in the quarter  ended  September 30, 1996, an increase of 11 machines or 4%.
The increase in average  daily net win per slot and the average  number of slots
produced a 10%  increase in slot net  revenue.  The increase in slot net win was
partially  offset by the closure of the poker room and a decrease in table games
revenue.

     Nine months ended September 30, 1996 versus nine months ended September 30,
1995

     GCI's gross revenues decreased from $5.5 million to $5.1 million during the
nine months ended September 30, 1995 and 1996, respectively,  a decrease of $0.4
million or 7%. The decrease was due to declines in slot revenues from decreasing
the  average  number of slot  machines  in  operation  from 351 to 293 for these
comparative periods.  These machines were relocated,  primarily in June 1995, to
other  operating  properties with higher average daily net wins per slot machine
or  operating  margins.  This  decrease was  partially  offset by an increase in
average daily net win per slot machine from $45 to $52 for the nine months ended
September  30, 1995, an increase of $7 or 16%. The Company has  implemented  and
has  planned  additional  actions  designed  to  improve  its  future  operating
performance  including  operating  management  personnel  changes,  and  planned
capital expenditures to enhance the casino during the rest of the year.

Other Factors

      During October 1996,  Gold Coin, Inc. ("GCI"),  entered into a non-binding
Memorandum  of  Understanding  (the  "Memorandum")  with BWCC,  Inc.  which does
business  as  Bullwhackers  ("Bullwhackers").  The  Memorandum  provides  for  a
combination of the respective  companies' gaming  establishments which currently
operate on adjacent real property in Central City,  Colorado and the use of, but
not the title  transfer or assumption of debt,  related to the assets of GCI and
Bullwhackers.  Pursuant to the Memorandum,  Bullwhackers shall provide resources
and  expertise to manage the joint  operation  subsequent  to the  completion of
certain  capital  improvements  to be made by GCI to combine the  facilities and
improve GCI's gaming equipment.  Budgeted capital improvements shall in no event
exceed $1.5  million.  The  Memorandum  provides  for  distributions  to be made
quarterly  in  accordance  with certain  priorities  which first  recognize  the
capital improvements to be made by GCI. The Memorandum provides GCI an option to
purchase the assets of Bullwhackers  and  Bullwhackers an option to purchase the
assets of GCI upon advance  written  notice after the joint  facility


                                                                 36
<PAGE>
                      LADY LUCK GAMING CORPORATION
     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                       AND RESULTS OF OPERATIONS



commences  gaming   operations.  In  addition,   the  Memorandum  provides a put
option for  Bullwhackers  to sell its  assets to GCI under  similar  terms.  The
option price shall be determined based on carrying amounts or earnings multiples
and shall be at  discounted  amounts if the sale is within a certain  period and
shall be in exchange for certain consideration,  a portion of which, may include
the Company's stock. The transactions contemplated by the Memorandum are subject
to various contingencies including,  inter alia, the due diligence investigation
of the parties,  governmental approvals,  approval by the Boards of Directors of
GCI  and   Bullwhackers,   and  the  negotiation  and  execution  of  definitive
agreements.  No  assurance  can be  provided  that these  contingencies  will be
satisfied.

     Additional  casinos  developed in the Central  City or  competing  Colorado
gaming markets or changes in the Colorado gaming legislation may have a material
effect on the net revenues and operating results of GCI.





                                                                 37
<PAGE>
                      LADY LUCK GAMING CORPORATION
       MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                        AND RESULTS OF OPERATIONS



Liquidity and Capital Resources
 
     During the nine  months  ended  September  30,  1996,  the  Company's  cash
generated by operations  exceeded its uses of operating  cash by $12.4  million.
Additional  sources  of cash were $8.9  million  of  restricted  cash,  and $3.0
million of cash and cash equivalents related to the Greek Projects, which became
available for specified uses upon consent from a sufficient number of holders of
the 2001 Notes.  Excess cash flow from  operations,  restricted cash and cash on
hand at the  beginning  of the year were the primary  sources of cash during the
nine  months  ended  September  30,  1996.  The  primary  uses of cash and other
resources   during  the  first  nine  months  of  1996,   other  than  operating
expenditures, include:

     A. $20.7 million cash for property and equipment,  primarily related to the
construction of Country Casino and the Pavilion, but also including $4.0 million
for the  acquisition of the River Park Hotel  comprising $1.0 million cash and a
mortgage  note for the  balance,  and $1.0  million for the  acquisition  of the
Riverbluff  Hotel  comprising  $0.6  million  cash and a  mortgage  note for the
balance.  Also  included  are  portions  of the  costs of  remodeling  Lady Luck
Natchez, the Riverbluff Hotel and a portion of the River Park Hotel.

     B. $4.6 million cash for payment of debt and slot contracts.

     C.  $3.8  million  for  the   acquisition   of  slot  machines  by  certain
subsidiaries in exchange for indebtedness.

     GCI did not  generate  operating  cash flow during the first nine months of
1996; the Company expects this trend to continue.

     Due to  debt  service  requirements  on an  equipment  note  payable  and a
mortgage note, GCI required cash infusions of $0.8 million during the first nine
months of 1996 and,  during  the  remainder  of 1996,  is  expected  to  require
additional cash infusions to cover up to $0.3 million of scheduled repayments on
an equipment note payable and anticipated operating cash shortfalls.

      During October 1996,  Gold Coin, Inc. ("GCI"),  entered into a non-binding
Memorandum  of  Understanding  (the  "Memorandum")  with BWCC,  Inc.  which does
business  as  Bullwhackers  ("Bullwhackers").  The  Memorandum  provides  for  a
combination of the respective  companies' gaming  establishments which currently
operate on adjacent real property in Central City,  Colorado and the use of, but
not the title  transfer or assumption of debt,  related to the assets of GCI and
Bullwhackers.  Pursuant to the Memorandum,  Bullwhackers shall provide resources
and  expertise to manage the joint  operation  subsequent  to the  completion of
certain  capital  improvements  to be made by GCI to combine the  facilities and
improve GCI's gaming equipment.  Budgeted capital improvements shall in no event
exceed $1.5  million.  The  Memorandum  provides  for  distributions  to be made
quarterly  in  accordance  with certain  priorities  which first  recognize  the
capital improvements to be made by GCI. The Memorandum provides GCI an option to
purchase the assets of Bullwhackers  and  Bullwhackers an option to purchase the
assets of GCI upon advance  written  notice after the joint  facility  commences
gaming  operations.  In  addition,  the  Memorandum  provides  a put  option for
Bullwhackers  to sell its assets to GCI under  similar  terms.  The option price
shall be determined based on carrying amounts or earnings multiples and shall be
at  discounted  amounts  if the sale is within a certain  period and shall be in
exchange  for  certain  consideration,  a  portion  of  which, may  include  the
Company's stock. The transactions  contemplated by the Memorandum are subject to
various contingencies including,  inter alia, the due diligence investigation of
the parties,  governmental approvals, approval by the Boards of Directors of GCI
and Bullwhackers, and the negotiation and execution of definitive agreements. No
assurance can be provided that these contingencies will be satisfied.



                                                                 38
<PAGE>
                       LADY LUCK GAMING CORPORATION
       MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                        AND RESULTS OF OPERATIONS



     The  Company  is  expending  approximately  $0.9  million  to  remodel  the
Riverbluff Hotel and portions of the River Park Hotel.  The remodeling  includes
replacement  of certain  furniture and equipment and is expected to be completed
by December 31, 1996.

     Various  other  amounts of cash and other  resources may be used during the
remainder of 1996 for capital  improvements,  expansions or  acquisitions  which
cannot  currently be estimated and may be contingent upon market  conditions and
other factors.  If significant  cash or other resources  become  available,  the
Company may make additional capital expenditures related to the Lady Luck Rhythm
& Blues,  Lady Luck  Biloxi and other  capital  acquisitions,  improvements,  or
expansions which cannot currently be estimated and may be contingent upon market
conditions and the amount of excess cash or other resources  available,  if any.
Capital  expenditures at Lady Luck Rhythm & Blues could include additional hotel
rooms and signage.  Capital  expenditures at Lady Luck Biloxi could include $2.0
million  for  additional  parking.  In any  case,  the  amount  of such  capital
expenditures will be based upon cash available and market conditions at the time
any commitment is made.

     The  Company  may also  repurchase  2001  Notes  from time to time in early
satisfaction of any repurchase  expected  pursuant to the Indenture,  which such
amount  and the  timing of  repurchase  cannot  currently  be  estimated  and is
dependent on excess cash flow and market conditions.

     The  Company  has  entered  into an  agreement  for the  construction  of a
cruising  gaming  vessel in the amount of $16.0  million and as of September 30,
1996,  approximately  $6.0  million  has  been  expended  under  this  contract,
approximately  $1.9  million of which is  included in  construction  payables at
September 30, 1996. It is anticipated  that this vessel will be utilized by Lady
Luck  Kimmswick and,  therefore,  the Missouri  Project will be responsible  for
payment of the remaining  amounts under the contract.  However,  if the Missouri
Project  is  never  consummated  the  Company  may be  responsible  for the then
outstanding obligations.

     No further  significant  expenditures  for projects under  development  are
anticipated  from  existing  cash or cash flow from  operations.  If the Company
determines it needs additional funds, there can be no assurance that such funds,
whether from equity or debt financing or other sources, will be available, or if
available, will be on terms satisfactory to the Company.

     In the opinion of management,  the Company believes it will have sufficient
cash flow to meet its debt  service  and other  cash  outflow  requirements  and
maintain  compliance  with the revised  covenants  of the  Indenture  during the
remainder of 1996 and during 1997. There can be no assurance,  however, that the
Company  will  in  fact  have   sufficient  cash  resources  to  meet  its  cash
requirements under any circumstances.
 
     Seasonality and Weather

     A flood or other severe weather  condition  could cause the Company to lose
the use of one or more dockside facilities for an extended period. The inability
to use a  dockside  facility  during any  period  could have a material  adverse
effect on the  Company's  financial  results.  In addition,  a  disproportionate
amount of GCI's revenues is received during the summer months. GCI is accessible
only via a narrow, winding mountain road and, accordingly, inclement weather may
have an adverse effect on revenues.  While  seasonal  revenue  fluctuations  may
occur at the Company's  existing and proposed  casinos in Mississippi,  Iowa and
Missouri,  such seasonal  fluctuations  are expected to be less significant than
those experienced in Colorado.


                                                                 39
<PAGE>

PART II             OTHER INFORMATION

    Item 1.        LEGAL PROCEEDINGS

     The Company has been named as a defendant in a purported  shareholder class
action lawsuit alleging  violations by the Company of the Securities Act of 1933
and the Securities Exchange Act of 1934 for alleged material  misrepresentations
and  omissions in  connection  with the Company's  1993  prospectus  and initial
public offering of Common Stock.  The complaint  seeks,  inter alia,  injunctive
relief,  rescission and  unspecified  compensatory  damages.  In addition to the
Company, the complaint also names as defendants Andrew H. Tompkins, Chairman and
Chief  Executive  Officer of LLGC,  Alain Uboldi,  Director and Chief  Operating
Officer of LLGC,  Michael Hlavsa,  the former Chief  Financial  Officer of LLGC,
Bear  Stearns  & Co.,  Inc.  and  Oppenheimer  & Co.,  Inc.,  who  acted as lead
underwriters for the initial public  offering.  The Company has retained outside
counsel to respond to the  complaint and while the outcome of this matter cannot
presently  be  determined,  the  Company  believes  based in part on  advice  of
counsel, that it has meritorious defenses.

     The Company and certain of its joint venture  partners  (the "Defendants")
have been named as defendants in two separate lawsuits brought by the country of
Greece and its Minister of Tourism before the Greek  Multi-Member Court of First
Instance.  Each  action  alleges  that the  Defendants  failed  to make  certain
payments in connection with the gaming license bid process for Loutraki,  Greece
and Patras,  Greece. The Company has been informed by its Greek counsel that the
lawsuit  regarding the gaming license bid process for Loutraki,  Greece has been
dismissed.  Accordingly,  the  payments  the  Company  is  alleged  to have been
required  to make  aggregate  approximately  2.1  billion  drachmae  (which  was
approximately  $8.8 million as of November 7, 1996 based upon published exchange
rates)  related to Patras,  Greece.  Although it is difficult  to determine  the
damages  being sought from the  lawsuit,  the action may seek damages up to such
aggregate amount. The Company's Greek counsel is defending the remaining lawsuit
and in  management's  opinion,  the  ultimate  outcome  of  this  matter  is not
presently known.

     Additionally,  a lawyer and a consultant  which were allegedly  retained by
the Company in connection  with the Company's bid for a gaming license in Greece
recently  threatened  litigation against the Company.  On or about September 24,
1996, the Company and the lawyer and consultant  reached an agreement whereby in
exchange for certain consideration mutual releases were executed.

     Also, a Greek architect  filed an action against the Company  alleging that
he was retained by the Company to provide professional  services with respect to
a casino in Loutraki,  Greece.  The  plaintiff  in such action seeks  damages of
approximately $800,000. On July 29, 1996, the Company's Greek counsel was served
with a decision by the Athens Court of First Instance in such matter.  The Greek
Court  entered  judgement  against  the  Company in the amount of  approximately
$375,000.  The Company  intends to appeal the Court's  decision  and has been
informed by its Greek counsel that it has meritorious  grounds to prosecute such
appeal.

     On November 5, 1996,  the United States  Bankruptcy  Court for the Northern
District of  Mississippi  dismissed a lawsuit which had been brought by Superior
Boat Works,  Inc.  ("Superior")  against the LLM on or about September 23, 1993.
Superior had  previously  done  construction  work for LLM on its Natchez  barge
("Lady Luck Natchez"), as well as some minor preparatory work on one other barge
of the Company. Such proceeding alleged damages of approximately $47,000,000, of
which approximately  $3,400,000 was alleged for additional  construction work on
Lady Luck Natchez and the  remaining  amount was alleged for unjust  enrichment,
for causing the bankruptcy of Superior and for future work Superior  expected to
perform for the Company.

     The decision is subject to adjustment for certain additional work performed
by Superior.  The Company believes the additional  charges will be less than the
credit to which the court ruled LLM is entitled to for excess  payments  made to
Superior by LLM. Superior also has the right to appeal.

                                                    40
<PAGE>

The  Company,   based  in  part  on the advice of its counsel,  does not believe
that any appeal of the  decision  would have a  material  adverse  effect on the
Company's financial condition or results of operations.


    Item 2.       CHANGES IN SECURITIES

                  (a)      None.

                  (b)      None.


    Item 3.       DEFAULTS UPON SENIOR SECURITIES

                  (a)      None.

                  (b)      None.


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

                  (a)      Not applicable.

                  (b)      Not applicable.

                  (c)      Not applicable.

                  (d)      Not applicable.


    Item 5.       OTHER INFORMATION

                  (a)      None.


    Item 6.       EXHIBITS AND REPORTS ON FORM 8-K

                  (a)      Exhibits.
 
    Exhibit
    Number        Description of Exhibits

3.1  Certificate of Incorporation of Lady Luck Gaming  Corporation,  as amended.
     Incorporated  by  reference  to  Exhibit  3.1 to the Form S-1  Registration
     Statement  filed by Lady Luck Gaming  Corporation  under the Securities Act
     (No. 33-63930) (the "Form S-1").

3.2  By-Laws  of Lady Luck  Gaming  Corporation,  as  amended.  Incorporated  by
     reference to Exhibit 3.2 to the Form S- 1.

3.3  Certificate of  Incorporation of Lady Luck Gaming Finance  Corporation,  as
     amended.  Incorporated  by  reference  to  Exhibit  3.1  to  the  Form  S-4
     registration statement filed under the Securities Act (No. 33- 77184) ("the
     Form S-4, No. 77184").


                                                                 41
<PAGE>

3.4  By-Laws of Lady Luck Gaming Finance Corporation,  as amended.  Incorporated
     by  reference  to  Exhibit  3.2  to the  Form  S-4  Registration  Statement
     previously  filed under the Securities  Act (No.  33-65232) (the "Form S-4,
     No. 65232").

3.5  Articles of Incorporation of Lady Luck  Mississippi,  Inc.  Incorporated by
     reference to Exhibit 3.5 to the Form S-4, No. 65232.

3.6  Bylaws of Lady Luck Mississippi,  Inc. Incorporated by reference to Exhibit
     3.6 to the Form S-4, No. 65232.

3.7  Articles  of  Incorporation  of Lady  Luck  Biloxi,  Inc.  Incorporated  by
     reference to Exhibit 3.7 to the Form S-4, No. 65232.

3.8  Bylaws of Lady Luck Biloxi,  Inc.  Incorporated by reference to Exhibit 3.8
     to the Form S-4, No. 65232.

3.9  Articles  of  Incorporation  of Lady  Luck  Tunica,  Inc.  Incorporated  by
     reference to Exhibit 3.9 to the Form S-4, No. 65232.

3.10 Bylaws of Lady Luck Tunica, Inc.  Incorporated by reference to Exhibit 3.10
     to the Form S-4, No. 65232.

3.11 Articles of  Incorporation  of Lady Luck  Gulfport,  Inc.  Incorporated  by
     reference to Exhibits 3.11 to the Form S-4, No. 65232.

3.12 Bylaws of Lady Luck  Gulfport,  Inc.  Incorporated  by reference to Exhibit
     3.12 to the Form S-4, No. 65232.

3.13 Articles of  Incorporation  of Lady Luck  Vicksburg,  Inc.  Incorporated by
     reference to Exhibit 3.13 to the Form S-4, No. 65232.

3.14 Bylaws of Lady Luck  Vicksburg,  Inc.  Incorporated by reference to Exhibit
     3.14 to the Form S-4, No. 65232.

3.15 Certificate  of  Incorporation  of  Gold  Coin  Incorporated,  as  amended.
     Incorporated by reference to Exhibit 3.15 to the Form S-4, No. 77184.

3.16 Amended and Restated  By-Laws of Gold Coin  Incorporated.  Incorporated  by
     reference to Exhibit 3.16 to the Form S-4, No. 65232.

3.17 Articles of  Incorporation  of Lady Luck  Kimmswick,  Inc.  Incorporated by
     reference to Exhibit 3.17 to the Form S-4, No. 65232.

3.18 By-Laws of Lady Luck Kimmswick,  Inc.  Incorporated by reference to Exhibit
     3.18 to the Form S-4, No. 65232.

3.19 Articles of Incorporation of Magnolia Lady, Inc.  Incorporated by reference
     to Exhibit 3.19 to the Form S-4, No. 65232.

3.20 Bylaws of Magnolia Lady, Inc.  Incorporated by reference to Exhibit 3.20 to
     the Form S-4, No. 65232.

3.21 Articles of  Incorporation of Lady Luck Quad Cities,  Inc.  Incorporated by
     reference  to Exhibit  3.21 to the Form S-4  registration  statement  filed
     under the Securities Act (No. 33-91616) (the "Form S-4, No. 33- 91616").


                                                                 42
<PAGE>

3.22 Bylaws of Lady Luck Quad Cities, Inc.  Incorporated by reference to Exhibit
     3.22 to the Form S-4, No. 33-91616.

3.23 Articles of Incorporation of Old River  Development,  Inc.  Incorporated by
     reference to Exhibit 3.23 to the Form S-4, No. 33-91616.

3.24 Bylaws of Old River Development,  Inc. Incorporated by reference to Exhibit
     3.24 to the Form S-4, No. 33-91616.

4.1  Indenture  dated as of  February  17,  1994 by and among  Lady Luck  Gaming
     Finance Corporation,  the Guarantors named therein and First Trust National
     Association (the "Indenture").  Incorporated by reference to Exhibit 4.1 to
     the Annual Report on Form 10-K for the fiscal year ended  December 31, 1993
     by Lady Luck Gaming Corporation (the "Form 10-K").

4.2  Registration  Rights  Agreement  dated as of February 17, 1994 by and among
     Lady Luck Gaming Finance Corporation,  the Guarantors named therein and the
     Purchasers  who were  signatories  thereto.  Incorporated  by  reference to
     Exhibit 4.2 to the Form 10-K.

4.3  Pledge  Agreement  dated as of  February  17,  1994 from  Lady Luck  Gaming
     Finance  Corporation,  as Pledgor to First Trust National  Association,  as
     Trustee. Incorporated by reference to Exhibit 4.4 to the Form 10-K.

4.4  Pledge  Agreement  dated as of  February  17,  1994 from  Lady Luck  Gaming
     Finance  Corporation,  as Pledgor to First Trust National  Association,  as
     Trustee. Incorporated by reference to Exhibit 4.4 to the Form 10-K.

4.5  Leasehold Deed of Trust,  Assignment of Rents and Security  Agreement dated
     as of February 17, 1994 by and among Lady Luck Gulfport,  Inc., as Trustor,
     Jim B.  Tohill  as  Trustee,  and  First  Trust  National  Association,  as
     Beneficiary.  Incorporated by reference to National Exhibit 4.5 to the Form
     10-K.

4.6  Leasehold Deed of Trust,  Assignment of Rents and Security  Agreement dated
     as of  February  17,  1994 by and among  Lady  Luck  Mississippi,  Inc.  as
     Trustor, Jim B. Tohill, as Trustee,  and First Trust National  Association,
     as Beneficiary. Incorporated by reference to Exhibit 4.6 to the Form 10-K.

4.7  Leasehold Deed of Trust,  Assignment of Rents and Security  Agreement dated
     as of February  17, 1994 by and among Lady Luck Tunica,  Inc.,  as Trustor,
     Jim B.  Tohill,  as  Trustee,  and First  Trust  National  Association,  as
     Beneficiary. Incorporated by reference to Exhibit 4.7 to the Form 10-K.

4.8  Leasehold Deed of Trust,  Assignment of Rents and Security  Agreement dated
     as of February  17, 1994 by and among Lady Luck Biloxi,  Inc.,  as Trustor,
     Jim B.  Tohill,  as  Trustee,  and First  Trust  National  Association,  as
     Beneficiary. Incorporated by reference to Exhibit 4.8 to the Form 10-K.

4.9  Leasehold Deed of Trust,  Assignment of Rents and Security  Agreement dated
     as of February 17, 1994 by and among Magnolia Lady,  Inc., as Trustor,  Jim
     B.  Tohill,  as  Trustee,   and  First  Trust  National   Association,   as
     Beneficiary. Incorporated by reference to Exhibit 4.9 to the Form 10-K.

4.10 Leasehold Deed of Trust,  Assignment of Rents and Security  Agreement dated
     as of February  17, 1994 by and among Gold Coin  Incorporated,  as Trustor,
     Jim B.  Tohill,  as  Trustee,  and First  Trust  National  Association,  as
     Beneficiary. Incorporated by reference to Exhibit 4.10 to the Form 10-K.

4.11 First Preferred Vessel Mortgage on the Whole of the Lady Luck I dated as of
     February 17, 1994 from Lady Luck Mississippi,  Inc. in favor of First Trust
     National Association. Incorporated by reference to Exhibit 4.11 to the Form
     10-K.

                                                                 43
<PAGE>

4.12 First  Preferred  Fleet Mortgage on the Whole of the Lady Luck Tunica I and
     Lady Luck  Tunica II dated as of February  17, 1994 from Lady Luck  Tunica,
     Inc.  in  favor  of  First  Trust  National  Association.  Incorporated  by
     reference to Exhibit 4.12 to the Form 10-K.

4.13 First Preferred Vessel Mortgage on the Whole of the Lady Luck Biloxi,  Inc.
     dated as of February 17, 1994 from Lady Luck Biloxi, Inc. in favor of First
     Trust National  Association.  Incorporated  by reference to Exhibit 4.13 to
     the Form 10-K.

4.14 Security  Agreement  dated as of February 17, 1994 by and between Lady Luck
     Kimmswick,  Inc.  and First Trust  National  Association.  Incorporated  by
     reference to Exhibit 4.14 to the Form 10-K.

4.15 Security  Agreement  dated as of February 17, 1994 by and between Lady Luck
     Vicksburg,  Inc.  and First Trust  National  Association.  Incorporated  by
     reference to Exhibit 4.15 to the Form 10-K.

4.16 Deed of Trust,  Assignment  of Rents  and  Security  Agreement  dated as of
     February 17, 1994 by and among Gold Coin  Incorporated,  the Public Trustee
     of the  County  of  Gilpin,  State of  Colorado  and First  Trust  National
     Association. Incorporated by reference to Exhibit 4.16 to the Form 10-K.

4.17 Deed of Trust,  Assignment  of Rents  and  Security  Agreement  dated as of
     February  17, 1994 by and among Lady Luck Biloxi,  Inc.,  Jim B. Tohill and
     First Trust National Association. Incorporated by reference to Exhibit 4.17
     to the Form 10-K.

4.18 Deed of Trust,  Assignment  of Rents  and  Security  agreement  dated as of
     February 17, 1994 by and among Lady Luck  Mississippi,  Inc., Jim B. Tohill
     and First Trust National Association.  Incorporated by reference to Exhibit
     4.18 to the Form 10-K.

4.19 Assignment  of Option dated as of February 17, 1994 by Lady Luck  Gulfport,
     Inc.  in  favor  of  First  Trust  National  Association.  Incorporated  by
     reference to Exhibit 4.19 to the Form 10-K.

4.20 Assignment of Option dated as of February 17, 1994 by Lady Luck  Kimmswick,
     Inc.  in  favor  of  First  Trust  National  Association.  Incorporated  by
     reference to Exhibit 4.20 to the Form 10-K.

4.21 Assignment of Option dated as of February 17, 1994 by Lady Luck  Vicksburg,
     Inc.  in  favor  of  First  Trust  National  Association.  Incorporated  by
     reference to Exhibit 4.21 to the Form 10-K.

4.22 Stockholders Agreement dated as of April 1, 1993 by and among the Lady Luck
     Gaming  Corporation,  Andrew H. Tompkins and all current  stockholders  and
     warrant holders of Lady Luck Gaming Corporation.  Incorporated by reference
     to Exhibit 4.14 to the Form S-1.

4.23 Cash  Collateral and  Disbursement  Agreement dated February 17, 1994 among
     First Trust  National  Association.  the Company and the  Guarantors  named
     therein. Incorporated by reference to Exhibit 4.18 to the Form 10-K.

4.24 First Amendment to Stockholders  Agreement dated as of June 9, 1993, by and
     among Andrew H. Tompkins and the Stockholders  named therein.  Incorporated
     by  reference  to Exhibit  4.24 to the  Registration  Statement on Form S-4
     (Registration No. 33- 91616)(the "Form S-4, No. 91616").

4.25 Second Supplemental Indenture dated as of March 17,  1995 by and among Lady
     Luck Gaming Finance  Corporation,  the  Guarantors  named therein and First
     Trust National  Association.  Incorporated  by reference to Exhibit 4.25 to
     the Quarterly  Report on Form 10-Q for the quarterly period ended March 31,
     1995.


                                                                 44
<PAGE>

4.26 Third  Supplemental  Indenture  by  and  among  Lady  Luck  Gaming  Finance
     Corporation,   Lady  Luck  Quad  Cities,  Inc.  and  First  Trust  National
     Association.  Incorporated  by  reference  to Exhibit 4.26 to the 1995 Form
     10-K.  4.27  Fourth  Supplemental  Indenture  by and among Lady Luck Gaming
     Finance Corporation,  the Guarantors named therein and First Trust National
     Association.  Incorporated by reference to Exhibit 4.27 to the Registrant's
     Form 10-K for the year 1995 (the "1995 Form 10-K").

4.28 Specimen  Common Stock  Certificate.  Incorporated by reference to the Form
     10-K.

4.29 Security  Agreement  (Lady Luck Gaming Finance  Corporation) by and between
     Lady Luck Gaming Finance Corporation and First Trust National  Association.
     Incorporated by reference to Exhibit 4.29 to the 1995 Form 10-K.

4.30 Security Agreement (Lady Luck Gaming  Corporation) by and between Lady Luck
     Gaming  Corporation and First Trust National  Association.  Incorporated by
     reference to Exhibit 4.30 to the 1995 Form 10-K.

4.31 Pledge  Agreement  between  Lady Luck Quad  Cities,  Inc.  and First  Trust
     National Association. Incorporated by reference to Exhibit 4.31 to the 1995
     Form 10-K.

10.1.Lease for  parking  lot in Biloxi,  Mississippi  dated May 28,  1993 by and
     between  John M.  Mladnick  and Lady  Luck  Biloxi,  Inc.  Incorporated  by
     reference to Exhibit 10.18 to the Form S-1.

10.2 Lease Agreement dated January 12, 1994 by and among Tyrone J. Gollott, Gary
     F. Gollott,  Thomas H. Gollott and Lady Luck Biloxi,  Inc.  Incorporated by
     reference to Exhibit 10.10 to the Form 10-K.

10.3 Lease  Agreement  dated January 17, 1994 by and between Michael S. Sinopoli
     and Lady Luck Biloxi,  Inc.  Incorporated  by reference to Exhibit 10.11 to
     the Form 10-K.

10.4 Lease for Parcel in Biloxi,  Mississippi  dated July 25,  1993 by and among
     Lady  Luck  Biloxi,  Inc.  and Joe G.,  Jackie R. and John  Brett  Aldrich.
     Incorporated by reference to Exhibit 10.12 to the Form S-1.

10.5 Lease for casino site in Tunica, Mississippi,  dated March 18, 1993 between
     Lady Luck Tunica, Inc. and D.C. Parker and Richard B. Flowers. Incorporated
     by reference to Exhibit 10.5 to the Form S-1.

10.6 Lease for  casino  site in  Gulfport,  Mississippi  dated  October  5, 1992
     between  Lady  Luck  Gulfport,  Inc.  and  Mississippi  Coast  Marine  Inc.
     Incorporated by reference to Exhibit 10.6 to the Form S-1.

10.7 Lease in Gulfport,  Mississippi  dated October 1, 1993 by and between Coast
     Materials Company and Lady Luck Gulfport, Inc. Incorporated by reference to
     Exhibit 10.15 to the Form 10-K.

10.8 Agreement to Lease in Gulfport, Mississippi dated September 23, 1993 by and
     among Robert C.  Fielding,  Lady Luck  Gulfport,  Inc. and Lady Luck Gaming
     Corporation. Incorporated by reference to Exhibit 10.16 to the Form 10-K.

10.9 Leases of part of casino site in  Natchez,  Mississippi  dated  October 29,
     1991 between Lady Luck Mississippi, Inc. and Silver Land, Inc. Incorporated
     by reference to Exhibit 10.7 to the Form S-1.

10.10Silver Land,  Inc.  Amended and Restated Lease Agreement dated December 31,
     1992. Incorporated by reference to Exhibit 10.8 to the Form S-1.

10.11Lease for part of casino site in Natchez,  Mississippi  dated June 30, 1992
     by and  between  Lady Luck  Mississippi,  Inc.  and the City of Natchez and
     amendment  thereto  dated  October 27, 1992.  Incorporated  by reference to
     Exhibit 10.9 to the Form S-1.

                                                                 45
<PAGE>

10.12Lease for part of casino site in Natchez,  Mississippi  dated June 30, 1992
     by and  between  Lady Luck  Mississippi,  Inc.  and the City of Natchez and
     amendment  thereto  dated  October 27, 1992.  Incorporated  by reference to
     Exhibit 10.10 to the Form S-1.

10.13Sublease  Contract  dated August 13, 1993 by and between  Callon  Petroleum
     Company  and Lady Luck  Mississippi,  Inc.  Incorporated  by  reference  to
     Exhibit 10.22 to the Form 10-K.

10.14Lease for parking lot in Central City,  Colorado  dated June 1, 1993 by and
     among Gold Coin  Incorporated  and J. Scott  Bradley  and  Phyllis M. Brown
     (Lots 1-12).  Incorporated  by  reference to Exhibit  10.21 to the Form S-4
     Registration  Statement  previously  filed  under the  Securities  Act (No.
     33-65232) (the "Form S-4, No. 65232").

10.15Lease for parking lot in Central City,  Colorado  dated June 1, 1993 by and
     among J. Scott  Bradley  and  Phyllis  M. Brown and Gold Coin  Incorporated
     (Lots 13-21).  Incorporated  by reference to Exhibit 10.22 to the Form S-4,
     No. 65232.

10.16Agreement of Option,  Purchase and Sale and Joint Escrow  Instructions  for
     Vicksburg,  Mississippi  casino site dated May 21, 1993 by and between Lady
     Luck Vicksburg,  Inc. and Vicksburg Terminal Company,  Inc. Incorporated by
     reference to Exhibit 10.11 to the Form S-1.

10.17Option to purchase site in Jefferson  County,  Missouri  dated July 8, 1993
     by and between Lady Luck Kimmswick, Inc. and Donald J. Branch. Incorporated
     by reference to Exhibit 10.17 to the Form S-1.

10.18Lease in Coahoma,  Mississippi  dated  November 30, 1993 (sic) by and among
     Roger Allen Johnson,  Jr.,  Charles Bryant Johnson and Magnolia Lady,  Inc.
     Incorporated by reference to Exhibit 10.28 to the Form 10-K.

10.19Agreement  dated March 19, 1994 by and among Lady Luck Gaming  Corporation,
     Old River  Development,  Inc. and D.J. Brata.  Incorporated by reference to
     Exhibit 10.29 to the Form 10-K.

10.20Lady Luck Gaming  Corporation  Employee Stock Option Plan.  Incorporated by
     reference to Exhibit 10.31 to the Form 10-K.

10.21Indemnification   Agreement  dated  April  28,  1993  by  and  among  Terry
     Christensen,  Barry Fink,  Kimberly  Harrison,  Colorado Casino  Properties
     Investment L.P. and Lady Luck Gaming Corporation. Incorporated by reference
     to Exhibit 10.13 to the Form S-1.

10.22$2,300,000  Promissory Note of Gold Coin Incorporated dated April 28, 1993.
     Incorporated by reference to Exhibit 10.14 to the Form S-1.

10.23Warrant  Agreement  dated  April 1,  1993.  Incorporated  by  reference  to
     Exhibit 10.15 to the Form S-1.

10.24Amendment  to  Agreement  dated March 19, 1994 (sic) by and among Lady Luck
     Gaming   Corporation,   Old  River   Development,   Inc.  and  D.J.  Brata.
     Incorporated  by  reference to Exhibit  10.32 to the Form S-4  registration
     statement filed under the Securities Act (No. 33-77184) ("the Form S-4, No.
     77184").

10.25Option  Agreement  dated April 28, 1994 by and between  Seven-Thirty,  Inc.
     and Lady Luck Scott City.  Inc.  Incorporated by reference to Exhibit 10.33
     to the Form S-4, No. 77184.

10.26Lease dated  September 13, 1993 by and between Nancy Harris  Holmes,  James
     S. Williams,  Tempe Kyser Adams and Ben C. Adams as Trustee under the Trust
     Agreement dated September 9, 1993, as Lessor and

                                                                 46
<PAGE>

     D.J. Brata as Lessee.Incorporated by reference to Exhibit 10.34 to the Form
     10-Q for the quarter ended June 30, 1994.

10.27Assignment of Lease  Agreement dated September 30, 1993 by and between D.J.
     Brata,  as  assignor,  and  Old  River  Development,   Inc.,  as  assignee.
     Incorporated by reference to Exhibit 10.35 to the Form 10-Q for the quarter
     ended June 30, 1994.

10.28Modification  of Lease  Agreement dated February 8, 1994 by and between Old
     River  Development,  Inc., Lady Luck Tunica,  Inc. and Nancy Harris Holmes,
     James S.  Williams,  Tempe Kyser  Adams and Ben C.  Adams,  Jr., as Trustee
     under the Trust dated  September  9, 1993.  Incorporated  by  reference  to
     Exhibit 10.36 to the Form 10-Q for the quarter ended June 30, 1994.

10.29Second  Modification  of Lease Agreement dated April 7, 1994 by and between
     Old River Development,  Inc., Lady Luck Gaming Corporation and Nancy Harris
     Holmes,  James S.  Williams,  Tempe Kyser  Adams and Ben C. Adams,  Jr., as
     Trustee under the Trust Agreement dated September 9, 1993.  Incorporated by
     reference to Exhibit  10.37 to the Form 10-Q for the quarter ended June 30,
     1994.

10.30Escrow  Agreement  Concerning  Agreement of Option and Purchase and Sale of
     Property dated April 21, 1994 by and among Vicksburg Terminal Company, Inc.
     and Lady Luck Vicksburg,  Inc.,  including  Exhibit A, Agreement of Option,
     Purchase and Sale and Joint Escrow Instructions.  Incorporated by reference
     to Exhibit 10.38 to the Form 10-Q for the quarter ended June 30, 1994.

10.31Agreement  dated July 18, 1994 by and among Green Bridge  Company,  an Iowa
     corporation,  Bettendorf  Riverfront  Development  Company,  L.C.,  an Iowa
     limited liability company,  Lady Luck Casino,  Inc., a Nevada  corporation,
     and Lady Luck Gaming  Corporation.  Incorporated  by  reference  to Exhibit
     10.40 to the Form 10-Q for the quarter ended June 30, 1994.

10.32Management  Agreement  dated  August  15,  1994 by and among the  Pueblo of
     Santa Ana, (the "Pueblo"),  a federally  recognized Indian Tribe, Santa Ana
     Nonprofit  Enterprise,  an  enterprise  at the  Pueblo,  and Lady  Luck New
     Mexico,  Inc.,  a New Mexico  corporation.  Incorporated  by  reference  to
     Exhibit 10.41 to the Form 10-Q for the quarter ended September 30, 1994.

10.33Letter  Agreement  dated  October 24, 1994 by and between  Alain Uboldi and
     Lady Luck Gaming Corporation. Incorporated by reference to Exhibit 10.41 to
     the Annual Report on Form 10-K for the fiscal year ended  December 31, 1994
     by Lady Luck Gaming Corporation (the "1994 Form 10-K").

10.34Letter  Agreement  dated  October 24, 1994 by and between  Rory J. Reid and
     Lady Luck Gaining  Corporation.  Incorporated by reference to Exhibit 10.42
     to the 1994 Form 10-K.

10.35Amended  and  Restated  Joint  Venture  Agreement  by and  among  Old River
     Development,   Inc.,  D.J.  Brata,  Bally's  Operator,   Inc.,  a  Delaware
     corporation,  Bally's Tunica,  Inc., a Mississippi  corporation and Bally's
     Olympia Limited Partnership,  a Delaware limited partnership dated February
     24,  1995.  Incorporated  by  reference  to  Exhibit  2(a) to the  Form 8-K
     previously filed on February 28, 1995.

10.36Stock  Exchange  Agreement  dated  December  30, 1994 by and between  Grace
     Brothers,  Ltd.  an  Illinois  limited  partnership  and Lady  Luck  Gaming
     Corporation.  Incorporated  by reference to Exhibit  10.44 to the 1994 Form
     10-K.

10.37Stock  Exchange  Agreement  dated  February  17, 1995 by and between  Grace
     Brothers,  Ltd.  an  Illinois  limited  partnership  and Lady  Luck  Gaming
     Corporation.  Incorporated  by reference to Exhibit  10.45 to the 1994 Form
     10-K.


                                                                 47
<PAGE>

10.38Real Estate Lease dated January 12, 1995 by and among Greenbridge  Company,
     an Iowa corporation,  Bettendorf Riverfront  Development Company,  L.C., an
     Iowa limited liability company, Lady Luck Bettendorf, L.C., an Iowa limited
     liability company and Lady Luck Quad Cities, Inc., a Delaware  corporation.
     Incorporated by reference to Exhibit 10.46 to the 1994 Form 10-K.

10.39Operating  Agreement  dated  December 2, 1994 by and between Lady Luck Quad
     Cities, Inc., a Delaware corporation and Bettendorf Riverfront  Development
     Company, L.C., an Iowa limited liability company. Incorporated by reference
     to Exhibit 10.47 to the 1994 Form 10-K.

10.40Charter  Agreement  dated  December  9, 1994 by and among Lady Luck  Gaming
     Corporation,  Lady Luck Kimmswick, Inc. and Lady Luck Bettendorf,  L.C., an
     Iowa limited liability company.  Incorporated by reference to Exhibit 10.48
     to the 1994 Form 10-K.

10.41Memorandum   of  Intent   dated   February   22,  1995  by  and  among  C-A
     International  Associates,  a Virginia  limited  partnership  and Lady Luck
     Mississippi,  Inc.  Incorporated  by reference to Exhibit 10.50 to the 1994
     Form 10-K.

10.42Agreement  of General  Partnership  dated as of  November  30,  1995 by and
     among Lady Luck  Kimmswick,  Inc., a Missouri  corporation and Davis Gaming
     Company II.  Incorporated  by  reference to Exhibit 2 to the Form 8-K dated
     December 1, 1995.

10.43Memorandum  of  Understanding  between  Lady Luck Biloxi,  Inc.,  Lady Luck
     Gaming  Corporation and Algernon Blair,  Inc.  Incorporated by reference to
     Exhibit 10.58 to the Form S-4, No. 91616.

10.44Contribution  and Sale  Agreement  dated February 5, 1996 between Lady Luck
     Mississippi,  Inc. and Holstar, Inc. Incorporated by reference to Exhibit 2
     to the Form 8-K dated February 5, 1996.

10.45License  Agreement  dated as of January  1, 1996  among  Lady Luck  Casino,
     Inc.,  Lady Luck Gaming  Corporation  and the other  parties  listed on the
     signature pages thereto.  Incorporated by reference to Exhibit 10.45 to the
     1995 Form 10-K.

10.46Services  Agreement  dated as of January  1, 1996  among  Lady Luck  Gaming
     Corporation and Marco Polo International  Marketing,  Inc.  Incorporated by
     reference to Exhibit 10.46 to the 1995 Form 10-K.

10.47Office   Lease  dated  as  of  January  1,  1996  among  Lady  Luck  Gaming
     Corporation and Gemini, Inc.  Incorporated by reference to Exhibit 10.47 to
     the 1995 Form 10-K.

10.48Assignment and Assumption  Agreement dated as of January 1, 1996 among Lady
     Luck  Gaming  Corporation  and Lady  Luck  Casinos,  Inc.  Incorporated  by
     reference to Exhibit 10.48 to the 1995 Form 10-K.

10.49Contract for the  Purchase  and Sale of Real Estate and  Personal  Property
     dated as of April 12, 1996 by and between River Park Hotel Group,  Inc. and
     Lady Luck Mississippi, Inc.

27   Financial Data Schedule


     (b)     Reports on Form 8-K

             None.




                                                                 

                                                             48
<PAGE>
                                    SIGNATURES



     Pursuant to the  requirements  of the Securities  Exchange Act of 1934, the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.
 
 
 
 
                                                   Lady Luck Gaming Corporation
                                                                     Registrant


DATE: November 13, 1996
 
                                                   /s/James D. Bowen
                                                   James D. Bowen
                                                   Vice President Finance and
                                                   Principal Accounting Officer
                                                   and duly authorized officer