##### Table of Contents



UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
 Washington, D.C.
    20549
  Form 10-Q
  (Mark One)þ

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934For the quarterly period ended
    March 31, 2006oro

TRANSITION REPORT PURSUANT TO SECTION 13 OR
    15 (d)
    OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period
    from          to   Commission file
    number 333-110484
  Atlantic Coast
    Entertainment
 Holdings, Inc.
 (Exact name of registrant as
    specified in its charter)
  DELAWARE

54-2131349(State or other jurisdiction
    of
    incorporation or organization)

(I.R.S. Employer
    Identification No.)C/o Sands Hotel &
    Casino
    Indiana Avenue & Brighton Park
    Atlantic City, New Jersey

08401(Zip Code)(Address of registrants
    principal executive offices)   (609) 441-4633
 (Registrants telephone
    number, including area code)
  þ o
  non-accelerated Rule 12b-2
 o o þ
  Rule 12b-2 o þ
    Registrant

Class

Outstanding at May 5,
    2006Atlantic Coast Entertainment
    Holdings, Inc.

Common stock, $
0.01 par value



6,916,914 shares




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TABLE OF
    CONTENTS
  PagePart I


FINANCIAL
    INFORMATIONItem 1.


Unaudited Condensed
    Consolidated Financial Statements


2Condensed
    Consolidated Balance Sheets as of March 31, 2006
    (unaudited) and December 31, 2005


2Condensed
    Consolidated Statements of Income for the three months ended
    March 31, 2006 and March 31, 2005 (unaudited)


3Condensed
    Consolidated Statements of Cash Flows for the three months ended
    March 31, 2006 and March 31, 2005 (unaudited)


4Notes to Condensed
    Consolidated Financial Statements (unaudited)


5Item 2.


Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations


7Item 3.


Quantitative and
    Qualitative Disclosures About Market Risk


10Item 4.


Controls and
    Procedures


11 





 Part II


OTHER
    INFORMATIONItem 1.


Legal
    Proceedings


11Item 1A.


Risk Factors


11Item 6.


Exhibits


12EX-31.1: CERTIFICATIONEX-31.2: CERTIFICATIONEX-32.1: CERTIFICATIONEX-32.2: CERTIFICATION   1




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PART I.
    FINANCIAL INFORMATION  Item 1.
    UNAUDITED
    CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  ATLANTIC
    COAST ENTERTAINMENT HOLDINGS, INC. AND SUBSIDIARY
  CONDENSED
    CONSOLIDATED BALANCE SHEETS
  As of


As ofMarch 31, 2006


December 31, 2005(Unaudited)(In thousands, except share
    data)ASSETSCurrent Assets:Cash and cash equivalents

$
15,991


$
13,711Accounts receivable, net


4,332



3,745Other current assets


8,803



10,170Total Current Assets


29,126



27,626Property and equipment, net


157,384



160,603Obligatory investments, net


13,015



12,929Deferred financing costs and other
    assets


3,253



3,510Total Other Assets


16,268



16,439TOTAL ASSETS

$
202,778


$
204,668LIABILITIES AND
    SHAREHOLDERS EQUITYCurrent Liabilities:Line of credit

$



$
1,500Accounts payable


3,153



3,746Related party payable


619



559Accrued expenses


7,922



7,940Accrued payroll and related
    expenses


7,533



6,798Note payable


1,366



2,048Current portion of capital lease
    obligation


314



310Total Current Liabilities


20,907



22,901Long-Term Liabilities:Long-term debt, less current
    portion


37,459



37,459Capital lease obligations, less
    current portion


170



251Other


6,281



5,965Total Long-Term Liabilities


43,910



43,675Total Liabilities


64,817



66,576Commitments and ContingenciesShareholders Equity:Common stock; $0.01 par
    value; 20,000,000 shares authorized; 6,916,914 shares
    outstanding


69



69Additional paid-in capital


187,304



187,304Warrants outstanding


9,735



9,735Accumulated deficit


(59,147
)


(59,016
)Total Shareholders Equity


137,961



138,092TOTAL LIABILITIES AND
    SHAREHOLDERS EQUITY

$
202,778


$
204,668    2




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ATLANTIC
    COAST ENTERTAINMENT HOLDINGS, INC. AND SUBSIDIARY
  CONDENSED
    CONSOLIDATED STATEMENTS OF INCOME
  Three Months


Three MonthsEnded


EndedMarch 31, 2006


March 31, 2005(Unaudited)(In thousands, except share
    data)REVENUES:Casino

$
37,350


$
37,341Hotel


2,888



2,294Food and beverage


4,405



4,866Other income


538



807Gross Revenues


45,181



45,308Less promotional allowances


4,408



5,343Net Revenues


40,773



39,965COSTS AND EXPENSES:Casino


11,358



11,827Hotel


1,228



703Food and beverage


2,077



1,566Other operating expenses


231



209Selling, general and administrative


21,112



22,864Depreciation and amortization


3,823



4,026Provision for obligatory
    investments


368



238Gain on sale of assets






(4
)Total Costs and Expenses


40,197



41,429INCOME (LOSS) FROM OPERATIONS


576



(1,464
)OTHER INCOME (EXPENSE):Interest income


203



107Interest expense


(658
)


(1,193
)Debt restructuring costs






(23
)Total other expense, net


(455
)


(1,109
)INCOME (LOSS) BEFORE INCOME TAXES


121



(2,573
)Provision for income taxes


252



247NET LOSS

$
(131
)

$
(2,820
)Basic/diluted loss per common share

$
(0.02
)

$
(0.98
)Weighted average common shares
    outstanding


6,916,914



2,882,938    3




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ATLANTIC
    COAST ENTERTAINMENT HOLDINGS, INC. AND SUBSIDIARY
  CONDENSED
    CONSOLIDATED STATEMENTS OF CASH FLOWS
  Three Months EndedMarch 31, 2006


March 31, 2005(Unaudited)(In thousands)CASH FLOWS FROM OPERATING
    ACTIVITIES:Net loss

$
(131
)

$
(2,820
)Adjustments to reconcile net loss
    to net cash provided by operating activities:Depreciation and amortization


3,823



4,026Gain on sale or disposal of assets






(4
)Provision for obligatory
    investments


368



238Changes in operating assets and
    liabilities:Accounts receivable, net


(587
)


729Other assets


1,494



(1,946
)Accounts payable and accrued
    expenses


124



704Other liabilities


327



576Net Cash Provided By Operating
    Activities


5,418



1,503CASH FLOWS FROM INVESTING
    ACTIVITIES:Acquisition of property and
    equipment


(552
)


(571
)Purchase of obligatory investments


(470
)


(553
)Proceeds from sale of obligatory
    investments


83



132Proceeds from sale of property and
    equipment






4Net Cash Used In Investing
    Activities


(939
)


(988
)CASH FLOWS FROM FINANCING
    ACTIVITIES:Proceeds from borrowing on line of
    credit


1,000



4,000Payments on line of credit


(2,500
)


Increase in related party payables


60



217Payments on note payable


(682
)Payments on capital lease
    obligation


(77
)


(59
)Deferred financing costs






(33
)Return of capital of GB Holdings,
    Inc.






(2,467
)Net Cash (Used In) Provided By
    Financing Activities


(2,199
)


1,658Net increase in cash and cash
    equivalents


2,280



2,173Cash and cash
    equivalents  beginning of period


13,711



12,756Cash And Cash
    Equivalents  end of period

$
15,991


$
14,929SUPPLEMENTAL DISCLOSURES OF CASH
    FLOW INFORMATION:Cash paid during the period for
    interest, net of amounts capitalized

$
55


$
89Cash paid during the period for
    income taxes

$
88


$
88    4




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ATLANTIC
    COAST ENTERTAINMENT HOLDINGS, INC. AND SUBSIDIARY
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 (Unaudited)
  Note 1.
    The
    Company      Note 2.
    Basis of
    Presentation  Form 10-K No. 333-110484).
    Principles
    of Consolidation
    Note 3.
    Related
    Party Transactions  out-of-pocket
     5




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ATLANTIC
    COAST ENTERTAINMENT HOLDINGS, INC. AND SUBSIDIARY
  NOTES TO
    CONDENSED CONSOLIDATED
    FINANCIAL STATEMENTS  (Continued)
      Note 4.
    Line of
    Credit    Note 5.
    Commitments
    and Contingencies      Legal
    Proceedings
      Note 6.
    Income
    Taxes   6




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Item 2.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations  Form 10-K
  Overview
      Number ofCasino

Hotel

Number of

Number ofSquare Footage

Rooms

Slots

Table Games80,000


620



2,154



80    7




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Results
    of Operations
  Three
    Months Ended March 31, 2006 Compared to Three Months
    Ended
    March 31, 2005
  Three Months EndedMarch 31,2006


2005


% Change(in millions)INCOME STATEMENT
    DATA:Revenues:Casino

$
37.4


$
37.3



0.3
%Hotel


2.9



2.3



26.1
%Food and beverage


4.4



4.9



(10.2
)%Other


0.5



0.8



(37.5
)%Gross revenues


45.2



45.3



(0.2
)%Less promotional allowances


4.4



5.3



(17.0
)%Net revenues


40.8



40.0



2.0
%Costs and expenses:Casino


11.4



11.8



(3.4
)%Hotel


1.2



0.7



71.4
%Food and beverage


2.1



1.6



31.3
%Other operating expenses


0.2



0.2



0.0
%Selling, general and administrative


21.1



22.9



(7.9
)%Depreciation and amortization


3.8



4.0



(5.0
)%Provision for obligatory
    investments


0.4



0.2



100.0
%Total costs and expenses


40.2



41.4



(2.9
)%Income (loss) from operations

$
0.6


$
(1.4
)


142.9
%   Gross
    Revenues
    Casino
    Revenues
    Non-Casino
    Revenues
   8




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Promotional
    Allowances
    Operating
    Expenses
            Interest
    Expense
    Financial
    Condition
  Liquidity
    and Capital Resources
   9




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Forward
    Looking Statements
  Form 10-K
  We warn you that forward-looking statements are only
    predictions. Actual events or results may differ as a result of
    risks that we face. Forward-looking statements speak only as of
    the date they were made and we undertake no obligation to update
    them.
  Item 3.
    Quantitative
    and Qualitative Disclosures About Market Risk   10




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Item 4.
    Controls
    and Procedures  Rule 13a-15(e) 15d-15(e).
     PART II.
    OTHER INFORMATION  Item 1.
    Legal
    Proceedings      Item 1A.
    Risk
    Factors  Form 10-K
 11




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Item 6.
    Exhibits  31
.1

Certification of Principal
    Executive Officer, pursuant to Section 302(a) of the
    Sarbanes-Oxley Act of 2002.31
.2

Certification of Principal
    Financial Officer, pursuant to Section 302(a) of the
    Sarbanes-Oxley Act of 2002.32
.1

Certification of Chief Executive
    Officer, pursuant to Section 906 of the Sarbanes-Oxley Act
    2002.32
.2

Certification of Chief Financial
    Officer, pursuant to Section 906 of the Sarbanes-Oxley Act
    2002.  12




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SIGNATURES
             13




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EXHIBITS INDEX
  ExhibitNo.

Description31
.1

Certification of Principal
    Executive Officer, pursuant to Section 302(a) of the
    Sarbanes-Oxley Act of 2002.31
.2

Certification of Principal
    Financial Officer, pursuant to Section 302(a) of the
    Sarbanes-Oxley Act of 2002.32
.1

Certification of Chief Executive
    Officer, pursuant to Section 906 of the Sarbanes-Oxley Act
    2002.32
.2

Certification of Chief Financial
    Officer, pursuant to Section 906 of the Sarbanes-Oxley Act
    2002.