===============================================================================


                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 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 June 30, 2005
                                       OR
|_|             TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                  For the transition period from        to

                       Commission file number 333-114335

                          POSTER FINANCIAL GROUP, INC.
             (Exact name of registrant as specified in its charter)

               Nevada                                  56-2370836
   (State or other jurisdiction           (I.R.S. Employer Identification No.)
 of incorporation or organization)

                    129 E. Fremont Street, Las Vegas, Nevada
                    (Address of principal executive offices)

                                     89101
                                   (Zip Code)

                                 (702) 385-7111
               Registrant's telephone number, including area code

                                      N/A
              (Former name, former address and former fiscal year,
                         if changed since last report)

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

Indicate by check mark whether the registrant is an accelerated filer.
Yes |_|    No |X|

     Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.

    Common Stock, no par value, 100 outstanding shares as of August 12, 2005




===============================================================================

<PAGE>

                                   Form 10-Q

                               TABLE OF CONTENTS

Part I.    Financial Information

Item 1.    Financial Statements
           Poster Financial Group, Inc.

           Consolidated Balance Sheets as of December 31, 2004 and June 30, 2005
           (unaudited)
           Unaudited Consolidated Statements of Operations for the Three and Six
           Months Ended June 30, 2004 and 2005
           Unaudited Consolidated Statements of Cash Flows for the Six Months
           Ended June 30, 2004 and 2005
           Notes to Unaudited Consolidated Financial Statements

           Golden Nugget Group (1)

           Unaudited Combined Statements of Operations for the Period January 1,
           2004 to January 22, 2004 (Date Immediately Prior to Acquisition by
           Poster Financial)
           Unaudited Combined Statements of Cash Flows for the Period January 1,
           2004 to January 22, 2004 (Date Immediately Prior to Acquisition by
           Poster Financial)
           Notes to Unaudited Combined Financial Statements

           ---------------------------------------------------------------------
           (1) Poster Financial Group, Inc. completed the acquisition of the
           Golden Nugget Group on January 23, 2004. When a registrant acquires
           a business, it is required under Rule 3-05 of Regulation S-X under
           the Securities Act to assess the significance of the acquired
           business to determine whether the acquired business' historical
           financial statements must be included with any subsequent financial
           statements of the acquirer (this requirement relates to both audited
           annual financial statements and unaudited interim financial
           statements). The acquisition of the Golden Nugget Group was
           significant. Accordingly, the financial statements of the Golden
           Nugget Group are included in the Quarterly Report on Form 10-Q in
           order to comply with Rule 3-05 of Regulation S-X.


Item 2.    Management's Discussion and Analysis of Financial Condition and
           Results of Operations                                              27

Item 3.    Quantitative and Qualitative Disclosures About Market Risk         38

Item 4.    Disclosure Controls and Procedures                                 39


Part II.   Other Information                                                  40

Item 1.    Legal Proceedings                                                  40

Item 2.    Changes in Securities and Use of Proceeds                          40

Item 3.    Defaults Upon Senior Securities                                    40

Item 4.    Submission of Matters to a Vote of Security Holders                40

Item 5.    Other Information                                                  40

Item 6.    Exhibits                                                           40

Signature                                                                     41

                                       2
<PAGE>

                          Poster Financial Group, Inc.
                 (A Wholly Owned Subsidiary of PB Gaming, Inc.)

<TABLE>
                          Consolidated Balance Sheets
                             (Thousands of dollars)

<CAPTION>
                                                                 December 31, 2004     June 30, 2005
                                                                 -----------------   -----------------
                                                                                         (unaudited)
<S>                                                                     <C>                 <C>
Assets
Current assets
    Cash and cash equivalents                                           $   15,321          $   24,564
    Accounts receivable, net                                                16,370               8,037
    Inventories                                                              3,228               3,536
    Prepaid expenses and other                                               4,832               6,968
    Assets held for sale                                                    43,076                  --
                                                                 -----------------   -----------------
         Total current assets                                               82,827              43,105
Property and equipment, net                                                152,793             178,254
Investment in joint venture                                                  5,351               5,306
Deposits and other assets, net                                              36,203              35,505
                                                                 -----------------   -----------------
         Total assets                                                   $  277,174          $  262,170
                                                                 =================   =================

Liabilities and Stockholder's Equity
Current liabilities
      Accounts payable                                                   $   8,534           $   8,462
      Current portion of notes payable                                         119                 119
      Bank credit facility classified as currently payable                  36,036               2,800
      Other accrued liabilities                                             33,224              27,729
      Liabilities related to assets held for sale                            5,783                  --
                                                                 -----------------   -----------------
         Total current liabilities                                          83,696              39,110
Notes payable, net of current portion                                      155,272             183,695
                                                                 -----------------   -----------------
         Total liabilities                                                 238,968             222,805
                                                                 -----------------   -----------------
Contingencies and Commitments
Stockholder's equity
     Common stock (no par value; 10,000 shares authorized;
     100 shares issued and outstanding)                                         --                  --
     Paid-in capital in excess of par value                                 50,000              53,000
     Retained deficit                                                      (11,794)            (13,635)
                                                                 -----------------   -----------------
         Total stockholder's equity                                         38,206              39,365
                                                                 -----------------   -----------------
         Total liabilities and stockholder's equity                     $  277,174          $  262,170
                                                                 =================   =================
</TABLE>

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

                                       3
<PAGE>

                          Poster Financial Group, Inc.
                 (A Wholly Owned Subsidiary of PB Gaming, Inc.)


<TABLE>
                Unaudited Consolidated Statements of Operations
                             (Thousands of dollars)

<CAPTION>
                                                         Three Months ended          Six Months Ended
                                                       ----------------------     ----------------------
                                                              June 30,                    June 30,
                                                       ----------------------     ----------------------
                                                          2004         2005          2004         2005
                                                       ---------    ---------     ---------    ---------
<S>                                                     <C>          <C>          <C>          <C>
Revenues
         Casino                                         $ 45,009     $ 39,549     $ 83,955     $ 84,887
         Rooms                                            12,439       14,001       22,497       28,832
         Food and beverage                                13,723       14,070       22,952       28,950
         Entertainment, retail and other                   3,100        2,840        5,989        5,716
                                                       ---------    ---------     ---------    ---------
                  Gross revenues                          74,271       70,460      135,393      148,385
                  Promotional allowances                  (8,610)      (8,059)     (15,850)     (17,666)
                                                       ---------    ---------     ---------    ---------
                  Net revenues                            65,661       62,401      119,543      130,719
                                                       ---------    ---------     ---------    ---------
Costs and expenses
         Casino                                           26,347       23,403       46,722       50,197
         Rooms                                             5,285        5,971        9,094       11,301
         Food and beverage                                 9,101        9,518       15,368       18,459
         Entertainment, retail and other                   2,463        2,214        4,815        4,722
         Provision for doubtful accounts                     464          556        1,075        1,496
         General and administrative                       13,249       12,792       23,828       26,149
              Severance payments                              --           --           --        1,268
         (Gain) loss on disposal of fixed assets              --           (7)          --         (493)
         Depreciation and amortization                     4,312        4,857        7,081        8,896
                                                       ---------    ---------     ---------    ---------
                  Total cost and expenses                 61,221       59,304      107,983      121,995
                                                       ---------    ---------     ---------    ---------
         Operating income                                  4,440        3,097       11,560        8,724
                                                       ---------    ---------     ---------    ---------

Other income (expense)
         Equity in loss of joint venture                    (173)        (364)        (256)        (514)
         Interest income                                      13           11           89           19
         Interest expense                                 (4,206)      (4,536)      (8,157)      (9,091)
                                                       ---------    ---------     ---------    ---------
                  Total other income (expense)            (4,366)      (4,889)      (8,324)      (9,586)
                                                       ---------    ---------     ---------    ---------

Net income (loss)                                         $   74     $ (1,792)    $  3,236      $  (862)
                                                       =========    =========     =========    =========
</TABLE>

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

                                       4
<PAGE>

                          Poster Financial Group, Inc.
                 (A Wholly Owned Subsidiary of PB Gaming, Inc.)

<TABLE>
                Unaudited Consolidated Statements of Cash Flows
                             (Thousands of dollars)
<CAPTION>
                                                                                                 Six Months Ended June 30,
                                                                                               -------------------------------

                                                                                                    2004             2005
                                                                                               --------------   --------------
<S>                                                                                                 <C>              <C>
Cash flows from operating activities
Net income (loss)                                                                                   $  3,236         $   (862)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
         Depreciation and amortization                                                                 7,081            8,896
         Provision for doubtful accounts                                                               1,075            1,496
         Gain on sale of assets                                                                           --            (493)
         Equity in loss of joint venture                                                                 256              514
Changes in operating assets and liabilities, net of amounts resulting from
  acquisition of the Golden Nugget Group:
         (Increase) decrease in accounts receivable                                                   (7,353)           7,172
         (Increase) decrease in inventories                                                             (190)             388
         (Increase) decrease in prepaid expenses and other                                            (2,320)            (711)
         (Increase) decrease in deposits and other assets                                                (36)           1,246
         Increase (decrease) in accounts payable                                                       2,399             (438)
         Increase (decrease) in other accrued liabilities                                              5,106           (7,736)
                                                                                               --------------   --------------

                  Net cash provided by operating activities                                            9,254            9,472
                                                                                               --------------   --------------

Cash flows from investing activities
Acquisition of property, equipment and improvements                                                   (9,767)          (3,734)
Acquisition of the Golden Nugget Group, net of cash acquired of $11,942                             (201,781)              --
Proceeds from sale of equipment                                                                           --            1,146
Contributions to joint venture                                                                          (235)            (469)
Increase in restricted cash                                                                          159,548               --
                                                                                               --------------   --------------

                  Net cash used in investing activities                                              (52,235)          (3,057)
                                                                                               --------------   --------------

Cash flows from financing activities
Payments on senior secured notes payable                                                                  --           (1,400)
Proceeds from issuance of term loan                                                                   20,000               --
Net borrowings (repayments) under revolving credit facility                                            6,645           (3,413)
Change in bank overdraft                                                                              (1,332)          (3,178)
Distributions to PB Gaming                                                                            (2,517)            (979)
Additional contributions of equity from PB Gaming                                                     39,117            3,000
                                                                                               --------------   --------------

                  Net cash provided by (used in) financing activities                                 61,913           (5,970)
                                                                                               --------------   --------------

Net increase in cash and cash equivalents                                                             18,932              445
Cash and cash equivalents, beginning of period                                                            --           24,119
                                                                                               --------------   --------------
Cash and cash equivalents, end of period                                                           $  18,932        $  24,564
                                                                                               ==============   ==============
</TABLE>

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

                                       5
<PAGE>
                          Poster Financial Group, Inc.
                 (A Wholly Owned Subsidiary of PB Gaming, Inc.)

              Notes to Unaudited Consolidated Financial Statements


1.  Organization

         Poster Financial Group, Inc. ("Poster Financial" or the "Company") is
a Nevada corporation, formed on June 2, 2003 as a holding corporation, for the
purpose of completing the acquisition (the "Acquisition") of the Golden Nugget
Group, as more fully described in Note 3. The Company is a wholly owned
subsidiary of PB Gaming, Inc. ("PB Gaming" or the "Parent").

         After completion of the Acquisition, the Company owns and operates the
following entities, each of which operates as a separate business segment:

         o        Golden Nugget--Las Vegas, a hotel-casino and entertainment
                  resort located in downtown Las Vegas, Nevada and operated by
                  GNLV, CORP., a Nevada corporation ("GNLV").

         o        Golden Nugget--Laughlin, a hotel-casino resort located in
                  Laughlin, Nevada and operated by GNL, CORP., a Nevada
                  corporation ("GNL").

         GNLV also has a wholly owned subsidiary, Golden Nugget Experience, LLC
("GNE"), a Nevada limited liability company. GNE is a holding company that has
an investment in The Fremont Street Experience Limited Liability Company, a
Nevada limited liability company (the "Fremont Street Experience") organized to
enhance tourism in downtown Las Vegas, Nevada. The Fremont Street Experience is
owned by a group of unrelated casino operators in downtown Las Vegas, and
operates retail malls, parking garages, entertainment venues and a pedestrian
mall that encloses a city street (Fremont Street), located adjacent to the
Golden Nugget--Las Vegas. GNE holds 17.65% of the voting units and 50.0% of the
non-voting units of the Fremont Street Experience, and accounts for its
investment utilizing the equity method of accounting.

         The Acquisition closed on January 23, 2004. The total purchase price
for the Group was approximately $216.7 million, comprised of a base purchase
price of $215.0 million, adjusted for working capital of the Group at the date
of closing (a decrease in the purchase price of approximately $1.8 million at
closing) and transaction expenses of approximately $3.5 million.

         On November 8, 2004, Poster Financial entered into a stock purchase
agreement (the "Barrick Purchase Agreement") to sell the Golden Nugget
--Laughlin to Las Vegas-based gaming and real estate company, Barrick Gaming
Corporation ("Barrick") for $31 million, plus working capital at the closing of
the transaction as calculated under the Barrick Purchase Agreement. The parties
previously agreed to extend the outside termination date of the Barrick
Purchase Agreement from May 8, 2005 to May 31, 2005.

         Since the transaction did not close by May 31, 2005, the Barrick
Purchase Agreement automatically terminated in accordance with its terms and
therefore is of no further force and effect. On June 1, 2005, Poster Financial
filed a complaint against Barrick seeking the release of a $1.0 million deposit
from escrow on account of Barrick's failure to acquire the stock of the Golden
Nugget-Laughlin before the transaction's May 31, 2005 expiration date.

         On March 24, 2005, in connection with the proposed sale of the Golden
Nugget--Laughlin, we sold a motel formerly used by the Golden Nugget--Laughlin
to an unrelated third party. The motel is located in Bullhead City, Arizona and
occupies approximately two acres of land. Net proceeds from the sale were
approximately $1.1 million and were used to pay down debt outstanding under the
Credit Facility.

         On February 4, 2005, Poster Financial entered into an agreement (the
"Landry's Purchase Agreement") to sell the Company to Houston, Texas-based
Landry's Restaurants, Inc. ("Landry's") for approximately $140 million in cash,
and an additional payment by Landry's for certain working capital liabilities.
Under the terms of the transaction, PB Gaming has agreed to sell all of the
shares of Poster Financial to LSRI Holdings, Inc. ("LSRI"), a wholly owned
subsidiary of Landry's. Pursuant to the terms of the Landry's Purchase
Agreement, LSRI deposited $25.0 million into an escrow account as a
non-refundable deposit, except as otherwise expressly provided for in the
purchase agreement.

                                       6
<PAGE>

                          Poster Financial Group, Inc.
                 (A Wholly Owned Subsidiary of PB Gaming, Inc.)

              Notes to Unaudited Consolidated Financial Statements


         Landry's informed Poster Financial that on May 11, 2005, LSRI assigned
to Landry's Gaming, Inc., a newly formed Nevada corporation and wholly owned
subsidiary of Landry's ("Landry's Gaming"), all of LSRI's rights, interests and
obligations in, to and under the Landry's Purchase Agreement, and Landry's
Gaming accepted and assumed all rights, interests and obligations of LSRI under
the Landry's Purchase Agreement and agreed to be bound by the terms of the
Landry's Purchase Agreement as the assignee of LSRI. This assignment and
assumption does not relieve LSRI of its obligations under the Landry's Purchase
Agreement.

         Pursuant to the terms of the Landry's Purchase Agreement, LSRI
deposited $25 million into an escrow account with Chicago Title of Nevada,
Inc., the escrow agent, as a non-refundable deposit, except as otherwise
expressly provided in the Landry's Purchase Agreement. Landry's Gaming may
terminate the Landry's Purchase Agreement for any reason or no reason in its
sole and absolute discretion.

         Under the terms of the Landry's Purchase Agreement, the outstanding
8 3/4% Senior Secured Notes due 2011 (the "Senior Notes") will remain
outstanding obligations of Poster Financial following the closing. The
consummation of the sale will result in a change of control of Poster Financial
under the indenture governing the Senior Notes and, as a result, Poster
Financial will be required within 30 days of such change of control to commence
an offer to purchase all outstanding Senior Notes for 101% of the aggregate
principal amount of the Senior Notes, plus any accrued and unpaid interest.
Under the terms of the Landry's Purchase Agreement, amounts outstanding at
closing under the Company's senior secured credit facility will be paid off by
Landry's or Landry's will seek consent from the lender under such facility for
such amounts to remain outstanding.

         As a result of the Barrick Purchase Agreement terminating in
accordance with its terms, Landry's Gaming will acquire the Golden
Nugget--Laughlin in addition to the Golden Nugget--Las Vegas because the Golden
Nugget--Laughlin remains a wholly owned subsidiary of Poster Financial. Under
the terms of the Landry's Purchase Agreement, there is no adjustment to the
cash purchase price for the acquisition of the Golden Nugget--Laughlin because
the net proceeds that would have been applied to outstanding balances under the
Credit Facility would not have been received from Barrick. Landry's will thus
pay off, or assume as the case may be, an equivalently larger liability under
the Credit Facility.


2.  Significant Accounting Policies and Basis of Presentation

         The consolidated financial statements included herein have been
prepared by the Company, without audit, pursuant to the rules and regulations
of the Securities and Exchange Commission (SEC). Certain information and
footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been condensed or
omitted pursuant to such rules and regulations. The preparation of the
consolidated financial statements requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent liabilities at the date of the financial statements
and the reported amounts of revenue and expenses during the reporting period.
Actual results could differ from those estimates. In the opinion of management,
all adjustments, consisting of normal recurring items and estimates necessary
for a fair presentation of the results for interim periods, have been made.
These consolidated financial statements should be read in conjunction with the
financial statements and notes thereto included in the 2004 Form 10-K and the
first quarter 2005 Form 10-Q.

         Principles of Consolidation

         All inter-company accounts and transactions between the Company and
GNLV and GNL are eliminated in consolidation. All inter-company accounts and
transactions between GNLV and GNE are eliminated in consolidation.

         GNL was treated as a discontinued operation and its assets were
classified as held for sale at December 31, 2004, due to the Barrick Purchase
Agreement. As more fully explained in Note 1, such agreement was cancelled
during the quarter ended June 30, 2005. Accordingly, the assets of the GNL
segment were reclassified from assets held for sale, and the

                                       7
<PAGE>

                          Poster Financial Group, Inc.
                 (A Wholly Owned Subsidiary of PB Gaming, Inc.)

              Notes to Unaudited Consolidated Financial Statements


Company no longer reports its results in discontinued operations.

         The depreciation of GNL's fixed assets were suspended from November
2004, the time the assets were classified as held for sale, through termination
of the sale agreement in May 2005. In accordance with accounting principles
generally accepted in the United States of America, the Company recorded a
catch-up adjustment in the amount of approximately $818,000 in June 2005, to
recognize such depreciation expense. Approximately $190,000 of the adjustment
related to depreciation that would have been recognized in 2004, and
approximately $628,000 of the adjustment related to depreciation that would
have been recognized during the six months ended June 30, 2005.

         Concentration of Credit Risk

         Financial instruments that potentially subject the Company to
concentrations of credit risk consist principally of casino accounts
receivable. The Company extends credit to approved casino customers following
background checks and investigations of creditworthiness.

         Trade receivables, including casino and hotel receivables, are
typically non-interest bearing and are initially recorded at cost. Accounts are
written off when management deems the account to be uncollectible. Recoveries
of accounts previously written off are recorded when received. An estimated
allowance for doubtful accounts is maintained to reduce the Company's
receivables to their carrying amount, which approximates fair value. The
allowance is estimated based on specific review of customer accounts as well as
historical collection experience and current economic and business conditions.
Management believes that as of June 30, 2005, no significant concentrations of
credit risk existed for which an allowance had not already been recorded.

         Inventories

         Inventories consisting of principally food and beverage, operating
supplies and gift shop items are stated at the lower of cost or market value.
Cost is determined by the first-in, first-out method.

         Property and Equipment

         Property and equipment are stated at cost. Depreciation expense is
computed utilizing the straight-line method over the estimated useful lives of
the depreciable assets, as follows:

  Buildings and improvements                                    15 - 40 years
  Land improvements                                             15 - 40 years
  Equipment, furniture, fixtures and leasehold improvements      3 - 20 years

         Certain equipment held under capital leases are classified as property
and equipment and amortized using the straight-line method over the lease term
and the related obligations are recorded as liabilities. Costs of major
improvements are capitalized; costs of normal repairs and maintenance are
charged to expense as incurred. Gains or losses on dispositions of property and
equipment are recognized in the consolidated statements of operations when
incurred.

         Long-lived Assets

         Long-lived assets and certain identifiable intangibles held and used
by the Company are reviewed for impairment when events or changes in
circumstances warrant such a review. The carrying value of a long-lived or
intangible asset is considered impaired when the anticipated undiscounted cash
flow from such asset is less than its carrying value. In that event, an
impairment loss is recognized for the excess of carrying value over fair value.
Losses on long-lived assets to be disposed of are also determined based on fair
values, except that fair values are reduced for the cost of disposition.
Accounting principles generally accepted in the United States of America
require an annual review of all intangible assets with indefinite lives.

                                       8
<PAGE>

                          Poster Financial Group, Inc.
                 (A Wholly Owned Subsidiary of PB Gaming, Inc.)

              Notes to Unaudited Consolidated Financial Statements


         The total purchase price of the Company, including liabilities to be
assumed by Landry's, exceeds the carrying value of the Company's assets at June
30, 2005. Accordingly, no impairment of the Company's long-lived assets is
indicated.

         Revenue Recognition and Promotional Allowances

         Casino revenue is the aggregate net difference between gaming wins and
losses, with liabilities recognized for funds deposited by customers before
gaming play occurs ("casino front money") and for chips in the customer's
possession ("outstanding chip liability"). Casino revenues are recognized net
of certain sales incentives in accordance with the Emerging Issues Task Force
("EITF") consensus on Issue 01-9, "Accounting for Consideration Given by a
Vendor to a Customer (Including a Reseller of the Vendor's Products)." Under
the guidance of the EITF, the Company recognizes sales incentives as a
reduction of revenue. In addition, accruals for the cost of cash-back points in
point-loyalty programs, such as points earned in slot players clubs, are
recorded as a reduction of revenue.

         Hotel, food and beverage, entertainment and other operating revenues
are recognized as services are performed. Advance deposits on rooms and advance
ticket sales are recorded as accrued liabilities until services are provided to
the customer. The retail value of accommodations, food and beverage, and other
services furnished to hotel-casino guests without charge is included in gross
revenue and then deducted as promotional allowances.

         The estimated cost of providing such promotional allowances is
primarily included in casino expenses as follows (in thousands of dollars):

                        Three Months Ended June 30,  Six Months Ended June 30,
                        ---------------------------  --------------------------
                            2004          2005           2004          2005
                        -------------  ------------  -------------  -----------

Rooms                        $  1,851      $  1,799       $  3,530     $  4,008
Food and beverage               5,954         5,386         10,959       11,717
Other                             453           633          1,042        1,180
                        -------------  ------------  -------------  -----------
                             $  8,258      $  7,818       $ 15,531     $ 16,905
                        =============  ============  =============  ===========

         The estimated retail value of such promotional allowances is included
in operating revenues as follows (in thousands of dollars):

                        Three Months Ended June 30,  Six Months Ended June 30,
                        ---------------------------  --------------------------
                            2004          2005           2004          2005
                        -------------  ------------  -------------  -----------
Rooms                        $  3,128      $  2,781       $  5,524      $ 6,150
Food and beverage               5,037         4,893          9,388       10,756
Other                             445           385            938          760
                        -------------  ------------  -------------  -----------
                             $  8,610      $  8,059       $ 15,850     $ 17,666
                        =============  ============  =============  ===========

         Recently Issued Accounting Pronouncements

         In March 2004, the Financial Accounting Standards Board ("FASB")
approved the consensus reached on the Emerging Issues Task Force ("EITF") Issue
No. 03-1, "The Meaning of Other-Than-Temporary Impairment and Its Application
to Certain Investments." The Issue's objective is to provide guidance for
identifying other-than-temporarily impaired investments. EITF 03-1 also
provides new disclosure requirements for investments that are deemed to be
temporarily impaired. The accounting provisions of EITF 03-1 are effective for
all reporting periods beginning after June 15, 2004, while the disclosure
requirements are effective for annual periods ending after June 15, 2004. In
September 2004, the FASB issued a FASB Staff Position ("FSP") EITF 03-1-1 that
delays the effective date of the measurement and recognition guidance in EITF
03-1 on certain impaired debt securities until after further deliberations by
the FASB. The adoption of this

                                       9
<PAGE>

                          Poster Financial Group, Inc.
                 (A Wholly Owned Subsidiary of PB Gaming, Inc.)

              Notes to Unaudited Consolidated Financial Statements


pronouncement did not impact the Company's consolidated financial position,
results of operations or cash flows.

         In December 2004, the FASB issued Statement of Financial Accounting
Standards ("SFAS") No. 123R (revised 2004), "Share-Based Payment," which
revised SFAS No. 123, "Accounting for Stock-Based Compensation." This statement
supersedes APB Opinion No. 25, "Accounting for Stock Issued to Employees." The
revised statement addresses the accounting for share-based payment transactions
with employees and other third parties, eliminates the ability to account for
share-based compensation transactions using APB 25 and requires that the
compensation costs relating to such transactions be recognized in the
consolidated statement of operations. The revised statement is effective as of
the first annual period beginning after June 15, 2005. In accordance with the
revised statement, we will be required to recognize the expense attributable to
stock options granted or vested subsequent to December 31, 2005. The Company
does not have a stock option plan and no stock options have been issued to any
employees since the purchase of the Company from MGM MIRAGE. Accordingly, the
adoption of this pronouncement is not expected to have any effect on the
Company's consolidated financial position, results of operations and cash
flows.

         In November 2004, the FASB issued SFAS No. 151, "Inventory Costs,"
which amends part of ARB 43, "Inventory Pricing," concerning the treatment of
certain types of inventory costs. The provisions of ARB No. 43 provided that
certain inventory-related costs, such as double freight and re-handling might
be "so abnormal" that they should be charged against current earnings rather
than be included in the cost of inventory. As amended by SFAS No. 151, the
"so-abnormal" criterion has been eliminated. Thus, all such (abnormal) costs
are required to be treated as current-period charges under all circumstances.
In addition, fixed production overhead should be allocated based on the normal
capacity of the production facilities, with unallocated overhead charged to
expense when incurred. The Company maintains inventories for its restaurants,
gift shops, bars and other operations. SFAS 151 is required to be adopted for
fiscal years beginning after June 15, 2005, and is not expected to have a
material impact on the Company's financial position, results of operations or
cash flows.

         In December 2004, the FASB issued SFAS No. 153, "Exchanges of
Nonmonetary Assets" ("SFAS 153"), which eliminates the exception from fair
value measurement for nonmonetary exchanges of similar productive assets and
replaces it with a general exception from fair value measurement for exchanges
of nonmonetary assets that do not have commercial substance. SFAS 153 is
required to be adopted in fiscal periods beginning after June 15, 2005.
Management does not believe its adoption will have a material impact on the
Company's financial position, results of operations or cash flows.

         In June 2005, the FASB issued SFAS No. 154, "Accounting Changes and
Error Corrections--a replacement of APB No. 20 and FAS No. 3" ("SFAS 154").
SFAS 154 provides guidance on the accounting for and reporting of accounting
changes and error corrections. It establishes, unless impracticable,
retrospective application as the required method for reporting a change in
accounting principle in the absence of explicit transition requirements
specific to the newly adopted accounting principle. SFAS 154 also provides
guidance for determining whether retrospective application of a change in
accounting principle is impracticable and for reporting a change when
retrospective application is impracticable. The correction of an error in
previously issued financial statements is not an accounting change. However,
the reporting of an error correction involves adjustments to previously issued
financial statements similar to those generally applicable to reporting an
accounting change retrospectively. Therefore, the reporting of a correction of
an error by restating previously issued financial statements is also addressed
by SFAS 154. SFAS 154 is required to be adopted in fiscal years beginning after
December 15, 2005. The adoption of AFAS 154 is not expected to have a material
impact on the Company's financial position, results of operations and cash
flows.


3.  Golden Nugget Acquisition

         On January 23, 2004, the Company completed the Acquisition of the
Golden Nugget Group from MGM MIRAGE. The purchase price for the Acquisition was
approximately $213.7 million, reflecting a base purchase price of $215.0
million less an adjustment for working capital at the date of the closing of
approximately $4.8 million plus acquisition related expenses of approximately
$3.5 million. There are no contingent payments.

                                      10
<PAGE>

                          Poster Financial Group, Inc.
                 (A Wholly Owned Subsidiary of PB Gaming, Inc.)

              Notes to Unaudited Consolidated Financial Statements


         The transaction has been accounted for as a purchase and accordingly,
the purchase price has been allocated to the underlying assets acquired and
liabilities assumed based upon their estimated fair values at the date of the
Acquisition. Results of operations for the acquired companies have been
reflected in the Company's financial statements from the day the acquisition
closed.

         The following table summarizes the estimated fair values of the assets
acquired and liabilities assumed at the date of Acquisition. The allocation of
the purchase price to the fair value of net assets acquired has been based on
appraisals of the assets acquired (in thousands of dollars):

<TABLE>
<CAPTION>
                                                                                                Adjusted
                                                                                                Purchase
                                                             At               Revision           Price
                                                       January 23, 2004      in Estimate       Allocation
                                                      ------------------  ------------------  -------------
<S>                                                   <C>                 <C>                 <C>
Working Capital Items
Cash and cash equivalents                             $          11,943   $              --   $     11,943
Accounts receivable, net                                          4,219                  --          4,219
Inventories                                                       3,918                  --          3,918
Prepaid expenses and other                                        4,646                  --          4,646
Deposits and other assets                                         2,357                  --          2,357
Accounts payable and accrued liabilities                        (22,292)                 --        (22,292)
Notes payable                                                      (500)                 --           (500)
                                                      ------------------  ------------------  -------------
        Subtotal--Working Capital Items                           4,291                  --          4,291
                                                      ------------------  ------------------  -------------
Long-lived Assets:
Property & Equipment
     Land                                                        19,992               1,071         21,063
     Buildings                                                  132,620              (4,699)       127,921
     Construction in Progress                                     2,686                 162          2,848
     FFE and Equipment                                           29,900               1,978         31,878
Intangibles
     Tradename                                                   12,458                 666         13,124
     Player Club                                                  4,585                 300          4,885
     Artwork and Display Nugget                                   2,432                 177          2,609
Investment in Joint Venture                                       4,760                 345          5,105
                                                      ------------------  ------------------  -------------
        Subtotal--long-lived assets                             209,433                  --        209,433
                                                      ------------------  ------------------  -------------
Total purchase price allocated                        $         213,724   $              --   $    213,724
                                                      ==================  ==================  =============
</TABLE>

         In the quarter ended September 30, 2004 the Company adjusted its
initial purchase price allocation to reflect the results of a detailed cost
segregation study of the GNLV buildings. The study resulted in a reduction in
the net allocated cost to the building of approximately $4.7 million, offset by
pro-rata adjustments to other long-lived assets, and is reflected in the
amounts presented above. There was no goodwill resulting from the Acquisition.

                                      11
<PAGE>

                          Poster Financial Group, Inc.
                 (A Wholly Owned Subsidiary of PB Gaming, Inc.)

              Notes to Unaudited Consolidated Financial Statements


         Had the Acquisition taken place on January 1, 2004, results of
operations would have reflected the following pro forma amounts for the six
month period ended June 30, 2004 (in thousands of dollars):

                                                   Six Months
                                                 Ended June 30,
                                                      2004
                                                 ---------------
                 Net revenues                    $      134,348
                                                 ===============
                 Operating income                $       14,876
                                                 ===============
                 Net income                      $        6,498
                                                 ===============

         The principal differences between reported amounts and the pro forma
amounts result from the addition of historical operating results for the Golden
Nugget Group for the period January 1 through January 22, 2004; which
historical results are then adjusted for elimination of the MGM MIRAGE
management fee, changes in depreciation and amortization resulting from the new
basis in assets acquired, and elimination of the provision for income taxes due
to the election of PB Gaming to have each of its subsidiaries treated as a
qualified Subchapter S corporation subsidiary for income tax purposes. In
addition, signing bonuses paid to key executives upon completion of the
Acquisition of approximately $1.6 million are included in the actual results
for the six months ended June 30, 2004 but have been excluded from the pro
forma results presented above because such bonuses are non-recurring in nature,
are directly related to the Acquisition, and are not reflective of the results
of operations on a pro forma basis.


4.  Supplemental information relating to Cash Flows

         The following is supplemental cash flow information relating to
interest paid and distributions (for income taxes) to PB Gaming (in thousands
of dollars):

                                               Six Months Ended June 30,
                                               -------------------------
                                                  2004           2005
                                               ----------     ----------
         Interest paid                           $  7,110       $  8,018
                                               ==========     ==========
         Distributions for income taxes          $  1,399       $    979
                                               ==========     ==========


         The following information presents supplemental cash flows information
of assets acquired and liabilities assumed in connection with the Golden Nugget
Acquisition (in thousands of dollars):


         Accounts receivable                                       $   4,219
         Inventories                                                   3,918
         Prepaid expenses and other                                    4,646
         Property and equipment                                      183,710
         Tradename and other intangibles                              18,009
         Investment in joint venture                                   5,105
         Deposits and other assets                                     4,966
         Accounts payable                                             (2,098)
         Other accrued liabilities                                   (20,194)
         Notes payable                                                  (500)
                                                                   ---------
                                                                   $ 201,781
         Plus, cash acquired                                          11,943
                                                                   ---------
Total purchase price and acquisition costs                         $ 213,724
                                                                   =========

                                      12
<PAGE>
                          Poster Financial Group, Inc.
                 (A Wholly Owned Subsidiary of PB Gaming, Inc.)

              Notes to Unaudited Consolidated Financial Statements


5.   Employee Benefit Plan

         Employees of the Company who are members of various unions are covered
by union-sponsored, collective bargained, multi-employer health and welfare and
defined benefit pension plans. The Company recorded an expense of $5.1 million
for the six month period ended June 30, 2005 and $4.6 million for the period
from January 23, 2004 through June 30, 2004 under such plans. The plans'
sponsors have not provided sufficient information to permit the Company to
determine its share of unfunded vested benefits, if any. However, based on
available information, management does not believe that unfunded amounts
attributable to its casino operations are material.

         The Company is self-insured for most health care benefits for its
non-union employees. The liability for claims filed and estimates of claims
incurred but not reported is included in the "Other accrued liabilities"
caption in the accompanying consolidated balance sheets.

         The Company sponsors a retirement savings plan under Section 401(k) of
the Internal Revenue Code covering its non-union employees. The plan is
available to certain employees with at least three months of service. The plan
allows eligible employees to defer, within prescribed limits, up to 20 percent
of their income on a pre-tax basis through contributions to the plan. The
Company matches, within prescribed limits, a portion of eligible employees'
contributions up to a maximum of 2 percent of an employees' eligible
compensation. The Company recorded charges for matching contributions of
approximately $377,000 for the six month period ended June 30, 2005, and
$344,000 for the period from January 23, 2004 through June 30, 2004.


6.  Fremont Street Experience

         The Company indirectly owns 17.65% of the voting units and 50.0% of
the non-voting units of the Fremont Street Experience. This investment is
accounted for under the equity method of accounting. Under the equity method,
the carrying value of the investment is adjusted by the Company's share of
earnings, losses, capital contributions and distributions. Activity relating to
the Company's investment in the Fremont Street Experience for the period from
the date of Acquisition through June 30, 2005 is as follows (in thousands of
dollars):

        Acquisition of investment                                   $ 5,105
        Contributions                                                 1,173
        Equity in loss of joint venture                                (972)
                                                                    -------
        Investment Balance--end of period                           $ 5,306
                                                                    ========

         The investment balance reflects the Company's member's equity in
Fremont Street Experience, comprised of cumulative contributions, adjusted for
the Golden Nugget Group's proportional interest in profits or losses, as well
as an additional $1.8 million contribution made by the Golden Nugget Group in
1995 on a voluntary basis, and used by the Fremont Street Experience to acquire
additional fixed assets used in its operations.

         The $5.3 million member's equity carried by the Golden Nugget Group is
approximately $0.3 million less than the proportional amount of members'
capital reported by the Fremont Street Experience due to values assigned in the
allocation of purchase price resulting from the Acquisition.

         The additional contribution of $1.8 million represents a non-voting
interest which has been treated as a redeemable preferred member contribution
of the Fremont Street Experience. The redeemable preferred member contribution
does not have any profit distribution and must be repaid before any
distributions are made on voting interests.

         Summarized financial information of the Fremont Street Experience is
as follows (in thousands of dollars):

                                      13
<PAGE>

                          Poster Financial Group, Inc.
                 (A Wholly Owned Subsidiary of PB Gaming, Inc.)

              Notes to Unaudited Consolidated Financial Statements

                                                            As of
                                                        June 30, 2005
                                                        -------------

        Current assets                                      $   4,138
        Non-current assets                                     41,659
                                                        -------------
        Total assets                                        $  45,797
                                                        =============

        Current liabilities                                 $     367
        Non-current liabilities                                21,497
        Preferred member contribution                           3,040
        Members' capital                                       20,893
                                                        -------------
        Total liabilities and members' capital              $  45,797
                                                        =============


                                       For the Period
                                      January 23, 2004
                                        (Acquisition)       Six Months
                                      through June 30,      Ended June 30,
                                            2004                 2005
                                      ----------------     ----------------
        Total revenues                       $   2,144            $   3,041
        Costs and expenses                       3,594                5,953
                                      ----------------     ----------------
        Net loss                             $  (1,450)           $  (2,912)
                                      ================     ================

         The proportionate share of the Company's loss of the Fremont Street
Experience for the six months ended June 30, 2005 and the period January 23,
2004 through June 30, 2004 is approximately $514,000 and $256,000,
respectively.


7.  Segment Information

         The Company owns and operates two properties as follows: a
casino-hotel resort located in downtown Las Vegas, Nevada (GNLV); and a casino
and nearby hotel located in Laughlin, Nevada (GNL). The properties market in
each of their segments primarily to middle-income guests. The major products
offered in each segment are as follows: casino entertainment, hotel rooms, and
food and beverage. The accounting policies of each business segment are the
same as those described in the summary of significant accounting policies.
There are minimal inter-segment sales.

                                      14
<PAGE>

                          Poster Financial Group, Inc.
                 (A Wholly Owned Subsidiary of PB Gaming, Inc.)

              Notes to Unaudited Consolidated Financial Statements

<TABLE>
         A summary of the operations by business segment is presented below (in
thousands of dollars):

<CAPTION>
                                                                                          For the Period
                                                                                           Jan 23, 2004
                                                                                          (Acquisition)
                                                        Three Months Ended June 30,      through June 30,
                                                     ---------------------------------   ----------------   Six Months Ended
                                                          2004              2005               2004           June 30, 2005
                                                     ---------------  ----------------   ----------------   ----------------
<S>                                                       <C>               <C>                <C>               <C>
Net revenues
         GNLV, CORP.                                      $   53,915        $   50,660         $   97,899        $   105,580
         GNL, CORP.                                           11,746            11,741             21,644             25,139
                                                     ---------------  ----------------   ----------------   ----------------
                  Total                                   $   65,661        $   62,401         $  119,543        $   130,719
                                                     ===============  ================   ================   ================

Income (loss) from operations:
         GNLV, CORP.                                       $   4,063         $   3,014         $    9,924         $    5,684
         GNL, CORP.                                              708               458              2,119              3,553
         Poster Financial (corporate)                          (331)             (375)              (483)              (513)
                                                     ---------------  ----------------   ----------------   ----------------
                  Total                                    $   4,440         $   3,097         $   11,560          $   8,724
                                                     ===============  ================   ================   ================

Segment depreciation:
         GNLV, CORP.                                       $   3,968         $   3,865         $    6,488          $   7,731
         GNL, CORP.                                              344               818                593                818
                                                     ---------------  ----------------   ----------------   ----------------
                  Total                                    $   4,312         $   4,683         $    7,081          $   8,549
                                                     ===============  ================   ================   ================

Expenditures for additions to long-lived assets
         GNLV, CORP.                                       $   7,485         $   1,466          $   8,865          $   3,170
         GNL, CORP.                                              427                79                902                564
                                                     ---------------  ----------------   ----------------   ----------------
                  Total                                    $   7,912         $   1,545          $   9,767          $   3,734
                                                     ===============  ================   ================   ================
</TABLE>


8.  Commitments and Contingences

         Licensing Contingency

         The Company conducts licensed gaming operations in Nevada. The Nevada
gaming authorities control approval of ownership interests in gaming
operations.

         On January 22, 2004, the Nevada Gaming Commission ("NGC") found the
principal shareholders (the "Shareholders") of PB Gaming (who are also the
Chief Executive Officer and Chief Operating Officer of Poster Financial)
suitable as officers, directors and shareholders of PB Gaming and as officers
and directors of Poster Financial, and issued licenses to them as officers and
directors of GNLV and GNL. The findings of suitability and licenses issued to
the Shareholders expire in January 2008. During the four-year period in which
the findings of suitability and licenses are in effect, the Shareholders may
apply for new unlimited findings of suitability and licenses. No assurance can
be given that such applications would be granted without further limitation or
at all. If the Shareholders were found unsuitable, they would be required to be
removed from their positions as officers and directors and PB Gaming could be
required to redeem the stock in PB Gaming held by them at a price equal to fair
market value. Such an event could result in the liquidation of PB Gaming and
the Company.

                                      15
<PAGE>

                          Poster Financial Group, Inc.
                 (A Wholly Owned Subsidiary of PB Gaming, Inc.)

              Notes to Unaudited Consolidated Financial Statements


         Severance Payment

         On March 4, 2005, Poster Financial and each of its wholly owned
subsidiaries entered into a Separation Agreement and General Release (the
"Separation Agreement") with Maurice Wooden, the former Chief Operating Officer
of Poster Financial. The Separation Agreement provides for Mr. Wooden's
resignation, effective as of March 4, 2005, from his position as Chief
Operating Officer and a director of Poster Financial and his resignation from
all positions as an officer, director or manager of Poster Financial, each of
Poster Financial's wholly owned subsidiaries and The Fremont Street Experience
LLC (collectively, the "Poster Companies").

         Under the terms of the Separation Agreement, Poster Financial has
agreed to pay Mr. Wooden a separation payment equal to $1.25 million (the
"Separation Payment"), less all applicable withholdings. Mr. Wooden has agreed
to release PB Gaming, the Poster Companies, as well as LSRI and Landry's, and
each of the foregoing entities' respective parents, subsidiaries and affiliates
from all claims arising from the beginning of time to the date of the
Separation Agreement, including but not limited to claims relating to (i) Mr.
Wooden's employment relationship with the Poster Companies, (ii) all positions
Mr. Wooden previously held with the Poster Companies, (iii) the termination of
Mr. Wooden's employment relationship and positions with the Poster Companies
and (iv) all claims arising under the Employment Agreement, dated as of October
29, 2003, by and between Poster Financial and Mr. Wooden, which employment
agreement has been terminated as a result of the Separation Agreement.

         The Separation Agreement provides that Mr. Wooden, for the period
commencing on March 4, 2005 and continuing until the earlier to occur of the
one year anniversary of the Closing Date (as such term is defined in the
Landry's Purchase Agreement) or October 31, 2006 (such period being referred to
as the "Noncompete Period"), shall not be employed by or otherwise associated
with any entity engaged in gaming in the State of Nevada or within a 150 mile
radius of any jurisdiction in which any member of the Poster Companies is
engaged in gaming during the Noncompete Period. Mr. Wooden has further agreed
that in the event of his breach of such noncompete obligations, he will
immediately become liable to the Company for a pro rata portion of the
Separation Payment.

         The Separation Agreement also provides that Mr. Wooden, for the period
commencing on March 4, 2005 and continuing until February 28, 2007, will not
solicit customers, prospective customers or employees of the Poster Companies
and, at all times, will not disclose any trades secrets or proprietary or other
confidential information concerning any member of the Poster Companies.


9.  Long-term Debt

         Notes

         On December 3, 2003, the Company issued $155 million aggregate
principal amount of 8 3/4% Senior Secured Notes due 2011 (the "Senior Notes")
to finance a portion of the purchase price of the Acquisition. All payments
with respect to the Senior Notes are fully, unconditionally and irrevocably
guaranteed, jointly and severally, by all the Company's current and future
restricted subsidiaries on a senior secured basis. The Company's "restricted
subsidiaries," which are subject to many of the restrictive covenants in the
indenture governing the Senior Notes, currently are GNLV and GNL the Company's
wholly owned subsidiaries, and GNE, a wholly owned subsidiary of GNLV. The
Senior Notes and the guarantees are secured by a pledge of capital stock of the
Company's restricted subsidiaries and a security interest in substantially all
of the Company's and the guarantors' current and future assets. Such security
interest is junior to the security interest granted to the lenders under the
Company's Credit Facility (as defined below). Interest on the Notes is payable
on June 1 and December 1 of each year.


                                      16
<PAGE>

                          Poster Financial Group, Inc.
                 (A Wholly Owned Subsidiary of PB Gaming, Inc.)

              Notes to Unaudited Consolidated Financial Statements


         Credit Facility

         On January 23, 2004, the Company entered into a senior secured credit
facility (the "Credit Facility"), which was established pursuant to a Loan and
Security Agreement with Wells Fargo Foothill, Inc. as administrative agent. The
Credit Facility consists of a $20.0 million amortizing term loan and a $15.0
million revolver (subsequently amended to $25.0 million).

         The Credit Facility contains covenants, including, among other things,
financial covenants, limitations on the Company from disposing of assets,
entering into mergers and certain acquisitions, incurring liens or
indebtedness, and entering into transactions with affiliates. The Company's
obligations under the Credit Facility are fully, unconditionally and
irrevocably guaranteed, jointly and severally, by all the Company's
subsidiaries. The Company's obligations under the Credit Facility are also
secured by a pledge of capital stock of the Company's restricted subsidiaries
and the Company's interest in the Fremont Street Experience, as well as a first
priority lien on substantially all of the Company's and the guarantors' current
and future assets. Interest on the Credit Facility accrues on all individual
borrowings at an interest rate determined at the option of the Company, at
either the LIBOR Index plus a 4% margin, or the Base Rate, defined as the
bank's prime rate plus a 3% margin.

         At March 31, 2005, the Company failed to satisfy the financial
covenants under the loan and security agreement. On March 31, 2005, the Company
entered into a commitment letter arrangement with their lender, which on May 2,
2005, was formalized into an amendment to the loan and security agreement
relating to its Credit Facility. The amendment modifies financial ratios and
covenants to cure certain defaults (which had been previously waived by the
lenders) and to permit the sale of the Golden Nugget -- Laughlin.

         On August 10, 2005, the Company entered into an amendment to the loan
and security agreement relating to the senior secured credit facility. The
amendment modified the financial covenants to consider the results of
operations of the Laughlin properties in light of the terminated agreement to
sell that property to Barrick.

10.  Stockholder's Equity

         During the first quarter 2005, the Company received additional paid in
capital of $3.0 million from PB Gaming. Distributions to PB Gaming for the six
month periods ended June 30, 2004 and 2005 amount to approximately $2.5 million
and $1.0 million, respectively.

11.   Summarized Financial Information

         All payments with respect to the Company's 8 3/4% Senior Secured
Notes due 2011 are fully, unconditionally and irrevocably guaranteed, jointly
and severally, by all the Company's subsidiaries. The Notes are also
collateralized by a pledge of capital stock of the Company's subsidiaries and a
security interest in substantially all of the Company's and the guarantors'
current and future assets. Such security interest is junior to the security
interest granted to the lenders under the Senior Credit Facility.

         Separate financial statements and other disclosures concerning each of
the subsidiary guarantors are not presented below because management believes
they are not material to investors. The following information represents the
summarized financial information of the Company and the subsidiary guarantors
on a consolidating basis as of June 30, 2005 and for the six months ended June
30, 2005.

                                      17
<PAGE>

                          Poster Financial Group, Inc.
                 (A Wholly Owned Subsidiary of PB Gaming, Inc.)

              Notes to Unaudited Consolidated Financial Statements

<TABLE>
                     CONDENSED CONSOLIDATING BALANCE SHEETS

                                 June 30, 2005
                             (Thousands of dollars)
<CAPTION>
                                                                                               Consolidating/
                                                                    Poster       Guarantor      Eliminating
                                                                   Financial    Subsidiaries      Entries            Total
                                                                  -----------  --------------  --------------     ----------
<S>                                                                 <C>             <C>            <C>             <C>
Assets
Current assets
         Cash and cash equivalents                                  $      --       $  24,564      $       --       $ 24,564
         Accounts receivable, net                                          --           8,037              --          8,037
         Inventories                                                       --           3,536              --          3,536
         Prepaid expenses and other                                       198           6,770              --          6,968
         Intercompany receivables                                          --          16,232         (16,232) (a)        --
                                                                  -----------  --------------  --------------     ----------
                  Total current assets                                    198          59,139         (16,232)        43,105

Property and equipment, net                                                --         178,254              --        178,254
Investment in subsidiaries                                            233,764              --        (233,764) (b)        --
Investment in joint venture                                                --           5,306              --          5,306
Deposits and other assets, net                                          9,611          35,129          (9,235) (c)    35,505
                                                                  -----------  --------------  --------------     ----------
         Total assets                                               $ 243,573       $ 277,828       $(259,231)     $ 262,170
                                                                  ===========  ==============  ==============     ==========

Liabilities and Stockholder's Equity
Current liabilities
         Accounts payable                                           $      54       $   8,408       $      --        $ 8,462
         Current portion of notes payable                               2,800           2,919          (2,800) (c)     2,919
         Other accrued liabilities                                      1,699          26,030              --         27,729
         Amounts due to affiliates                                     16,232              --         (16,232) (a)        --
                                                                  -----------  --------------  --------------     ----------
     Total current liabilities                                         20,785          37,357         (19,032)        39,110

Notes payable pushed down from the Company, net of current
  portion                                                             183,423         169,400        (169,400) (c)   183,423
Notes payable to non-affiliates, net of current portion                    --             272              --            272
                                                                  -----------  --------------  --------------     ----------
         Total liabilities                                            204,208         207,029        (188,432)       222,805

Stockholder's equity                                                   39,365          70,799         (70,799)        39,365
                                                                  -----------  --------------  --------------     ----------
         Total liabilities and stockholder's equity                 $ 243,573       $ 277,828      $ (259,231)     $ 262,170
                                                                  ===========  ==============  ==============     ==========
</TABLE>
_________________________________

(a)      To eliminate intercompany receivables and payables in consolidation.

(b)      To eliminate investment in subsidiaries in consolidation.

(c)      To eliminate notes payable and related debt issuance costs pushed down
         to GNLV to reflect the impact of the Acquisition, in accordance with
         the requirements of Staff Accounting Bulletin Topic 5(J) of the U.S.
         Securities and Exchange Commission.

                                      18
<PAGE>

                          Poster Financial Group, Inc.
                 (A Wholly Owned Subsidiary of PB Gaming, Inc.)

                   Notes to Consolidated Financial Statements

<TABLE>
                CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
                                 June 30, 2005
                             (Thousands of dollars)

<CAPTION>
                                                                                               Consolidating/
                                                                    Poster       Guarantor      Eliminating
                                                                   Financial    Subsidiaries      Entries            Total
                                                                  -----------  --------------  --------------     ----------
<S>                                                                 <C>             <C>            <C>              <C>
Net Revenues                                                        $      --       $ 130,719    $         --      $ 130,719
                                                                  -----------  --------------  --------------     ----------

Cost and expenses
         Casino-hotel operations                                           --          86,175              --         86,175
         General and administrative                                       513          26,411              --         26,924
         Depreciation and amortization                                     --           8,896              --          8,896
                                                                  -----------  --------------  --------------     ----------
                  Total costs and expenses                                513         121,482              --        121,995
                                                                  -----------  --------------  --------------     ----------
      Operating income                                                   (513)          9,237              --          8,724
                                                                  -----------  --------------  --------------     ----------

Other income (expense)
         Equity in loss of joint venture                                   --            (514)             --           (514)
         Equity in income of subsidiaries                                (135)             --             135  (a)        --
         Interest income                                                   --              19              --             19
         Interest expense                                              (9,073)            (18)             --         (9,091)
         Interest expense associated with pushed
           down indebtedness                                               --          (9,073)          9,073  (b)        --
                                                                  -----------  --------------  --------------     ----------
                  Total other income (expense)                         (9,208)         (9,586)          9,208         (9,586)
                                                                  -----------  --------------  --------------     ----------

   Net income (loss)                                                $  (9,721)      $    (349)   $      9,208        $  (862)
                                                                  ===========  ==============  ==============     ==========
</TABLE>
_________________________________

(a)      To eliminate equity in income of subsidiaries in consolidation.

(b)      To eliminate interest expense on the Notes and term loan pushed down
         to GNLV to reflect the impact of the Acquisition, in accordance with
         Staff Accounting Bulletin Topic 5(J) of the U.S. Securities and
         Exchange Commission.

                                      19
<PAGE>

                          Poster Financial Group, Inc.
                 (A Wholly Owned Subsidiary of PB Gaming, Inc.)

                   Notes to Consolidated Financial Statements

<TABLE>
                CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
                                 June 30, 2005
                             (Thousands of dollars)

<CAPTION>
                                                                                               Consolidating/
                                                                    Poster       Guarantor      Eliminating
                                                                   Financial    Subsidiaries      Entries            Total
                                                                  -----------  --------------  --------------     ----------
<S>                                                                 <C>             <C>            <C>              <C>

Cash flows from operating activities                                 $  2,792       $   6,680   $          --       $  9,472
                                                                  -----------  --------------  --------------     ----------

Cash flows from investing activities
   Acquisition of property and equipment                                   --          (3,734)             --         (3,734)
    Proceeds from sale of property and equipment                           --           1,146              --          1,146
    Contributions to joint venture                                         --            (469)             --           (469)
                                                                  -----------  --------------  --------------     ----------
          Net cash used in investing activities                            --          (3,057)             --         (3,057)
                                                                  -----------  --------------  --------------     ----------

Cash flows from financing activities
    Payments on senior secured notes payable                           (1,400)             --              --         (1,400)
    Net borrowings under revolving credit facility                     (3,413)             --              --         (3,413)
    Change in bank overdraft                                               --          (3,178)             --         (3,178)
    Distributions to PB Gaming                                           (979)             --              --           (979)
    Additional contributions of equity from PB Gaming                   3,000              --              --          3,000
                                                                  -----------  --------------  --------------     ----------
           Net cash provided by financing activities                   (2,792)         (3,178)             --         (5,970)
                                                                  -----------  --------------  --------------     ----------
Net increase in cash and cash equivalents                                  --             445              --            445
Cash and cash equivalents, beginning of period                             --          24,119              --         24,119
                                                                  -----------  --------------  --------------     ----------
Cash and cash equivalents, end of period                             $     --       $  24,564   $          --       $ 24,564
                                                                  ===========  ==============  ==============     ==========
</TABLE>

                                      20
<PAGE>

                              Golden Nugget Group
                           (A division of MGM MIRAGE)

   Unaudited Combined Statements of Operations and Changes in Division Equity
                             (Thousands of dollars)


                                                           Period from
                                                          January 1, 2004
                                                          to January 22,
                                                            2004 (Date
                                                         Immediately Prior
                                                         to Acquisition by
                                                         Poster Financial)
                                                        -------------------
Revenues
Casino                                                   $           10,121
Rooms                                                                 2,795
Food and beverage                                                     3,034
Entertainment, retail and other                                         817
                                                        -------------------
         Gross revenue                                               16,767
         Promotional allowances                                      (1,962)
                                                        -------------------
         Net revenues                                                14,805
                                                        -------------------

Costs and expenses
Casino                                                                5,441
Rooms                                                                 1,304
Food and beverage                                                     2,003
Entertainment, retail and other                                         568
Provision for doubtful accounts                                         107
General and administrative                                            2,524
Depreciation                                                            806
Management fee                                                          844
                                                        -------------------
         Total costs and expenses                                    13,597
                                                        -------------------
Operating income                                                      1,208
                                                        -------------------
Other income (expense)
Equity in loss of joint venture                                         (26)
Interest income                                                           2
Interest expense                                                         (3)
Intercompany interest expense                                          (206)
                                                        -------------------
         Total other expense                                           (233)
                                                        -------------------
Income before income taxes                                              975
Income tax provision                                                   (307)
                                                        -------------------
             Net income                                                 668

Division equity, beginning of period                                  7,855
                                                        -------------------
Division equity, end of period                           $            8,523
                                                        ===================

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

                                      21
<PAGE>

                              Golden Nugget Group
                           (A division of MGM MIRAGE)

<TABLE>
                  Unaudited Combined Statements of Cash Flows
                             (Thousands of dollars)

<CAPTION>
                                                                                             Period from
                                                                                           January 1, 2004
                                                                                           to January 22,
                                                                                              2004 (Date
                                                                                             Immediately
                                                                                                Prior
                                                                                                  to
                                                                                            Acquisition by
                                                                                           Poster Financial)
                                                                                           -----------------
<S>                                                                                                <C>
Cash flows from operating activities
Net income                                                                                   $           668
Adjustments to reconcile net income to net cash provided by operating activities
         Depreciation                                                                                    806
         Provision for doubtful accounts                                                                 107
         Equity in loss of joint venture                                                                  26
Changes in operating assets and liabilities
         Decrease (increase) in accounts receivable                                                      923
         Decrease (increase) in due from Poster Financial                                                376
         Decrease (increase) in inventories                                                               95
         Decrease (increase) in prepaid expenses and other                                               633
         Decrease (increase) in deposits and other assets                                                 22
         Increase (decrease) in accounts payable, net of change in bank overdraft                       (380)
         Increase (decrease) in other accrued liabilities                                              1,736
                                                                                           -----------------
                  Net cash provided by operating activities                                            5,012
                                                                                           -----------------

Cash flows from investing activities
Acquisition of property, equipment and improvements                                                   (4,436)
Contributions to joint venture                                                                          (235)
                                                                                           -----------------
                  Net cash used in investing activities                                               (4,671)
                                                                                           -----------------

Cash flows from financing activities
Change in bank overdraft                                                                              (4,996)
Change in amounts payable to MGM MIRAGE and affiliates, net                                           (3,456)
                                                                                           -----------------
                  Net cash used in financing activities                                               (8,452)
                                                                                           -----------------
Net decrease in cash and cash equivalents                                                             (8,111)
Cash and cash equivalents, beginning of period                                                        23,904
                                                                                           -----------------
Cash and cash equivalents, end of period                                                     $        15,793
                                                                                           =================

</TABLE>

                                      22
<PAGE>

                              Golden Nugget Group
                           (A division of MGM MIRAGE)

                Notes to Unaudited Combined Financial Statements

                              For the period from
                      January 1, 2004 to January 22, 2004
          (Date Immediately Prior to Acquisition by Poster Financial)


1.  Organization

         The Golden Nugget Group (the "Group") is an operating division of MGM
MIRAGE ("MGM MIRAGE" or "Parent"), a publicly held Delaware corporation. The
Group is comprised of the following entities:

         o        Golden Nugget--Las Vegas, a hotel-casino and entertainment
                  resort located in downtown Las Vegas, Nevada and operated by
                  GNLV, CORP., a Nevada corporation wholly owned by MGM MIRAGE
                  ("GNLV").

         o        Golden Nugget--Laughlin, a hotel-casino resort located in
                  Laughlin, Nevada and operated by GNL, CORP., a Nevada
                  corporation wholly owned by MGM MIRAGE ("GNL").

         o        GNLV also has a wholly owned subsidiary, Golden Nugget
                  Experience, LLC ("GNE"), a Nevada limited liability company.
                  As more fully explained in Note 4, GNE is a holding company
                  that has an investment in The Fremont Street Experience
                  Limited Liability Company, a Nevada limited liability company
                  (the "Fremont Street Experience") organized to enhance
                  tourism in downtown Las Vegas, Nevada. The Fremont Street
                  Experience is owned by a group of unrelated casino operators
                  in downtown Las Vegas, and operates retail malls, parking
                  garages, entertainment venues and a pedestrian mall that
                  encloses a city street (Fremont Street), located adjacent to
                  the Golden Nugget--Las Vegas. GNE holds 17.65% of the voting
                  units and 50.0% of the non-voting units of the Fremont Street
                  Experience, and accounts for its investment utilizing the
                  equity method of accounting.

         The management of MGM MIRAGE has made all significant operational and
financial decisions of the Group during the periods presented.

         On January 23, 2004, Poster Financial Group, Inc. ("Poster
Financial"), a party unrelated to MGM MIRAGE, completed the acquisition of the
Group from MGM MIRAGE (the "Acquisition"). The purchase price for the
Acquisition was approximately $213.7 million, reflecting a base purpose price
of $215.0 million less an adjustment for working capital at the date of the
closing of approximately $4.8 million plus acquisition related expenses of
approximately $3.5 million.


2.       Significant Accounting Policies and Basis of Presentation

         The combined financial statements included of the Group for the period
January 1, 2004 through January 22, 2004 have been prepared by the Group,
without audit, pursuant to the rules and regulations of the Securities and
Exchange Commission (SEC). Certain information and footnote disclosures
normally included in financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted pursuant to such
rules and regulations. The preparation of the combined financial statements
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent liabilities at
the date of the financial statements and the reported amounts of revenue and
expenses during the reporting period. Actual results could differ from those
estimates. In the opinion of management, all adjustments, consisting of normal
recurring items and estimates necessary for a fair presentation of the results
for interim periods, have been made.

         The Acquisition described in Note 3 was accounted for as a purchase,
and the accounting basis in the assets and liabilities of the Group were
adjusted on January 23, 2004 to reflect the allocation of purchase price
resulting from the Acquisition. The accompanying financial statements present
results of operations and cash flows of the Group for the period from January
1, 2004 through January 22, 2004 (date immediately prior to the Acquisition)
utilizing the historical pre-acquisition basis.

                                      23
<PAGE>

                              Golden Nugget Group
                           (A division of MGM MIRAGE)

                Notes to Unaudited Combined Financial Statements

                              For the period from
                      January 1, 2004 to January 22, 2004
          (Date Immediately Prior to Acquisition by Poster Financial)


         Principles of Presentation

         All inter-company accounts and transactions between GNLV and GNE are
eliminated in consolidation. All inter-company accounts and transactions
between GNLV and GNL are eliminated in combination to arrive at the financial
statements of the Group. The Group is not a separate reporting entity and has
not previously presented financial statements on a stand-alone basis. Certain
estimates, including allocations from the Parent, have been made to provide
financial information for stand-alone reporting purposes. Management of the
Group believes that the presentations and disclosures herein are adequate to
make the information not misleading. In the opinion of management, all
adjustments necessary to fairly state the financial statements have been
reflected.

         Concentration of Credit Risk

         Financial instruments that potentially subject the Group to
concentrations of credit risk consist principally of casino accounts
receivable. The Group extends credit to approved casino customers following
background checks and investigations of creditworthiness.

         Trade receivables, including casino and hotel receivables, are
typically noninterest bearing and are initially recorded at cost. Accounts are
written off when management deems the account to be uncollectible. Recoveries
of accounts previously written off are recorded when received. An estimated
allowance for doubtful accounts is maintained to reduce the Group's receivables
to their carrying amount, which approximates fair value. The allowance is
estimated based on specific review of customer accounts as well as historical
collection experience and current economic and business conditions. Management
believes that as of January 22, 2004, no significant concentrations of credit
risk existed for which an allowance had not already been recorded.

         Stock Based Compensation

         Certain employees are eligible to participate in the stock option
plans of the Parent. The Group accounts for stock-based compensation, including
employee stock option plans, in accordance with Accounting Principles Board
Opinion No. 25, "Accounting for Stock Issued to Employees" and the Financial
Accounting Standards Board's Interpretation No. 44, "Accounting for Certain
Transactions involving Stock Compensation, an interpretation of APB Opinion No.
25", and discloses supplemental information in accordance with Statement of
Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation" ("SFAS 123"), as amended by Statement of Financial Accounting
Standards No. 148, "Accounting for Stock-Based Compensation-Transition and
Disclosure" ("SFAS 148"). The Group does not incur compensation expense for
employee stock options when the exercise price is at least 100% of the market
value of the Group's common stock on the date of grant. For disclosure
purposes, employee stock options are measured at fair value, compensation is
assumed to be amortized over the vesting periods of the options, and pro forma
results are disclosed as if the Group had applied SFAS 123.

                                      24
<PAGE>

                              Golden Nugget Group
                           (A division of MGM MIRAGE)

                Notes to Unaudited Combined Financial Statements

                              For the period from
                      January 1, 2004 to January 22, 2004
          (Date Immediately Prior to Acquisition by Poster Financial)


         Had the Group accounted for these plans under the fair value method
allowed by SFAS 123, the Group's net income would have been reduced to
recognize the fair value of employee stock options. The following are required
disclosures under SFAS 123 and SFAS 148 (in thousands of dollars):

                                                           Period from
                                                          January 1, 2004
                                                        to January 22, 2004
                                                         (Date Immediately
                                                               Prior
                                                         to Acquisition by
                                                         Poster Financial)
                                                       --------------------
Net income (loss) as reported                             $             668
Stock based compensation under SFAS 123                                 (56)
                                                       --------------------
Pro Forma                                                 $             612
                                                       ====================

     There was no cost of employee stock-based compensation included in
reported net income for the period presented. For purposes of computing the pro
forma compensation, the fair value of each option grant was estimated on the
date of grant using the Black-Scholes option-pricing model with the following
weighted-average assumptions: risk-free interest rates of 3% for the 2004
period; no expected dividend yields for the period presented; expected lives of
5 years for the period presented; and expected volatility of 42% for the 2004
period. There were no options granted in the 2004 period.


3.       Golden Nugget Acquisition

         On January 23, 2004, Poster Financial Group, Inc. ("Poster
Financial"), an unrelated third party, completed the acquisition of the Group
from MGM MIRAGE (the "Golden Nugget Acquisition"). The purchase price for the
acquisition was approximately $213.7 million, reflecting a base purchase price
of $215.0 million less an adjustment for estimated working capital at the date
of closing of approximately $4.8 million plus acquisition related expenses of
approximately $3.5 million.

4.       Fremont Street Experience

         The Group owns 17.65% of the voting units and 50.0% of the non-voting
units of the Fremont Street Experience. This investment is accounted for under
the equity method of accounting. Under the equity method, the carrying value of
the investment is adjusted by the Group's share of earnings, losses, capital
contributions and distributions. Activity relating to the Group's investment in
the Fremont Street Experience is as follows (in thousands of dollars):

                                                           Period from
                                                        January 1, 2004
                                                      to January 22, 2004
                                                       (Date Immediately
                                                             Prior
                                                       to Acquisition by
                                                       Poster Financial)
                                                      -------------------
Investment Balance--beginning of period                 $           5,187
Contributions                                                           -
Equity in loss of joint venture                                       (26)
                                                      -------------------
Investment Balance--end of period                       $           5,161
                                                      ===================

                                      25
<PAGE>

                              Golden Nugget Group
                           (A division of MGM MIRAGE)

                Notes to Unaudited Combined Financial Statements

                              For the period from
                      January 1, 2004 to January 22, 2004
          (Date Immediately Prior to Acquisition by Poster Financial)


         The investment balance reflects the Group's member's equity in Fremont
Street Experience, comprised of cumulative contributions, adjusted for the
Group's proportional interest in profits or losses, as well as an additional
$1.8 million contribution made by the Group in 1995 on a voluntary basis, and
used by the Fremont Street Experience to acquire additional fixed assets used
in its operations.

         The additional contribution of $1.8 million represents a non-voting
interest which has been treated as a redeemable preferred member contribution
of the Fremont Street Experience. The redeemable preferred member contribution
does not have any profit distribution and must be repaid before any
distributions are made on voting interests.

         Summarized financial information of the Fremont Street Experience is
as follows (in thousands of dollars):

                                                        Period from
                                                      January 1, 2004
                                                    to January 22, 2004
                                                     (Date Immediately
                                                           Prior
                                                     to Acquisition by
                                                     Poster Financial)
                                                    -------------------
    Total revenues                                    $             274
    Costs and expenses                                             (423)
                                                    -------------------
             Net loss                                 $            (149)
                                                    ===================

5.  Segment Information

         The Group owns and operates two properties as follows: a casino-hotel
resort located in downtown Las Vegas, Nevada; and a casino and nearby hotel
located in Laughlin, Nevada. The properties market in each of their segments
primarily to middle-income guests. The major products offered in each segment
are as follows: casino entertainment, hotel rooms, and food and beverage.

         The accounting policies of each business segment are the same as those
described in the summary of significant accounting policies. There are minimal
inter- segment sales. Corporate costs have historically been allocated to each
business segment through management fees charged by MGM MIRAGE.

                                      26
<PAGE>

                              Golden Nugget Group
                           (A division of MGM MIRAGE)

                Notes to Unaudited Combined Financial Statements

                              For the period from
                      January 1, 2004 to January 22, 2004
          (Date Immediately Prior to Acquisition by Poster Financial)


         A summary of the operations by business segment is presented below (in
thousands of dollars):

                                                           Period from
                                                          January 1, 2004
                                                        to January 22, 2004
                                                         (Date Immediately
                                                               Prior
                                                         to Acquisition by
                                                         Poster Financial)
                                                       ---------------------
Net revenues
         GNLV, CORP.                                     $            12,167
         GNL, CORP.                                                    2,638
                                                       ---------------------
                  Total                                  $            14,805
                                                       =====================

Income (loss) from operations:
         GNLV, CORP.                                     $             1,052
         GNL, CORP.                                                      156
                                                       ---------------------
                  Total                                  $             1,208
                                                       =====================

Segment depreciation:
         GNLV, CORP.                                     $               782
         GNL, CORP.                                                       24
                                                       ---------------------
                  Total                                  $               806
                                                       =====================

Expenditures for additions to long-lived assets
         GNLV, CORP.                                     $             3,772
         GNL, CORP.                                                      664
                                                       ---------------------
                  Total                                  $             4,436
                                                       =====================



                                      27
<PAGE>


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

         This Quarterly Report on Form 10-Q contains certain forward-looking
statements regarding our future results of operations and performance.
Important factors that could cause differences in results of operations
include, but are not limited to, general economic conditions in the markets in
which the Company operates, competition from other gaming operations, leverage,
the inherent uncertainty and costs associated with litigation and governmental
and regulatory investigations, and licensing and other regulatory risks. See
"--Cautionary Statement Regarding Forward-Looking Statements."

         In this Quarterly Report on Form 10-Q, unless the context requires
otherwise, the terms the "Company," "we," "us," and "our" refer to Poster
Financial Group, Inc. and its subsidiaries and the term "Poster Financial"
refers only to Poster Financial Group, Inc. and not its subsidiaries. In this
Quarterly Report on Form 10-Q, our parent company, PB Gaming, Inc., is referred
to as "PB Gaming."

Overview

The Company

         We own and operate the Golden Nugget--Las Vegas and the Golden
Nugget--Laughlin hotel casinos. The following table sets forth information
about each of the Golden Nugget properties as of June 30, 2005:

<TABLE>
<CAPTION>

                                                                           Casino
                                               Slot         Table      Space (square
Property                                     Machines       Games          feet)         Hotel Rooms
--------                                     --------       -----      --------------    -----------
<S>                                             <C>            <C>             <C>             <C>
Golden Nugget--Las Vegas..................      1,309          59              42,000          1,907
Golden Nugget--Laughlin...................        957          21              32,000            300
                                               ------        ----             -------         ------
Total.....................................      2,266          80              74,000          2,207
                                               ======        ====             =======         ======
</TABLE>


         We believe that the Golden Nugget brand name is one of the most
recognized in the gaming industry and we expect to continue to capitalize on
the strong name recognition and high level of quality and value associated with
it. We target out-of-town customers at both of our properties while also
catering to the local customer base. We believe that the Golden Nugget--Las
Vegas is the leading downtown destination for out-of-town customers. The
property offers the same complement of services as our Las Vegas Strip
competitors, but we believe that our customers prefer the boutique experience
we offer and the downtown environment. We emphasize the property's wide
selection of amenities and provide a luxury room product and personalized
services at an attractive value. At the Golden Nugget--Laughlin, we focus on
providing a high level of customer service, a quality dining experience at an
appealing value, a slot product with highly competitive pay tables and a
superior player rewards program. As further discussed under the heading "--
Recent Developments," on February 4, 2005 we entered into an agreement to sell
the Company.

          We also have an investment in The Fremont Street Experience Limited
Liability Company ("The Fremont Street Experience LLC"), the entity which owns
and operates The Fremont Street Experience. The Fremont Street Experience is a
unique entertainment attraction located in the center of downtown Las Vegas on
Fremont Street, where the Golden Nugget--Las Vegas is located.

         The Golden Nugget Group

         The operations of the Golden Nugget Group consist of two hotel-casinos
located in Las Vegas and Laughlin, Nevada, referred to in this report as the
Golden Nugget--Las Vegas and the Golden Nugget--Laughlin, respectively. Our
business strategy is to create the best possible gaming and entertainment
experience for our customers by providing a combination of comfortable and
attractive surroundings with attentive service from friendly and experienced
employees. In

                                      28
<PAGE>

addition, the Golden Nugget properties offer a wide selection of high-quality
amenities to complement their guests' gaming experience.

          Key gaming volume indicators are table game "drop" and slot machine
"handle". Table game drop and slot machine handle are casino industry specific
terms that are used to identify the amount wagered by patrons at a casino table
game or slot machine, respectively. The revenues of the Golden Nugget
properties can also be affected by the percentage of gaming volume retained by
them, indicated by "win" or "hold" percentages, which we cannot fully control.
Hold is calculated by dividing the amount won by the casino by the amount
wagered by patrons. Hold percentages vary based on the mix of games on the
floor. In addition, while hold percentage is reasonably predictable over
periods greater than twelve months, it can fluctuate significantly over shorter
periods of time, such as a fiscal quarter, which can affect comparability
between periods.

          In the hotel operations of the Golden Nugget properties, key measures
are occupancy rates (a volume indicator) and average daily room rate ("ADR," a
price indicator). Revenues of the Golden Nugget Group can also be affected by
economic and other factors. Domestic leisure travel is dependent on the
national economy and the level of consumers' disposable income.

Recent Developments

Sale of Poster Financial

         On February 4, 2005, Poster Financial entered into an agreement (the
"Landry's Purchase Agreement") to sell the Company to Houston, Texas-based
Landry's Restaurants, Inc. ("Landry's") for approximately $140 million in cash,
and an additional payment by Landry's for certain working capital liabilities.
Under the terms of the transaction, PB Gaming agreed to sell all of the shares
of Poster Financial to LSRI Holdings, Inc. ("LSRI"), a wholly owned subsidiary
of Landry's.

         Landry's informed Poster Financial that on May 11, 2005, LSRI assigned
to Landry's Gaming, Inc., a newly formed Nevada corporation and wholly owned
subsidiary of Landry's ("Landry's Gaming"), all of LSRI's rights, interests and
obligations in, to and under the Landry's Purchase Agreement, and Landry's
Gaming accepted and assumed all rights, interests and obligations of LSRI under
the Landry's Purchase Agreement and agreed to be bound by the terms of the
Landry's Purchase Agreement as the assignee of LSRI. This assignment and
assumption does not relieve LSRI of its obligations under the Landry's Purchase
Agreement.

         Pursuant to the terms of the Landry's Purchase Agreement, LSRI
deposited $25 million into an escrow account with Chicago Title of Nevada,
Inc., the escrow agent, as a non-refundable deposit, except as otherwise
expressly provided in the Landry's Purchase Agreement. Landry's Gaming may
terminate the Landry's Purchase Agreement for any reason or no reason in its
sole and absolute discretion.

         Under the terms of the Landry's Purchase Agreement, our 8 3/4% Senior
Secured Notes due 2011 (the "Senior Notes") will remain outstanding obligations
of Poster Financial following the closing. The consummation of the sale will
result in a change of control of Poster Financial under the indenture governing
the Senior Notes and, as a result, Poster Financial will be required within 30
days of such change of control to commence an offer to purchase all outstanding
Senior Notes for 101% of the aggregate principal amount of the Senior Notes,
plus any accrued and unpaid interest. Under the terms of the Landry's Purchase
Agreement, amounts outstanding at closing under our senior secured credit
facility (the "Credit Facility") will be paid off by Landry's or Landry's will
seek consent from the lenders under the Credit Facility for such amounts to
remain outstanding.

                  It is anticipated that the transaction will close by the end
of 2005, subject to customary closing conditions contained in the Landry's
Purchase Agreement, including receipt of all necessary governmental, gaming and
other regulatory approvals.

                                      29
<PAGE>


Sale of the Golden Nugget--Laughlin

         On November 8, 2004, Poster Financial entered into a stock purchase
agreement (the "Barrick Purchase Agreement") to sell the Golden Nugget
--Laughlin to Las Vegas-based gaming and real estate company, Barrick Gaming
Corporation ("Barrick") for $31 million, plus working capital at the closing of
the transaction as calculated under the Barrick Purchase Agreement. The parties
previously agreed to extend the outside termination date of the Barrick
Purchase Agreement from May 8, 2005 to May 31, 2005.

         As a result of the Barrick Purchase Agreement terminating in
accordance with its terms, Landry's Gaming will acquire the Golden
Nugget--Laughlin in addition to the Golden Nugget--Las Vegas because the
Golden Nugget--Laughlin remains a wholly owned subsidiary of Poster Financial.
Under the terms of the Landry's Purchase Agreement, there is no adjustment to
the cash purchase price for the acquisition of the Golden Nugget--Laughlin
because the net proceeds that would have been applied to outstanding balances
under the Credit Facility would not have been received from Barrick. Landry's
will thus pay off, or assume as the case may be, an equivalently larger
liability under the Credit Facility.

         On June 1, 2005, Poster Financial filed a complaint against Barrick
seeking the release of a $1.0 million deposit from escrow on account of
Barrick's failure to acquire the stock of the Golden Nugget-Laughlin before the
transaction's May 31, 2005 expiration date.

         On March 24, 2005, in connection with the proposed sale of the Golden
Nugget--Laughlin, we sold a motel formerly used by the Golden Nugget--Laughlin
to an unrelated third party. The motel is located in Bullhead City, Arizona and
occupies approximately two acres of land. Net proceeds from the sale were
approximately $1.1 million and were used to pay down debt outstanding under the
Credit Facility.

Additional Shareholders of PB Gaming, Inc.

         As previously disclosed in the Company's Form 10-K for the fiscal year
ended December 31, 2004, PB Gaming has 10,000 shares of common stock, no par
value, issued and outstanding. 3,750 shares (37.5%) are owned by Timothy N.
Poster ("Poster"), our Chairman and Chief Executive Officer, 3,750 shares are
owned by Thomas C. Breitling ("Breitling"), our President, Treasurer, Secretary
and one of our directors, 1,275 shares (12.75%) are owned by Andre K. Agassi
("Agassi"), 1,000 shares (10%) are owned by Charles N. Mathewson ("Mathewson")
a member of our Board of Directors and 225 shares (2.25%) are owned by Perry
Rogers ("Rogers") a member of our Board of Directors.

         Poster and Breitling were issued their shares in connection with the
Company's Acquisition of the Golden Nugget Group from MGM MIRAGE. Agassi and
Rogers were issued their shares in connection with (i) the conversion of junior
subordinated convertible notes of PB Gaming in April 2005, (ii) the repurchase
by PB Gaming of junior subordinated notes of PB Gaming in June 2005, and (iii)
the subsequent issuance of PB Gaming shares in June 2005. Mathewson was issued
his shares in connection with the conversion of a junior subordinated
convertible note of PB Gaming in June 2005.

Results of Operations

Three Months Ended June 30, 2004 Compared to Three Months Ended June 30, 2005

         Net revenues for the three months ended June 30, 2005 amounted to
$62.4 million, a decrease of $3.3 million, or 5.0%, over the three months ended
June 30, 2004. The decrease in net revenues was attributable to a decrease in
table games drop coupled with the hold percentage, offset by strong increases
in hotel and food and beverage revenues. These increases in non-casino revenues
are the result of increased menu prices and room occupancy and ADR for the
three months ended June 30, 2005 compared to the three months ended June 30,
2004.

<TABLE>

         The following table presents detail of our net revenues (in thousands of dollars):
<CAPTION>

                                           Golden Nugget--Las Vegas                     Golden Nugget--Laughlin
                                   ---------------------------------------    -----------------------------------------
                                        Three Months Ended June 30,                 Three Months Ended June 30,
                                   ---------------------------------------    -----------------------------------------
                                                               Percentage                                    Percentage
                                       2004          2005        Change             2004            2005       Change
                                   -------------- ----------- ------------      --------------- -----------  ----------
<S>                                    <C>           <C>             <C>             <C>           <C>             <C>
     Casino revenue, net:
     Table Games                       $  14,901     $  9,280       -37.7%           $    746      $   738        -1.1%
     Slots                                19,997       20,207         1.1%              8,317        8,431         1.4%
     Other                                   759          672       -11.5%                289          221       -23.5%
                                   -------------- ------------                  --------------- -----------

     Casino revenue, net                  35,657       30,159       -15.4%              9,352        9,390         0.4%
                                   -------------- ------------                  --------------- -----------

     Non-casino revenue:
     Rooms                                11,362       12,982        14.3%              1,077        1,019        -5.4%
     Food and beverage                    10,994       11,224         2.1%              2,729        2,846         4.2%
     Entertainment, retail and
        other                              2,715        2,596        -4.4%                385          244       -36.6%
                                   -------------- ------------                  --------------- -----------

     Non-casino revenue                   25,071       26,802         6.9%              4,191        4,109        -2.0%
                                   -------------- ------------                  --------------- -----------

                                          60,728       56,961        -6.2%             13,543       13,499        -0.3%
     Less: Promotional allowances         (6,812)      (6,301)       -7.5%             (1,798)      (1,758)       -2.2%
                                   -------------- ------------                  --------------- -----------

     Net Revenue                       $  53,916    $  50,660        -6.0%         $   11,745    $  11,741         0.0%
                                   ============== ============                  =============== ===========
</TABLE>

                                      30
<PAGE>


Casino Revenues

         Casino revenues during the three months ended June 30, 2005 totaled
$39.5 million, a decrease of $5.5 million, or 12.1%, over the three months
ended June 30, 2004. Slot machine revenues accounted for $28.6 million, or
72.4% of casino revenues, and table games revenues accounted for $10.0 million,
or 25.3% of the casino revenues for the three months ended June 30, 2005. The
decline in table games revenue at the Las Vegas property is the result of
changes in table games limits and credit policy which reduced drop, along with
a lower hold percentage for the period ended June 30, 2005.

Non-Casino Revenues

         Room revenues totaled $14.0 million, or 22.4% of net revenues, for the
three months ended June 30, 2005 compared to $12.4 million, or 18.9% of net
revenues, for the three months ended June 30, 2004. Hotel occupancy during the
period at the Las Vegas property was 98.6%, compared to 97.6% for the three
months ended June 30, 2004. Overall ADR increased 13.8% for the three months
ended June 30, 2005, as compared to the three months ended June 30, 2004.

          Food and beverage revenues for the three months ended June 30, 2005
totaled $14.1 million, or 22.5% of net revenues, compared to $13.7 million, or
20.9% of net revenues, for the three months ended June 30, 2004. At the Las
Vegas property, food covers decreased 3.3% during the period, while average
revenue per cover increased 3.4% compared to the three months ended June 30,
2004.

          Entertainment, retail and other revenues decreased $0.3 from $3.1
million for the three months ended June 30, 2004 to $2.8 million for the three
months ended June 30, 2005. This decrease was the result of outsourcing our
Retail facilities in mid 2004. We now lease the facilities to a third party and
receive rental income, instead of operating the facilities directly.

Promotional Allowances

          Promotional allowances provided to gaming patrons for the three
months ended June 30, 2005 and 2004, totaled $8.1 million and $8.6 million,
respectively, and are characterized in the financial statements as a reduction
of gross revenues. The decrease is consistent with the decrease in gaming
volumes and customer base as compared to the three months ended June 30, 2004.


                                      31
<PAGE>


Operating Expenses

          Casino operating expenses for the three months ended June 30, 2005
totaled $23.4 million, or 59.2% of casino revenues, compared to $26.3 million,
or 58.5% of casino revenues, for the three months ended June 30, 2004. Casino
operating expenses were primarily comprised of salaries, benefits, gaming
taxes, and other operating expenses of the casinos. The decrease of $2.9
million, or 11.0%, in casino operating expenses is due primarily to decreases
in gaming taxes, special event costs and payroll expense.

          General and administrative expenses for the three months ended June
30, 2005 were $12.8 million, or 20.5% of net revenues, compared to $13.2
million, or 20.2% of net revenues, for the three months ended June 30, 2004.
The decrease in general and administrative expenses is attributed to costs
associated with payroll.

Income from Operations

         Operating income for the three months ended June 30, 2005 was $3.1
million, or 5.0% of net revenues, compared to $4.4 million, or 6.8% of net
revenues, for the three months ended June 30, 2004. The decrease in operating
income is primarily due to decreases in casino revenues for the three months
ended June 30, 2005.

Other Income and Expense

         Other income and expense consists principally of interest expense on
the Senior Notes and the Credit Facility and the equity in the loss of our
joint venture investment in The Fremont Street Experience LLC.

         Interest expense for Poster Financial for the three months ended June
30, 2005 amounted to approximately $4.5 million compared to $4.2 million for
the three months ended June 30, 2004. The interest expense resulted from the
issuance of $155.0 million principal amount of the Senior Notes on December 3,
2004. The Company also incurred interest expense from the $20.0 million term
loan under the Credit Facility (drawn on January 22, 2004 at the closing of the
Acquisition) and from borrowings under the revolving portion of the Credit
Facility.

         The Golden Nugget--Las Vegas accounts for its investment in The
Fremont Street Experience LLC as a joint venture, using the equity method of
accounting. The Golden Nugget--Las Vegas added to its investment through
contributions of approximately $0.2 million for the three months ended June 30,
2005, and its equity in the loss of The Fremont Street Experience LLC was
approximately $0.4 million for the three months ended June 30, 2005 and
approximately $0.2 million for the three months ended June 30, 2004, which
losses were consistent with our expectations. The joint venture is primarily
designed to increase visitation to downtown Las Vegas and it is expected to
continue to incur losses each three months. GNLV has a 17.65% interest in the
loss of The Fremont Street Experience LLC, which ownership and participation
rate was consistent throughout 2004 and 2005.

Six Months Ended June 30, 2004 Compared to Six Months Ended June 30, 2005

         Net revenues for the six months ended June 30, 2005 amounted to $130.7
million, a decrease of $3.6 million, or 2.7%, over the six months ended June
30, 2004. The slight decrease in net revenues was attributable to a decrease in
table games drop coupled with the hold percentage, offset by strong increases
in hotel and food and beverage revenues. These increases in non-casino revenues
are the result of increased menu prices and room occupancy and ADR for the six
months ended June 30, 2005 compared to the six months ended June 30, 2004.

         The following table presents detail of our net revenues (in thousands
of dollars):

                                      32
<PAGE>
<TABLE>
<CAPTION>

                                      Golden Nugget--Las Vegas                  Golden Nugget--Laughlin
                                -------------------------------------    -----------------------------------
                                     Six Months Ended June 30,               Six Months Ended June 30,
                                -------------------------------------    -----------------------------------
                                                           Percentage                             Percentage
                                 2004(1)         2005       Change         2004(1)        2005      Change
                                -----------  ------------- ---------     ------------ ----------- ----------
<S>                              <C>            <C>            <C>         <C>           <C>            <C>
     Casino revenue, net:
     Table Games                 $  28,035      $  18,409     -34.3%       $   1,427     $  1,532       7.4%
     Slots                          42,373         42,633       0.6%          17,975       18,824       4.7%
     Other                           1,816          2,841      56.4%             541          648      19.8%
                                -----------  -------------               ------------  -----------

     Casino revenue, net            72,224         63,883     -11.5%          19,943       21,004       5.3%
                                -----------  -------------               ------------  -----------

     Non-casino revenue:
     Rooms                          23,533         26,862      14.1%           2,000        1,970      -1.5%
     Food and beverage              22,177         23,389       5.5%           5,408        5,561       2.8%
     Entertainment, retail and
        other                        6,072          5,339     -12.1%             802          377     -53.0%
                                -----------  -------------               ------------  -----------

     Non-casino revenue             51,782         55,590       7.4%           8,210        7,908      -3.7%
                                -----------  -------------               ------------  -----------

                                   124,006        119,473      -3.7%          28,153       28,912       2.7%
     Less: Promotional
        allowances                 (13,940)       (13,892)     -0.3%          (3,871)      (3,774)     -2.5%
                                -----------  -------------               ------------  -----------

     Net Revenue                $  110,066      $ 105,581      -4.1%       $  24,282    $  25,138       3.5%
                                ===========  =============               ============  ===========
</TABLE>


(1)      The information presented reflects the results of operations for (i)
         the first 22 days of January 2004, while the Golden Nugget--Las Vegas
         was owned by MGM MIRAGE and (ii) the remainder of the period through
         June 30, 2004 while the Golden Nugget--Las Vegas was owned by Poster
         Financial. A discussion of our operations for those discrete periods
         in 2004 is not meaningful when compared to the six months ended June
         30, 2005. Accordingly, for purposes of "Management's Discussion and
         Analysis of Financial Condition and Results of Operations", we have
         presented the six month period ended June 30, 2004 on a combined
         basis.


Casino Revenues

         Casino revenues during the six months ended June 30, 2005 totaled
$84.9 million, a decrease of $7.3 million over the six months ended June 30,
2004. Slot machine revenues accounted for $61.5 million, or 72.4% of casino
revenues, and table games revenues accounted for $19.9 million, or 23.5% of the
casino revenues for the six months ended June 30, 2005. The decline in table
games revenue at the Las Vegas property is a result of changes in table games
limits and credit policy which reduced drop, along with a lower hold percentage
for the period ended June 30, 2005.

Non-Casino Revenues

         Room revenues totaled $28.8 million, or 22.1% of net revenues, for the
six months ended June 30, 2005 compared to $25.5 million, or 19.0% of net
revenues, for the six months ended June 30, 2004. Hotel occupancy during the
period at the Las Vegas property was 97.8%, compared to 98.3% for the six
months ended June 30, 2004. Overall ADR increased 16.4% for the six months
ended June 30, 2005, as compared to the six months ended June 30, 2004.

          Food and beverage revenues for the six months ended June 30, 2005
totaled $29.0 million, or 22.1% of net revenues, compared to $27.6 million, or
20.5% of net revenues, for the six months ended June 30, 2004. Food covers
decreased 3.1% during the period; while average revenue per cover increased
6.4% compared to the six months ended June 30, 2004.

          Entertainment, retail and other revenues decreased $1.2 from $6.9
million for the six months ended June 30, 2004 to $5.7 million for the six
months ended June 30, 2005. This decrease was the result of outsourcing our
Retail facilities in mid 2004. We now lease the facilities to a third party and
receive rental income, instead of operating the facilities directly.


                                      33
<PAGE>


Promotional Allowances

          Promotional allowances provided to gaming patrons for the six months
ended June 30, 2005 and 2004, totaled $17.7 million and $17.8 million,
respectively, and are characterized in the financial statements as a reduction
of gross revenues. The decrease is consistent with the decrease in gaming
volumes and customer base as compared to the six months ended June 30, 2004,
with the majority of the decrease occurring in the second quarter.

Operating Expenses

          Casino operating expenses for the six months ended June 30, 2005
totaled $50.2 million, or 59.1% of casino revenues, compared to $52.2 million,
or 56.6% of casino revenues, for the six months ended June 30, 2004 (including
the 22 days preceding the Acquisition for comparability purposes). Casino
operating expenses were primarily comprised of salaries, benefits, gaming
taxes, and other operating expenses of the casinos. The decrease of $2.0
million, or 3.8%, in casino operating expenses is due primarily to decreases in
payroll and gaming tax expenses.

          General and administrative expenses for the six months ended June 30,
2005 were $26.1 million, or 20.0% of net revenues, compared to $26.4 million,
or 19.6% of net revenues, for the six months ended June 30, 2004 (including the
22 days preceding the Acquisition for comparability purposes). The decrease in
general and administrative expenses is attributed to reductions in payroll and
outside labor costs.

Income from Operations

         Operating income for the six months ended June 30, 2005 was $8.7
million, or 6.7% of net revenues, compared to $12.8 million, or 9.5% of net
revenues, for the six months ended June 30, 2004 (including the 22 days
preceding the Acquisition for comparability purposes). The decrease in
operating income is primarily due to decreases in casino revenues for the six
months ended June 30, 2005, as well as the $1.3 million severance payment made
during the six months ended June 30, 2005.

Other Income and Expense

         Other income and expense consists principally of interest expense on
the Senior Notes and the Credit Facility and the equity in the loss of our
joint venture investment in The Fremont Street Experience LLC.

         Interest expense for Poster Financial for the six months ended June
30, 2005 amounted to approximately $9.1 million compared to $8.2 million for
the six months ended June 30, 2004. The interest expense resulted from the
issuance of $155.0 million principal amount of the Senior Notes on December 3,
2004. The Company also incurred interest expense from the $20.0 million term
loan under the Credit Facility (drawn on January 22, 2004 at the closing of the
Acquisition) and from borrowings under the revolving portion of the Credit
Facility. In 2004, the Golden Nugget Group also incurred approximately $0.2
million of interest expense, primarily on notes payable by Golden Nugget - Las
Vegas to MGM MIRAGE, in the principal amount of $80.0 million. In connection
with the closing of the Acquisition, the Golden Nugget--Las Vegas was relieved
of its obligations to repay the note payable to the MGM MIRAGE.

         The Golden Nugget--Las Vegas accounts for its investment in The
Fremont Street Experience LLC as a joint venture, using the equity method of
accounting. The Golden Nugget--Las Vegas added to its investment through
contributions of approximately $0.5 million for the six months ended June 30,
2005 and approximately $0.2 million for the six months ended June 30, 2004, and
its equity in the loss of The Fremont Street Experience LLC was approximately
$0.5 million for the six months ended June 30, 2005 and approximately $0.3
million for the six months ended June 30, 2004, which losses were consistent
with our expectations. The joint venture is primarily designed to increase
visitation to downtown Las Vegas and it is expected to continue to incur losses
each six months. GNLV has a 17.65% interest in the loss of The Fremont Street
Experience LLC, which ownership and participation rate was consistent
throughout 2004 and 2005.


                                      34
<PAGE>


Liquidity and Capital Resources

         On August 10, 2005, the Company entered into an amendment to the loan
and security agreement relating to the senior secured credit facility. The
amendment modified the financial covenants to consider the results of
operations of the Laughlin properties in light of the terminated agreement to
sell that property to Barrick.

         At June 30, 2005, Poster Financial had cash and cash equivalents of
$24.6 million, had approximately $14.0 million outstanding under the Revolver
portion of the Credit Facility, and $2.6 million drawn under Letters of Credit,
which reduce total availability. Accordingly, remaining availability under the
line of credit was approximately $8.4 million at June 30, 2005.

         Until the completion of the sale of the Company to Landry's, we expect
to fund our operating and capital needs, as currently contemplated, with
operating cash flows and availability under the Revolver. We currently
anticipate capital expenditures for 2005 to be approximately $10.0 million. The
majority of the budgeted expenditures for 2005 are expected to be spent on
purchasing new gaming equipment and information services equipment. We spent
approximately $15.0 million on capital expenditures in 2004 since the closing
of the Acquisition.

         Under the terms of the Landry's Purchase Agreement, the Senior Notes
will remain outstanding obligations of Poster Financial following the closing.
The consummation of the sale will result in a change of control of Poster
Financial under the indenture governing the Senior Notes and, as a result,
Poster Financial will be required within 30 days of such change of control to
commence an offer to purchase all outstanding Senior Notes for 101% of the
aggregate principal amount of the Senior Notes, plus any accrued and unpaid
interest. Under the terms of the Landry's Purchase Agreement, amounts
outstanding at closing under our Credit Facility will be paid off by Landry's
or Landry's will seek consent from the lenders under the Credit Facility for
such amounts to remain outstanding.

         It is anticipated that the Landry's transaction will close by the end
of 2005, subject to customary closing conditions contained in the purchase
agreement, including receipt of all necessary governmental, gaming and other
regulatory approvals.

         For the six months ended June 30, 2005, net cash provided by operating
activities totaled approximately $9.5 million as compared to $9.3 million for
the period from January 23, 2004 through June 30, 2004. Cash used for investing
activities during the six months ended June 30, 2005 totaled $3.1 million, as
compared to $52.2 million in 2004, reflecting the Acquisition.

         Cash flows used in financing activities were approximately $6.0
million in the six months ended June 30, 2005, primarily for payments on debt
and other obligations and distributions for tax payments to PB Gaming, offset
by a $3.0 million equity contribution from PB Gaming during the period. Cash
flows from financing activities in the comparable 2004 period were $61.9
million, reflecting borrowings and contributions to fund the Acquisition.


Off Balance Sheet Arrangements

          Our off balance sheet arrangements consist solely of our investment
in an unconsolidated affiliate, which currently consists of our investment in
Fremont Street Experience LLC. We have not entered into any transactions with
special purpose entities, nor have we engaged in any derivative transactions or
joint ventures.

          At June 30, 2005, we had outstanding letters of credit totaling $2.6
million.

Contractual Obligations

          The following table summarizes the contractual obligations and
commitments of Poster Financial (or the Golden Nugget Group prior to the
Acquisition) to make future payments under certain contracts, including
long-term debt obligations, and operating leases at June 30, 2005. We have
significant obligations under the Senior Notes and the Credit Facility.

                                      35
<PAGE>
<TABLE>
<CAPTION>

                                                                Payments Due By Period
                                     -----------------------------------------------------------------------------
Contractual Obligations and            Less than                                         After
Commitments                             1 year          1-3 years      4-5 years        5 years         Total
------------------------------------ --------------  --------------  -------------- --------------- --------------
                                                              (in thousands of dollars)
<C>                                  <C>             <C>             <C>            <C>             <C>
8 3/4% Senior Notes                  $          --   $          --   $          --  $      155,000  $     155,000
Credit Facility                              2,800           5,600          22,823              --         31,223
Other long-term debt                           119             272              --              --            391
Operating leases                             1,368           2,344           1,910          30,665         36,287
                                     --------------  --------------  -------------- --------------- --------------
Total cash obligations               $       4,287   $       8,216   $      24,733  $      185,665  $     222,901
                                     ==============  ==============  ============== =============== ==============
</TABLE>

Critical Accounting Policies

         The consolidated financial statements of the Company are prepared in
accordance with accounting principles generally accepted in the United States,
which requires management to make estimates and assumptions about the effects
of matters that are inherently uncertain. We have summarized the significant
accounting policies of the Company in Note 2 to the consolidated financial
statements of Poster Financial. Of the accounting policies, we believe the
following may involve a higher degree of judgment and complexity.

          Revenue Recognition. Casino revenues represent the net win from
gaming activities, which is the difference between gaming wins and losses.
Hotel and other revenues are recognized at the time the related service is
performed.

          Property and Equipment. At December 31, 2004, the Company had
approximately $152.8 million of net property and equipment recorded on its
balance sheet. The Company depreciates its assets on a straight-line basis over
their estimated useful lives. The estimate of the useful lives is based on the
nature of the asset as well as our current operating strategy. Future events,
such as property expansions, new competition and new regulations, could result
in a change in the manner in which we use certain assets, which could require a
change in the estimated useful lives of such assets. In assessing the
recoverability of the carrying value of property and equipment, we must make
assumptions regarding estimated future cash flows and other factors. If these
estimates or the related assumptions change in the future, we may be required
to record impairment charges for these assets.

          Slot Club Liability. The Golden Nugget casinos offer a program
whereby participants can accumulate points for casino wagering that can
currently be redeemed for cash, lodging, food and beverages and merchandise. A
liability is recorded for the estimate of unredeemed points based upon
redemption history at the Golden Nugget casinos. Changes in the program,
increases in membership and changes in the redemption patterns of the
participants can impact this liability.

          Self-Insurance. The Company maintains accruals for its self-insured
health program, which are classified in other accrued liabilities in the
combined balance sheet. Management determines the estimates of these accruals
by periodically evaluating the historical expenses and projected trends related
to these accruals. Actual results may differ from those estimates.

          Litigation, Claims and Assessments. The Company also utilizes
estimates for litigation, claims and assessments. These estimates are based
upon management's knowledge and experience about past and current events and
also upon reasonable future events. Actual results may differ from those
estimates.

Recently Issued Accounting Pronouncements

         In March 2004, the Financial Accounting Standards Board ("FASB")
approved the consensus reached on the Emerging Issues Task Force ("EITF")
Issue No. 03-1, "The Meaning of Other-Than-Temporary Impairment and Its
Application to Certain Investments." The Issue's objective is to provide
guidance for identifying other-than-temporarily impaired investments. EITF
03-1 also provides new disclosure requirements for investments that are
deemed to be temporarily impaired. The accounting provisions of EITF 03-1 are
effective for all reporting periods beginning after June 15, 2004, while the
disclosure requirements are effective for annual periods ending after June
15, 2004. In September 2004, the FASB issued a FASB Staff Position ("FSP")
EITF 03-1-1 that delays the effective date of the measurement and


                                      36
<PAGE>


recognition guidance in EITF 03-1 on certain impaired debt securities until
after further deliberations by the FASB. The adoption of this pronouncement
did not impact our consolidated financial position, results of operations or
cash flows.

         In December 2004, the FASB issued Statement of Financial Accounting
Standards ("SFAS") No. 123R (revised 2004), "Share-Based Payment," which
revised SFAS No. 123, "Accounting for Stock-Based Compensation." This statement
supersedes APB Opinion No. 25, "Accounting for Stock Issued to Employees." The
revised statement addresses the accounting for share-based payment transactions
with employees and other third parties, eliminates the ability to account for
share-based compensation transactions using APB 25 and requires that the
compensation costs relating to such transactions be recognized in the
consolidated statement of operations. The revised statement is effective as of
the first annual period beginning after June 15, 2005. In accordance with the
revised statement, we will be required to recognize the expense attributable to
stock options granted or vested subsequent to December 31, 2005. The Company
does not have a stock option plan and no stock options have been issued to any
employees since the purchase of the Company from MGM MIRAGE. Accordingly, the
adoption of this pronouncement is not expected to have any effect on our
consolidated financial position, results of operations and cash flows.

         In November 2004, the FASB issued SFAS No. 151, "Inventory Costs,"
which amends part of ARB 43, "Inventory Pricing," concerning the treatment of
certain types of inventory costs. The provisions of ARB No. 43 provided that
certain inventory-related costs, such as double freight and re-handling might
be "so abnormal" that they should be charged against current earnings rather
than be included in the cost of inventory. As amended by SFAS No. 151, the
"so-abnormal" criterion has been eliminated. Thus, all such (abnormal) costs
are required to be treated as current-period charges under all circumstances.
In addition, fixed production overhead should be allocated based on the normal
capacity of the production facilities, with unallocated overhead charged to
expense when incurred. We maintain inventories for our restaurants, gift shops,
bars and other operations. SFAS 151 is required to be adopted for fiscal years
beginning after June 15, 2005. We do not believe its adoption will have a
material impact on our financial position, results of operations or cash flows.

         In December 2004, the FASB issued SFAS No. 153, "Exchanges of
Nonmonetary Assets" ("SFAS 153"), which eliminates the exception from fair
value measurement for nonmonetary exchanges of similar productive assets and
replaces it with a general exception from fair value measurement for exchanges
of nonmonetary assets that do not have commercial substance. SFAS 153 is
required to be adopted in fiscal periods beginning after June 15, 2005. We do
not believe its adoption will have a material impact on our financial position,
results of operations or cash flows.

         In June 2005, the FASB issued SFAS No. 154, "Accounting Changes and
Error Corrections--a replacement of APB No. 20 and FAS No. 3" ("SFAS 154").
SFAS 154 provides guidance on the accounting for and reporting of accounting
changes and error corrections. It establishes, unless impracticable,
retrospective application as the required method for reporting a change in
accounting principle in the absence of explicit transition requirements
specific to the newly adopted accounting principle. SFAS 154 also provides
guidance for determining whether retrospective application of a change in
accounting principle is impracticable and for reporting a change when
retrospective application is impracticable. The correction of an error in
previously issued financial statements is not an accounting change. However,
the reporting of an error correction involves adjustments to previously issued
financial statements similar to those generally applicable to reporting an
accounting change retrospectively. Therefore, the reporting of a correction of
an error by restating previously issued financial statements is also addressed
by SFAS 154. SFAS 154 is required to be adopted in fiscal years beginning after
December 15, 2005. We do not believe its adoption will have a material impact
on our financial position, results of operations and cash flows.

Cautionary Statement Regarding Forward-Looking Statements

          This Quarterly Report on Form 10-Q contains "forward-looking
statements," within the meaning of the Private Securities Litigation Reform Act
of 1995, which involve known and unknown risks. Such forward-looking statements
include statements as to the Company's anticipated financial performance; the
impact of competition and current economic uncertainty; the sufficiency of
funds to satisfy our cash requirements; and other statements containing words
such as "believes," "anticipates," "estimates," "expects," "may," "intends" and
words of similar import or statements of management's opinion. These
forward-looking statements and assumptions involve known and unknown risks,
uncertainties and other factors that may cause our actual results, market
performance or achievements to differ materially from any future


                                      37
<PAGE>


results, performance or achievements expressed or implied by such
forward-looking statements. Important factors that could cause differences in
our results of operations include, but are not limited to, general economic
conditions in the markets in which we operate, competition from other gaming
operations, leverage, the inherent uncertainty and costs associated with
litigation and governmental and regulatory investigations, licensing and other
regulatory risks and other risks disclosed in our filings with the SEC. All
forward-looking statements attributable to the Company or persons acting on
behalf of the Company apply only as of the date of this report and are
expressly qualified in their entirety by the cautionary statements included in
this report. We undertake no obligation to update or revise forward-looking
statements to reflect events or circumstances that may arise after the date of
this report.


ITEM 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         Market risk is the risk of loss arising from adverse changes in market
rates and prices, such as interest rates, foreign currency exchange rates and
commodity prices. Our primary exposure to market risk is interest rate risk
associated with our long-term debt. We do not invest in derivative financial
instruments, interest rate swaps or other investments that alter interest rate
exposure.

         The table below provides information about our financial instruments
that are sensitive to changes in interest rates. For debt obligations, the
table presents notional amounts and weighted average interest rates by
contractual maturity dates for the remainder of 2005 and, for later years, for
the twelve-month periods ended December 31 (in thousands of dollars):


                                      38
<PAGE>
<TABLE>
<CAPTION>
                                                                                                                  Fair
                                      2005      2006       2007      2008     2009    Thereafter     Total      Value(1)
                                   --------- ----------  -------- --------- --------  ------------ ----------- -----------
<S>                                <C>       <C>         <C>      <C>       <C>       <C>           <C>         <C>
Variable Rate Debt
Poster Financial--Amounts
   outstanding under the Credit
   Facility, payable at one-month
   LIBOR plus a margin of 4.0%     $  1,400  $   2,800   $ 2,800  $ 24,223  $    --   $         --  $  31,223   $  31,223
Average interest rate (2)                --         --        --        --       --             --       5.09%

Fixed Rate Debt
Poster Financial--$155.0 principal
   amount of the Senior Notes due
   2011                                  --         --        --        --       --        155,000    155,000     157,713
Average interest rate (2)                --         --        --        --       --           8.75%      8.75%
Golden Nugget Group-Non-interest
   bearing slot jackpot payable
   over time and carried as a note
   payable (unamortized discount
   of $72 at December 31, 2004
   not reflected in scheduled
   payments)                            154        154       154         --      --             --        462         391
                                   --------- ----------  -------- --------- --------  ------------ ----------- -----------
                                   $  1,554  $   2,954   $  2,954  $ 24,223  $    --  $  155,000   $  186,685  $  189,327
                                   ========= ==========  ======== ========= ========  ============ =========== ===========
</TABLE>

------------------
(1)      The fair values for debt with no public market are based on the
         borrowing rates currently available for debt instruments with similar
         terms and maturities, and for publicly traded debts are based on
         market quotes.

(2)      Based on contractual interest rates for fixed rate indebtedness or
         current LIBOR rates for variable rate indebtedness.

(3)      Market risk is the risk of loss arising from adverse changes in market
         rates and prices, such as interest rates, foreign currency exchange
         rates and commodity prices. Our primary exposure to market risk is
         interest rate risk associated with our long-term debt. We attempt to
         limit our exposure to interest rate risk by managing the mix of our
         long-term fixed-rate borrowings and short-term borrowings under the
         Revolving Facility. Borrowings under the Revolving Facility bear
         interest at a margin above the Alternate Base Rate or the Eurodollar
         Rate (each, as defined in the agreement governing the Revolving
         Facility) as selected by us. However, the amount of outstanding
         borrowings is expected to fluctuate and may be reduced from time to
         time. The Revolving Facility matures in January 2009.

ITEM 4.    DISCLOSURE CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

         Our management, with the participation of our Chief Executive Officer
and Chief Financial Officer, has evaluated the effectiveness of our disclosure
controls and procedures (as such term is defined in Rules 13a-15(e) and
15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange
Act")) as of the end of the period covered by this report. Based on that
evaluation, our Chief Executive Officer and Chief Financial Officer have
concluded that, as of the end of such period, our disclosure controls and
procedures are effective.

 Changes in Internal Controls over Financial Reporting

         There have not been any changes in our internal control over financial
reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the
Exchange Act) during the fiscal year to which this report relates that have
materially affected, or are reasonably likely to materially affect, our
internal control over financial reporting.


                                      39
<PAGE>

Part II - OTHER INFORMATION

Item 1.  Legal Proceedings - None.

Item 2.  Changes in Securities and Use of Proceeds - None.

Item 3.  Defaults upon Senior Securities - None.

Item 4.  Submission of Matters to a Vote of Security Holders - None.

Item 5.  Other Information - None.

Item 6.  Exhibits

         No. 10.1 - Amendment Number Five to Loan and Security Agreement dated
                    as of August 10, 2005, by and among Poster Financial Group,
                    Inc., GNLV, CORP., GNL, CORP. and Wells Fargo Bank, National
                    Association.

         No. 31.1 - Certification pursuant to Section 302 of the Sarbanes-Oxley
                    Act of 2002.

         No. 31.2 - Certification pursuant to Section 302 of the Sarbanes-Oxley
                    Act of 2002.

         No. 32.1 - Certification pursuant to Section 906 of the Sarbanes-Oxley
                    Act of 2002.

         No. 32.2 - Certification pursuant to Section 906 of the Sarbanes-Oxley
                    Act of 2002.


                                      40
<PAGE>


                                   SIGNATURE

         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.

                                          Poster Financial Group, Inc.,
                                          Registrant


DATE:  August 12, 2005                      /s/ Dawn Prendes
                                          -----------------------------
                                          Dawn Prendes,
                                          Senior Vice President and
                                          Chief Financial Officer
                                          (Principal Accounting Officer)





                                      41