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

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549


                                    FORM 10-Q


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

                       FOR THE QUARTER ENDED JUNE 30, 2006

[_]   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
                                   333-114339

                        PREMIER ENTERTAINMENT BILOXI LLC
                                       AND
                          PREMIER FINANCE BILOXI CORP.
             (Exact Name of Registrant as specified in Its Charter)

           DELAWARE                                   20-0495680/20-0495563
(State or Other Jurisdiction of                 (IRS Employer Identification No)
Incorporation or Organization)

                               777 BEACH BOULEVARD
                                BILOXI, MS 39530
          (Address, including zip code, or Principal Executive Offices)

                                 (228) 374-7625
              (Registrant's Telephone Number, Including Area Code)

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 a large accelerated filer, an
accelerated filer, or a non-accelerated filer. See definition of "accelerated
filer and large accelerated filer" in Rule 12b-2 of the Exchange Act. (Check
one):

Large accelerated filer [_]    Accelerated filer [_]   Non-accelerated filer [x]

Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Act).
                                                              YES [_]  NO [x]



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<PAGE>

The equity securities of Premier Entertainment Biloxi LLC are not publicly
traded and are all owned by affiliates. The equity securities of Premier Finance
Biloxi Corp. are not publicly traded and are all owned by Premier Entertainment
Biloxi LLC. There is no established public trading market for these securities.
On August 14, 2006, there were 1,000 shares of common stock of Premier Finance
Biloxi Corp. outstanding and held by Premier Entertainment Biloxi LLC.















                                       2

<PAGE>



                        PREMIER ENTERTAINMENT BILOXI LLC
                                       AND
                          PREMIER FINANCE BILOXI CORP.
                          (A DEVELOPMENT STAGE COMPANY)

                                      INDEX

PART I.    FINANCIAL INFORMATION

Item 1.    Unaudited Financial Statements
           Condensed Consolidated Balance Sheets as of June 30, 2006
              and December 31, 2005............................................4
           Condensed Consolidated Statements of Operations for the
              Three Months ended June  30, 2006 and 2005 the Six Months
              ended June 30, 2006 and 2005 and for the period from
              commencement of operations on March 27, 2003 through
              June 30, 2006....................................................5
           Condensed Consolidated Statements of Cash Flows for the Six
              Months ended June 30, 2006 and 2005 and for the period
              from commencement of operations on March 27, 2003
              through June 30, 2006............................................6
           Notes to Condensed Consolidated Financial Statements................8

Item 2.    Management's Discussion and Analysis of Financial Condition
           and Results of Operations..........................................18

Item 3.    Quantitative and Qualitative Disclosures About Market Risk.........21

Item 4.    Controls and Procedures............................................22


PART II.   OTHER INFORMATION

Item 1.    Legal Proceedings..................................................22

Item 4.    Submission of Matters to a Vote of Security Holders................24

Item 6.    Exhibits Index.....................................................25

Signatures
Exhibits




                                       3
<PAGE>



                        PREMIER ENTERTAINMENT BILOXI LLC
                          (A DEVELOPMENT STAGE COMPANY)

                      CONDENSED CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                        JUNE 30,      DECEMBER 31,
                                                         2006             2005
                                                     (UNAUDITED)        (NOTE 1)
                                                   -------------    -------------
<S>                                                <C>              <C>
ASSETS
Current assets:
     Cash                                          $     813,475    $   1,747,004
     Government securities - restricted                     --          8,332,711
     Accounts receivable                                 224,306          163,005
     Prepaid insurance                                   278,685          932,636
     Prepaid expenses - other                            853,346          586,944
     Other current assets                                  8,600           23,600
                                                   -------------    -------------
          Total current assets                         2,178,412       11,785,900

Property and equipment, net of writedown              96,313,890       95,556,418

Other non-current assets:
     Restricted cash                                 117,488,378       34,191,301
     Insurance receivable                             47,915,640       92,877,100
     Other assets, net                                 5,878,353        6,486,277
                                                   -------------    -------------
Total assets                                       $ 269,774,673    $ 240,896,996
                                                   =============    =============

LIABILITIES AND MEMBERS' EQUITY

Current liabilities:
     Accounts payable                              $   5,334,606    $   7,003,665
     Accounts payable - construction in progress       6,223,434       10,594,649
     Accrued interest                                  9,016,656        8,326,097
     Other accrued liabilities                         7,086,506        3,725,252
     Notes payable                                   158,345,035      158,240,569
     Current maturities of long-term debt             12,092,616        2,741,735
                                                   -------------    -------------
          Total current liabilities                  198,098,853      190,631,967

Long-term debt, less current maturities               23,439,119       23,840,450

Members' contributed capital                          52,775,215       52,775,215
Deficit accumulated during development stage          (4,538,514)     (26,350,636)
                                                   -------------    -------------
     Total members' equity                            48,236,701       26,424,579
                                                   -------------    -------------
Total liabilities and members' equity              $ 269,774,673    $ 240,896,996
                                                   =============    =============
</TABLE>


 See the accompanying notes to the condensed consolidated financial statements.


                                       4
<PAGE>



                        PREMIER ENTERTAINMENT BILOXI LLC
                          (A DEVELOPMENT STAGE COMPANY)

                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)
<TABLE>
<CAPTION>
                                                                                                             Period from
                                                                                                           commencement of
                                                                                                            operations on
                                                                                                           March 27, 2003
                                         Three Months Ended June 30,        Six months ended June 30,          through
                                           2006             2005             2006             2005          June 30, 2006
                                       -------------    -------------    -------------    -------------    -------------
<S>                                    <C>              <C>              <C>              <C>              <C>
Preopening expenses                    $   3,072,053    $   1,276,059    $   4,003,009    $   2,284,395    $  13,398,320
Hurricane-related expenses:
   Preopening expenses - business
     interruption                          1,922,445             --          3,625,804             --         10,387,272
   Property and equipment writedowns          27,487             --             30,994             --         96,200,268
   Other hurricane-related expenses          864,437             --          1,073,195             --         10,209,391
                                       -------------    -------------    -------------    -------------    -------------
                                           2,814,369             --          4,729,993             --        116,796,931
Insurance recoveries                     (29,448,451)            --        (31,364,076)            --       (143,242,014)
Depreciation and amortization                204,836           34,374          412,617           64,698          861,538
                                       -------------    -------------    -------------    -------------    -------------
Income (loss) from operations             23,357,193       (1,310,433)      22,218,457       (2,349,093)      12,185,225

Other income (expense):
Interest expense                          (5,538,995)      (1,561,668)     (10,873,913)      (4,318,966)     (36,890,654)
Interest income                              432,118          417,388          548,880          935,835        3,599,055
Insurance recoveries - interest            4,933,614             --          9,918,698             --         16,567,860
                                       -------------    -------------    -------------    -------------    -------------
Total other income (expense)                (173,263)      (1,144,280)        (406,335)      (3,383,131)     (16,723,739)
                                       -------------    -------------    -------------    -------------    -------------
Net income (loss)                      $  23,183,930    $  (2,454,713)   $  21,812,122    $  (5,732,224)   $  (4,538,514)
                                       =============    =============    =============    =============    =============
</TABLE>

 See the accompanying notes to the condensed consolidated financial statements.


                                       5
<PAGE>



                                        PREMIER ENTERTAINMENT BILOXI LLC
                                         (A DEVELOPMENT STAGE COMPANY)

                                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                  (UNAUDITED)
<TABLE>
<CAPTION>
                                                                                                            Period from
                                                                                                          commencement of
                                                                                                           operations on
                                                                                                           March 27, 2003
                                                                            Six Months Ended June 30,         through
                                                                             2006             2005         June 30, 2006
                                                                         -------------    -------------    -------------
<S>                                                                      <C>              <C>              <C>
Operating activities
Net income (loss)                                                        $  21,812,122    $  (5,732,224)   $  (4,538,514)
     Depreciation and amortization                                             412,617           64,698          861,538
     Amortization of deferred financing costs, discount
        and repayment premium                                                  595,407          572,505        3,243,897
     Property and equipment writedowns                                          30,994             --         96,200,268
      Other hurricane-related writedowns                                          --               --            638,473
     Insurance recoveries                                                  (41,282,774)            --       (159,809,874)
     Changes in prepaid assets                                                 387,549         (249,131)      (1,571,293)
     Changes in other operating assets and liabilities                      (1,908,907)      (3,680,236)       4,921,026
                                                                         -------------    -------------    -------------

          Net cash used in operating activities                            (19,952,992)      (9,024,388)     (60,054,479)

Investing activities
     Purchases of property and equipment                                      (382,715)     (56,890,735)    (151,628,294)
     Insurance recoveries received                                          86,244,234             --        111,894,234
     Purchases of government securities                                           --               --        (32,946,442)
     Sales of government securities                                          8,332,711        8,428,979       33,451,651
     Acquisition of intangibles                                                   --               --           (965,672)
     Change in restricted cash                                             (83,297,077)      54,432,972     (116,976,043)
                                                                         -------------    -------------    -------------

          Net cash provided by (used in) investing activitie                 10,897,153       5,971,216     (157,170,566)

Financing activities
     (Increase) decrease in deferred financing costs                           122,310             --         (8,088,335)
     Increase in line of credit                                                   --               --          1,250,000
     Proceeds from long-term debt                                                 --          3,224,097      202,713,590
     Proceeds from short-term borrowings                                     8,000,000             --          8,000,000
     Capital contribution                                                         --               --         15,180,810
     Change in restricted cash                                                    --               --         (1,017,545)
                                                                         -------------    -------------    -------------

          Net cash provided by financing activities                          8,122,310        3,224,097      218,038,520

Net change in cash                                                            (933,529)         170,925          813,475

Cash at beginning of period                                                  1,747,004            5,215             --
                                                                         -------------    -------------    -------------

Cash at end of period                                                    $     813,475    $     176,140    $     813,475
                                                                         =============    =============    =============

</TABLE>




                                       6
<PAGE>



                        PREMIER ENTERTAINMENT BILOXI LLC
                          (A DEVELOPMENT STAGE COMPANY)

           CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
                                   (UNAUDITED)
<TABLE>
<CAPTION>
                                                                                                        Period from
                                                                                                      commencement of
                                                                                                       operations on
                                                                                                       March 27, 2003
                                                                        Six Months Ended June 30,          through
                                                                       2006                 2005        June 30, 2006
                                                                    -----------       -----------       -----------
<S>                                                                 <C>               <C>               <C>
Supplemental schedule of non-cash investing and
 financing activities:

     Construction costs funded through accounts payable             $   805,867       $   620,314       $ 6,223,434

     Purchase of property and equipment funded
        through notes payable                                       $      --         $      --         $14,120,932
</TABLE>


 See the accompanying notes to the condensed consolidated financial statements.




















                                       7
<PAGE>




                        PREMIER ENTERTAINMENT BILOXI LLC
                                       AND
                          PREMIER FINANCE BILOXI CORP.
                          (A DEVELOPMENT STAGE COMPANY)

         NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


1.    NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accompanying condensed consolidated financial statements should be read in
conjunction with the audited consolidated financial statements for the year
ended December 31, 2005 and 2004 and the period from the commencement of
operations on March 27, 2003 through December 31, 2005 filed with the Securities
Exchange Commission in April 2006. In the opinion of management, all adjustments
(consisting of normal recurring accruals or items discussed herein) necessary
for a fair presentation have been included. The results of operations for the
three months ended June 30, 2006 and 2005, for the six months ended June 30,
2006 and 2005 and for the period from the commencement of operations on March
27, 2003 through June 30, 2006 do not necessarily indicate the results that may
be expected for the full year through December 31, 2006.
Premier Entertainment Biloxi LLC, a Delaware limited liability company,
("Premier Entertainment" or the "Company") is a development stage company and
was established to own, construct and manage the operations of the Hard Rock
Hotel & Casino Biloxi ( "Hard Rock Biloxi"). The personal liability of the
members and officers of the Company is limited to the maximum amount permitted
under the laws of the state of Delaware.

Premier Finance Biloxi Corp. ("Premier Finance") was incorporated in October
2003 as a Delaware corporation and is a wholly-owned subsidiary of Premier
Entertainment. Under Mississippi law, certain expenditures are exempt from sales
tax if purchased with the proceeds from industrial development revenue bonds
issued by the Mississippi Finance Corporation. Premier Finance was formed to
fund the capital expenditures that qualify for the tax-exempt status.

The balance sheet at December 31, 2005 has been derived from the audited
financial statements at that date but does not include all of the information
and footnotes required by accounting principles generally accepted in the United
States for complete financial statements.

BASIS OF PRESENTATION
The accompanying consolidated financial statements include the accounts of
Premier Entertainment and its subsidiary, Premier Finance, and have been
prepared by the Company's management in accordance with generally accepted
accounting principles in the United States of America ("GAAP") and with the
rules and regulations of the Securities and Exchange Commission ("SEC").

The Company has incurred a net loss of $4.5 million for the period from the
commencement of operations on March 27, 2003 through June 30, 2006. Construction
of the property was completed on-time and on-budget in August 2005. However, on
August 29, 2005, the Company's casino was destroyed and the casino related
facilities, low-rise building, hotel tower and parking garage sustained
significant damage as a result of Hurricane Katrina.

On August 15, 2005, the Company purchased a comprehensive blanket insurance
policy providing up to $181.1 million in coverage for damage to real and
personal property, including business interruption coverage. The insurance was
comprised of a $25.0 million primary layer underwritten by Industrial Risk
Insurers, a $25.0 million first excess layer underwritten by several insurance
carriers, and a second excess layer comprising $131.1 million underwritten by
several insurance carriers. The syndicated coverage was spread over twelve
different insurance carriers. The Company had a 3.0% deductible on its coverage,
but purchased three additional insurance policies to reduce the Company's
exposure related to that deductible.

As of June 30, 2006, the Company has successfully negotiated settlements
totaling $159.8 million for $167.1 million face amount of coverage. Only $13
million of $14 million face value of insurance policies issued by James River
Insurance Company remains unsettled and is currently in litigation.

The $25.0 million primary layer of coverage and the $25.0 million first excess
layer have been settled for the full amount of coverage; $50.0 million has been
paid into restricted accounts. With respect to the second excess layer, the



                                       8
<PAGE>



Company has successfully negotiated settlements totaling $104.4 million for
$117.1 million face amount of coverage. $66.1 million of these settlements has
been received and deposited into a restricted account as of July 8, 2006. The
$38.3 million balance of the settlements is due from the insurers prior to
August 31, 2006 in accordance with the terms of the settlements. The Company has
also recovered $5.4 million under its smaller deductible buy-down policies;
these proceeds have also been deposited into a restricted account. On August 8,
2006, the Company received $1.0 million from James River, which represents,
according to James River, the uncontested amount of the claim under their
policy. The Company has sent the payment to the trustee and disbursement agent
for deposit into a restricted account.

In September 2005 the Company engaged its general contractor, Roy Anderson Corp.
("RAC"), to begin clearing the debris from the property and perform substantial
remediation; however, remediation, debris removal and reconstruction efforts
were halted as U.S. Bank National Association, in its capacity as trustee and
disbursement agent for the 10-3/4% First Mortgage Notes due 2012 (the "Notes"),
denied the Company's disbursement request for payment of construction expenses
incurred prior to Hurricane Katrina, as well as the request to access insurance
proceeds received for the purpose of remediation, debris removal, and
reconstruction. On February 22, 2006, the trustee and disbursement agent agreed
to disburse limited insurance proceeds for the payment of certain costs and
expenses related to protecting and maintaining the Hard Rock Biloxi and the
pursuit of the collection of insurance claims arising from damages caused by
Hurricane Katrina. However, the Company continues to have a significant working
capital deficit and has been unsuccessful in its attempt to pay various parties,
including vendors, RAC and subcontractors, for construction work performed prior
to Hurricane Katrina due to the trustee and disbursement agent's denial of those
disbursement requests.

During 2005, the Company commenced litigation against the trustee and
disbursement agent for their failure to release the requested funds. The Company
and the trustee and disbursement agent have agreed to defer all litigation
activity including discovery until August 15, 2006.

The Company believes that insurance settlements, cash on deposit in the
construction disbursement account, and permitted equipment financing is adequate
to reconstruct and open the Hard Rock Biloxi similar to its condition
immediately preceding Hurricane Katrina, assuming the insurance proceeds are
released from the trustee and disbursement agent in a timely manner. However,
due to Premier's current inability to access the insurance proceeds, together
with the litigation with the remaining insurance carrier, both the amount and
timing of access to the insurance proceeds is uncertain. As a result, the
Company may not be able to restore Hard Rock Biloxi as planned.

Premier has estimated that the costs associated with opening the Hard Rock
Biloxi, including, reconstruction, interest and expenses through the
reconstruction period, and settlement of existing overdue obligations is
approximately $195.0 million.

On July 21, 2006, the Company bound a new insurance policy providing up to
$149.3 million in coverage for damage to real and personal property and up to
the lesser of six months or $30.0 million of business interruption and delayed
opening coverage. The coverage is syndicated through several insurance carriers,
each with an A.M. Best Rating of A- (Excellent) or better. The policy provides
coverage for the existing structures, as well as for the repair and rebuild of
the hotel, low rise building and parking garage and the construction of the new
casino. Although the insurance policy is an "all risk" policy, weather
catastrophe occurrence ("WCO"), which is defined to include damage caused by a
named storm, is limited to $50.0 million with a deductible equal to the greater
of $7.0 million or 5% of total insured values at risk. WCO coverage is subject
to mandatory reinstatement of coverage for an additional pre-determined premium.

Since the WCO coverage purchased is substantially less than the coverage in
place prior to Hurricane Katrina, the Company has more exposure to property
damage resulting from similar catastrophic storms. However, the Company's
assessment of the probability of a similar type of loss occurring during the
remainder of this year's hurricane season is remote, which is based on an
assessment of the damage sustained to the non-casino facilities from Hurricane
Katrina last year, and the amount of new construction that will be at risk
during the balance of this hurricane season. Premiums for WCO coverage have
increased dramatically as a result of Hurricane Katrina, and the amount of
coverage that can be purchased has also been reduced as insurance companies seek
to reduce their exposure to such events.


CHANGE OF CONTROL

On April 25, 2006, LUK-Ranch Entertainment, LLC, ("LRE"), a Delaware limited
liability company and an indirect subsidiary of Leucadia National Corporation
("Leucadia"), indirectly acquired a controlling interest in the Company by



                                       9
<PAGE>



making a capital contribution to GAR, LLC, ("GAR"), owners of 100% of the class
A Common Units of the Company. GAR used this capital contribution to acquire
one-hundred percent (100%) of the equity interest held by AA Capital Equity
Fund, L.P. ("AA Capital"), and AA Capital Biloxi Co-Investment Fund, L.P., ("AA
Investment", with AA Investment and AA Capital, together, "AA") in the Company.
These interests consisted of one-hundred percent (100%) of the issued and
outstanding Class A Preferred Units of the Company and one-hundred percent
(100%) of the Class B Common Units of the Company for an aggregate cash purchase
price of $89 million.

The acquisition was made upon receipt of Mississippi Gaming Commission approval
of the acquisition of control, pursuant to a Unit Purchase Agreement by and
among GAR, AA, Leucadia, and HRHC Holdings, LLC dated as of April 6, 2006.
Pursuant to the agreement, GAR acquired all of AA's equity interest in the
Company, which, when added to GAR's existing equity interest in the Company,
represented 98% of the common equity of the Company on a fully diluted basis and
100% of the voting equity of the Company (the "Transaction"). LRE funded GAR's
acquisition of AA's equity interest in the Company by purchasing (i) 100% of the
Class B Common Units of GAR, representing approximately 45% of the total common
units of GAR and (ii) 100% of the Class A Preferred Units of GAR (approximately
$75.7 million at April 25, 2006), representing 100% of the preferred units in
GAR for aggregate cash consideration of $89 million. Under the terms of the GAR
operating agreement, LRE controls the Board of Managers of GAR and, as a result,
under the Company's operating agreement, LRE controls the board of managers of
the Company. The interests in the Company acquired by GAR from AA will continue
to be subject to the Pledge and Security Agreement, dated January 23, 2004,
among the Company, GAR, AA and U.S. Bank National Association, as are the
interests in the Company held by GAR prior to consummation of the acquisition.

In June 2006, GAR increased its ownership to 100% of the common equity of the
Company by purchasing 100% of the Class C Common Units from Joseph Billhimer.

As a result of the consummation of the Transaction, on May 5, 2006, BHR
Holdings, Inc., a wholly owned indirect subsidiary of Leucadia and the parent
company of LRE, commenced a tender offer (the "Offer") for all of the
outstanding $160 million principal amount of the Notes at a price equal to 101%
of the par value of the Notes, plus accrued and unpaid interest to the date of
payment. The Offer, which expired at noon on June 9, 2006, satisfied the
Company's obligation under the Indenture to make such an offer upon the
occurrence of a change of control as defined in the Indenture. In connection
with the Offer, GAR agreed to cause Premier to pay BHR a fee of $2.0 million,
which will be paid only to the extent distributions from the Company are
available for such purpose. The Company has recorded a liability for this fee as
of June 30, 2006.

In addition, the members of the Board of Managers of Premier are entitled to be
paid an annual management fee in an aggregate amount of $2.0 million which will
be paid by Premier to the extent distributions from the Company are available
for such purpose. The Company began accruing for this fee as of the date of the
Transaction and has accrued $0.4 for this management fee as of June 30, 2006.

TRUSTEE PROPOSAL

On June 29, 2006, the Company submitted a Comprehensive Hurricane Katrina
Recovery Proposal (the "Proposal") to the trustee and disbursement agent. Under
the terms of the Proposal, the Company formally requested that the trustee and
disbursement agent exercise its discretion, subject to court approval, to allow
the Company to use available insurance proceeds from Hurricane Katrina-related
insurance claims that are held or are expected to be held by the trustee and
disbursement agent by August 31, 2006 in accordance with the Cash Collateral and
Disbursement Agreement (the "Disbursement Agreement") related to the Notes in
order to repair, rebuild, and open Hard Rock Biloxi and to pay certain claims.

In the Proposal, the Company set forth the sources and uses of cash and
commitments needed to fully reconstruct and to have the Hard Rock Biloxi (the
"Project") operating by no later than December 31, 2007, to settle overdue
outstanding obligations that arose both prior and subsequent to Hurricane
Katrina, to fund ongoing operations during the construction period and to fund
an 18 month interest reserve from which semi-annual interest payments on the
Notes due August 1, 2006, February 1, 2007 and August 1, 2007 will be paid.

The Proposal also outlined five specific priorities of uses of the insurance
recovery funds anticipated to be received by the trustee and disbursement agent
on or before August 31, 2006. The first use of the funds would be to purchase at



                                       10
<PAGE>



100% of par, plus accrued but unpaid interest through and including the date of
purchase, Notes tendered under an event of loss offer as required by the
Indenture. Funds remaining after the first use would then be required to be used
to fund interest payments through August 1, 2007. The third use of the funds
would be to pay off certain indebtedness owed to equipment financiers to the
extent the trustee and disbursement agent determines that those claims have a
priority over the trustee and disbursement agent's claims. The fourth use of the
funds would be to pay the costs to reconstruct, repair and open Hard Rock
Biloxi. The fifth use of the funds would be to pay off certain other obligations
directly relating to the Project that arose both prior and subsequent to
Hurricane Katrina and are not otherwise prohibited under the Indenture. Funds
will only be available for this fifth use to the extent that an 'as-built'
appraisal of the Project ordered by the trustee and disbursement agent indicates
that the Project as completed will have a value equal to or greater than 120% of
the outstanding principal amount of the Notes.

On June 30, 2006, the trustee and disbursement agent filed a petition with the
State of Minnesota District Court, Second Judicial District, Ramsey County,
seeking authorization to take all actions reasonable or necessary to consummate
the Proposal. A hearing on this matter is scheduled for August 24, 2006.

In accordance with the terms of the Proposal and as required by the Indenture,
the Company commenced an event of loss offer on June 30, 2006 to purchase up to
$94.0 million principal amount of the Notes at 100% of par, plus accrued and
unpaid interest through and including the purchase date. Also on June 30, 2006,
BHR commenced a tender offer to purchase all of the outstanding Notes at 101% of
par, plus accrued and unpaid interest through and including the purchase date.
The BHR offer was intended to enable the Company to have the maximum amount of
insurance proceeds available to it to finance the opening of the Hard Rock
Biloxi while still providing the holders of the Notes with the opportunity to
sell all of their Notes without commission or expense associated with any such
sale. Both offers expired on August 2, 2006 with no notes tendered. Upon the
payment of certain additional insurance proceeds, the Company may be required to
make another tender offer for the Notes up to the aggregate amount of additional
insurance proceeds paid. BHR has also agreed, under certain conditions, to make
an additional tender offer for all of the Notes at a price equal to 101% of par
value contemporaneous with any such offer by the Company

At present all debris has been removed, reconstruction efforts have commenced
and are ongoing. In order to advance reconstruction efforts prior to obtaining
access to the insurance proceeds held by the trustee and disbursement agent, the
Company has taken certain actions and entered into the following agreements.

      o     On May 23, 2006, the Company received an unsecured $8.0 million loan
            from BHR for the purpose of furthering reconstruction efforts. The
            proceeds of this loan were used to make payments to various parties,
            including vendors, RAC and subcontractors, for construction work
            performed prior to Hurricane Katrina and for remediation and debris
            removal work performed subsequent to Hurricane Katrina.

      o     On June 16, 2006, the Company entered into an amended construction
            contract with RAC for a guaranteed maximum price of $78.3 million to
            rebuild the casino portion of Hard Rock and to renovate and repair
            the existing hotel tower, low-rise building, parking garage and pool
            and deck area that were severely damaged by Hurricane Katrina. The
            amended construction contract is an amendment and restatement of the
            construction contract with RAC dated December 24, 2003. As of August
            14, 2006 RAC has billed $2.9 million under the amended construction
            contract.

      o     On June 16, 2006, the Company entered into a receivables purchase
            agreement with BHR and RAC. Pursuant to the terms of the receivables
            purchase agreement, BHR has agreed to purchase up to $40.0 million
            of receivables due to RAC by the Company under the amended
            construction contract if such receivables are past due for more than
            10 days. As of August 14, 2006 no receivables have been purchased by
            BHR.


Management continues to operate at significantly reduced operating costs, and
seek full settlement of the remaining insurance coverage. There can be no
assurance that the Company's plans can be accomplished without additional
financial support. These conditions raise substantial doubt about the Company's
ability to continue as a going concern.

USE OF ESTIMATES
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the amounts reported in the financial statements and
accompanying notes. Significant estimates used in preparing the financial
statements that require management judgment include the estimated amount of



                                       11
<PAGE>



insurance recoveries, the replacement cost of the Company's property damaged by
Hurricane Katrina and the operating costs and interest which will be incurred
during the reconstruction period. Actual results could differ significantly from
those estimates.

RECLASSIFICATIONS
The consolidated financial statements for the prior year reflect certain
reclassifications to conform to the current year presentation. Reclassifications
affecting the consolidated balance sheet as of December 31, 2005 include a
decrease in current maturities of long-term debt and a corresponding increase in
long-term debt of $1.1 million. Such reclassifications consistently present
current maturities of long term debt for all periods presented.

PROPERTY AND EQUIPMENT
Property and equipment are stated at cost. The Company capitalizes the cost of
purchases of property and equipment and capitalizes the cost of improvements to
property and equipment that increase the value or extend the useful life of the
asset. Maintenance and repairs are charged to expense as incurred. Depreciation
is computed using the straight-line method over the following estimated useful
lives of the assets:

                     Building                                35 years
                     Furniture, fixtures and equipment       5-10 years

The Company has included in the statements of operations depreciation expense
related to office space and equipment that was placed in service after Hurricane
Katrina.

In accordance with SFAS No. 34, Capitalization of Interest Cost ("SFAS No. 34"),
the Company capitalizes the interest cost associated with major development and
construction projects as part of the cost of the project. Interest is typically
capitalized on amounts expended on the project using the weighted-average cost
of outstanding borrowings. Capitalization of interest starts when construction
activities, as defined in SFAS No. 34, begin and ceases when construction is
substantially complete or development activity is suspended for more than a
brief period. Accordingly, the Company suspended the capitalization of interest
after Hurricane Katrina.

LONG-LIVED ASSETS
Long-lived assets to be held and used by the Company are reviewed to determine
whether any events or changes in circumstances indicate the carrying amount of
the asset may not be recoverable. Factors that might indicate a potential
impairment may include, but are not limited to, significant decreases in the
market value of the long-lived asset, a significant change in the long-lived
asset's physical condition, a change in industry conditions or a reduction in
cash flows associated with the use of the long-lived asset. If these or other
factors indicate the carrying amount of the asset may not be recoverable, the
Company determines whether an impairment has occurred through the use of an
undiscounted cash flow analysis of the asset at the lowest level for which
identifiable cash flows exist. If an impairment has occurred, the Company
recognizes a loss for the difference between the carrying amount and the fair
value of the asset. The fair value of the asset is measured using market prices
or, in the absence of market prices, is based on an estimate of discounted cash
flows. The Company has included an impairment charge in its statement of
operations for the year ended December 31, 2005, because of the damage caused by
Hurricane Katrina.

INTANGIBLE ASSETS
The Company has a license agreement with Hard Rock Hotel Licensing, Inc., which
provides for an initial term of twenty years and the option to renew for two
successive 10-year terms. Under the license agreement the Company has the
exclusive right to use and develop the "Hard Rock" brand name in connection with
a hotel and casino resort in Biloxi, Mississippi. As consideration for the
licensed rights as provided in the license agreement, the Company paid a
one-time territory fee of $500,000. This cost was capitalized and is recorded as
other assets on the balance sheet and is being amortized over a 20-year period
that began in September 2005.

DEFERRED FINANCING COSTS AND DEBT DISCOUNT
The costs of issuing long-term debt are capitalized as other assets and, along
with the original issue discount, are amortized over the term of the related
debt. In the event the related debt is redeemed prior to its original term the
unamortized portion of these costs and any remaining unamortized debt discount
will be expensed as of the date of such redemption.



                                       12
<PAGE>



SELF-INSURANCE
Prior to July 1, 2006, the Company was self-insured for employee medical
insurance coverage up to an individual stop loss of $15,000. Self-insurance
liabilities are estimated based on the Company's claims experience and are
included in accrued liabilities on the consolidated balance sheets. Effective
July 1, 2006, the Company changed to a fully insured plan due to the minimal
number of current employees.

PREOPENING COSTS
Preopening costs are expensed as incurred, consistent with Statement of Position
98-5, Reporting on the Costs of Start-up Activities ("SOP 98-5"). Expenses
incurred include payroll and payroll related expenses, marketing expenses,
rental expenses, outside services, and other expenses related to the start-up
phase of operations.

INCOME TAXES
The Company was formed as a Delaware limited liability company and has elected
to be treated as a partnership for income tax purposes. Accordingly, any tax
related to the Company's income is the obligation of its members and no federal
or state income tax provision has been recorded in the Company's financial
statements.

NEW ACCOUNTING PRONOUNCEMENTS
Effective January 1, 2006, the Company adopted the provision of FASB Statement
No. 123(R), Share-Based Payment, which is a revision of SFAS 123 and supersedes
APB Opinion No. 25. The effect of adopting these new standards had no effect on
the Company's accounting for its 2004 Membership Interest Appreciation Rights
Plan which allow for the receipt of an award based on the increase in value of
the Company. The plan was terminated in June 2006 and the fair market value of
these rights at June 30, 2006 was $198,400. The liability has been recognized
for the outstanding awards.


2.    GOVERNMENT SECURITIES - RESTRICTED

In February 2004, the Company invested $32.9 million in U.S. Treasury securities
in accordance with the Disbursement Agreement with U.S. Bank as disbursement
agent. The investment was classified as held to maturity, and was recorded as
government securities at its acquisition cost including accrued interest. The
investment plus the interest earned were designated to be used to pay the first
four interest payments on the Notes as required by the Disbursement Agreement.
The Company used the balance in this account of $8.3 million at December 31,
2005 to pay the February 1, 2006 interest payment on the Notes as required.


3.    RESTRICTED CASH

The net proceeds from the issuance of the Notes, a portion of the equity
investment and the proceeds from the junior subordinated note were deposited
into a construction disbursement account and a tidelands lease reserve account
pursuant to the Disbursement Agreement. At June 30, 2006, the balance in these
accounts was approximately $7.5 million. The insurance proceeds related to
Hurricane Katrina totaling $111.9 million were also deposited into a restricted
cash account, of which $1.4 million was released to pay professional fees on
behalf of the noteholders and $1.8 was released to pay minimal operating costs
of the Company for the purpose of protecting the collateral and pursuing the
insurance recoveries. These accounts are pledged to the trustee and disbursement
agent as security for the Company's obligations under the Notes, and can only be
released to the Company in accordance with the Disbursement Agreement. The
Company also has a $1.0 million certificate of deposit which is pledged as
security for the Company's obligations under the Hard Rock license agreement. In
the accompanying consolidated balance sheets, restricted cash is classified as
non-current as it is primarily designated for the reconstruction of property and
purchases of equipment. Restricted cash includes the following:





                                       13
<PAGE>



                                          JUNE 30,    DECEMBER 31,
                                           2006           2005

Construction disbursement              $  6,529,925   $  7,563,614
Interest reserve                              8,064           --
Tidelands lease reserve                   1,021,267      1,035,440
Insurance proceeds                      108,929,122     24,577,870
                                       ------------   ------------
     Cash restricted by the Notes       116,488,378     33,176,924

Certificate of deposit restricted by
   the Hard Rock license agreement        1,000,000      1,014,377
                                       ------------   ------------
     Total restricted cash             $117,488,378   $ 34,191,301
                                       ============   ============

On July 6, 2006 and August 4, 2006, the trustee and disbursement agent released
$90,892 and $228,432, respectively from the construction disbursement account to
RAC as progress payments on the contract between the Company and RAC dated March
2, 2006.

On July 26, 2006, the trustee and disbursement agent advanced to the Company
$331,628 from the insurance proceeds to pay the anticipated monthly costs
related to maintaining the property to mitigate further loss and costs related
to the collection and prosecution of Hurricane Katrina insurance claims.

On August 1, 2006, the trustee and disbursement agent paid $8.6 million from the
insurance proceeds to the note holders for the semi-annual interest payment.


4.    INSURANCE RECEIVABLE

Due to the uncertainties regarding the amount of the insurance recovery that
previously existed, the Company had limited the recorded insurance recovery to
the costs it had incurred to date less the policy deductible and non-recoverable
costs. As of June 30, 2006, the Company has successfully negotiated settlements
totaling $159.8 million for $167.1 million face amount of coverage. Only $13 of
$14 million face value of insurance policies issued by James River Insurance
Company remains unsettled and is currently in litigation. Of these settlements,
$111.9 million has been received and deposited into restricted accounts. Of the
$47.9 million receivable at June 30, 2006, $9.6 million was received on July 8,
2006 and deposited into a restricted account and the balance of $38.3 million is
due from insurance carriers by August 31, 2006 as per the terms of the
settlement agreements.

As a result of these insurance settlements, the Company recorded an increase to
the insurance receivable to reflect the amounts that were resolved. Since the
amount recorded for the resolved claims exceeded the amount previously recorded,
the excess amount of $26.6 million is reflected in the Company's consolidated
statements of operations as insurance recoveries for the three and six months
periods ended June 30, 2006.


5.    LONG-TERM DEBT AND LOAN AND SECURITY AGREEMENT

Long-term debt consists of the following:


                                       14
<PAGE>




                                                JUNE 30,      DECEMBER 31,
                                                 2006           2005

10 3/4% First Mortgage Notes due 2012, net   $158,345,035   $158,240,569
15% Junior Subordinated Note due 2012, net     13,410,803     12,461,253
Variable rate IGT note payable                 12,870,932     12,870,932
Unsecured loan from BHR Holdings                8,000,000           --
Variable rate Senior Secured Reducing
   Line of Credit Facility                      1,250,000      1,250,000
                                             ------------   ------------
                                              193,876,770    184,822,754
Less:  notes payable current                  158,345,035    158,240,569
Less:  current maturities                      12,092,616      2,741,735
                                             ------------   ------------
     Long-term debt                          $ 23,439,119   $ 23,840,450
                                             ============   ============

10 3/4% FIRST MORTGAGE NOTES DUE 2012
On January 23, 2004, the Company issued $160.0 million of 10 3/4% First Mortgage
Notes due February 1, 2012 in a private placement offering which were
subsequently exchanged in an exchange offer registered on Form S-4. The debt
outstanding at June 30, 2006 is net of an unamortized discount of $1.7 million,
which is being amortized over the term of the Notes. In the event the Notes are
redeemed prior to their original term the unamortized portion of this discount
will be expensed as of the date of such redemption. The Notes are senior to all
existing and future senior unsecured indebtedness, but are subordinated to $14.1
million of senior secured indebtedness incurred to finance the acquisition and
installation of furniture, fixtures and equipment. The Notes are secured by a
pledge of the Company's membership interests and substantially all of the
existing and future assets, except for assets securing certain other
indebtedness. In addition, the trustee and disbursement agent is named as a loss
payee on behalf of the noteholders under the Company's blanket insurance
policies.

Interest on the Notes is payable semiannually on each February 1 and August 1
through maturity. The Notes may be redeemed, in whole or in part, at any time on
or after February 1, 2008 at the redemption prices (expressed as percentages of
principal amount) set forth below plus accrued and unpaid interest to the
applicable redemption date, if redeemed during the 12-month period beginning on
February 1 of the years indicated below:

                     YEAR                 PERCENTAGE
                  ----------              ----------
                  2008                      105.38%
                  2009                      102.69%
                  2010 and thereafter       100.00%

In addition, up to 35% of the Notes may be redeemed at a premium on or prior to
February 1, 2007 with the net cash proceeds of an initial public offering. As of
June 30, 2006, the Company had recorded deferred financing costs totaling $5.3
million, net of accumulated amortization, which were incurred in connection with
the private placement. These deferred financing costs are included in other
assets and are being amortized over the term of the related long-term debt. In
the event the related debt is redeemed prior to its original term the
unamortized portion of these costs will be expensed as of the date of such
redemption.

As discussed in Note 1 above, BHR commenced a tender offer for the Notes on May
5, 2006. The tender offer, which expired at noon on June 9, 2006, satisfied the
Company's obligation under the Indenture to make such an offer as a result of
the occurrence of a change of control as defined in the Indenture.

Also as discussed in Note 1 above, pursuant to the terms of the Indenture, in an
event of loss arising from a storm such as Hurricane Katrina, the Company is
required to make an event of loss offer to redeem certain of the Notes to the
extent it receives certain net loss proceeds under its insurance policy. The
Company commenced such an event of loss offer on June 30, 2006 to purchase up
to $94.0 million principal amount of the Notes at 100% of par, plus accrued and
unpaid interest through and including the purchase date. Contemporaneous with
the Company's event of loss offer, BHR commenced a tender offer for all of the
Notes at a purchase price of 101% of par, plus accrued and unpaid interest
through and including the purchase date. The BHR offer was intended to enable
the Company to have the maximum amount of insurance proceeds available to it to
finance the opening of the Hard Rock Biloxi while still providing the holders of
the Notes with the opportunity to sell all of their Notes without commission or
expense associated with any such sale. Both offers expired on August 2, 2006
with no notes tendered. Upon the receipt of certain additional insurance



                                       15
<PAGE>



proceeds, the Company may be required to make another tender offer for the Notes
up to the aggregate amount of additional insurance proceeds received. BHR has
also agreed, under certain conditions, to make a tender offer for all of the
Notes at a price equal to 101% of par value. As a result of the event of loss
offer requirements, the Notes are classified as current in the accompanying
consolidated balance sheets.

The Notes contain certain covenants. As of June 30, 2006, the Company believes
it is in compliance with these covenants; however, on January 6, 2006, the
Company received a notice from the trustee and disbursement agent relating to
its Notes that an Event of Default, as defined in the Indenture, had occurred
due to the alleged failure of the Hard Rock Biloxi to be operating by the time
specified in the Indenture (December 31, 2005). Further, the trustee and
disbursement agent alleges that an additional Event of Default may have occurred
due to an alleged failure of the Company to comply with the requirements under
the Indenture regarding the Company's obligation to make an event of loss offer
to redeem the Notes. On January 6, 2006, the Company responded via a letter to
the trustee and disbursement agent that it disagrees with the trustee and
disbursement agent that any Event of Default has occurred. Further, the letter
noted that the trustee and disbursement agent has no right to declare an Event
of Default pursuant to the event of loss criteria. In addition, the Company
noted to the trustee and disbursement agent that certain of its assertions are
subject to litigation in the United States District Court for the Southern
District of Mississippi, Southern Division. In March 2006, the Company signed a
litigation deferral agreement with the trustee and disbursement agent that
deferred all litigation activity including discovery with respect to the 2005
lawsuits initiated by the Company until April 15, 2006. This deferral agreement
was subsequently extended by both parties until August 15, 2006.

15% JUNIOR SUBORDINATED NOTE DUE 2012
Concurrently with the issuance of the Notes, the Company borrowed $10.0 million
in the form of a junior subordinated note due August 1, 2012 from Rank America,
Inc., an affiliate of The Rank Group Plc, and owner of Hard Rock Hotel
Licensing, Inc. Interest on the junior subordinated note accrues at a rate of
15% per annum and will be paid semiannually. If the Company had opened as
planned, the first interest payment would have been due on February 1, 2006.
Accrued interest at each semi annual interest payment date prior to opening is
added to the principal balance. The Company will be required to pay a repayment
premium of 3% of the principal amount of the junior subordinated note when it is
repaid. Such premium is being accrued over the term of the junior subordinated
note. On April 25, 2006, LRE acquired the junior subordinated note from Rank
America. Under the change of control event as described in Note 1 or should the
Hard Rock license agreement be terminated and the project become owned, operated
or licensed by a Hard Rock competitor, the Company may be required to repay all
amounts due under the junior subordinated note agreement. In addition, the
Company may be required to make mandatory quarterly prepayments as calculated
under the terms of the junior subordinated note once the Company opens the hotel
and casino after reconstruction. As of August 14, 2006, LRE has not required the
Company to prepay the junior subordinated note as a result of the change of
control event. Therefore the note is classified as long term in the accompanying
consolidated balance sheets.

The junior subordinated note contains covenants that are different and, in some
instances, more restrictive than those covenants in the Indenture governing the
Company's Notes. If there is a default under the junior subordinated note, then
there will be a default under the Notes. Although the Company entered into an
intercreditor agreement limiting the junior subordinated noteholder's rights to
payment under the junior subordinated note, the Company may not have sufficient
proceeds to pay its debt obligations under the Notes if there is a default under
the junior subordinated note.

IGT NOTE PAYABLE
On January 5, 2005, the Company entered into a Commercial Sales and Security
Agreement (the "IGT Agreement") with International Game Technology ("IGT") for
the financing of certain gaming devices and gaming systems. Pursuant to the
agreement, the Company purchased approximately 1,100 slot devices from IGT as
well as software licenses and related equipment for the gaming system. Under the
IGT Agreement, interest accrues at the "high Wall Street Journal prime lending
rate" (8.25% at June 30, 2006) and payments are based on a 60-month amortization
payable in thirty-six monthly installments of principal and accrued interest
with the balance due on the thirty-seventh month (November, 2008). IGT is named
as a loss payee under the Company's blanket insurance policies.

SENIOR SECURED REDUCING LINE OF CREDIT FACILITY
On August 26, 2005, the company received a $1.3 million loan from The Peoples
Bank pursuant to a $10.0 million Senior Secured Reducing Line of Credit Facility
(the "Credit Facility"). The Credit Facility is secured by a security interest
in certain collateral purchased by the Company and the lender is named as a loss
payee under the Company's blanket insurance policies. The Credit Facility has a



                                       16
<PAGE>



term of sixty-six months that includes an initial funding period that ended on
December 31, 2005.

Interest on the Credit Facility accrued at the rate of 9.6659% at June 30, 2006,
based on twelve month LIBOR plus 4.25%. On December 31, 2005, the outstanding
balance of the Credit Facility was converted into a fully amortizing, five year
term loan due December 31, 2010, requiring quarterly payments of principal and
interest. The Peoples Bank has waived the requirement for principal and interest
payments through July 14, 2007. The Company continues to make monthly payments
of interest only.

BHR HOLDINGS, INC.  NOTE PAYABLE
On May 23, 2006, the Company received an $8.0 million loan from BHR. The note
bears interest at 12% per annum and the principal balance and all accrued and
upaid interest is due on the earlier of May 23, 2007 or the date on which
sufficient insurance proceeds received from certain insurance carriers become
available to repay the note.

OTHER
On July 1, 2005, the Company obtained an Irrevocable Letter of Credit from The
Peoples Bank in favor of Hard Rock Hotel Licensing, Inc. in the amount of $1.0
million to comply with the terms and conditions of the Licensing Agreement with
Hard Rock Hotel Licensing, Inc. The Letter of Credit is secured by a certificate
of deposit in the amount of $1.0 million for a term of 90 days and will
automatically renew. The Letter of Credit will be increased to $3.0 million
within 90 days following the reconstruction and opening of the Hard Rock Biloxi.

6.    RELATED PARTY TRANSACTIONS

Roy Anderson, III a member of GAR is the President, Chief Executive Officer and
majority stockholder of RAC, the Company's general contractor. The Company has
entered into certain agreements with RAC, each of which the Company believes is
on terms that are similar to and no less favorable to the Company than those
that otherwise could have been obtained from third parties.

Pursuant to a guaranteed maximum price construction agreement, dated December
24, 2003, (the "Initial Construction Agreement"), as amended, RAC had
constructed the Project. Total payments for construction of the Project for the
period from the commencement of operations on March 27, 2003 through June 30,
2006 were $89.5 million, of which $71.1 million was paid directly to RAC.
Post-Katrina remedial work was performed by RAC and payments in respect thereof
through June 30, 2006 were $4.5 million; $2.9 million is outstanding and
reflected in accounts payable in the June 30, 2006 consolidated balance sheet.
On June 16, 2006, the Initial Contract was amended and restated (the "Amended
Construction Agreement") to provide for rebuilding the casino portion of the
Hard Rock Biloxi and renovating and repairing the existing hotel tower, low-rise
building, parking garage and pool and deck area that were severely damaged by
Hurricane Katrina. Pursuant to the terms of the Amended Construction Agreement,
the Company has agreed to pay RAC the cost of the work performed plus a
contractor's fee, with the aggregate of such amounts not to exceed the
guaranteed maximum price of $78.3 million. No payments under the Amended
Construction Agreement have been made as of June 30, 2006. The Company believes
that the terms of the amendments to the Initial Construction Agreement are no
less favorable to the Company than the terms of the Initial Construction
Agreement.

In March 2006, the Company entered into an agreement with RAC to provide
additional services at the property required as a result of the damage caused by
Hurricane Katrina. The Company agreed to pay RAC the cost of the work performed
plus a contractor's fee in an amount not to exceed the guaranteed maximum price
of $1.4 million. At June 30, 2006, total amount billed under this agreement was
$1.0 million with $90,892 outstanding and reflected in accounts payable in the
June 30, 2006 balance sheet.


7.    2004 MEMBERSHIP INTEREST APPRECIATION RIGHTS PLAN

On June 13, 2006, the Company entered into agreements with the employees who
were participants in the Company's Membership Interest Appreciation Rights Plan,
to terminate such plan. As a result of the plan termination, payments
aggregating $198,400 will be made to plan participants on the first to occur of
(i) the Company's having access for such purpose to restricted funds held by the
trustee or (ii) 90 days from the date of the respective agreement. The Company
has recorded such amount as a liability at June 30, 2006.


                                       17
<PAGE>



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

OVERVIEW

We were formed on October 18, 2002 and commenced operations on March 27, 2003.
There were no assets, liabilities or operations from inception through the
commencement of operations. Since our formation, we have been in the development
stage. Our activities have included applying for certain necessary permits,
licenses and regulatory approvals to enable us to own, construct and manage the
operations of and engage in development activities for the Hard Rock Biloxi, as
well as, pursuing insurance claim settlements related to Hurricane Katrina. We
also purchased approximately 8.5 acres of land on the Mississippi Gulf Coast in
Biloxi, Mississippi to build the Hard Rock Biloxi. In addition, we have entered
into a 20-year licensing agreement with Hard Rock Hotel Licensing, Inc. under
which we were granted the right to use and develop the Hard Rock brand name for
our hotel and casino resort. We began construction in January 2004 and
construction of Hard Rock Biloxi was completed on-time and on-budget in August
2005. On August 29, 2005, Hurricane Katrina destroyed the casino and damaged
related facilities, the low-rise building, hotel tower and parking garage.


RESULTS OF OPERATIONS

We are in the development stage and do not have any historical operating results
other than costs incurred in designing, developing and redeveloping Hard Rock
Biloxi. For the period from commencement of operations on March 27, 2003 through
June 30, 2006, we incurred a net loss of $4.5 million, which reflects preopening
expenses of $23.8 million, depreciation and amortization expenses of $0.9
million and net interest expense of $33.3 million, partially offset by insurance
recoveries of $159.8 million. As a result of Hurricane Katrina, we recorded an
impairment charge of $96.2 million for property and equipment that was destroyed
or damaged as well as $10.2 million in other hurricane-related expenses. Due to
the resolution of claims under all but one of our insurance policies, the amount
recorded for the resolved claims exceeded the amount previously recorded by
$26.6 million and is reflected in our consolidated statements of operations as
insurance recoveries for the three and six month periods ended June 30, 2006.
The preopening costs primarily relate to payroll, utilities, insurance premiums,
licensing expenses, transaction fees, legal fees and organizational costs
related to the design, development, and redevelopment of Hard Rock Biloxi. We
expect these losses to continue until operations commence. Our historical
operating results will not be indicative of future operating results because we
plan to operate a new gaming facility in the future.

Insurance recoveries related to Hurricane Katrina insurance settlements for the
three and six month periods ended June 30, 2006 were $34.4 million and $41.3
million respectively.

For the three month periods ended June 30, 2006 and 2005 we had net income of
$23.2 million and a net loss of $2.5 million, respectively and for the six month
periods ended June 30, 2006 and 2005 we had net income of $21.8 million and a
net loss of $5.7 million, respectively. Pre-opening expenses for the three month
periods ended June 30, 2006 and 2005 were $5.0 million and $1.3 million,
respectively and for the six month periods ended June 30, 2006 and 2005 were
$7.6 million and $2.3 million, respectively. The increase in pre-opening
expenses for the three and six month periods ended June 30, 2006 is related to
payroll and other general and administrative expenses, fees associated with the
Hard Rock License, utilities, professional fees associated with on-going efforts
to settle insurance claims and resolve issues with the trustee and disbursement
agent and fees associated with the change of control tender offer made by BHR on
the Company's behalf as required by the Indenture.

As a result of damage from Hurricane Katrina, property write downs and other
hurricane related expenses for the three and six month periods ended June 30,
2006, were $0.9 million and $1.1 million, respectively. These expenses related
primarily to costs associated with remediation and debris removal.

Depreciation and amortization expenses for the three month periods ended June
30, 2006 and 2005 were $0.2 million and $34,000, respectively and for the six
month periods ended June 30, 2006 and 2005 were $0.4 million and $65,000,
respectively. The increase is a result of the increased amortization of
intangibles and more depreciable assets placed into service.



                                       18
<PAGE>



Total net interest expense for the three month periods ended June 30, 2006 and
2005 was $5.1 million and $1.1 million, respectively and for the six month
periods ended June 30, 2006 and 2005 was $10.3 million and $3.4 million,
respectively. The increase primarily relates to interest capitalized for the
three and six month periods ended June 30, 2005 of $3.4 million and $5.7 million
respectively. No interest was capitalized for the three and six month periods
ended June 30, 2006.


LIQUIDITY AND CAPITAL RESOURCES

For the period from commencement of operations on March 27, 2003 through June
30, 2006, we used cash for operating activities of $60.1 million. We also used
cash for investing activities of $157.2 million, principally to purchase and
develop property and equipment. Other cash resources include $117.5 million of
cash; however, such funds along with the insurance receivable are restricted by
the Notes and the Hard Rock license agreement. We have a significant working
capital deficit.

We used the gross proceeds we obtained from the offering of the Notes, the
equity investment from AA Capital of $52.8 million, the junior subordinated note
of $10.0 million and $14.1 million in furniture, fixtures and equipment
financing to fund the costs associated with the original construction of Hard
Rock Biloxi. The Notes are classified as a current liability on the consolidated
balance sheets as a result of the event of loss offer requirements, pursuant to
the terms of the Indenture.

On August 29, 2005, we sustained an estimated $106.4 million in property,
equipment, inventory and other asset losses at Hard Rock Biloxi due to Hurricane
Katrina. As of June 30, 2006, we have successfully negotiated settlements
totaling $159.8 million for $167.1 million face amount of coverage. Only $13
million of $14 million face value of insurance policies issued by James River
Insurance Company remains unsettled and is currently in litigation.

The $25.0 million primary layer of coverage and the $25.0 million first excess
layer have been settled for the full amount of coverage; and $50.0 million has
been paid into restricted accounts. With respect to the second excess layer, we
have successfully negotiated settlements totaling $104.4 million for $117.1
million face amount of coverage. $66.1 million of these settlements has been
received and deposited into a restricted account as of July 8, 2006. The $38.3
million balance of the settlements is due from the insurers prior to August 31,
2006 in accordance with the terms of the settlement. We have also recovered $5.4
million under certain smaller deductible buy-down policies; these proceeds have
also been deposited into a restricted account. On August 8, 2006, the Company
received $1.0 million from James River, which according to James River
represents the uncontested amount of the claim under their policy. The Company
has sent the payment to the trustee and disbursement agent for deposit into a
restricted account.

We believe that insurance settlements, cash on deposit in the construction
disbursement account, and permitted equipment financing is adequate to
reconstruct and open the Hard Rock Biloxi similar to its condition immediately
preceding Hurricane Katrina, assuming the insurance proceeds are released from
the trustee and disbursement agent in a timely manner. However, due to Premier's
current inability to access the insurance proceeds, together with the litigation
with the remaining insurance carrier, both the amount and timing of access to
the insurance proceeds is uncertain. As a result, the Company may not be able to
restore Hard Rock Biloxi as planned.

Premier has estimated that the costs associated with opening the Hard Rock
Biloxi, including, reconstruction, interest and expenses through the
reconstruction period, and settlement of existing overdue obligations is
approximately $$195.0 million.

As more fully discussed in Note 1, - "Basis of Presentation" to the Financial
Statements, on April 25, 2006 a subsidiary of Leucadia indirectly acquired a
controlling interest in the Company for an aggregate cash purchase price of $89
million. In connection with that transaction, on May 5, 2006, BHR commenced a
tender offer (the "Offer") for all of the outstanding $160 million principal
amount of the Notes at a price equal to 101% of the par value of the Notes plus
accrued and unpaid interest to the date of payment. The tender offer, which
expired at noon on June 9, 2006, satisfied the Company's obligation under the
Indenture to make such an offer as a result of the occurrence of a change of
control as defined in the Indenture. In connection with the Offer, GAR has
agreed to cause the Company to pay BHR a fee of $2 million, which will be paid
in accordance with the provisions of the Indenture and only to the extent
distributions from the Company are available for such purpose.

Under the Indenture governing the Notes, in an event of loss such as Hurricane
Katrina, we are required to make an event of loss offer to the extent we receive
certain net loss proceeds under our insurance policy. What constitutes "net loss


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<PAGE>



proceeds" is the subject of litigation we have filed against the trustee and
disbursement agent. To the extent the noteholders choose not to tender their
Notes under an event of loss offer, the net loss proceeds may be used by us for
remediation and reconstruction of the Hard Rock Biloxi and for any other purpose
not otherwise prohibited by the Indenture.

On June 30, 2006, we commenced an event of loss offer to purchase up to $94.0
million principal amount of the Notes at 100% of par, plus accrued and unpaid
interest through and including the purchase date. Also on June 30, 2006, BHR
commenced a tender offer to purchase all of the outstanding Notes at 101% of
par, plus accrued and unpaid interest through and including the purchase date.
Both offers expired on August 2, 2006 with no notes tendered.

At present all debris has been removed, reconstruction efforts have commenced
and are ongoing. In order to advance reconstruction efforts we took certain
actions. First, we received an $8.0 million loan from BHR on May 23, 2006 and
used the proceeds to make certain payments to various parties, including
vendors, RAC and subcontractors, for construction work performed prior to
Hurricane Katrina and for remediation and debris removal work performed
subsequent to Hurricane Katrina. Secondly, on June 16, 2006, we entered into an
amended construction contract with RAC for a guaranteed maximum price of $78.3
million to rebuild the casino portion of Hard Rock and to renovate and repair
the existing hotel tower, low-rise building, parking garage and pool and deck
area that were severely damaged by Hurricane Katrina. Thirdly, we entered into a
receivables purchase agreement on June 16, 2006, with BHR and RAC whereby BHR
has agreed to purchase up to $40 million of receivables due to RAC by the
Company under the amended construction contract in the event such receivables
are past due for more than 10 days.

As more fully described above, we have submitted a Comprehensive Hurricane
Katrina Recovery Proposal to the trustee and disbursement agent asking the
trustee and disbursement agent to exercise its discretion to allow us to use
available insurance proceeds from Hurricane Katrina-related insurance claims
that are held or are expected to be held by the trustee and disbursement agent
by August 31, 2006, to repair, rebuild, and open Hard Rock Biloxi and to pay
certain claims, in accordance with the Cash Collateral and Disbursement
Agreement related to the Notes. The trustee and disbursement agent filed a
petition with the State of Minnesota District Court, Second Judicial District,
Ramsey County, on June 30, 2006, seeking authorization to take all actions
reasonable or necessary to consummate the proposal. A hearing on this matter is
scheduled for August 24, 2006.

In spite of certain payments made to various parties, including vendors, RAC and
subcontractors with the proceeds of the $8.0 million loan from BHR, the actions
by the trustee and disbursement agent have prevented us from paying all
obligations that arose both prior and subsequent to Hurricane Katrina. Our
inability to pay these obligations has resulted in liens being placed against
the property. Furthermore, reconstruction efforts may be hindered as a result of
the bad will that the nonpayment of past due amounts may create. Critical
suppliers, vendors and subcontractors may either increase prices significantly
or choose not to do business with us when we repair and reconstruct the
property.

Management continues to operate at significantly reduced operating costs, and
seek full settlement of the remaining insurance coverage. There can be no
assurance, however, that our plans can be accomplished without additional
support. These conditions raise substantial doubt about the Company's ability to
continue as a going concern.

Following the reconstruction and opening of the Hard Rock Biloxi, we expect to
fund our business from operating cash flows.

Mississippi Bond Financing. Mississippi law provides that certain expenditures
for materials made in connection with certain economic development projects in
the State of Mississippi, including the land-based portion of the Hard Biloxi
(which includes the hotel tower, the parking garage, the low-rise pavilion and
the pool area), are exempt from Mississippi's sales tax if such expenditures are
paid for with proceeds from approved industrial development revenue bonds issued
by the Mississippi Business Finance Corporation, ("MBFC"). At June 30, 2006,
Premier Finance Biloxi, Corp. had funded consolidated capital expenditures of
approximately $35.2 million to qualify for the tax-exempt status. We saved $1.7
million in sales tax that we would have otherwise been required to pay in
connection with the purchase of materials used in the construction of the
land-based portion of the Hard Rock Biloxi.

Premier Finance Biloxi Corp. serves as the co-issuer of the Notes and will not
have any material assets or operations, other than in connection with the
Mississippi Business Finance Corporation financing.



                                       20
<PAGE>



The sale and issuance of the industrial development revenue bonds to Premier
Finance Biloxi Corp. and the subsequent loan by MBFC of the proceeds thereof did
not result in any additional net indebtedness for us.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Our consolidated financial statements are prepared in accordance with U.S.
generally accepted accounting principles that require our management to make
estimates and assumptions that affect reported amounts and related disclosures.
Critical accounting policies and estimates discussed in the Form 10-K for the
period ended December 31, 2005, have not changed.

SEASONALITY

We do not have an operating history. We anticipate that activity at the Hard
Rock Biloxi may be modestly seasonal, with stronger results expected during the
second and third quarters due in part to the relatively higher levels of tourism
in the Mississippi Gulf Coast market during this time of the year and weaker
results in the fourth quarter. In addition, operations may be impacted by
adverse weather conditions and fluctuations in the tourism business generally.
Accordingly, results of operations may fluctuate from quarter to quarter and the
results for any one quarter may not be indicative of results for future
quarters.

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. Through June 30, 2006, we had not invested in derivative or foreign
currency-based financial instruments. We are currently exposed to market risk
from changes in interest rates.

INTEREST RATES
We are subject to interest rate risk on our long-term fixed interest rate debt
and, to a lesser extent, variable-interest rate borrowings. Variable rate debt,
where the interest rate fluctuates periodically, exposes us to short-term
changes in market interest rates. Fixed rate debt, where the interest rate is
fixed over the life of the instrument, exposes us to changes in market interest
rates reflected in the fair value of the debt and to the risk that we may need
to refinance maturing debt with new debt at a higher rate. All other things
being equal, the fair value of our fixed rate debt will increase or decrease as
interest rates change.


                   FORWARD-LOOKING STATEMENTS AND RISK FACTORS

Except for the historical information contained herein, the matters addressed in
this Quarterly Report on Form 10-Q may constitute "forward-looking statements"
within the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 2IE of the Securities and Exchange Act of 1934, as amended. The Private
Securities Litigation Reform Act of 1995 provides certain "safe harbor"
provisions for forward-looking statements. All forward-looking statements made
in this Quarterly Report on Form 10-Q are made pursuant to the Act. Words such
as, but not limited to, "believes", "expects", "anticipates", "estimates",
"intends", "plans", "could", "may", "should" and similar expressions are
intended to identify forward-looking statements. Such forward-looking
statements, which may include, without limitation, statements regarding
reconstruction plans, cash needs, cash reserves, liquidity, operating and
capital expenses, financing options, expense reductions, operating results and
pending regulatory matters, are subject to a variety of risks and uncertainties
that could cause actual results to differ materially from those anticipated by
us. From time to time, oral or written forward-looking statements are also
included in our other periodic reports on Forms l0-K, l0-Q and 8-K, press
releases and other materials released to the public.

Actual results may differ materially from those that might be anticipated from
forward-looking statements. This can occur as a result of inaccurate assumptions
or as a consequence of known or unknown risks and uncertainties. We undertake no
obligation to publicly update any forward-looking statements, whether as a
result of new information, future events or otherwise. Factors that may cause
our actual performance to differ materially from that contemplated by such
forward-looking statements or that may materially and adversely affect our
actual results include, among others: (1) in the aftermath of destruction to the
property and the Mississippi Gulf Coast region caused by Hurricane Katrina, our
ability to recover sufficient insurance proceeds to rebuild the property, to
gain access to the insurance proceeds currently restricted by U.S. Bank National
Association, as trustee and disbursement agent, and to recruit and retain
employees, (2) the gaming industry is very competitive and a recent change in



                                       21
<PAGE>



the gaming law that has allowed shore based gaming along the Mississippi Gulf
Coast could allow for increased competition in the Gulf Coast gaming market, as
would the legalization or expansion of gaming in Mississippi or Alabama and the
development or expansion of Native American casinos in or near our markets, (3)
general construction risks and other factors, some of which are beyond our
control, could prevent us from completing our reconstruction project as planned,
(4) changes in gaming laws or regulations, and delays in obtaining or our
inability to obtain necessary permits, licenses and approvals, including
alcoholic beverage licenses and gaming commission approvals, (5) changes in
federal or state tax laws, and (6) changes in the economy. Additional factors
that could cause our actual performance to differ materially from that
contemplated by such forward-looking statements are detailed in our Annual
Report on Form 10-K in section 1A entitled "Risk Factors" that was filed in
April 2006.


ITEM 4. CONTROLS AND PROCEDURES

An evaluation of the effectiveness of our disclosure controls and procedures
pursuant to Exchange Act Rule 13a-15(e) and 15d-15(e) was carried out under the
supervision and with the participation of our management, including our chief
executive officer and our chief financial and accounting officer. Based upon the
evaluation, our chief executive officer and our chief financial and accounting
officer have concluded that our disclosure controls and procedures (as defined
in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as
amended (the "Exchange Act") are effective as of June 30, 2006.

There have been no changes in our internal control over financial reporting (as
defined in Rules 13a-15(f) and 15d-15(f)) under the Exchange Act) that occurred
during the quarter ended June 30, 2006 that has materially affected, or is
reasonably likely to materially affect, our internal control over financial
reporting.


PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

U.S. Bank National Association Litigation
-----------------------------------------

In the middle of October 2005, we submitted a construction disbursement request
to U.S. Bank as trustee and disbursement agent, dated August 26, 2005, seeking a
disbursement for payment of construction expenses incurred prior to Hurricane
Katrina in the amount of approximately $11.4 million. The construction
disbursement request, along with the appropriate certifications from the general
contractor, the architect and the independent construction consultant, was
submitted in compliance with the Disbursement Agreement and in similar form to
eighteen other disbursement requests we submitted dating back to February 2004,
all of which were funded by U.S. Bank per the Disbursement Agreement.
Nevertheless, on or about October 19, 2005, U.S. Bank denied this August 2005
construction disbursement request. We do not understand the basis for the
denial.

Consequently, due to these actions of U.S. Bank as trustee and disbursement
agent, we have been unsuccessful in our attempt to pay various parties,
including vendors, RAC and subcontractors, for work performed prior to Hurricane
Katrina to construct the Hard Rock Biloxi. In order to protect the Hard Rock
Biloxi, our ongoing reconstruction efforts and to prevent liens from being filed
against the property, we filed a Complaint for Injunctive Relief on October 27,
2005 against U.S. Bank National Association, as trustee and disbursement agent
for the Notes in the United States District Court for the Southern District of
Mississippi Southern Division in Gulfport, Mississippi. We asked the court to
enforce the Disbursement Agreement and order the trustee and disbursement agent
to disburse funds due under the properly submitted disbursement request. A
hearing was held on November 8, 2005, at which time the judge suggested the
parties meet to resolve their disagreement. The parties met; however, no
solution was reached. On January 3, 2006, the trustee and disbursement agent
filed a counterclaim in this matter alleging that funds disbursed to us for
preopening expenses were used for other purposes. We deny these allegations and
will vigorously defend all actions we took in this matter.

On December 16, 2005, we filed another complaint against U.S. Bank National
Association, as trustee and disbursement agent, in the United States District
Court for the Southern District of Mississippi, Southern Division. We have asked
the court to determine that (1) the trustee and disbursement agent has withheld
to date, in violation of the Indenture with respect to the Notes, net loss
proceeds from us for the rebuilding, repair, replacement or construction of
improvements to our property, (2) the trustee and disbursement agent has


                                       22
<PAGE>



improperly withheld from us funds received from business interruption insurance;
(3) that the definition of "net loss proceeds" in the Indenture does not include
funds received from the business interruption insurance; and (4) that the 365
day grace period to rebuild the property granted in Section 4.11 of the
Indenture tolls or extends the event of default provisions. The matter has been
set for a trial in October 2006. There can be no assurance given as to the
results of this litigation.

On January 18, 2006, the two actions against U.S. Bank National Association were
consolidated by order of the U.S. District Court for the Southern District of
Mississippi, Southern Division.

On March 3, 2006, we signed a litigation deferral agreement with the trustee and
disbursement agent that deferred all litigation activity including discovery in
the October 27, 2005 and December 16, 2005 lawsuits until April 15, 2006. The
agreement has been extended by both parties until August 15, 2006.

On June 27, 2006 we filed a First Amended complaint to the consolidated actions
against U.S. Bank National Association, with the United States District Court
for the Southern District of Mississippi, Southern Division. This First Amended
Complaint essentially expanded the declaratory relief sought to include a
determination that any alleged Default by us under the Indenture has been
excused by impossibility of performance or otherwise waived and that insurance
proceeds from the Hurricane Katrina related damage should immediately be made
available to us to rebuild Hard Rock Biloxi.

In connection with the agreement deferring litigation activity in the civil
action involving the trustee and disbursement agent, the Company agreed to
dismiss its claims for money damages against U.S. Bank National Association,
however such dismissal did not affect, limit or impair any claims and rights of
the Company in or to the assets now or hereafter held in trust by the trustee
and disbursement agent under the Indenture or collateral documents.

See, also, the Company's disclosure in Note 1 - "Basis of Presentation" to the
Financial Statements included herein for a discussion of a petiton filed with
respect to the Company's Comprehensive Hurricane Katrina Recovery Proposal
submitted to the trustee and disbursement agent on June 29, 2006.

Insurance Litigation
--------------------

On January 10, 2006, we filed a complaint in the United States District Court
for the Southern District of Mississippi, Southern Division against James River,
one of the insurers that provided property insurance coverage for Hard Rock
Biloxi. We, via the complaints, seek declaratory judgments against the insurer
that the insurance policies provide coverage for the water damage to the
hotel-casino property resulting from Hurricane Katrina. We are seeking
compensatory and punitive damages as well as attorney's fees from the insurer.

The policy issued by James River covers $14.0 million of the second excess layer
of coverage. The complaint against James River alleges that water damage caused
to the Hard Rock Biloxi property by Hurricane Katrina is covered under the James
River policy because such water damage was part of a Weather Catastrophe
Occurrence (as defined in such policy). Prior to filing our complaint against
James River, we were advised by letter from counsel to James River that all
flood coverage is excluded from the James River policy, including water damage
that is part of a Weather Catastrophe Occurrence, by reason of the flood
exclusion in the policy. Counsel acknowledged, however, that the wind damage is
covered by the policy.

On January 30, 2006, we filed an amended complaint against James River alleging,
in addition to initial allegations, that the carrier's flood exclusion language,
in any event, does not exclude flood damage to the casino because the casino
floated on water. The applicable definition of flood in their policy describes
an inundation of normally dry land. James River has moved to dismiss both the
complaint and amended complaint. We have filed appropriate responsive pleadings.

On May 5, 2006, we filed a Motion for Leave to file a Second Amended Complaint
in the United States District Court for the Southern Division of Mississippi,
Southern Division, seeking to add a count for declaratory relief against James
River for wind damage sustained to the property during Hurricane Katrina.

On July 28, 2006 a United States District Judge denied James River's motion to
dismiss and motion to strike our jury trial request. James River's answer to our
second amended complaint was due to be filed August 11, 2006.

We intend to vigorously pursue this action; however, no assurance can be given
as to the results of this litigation.



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<PAGE>



On April 28, 2006, the Company filed a Complaint in the Circuit Court of
Harrison County, Mississippi, Second Judicial District, against Homeland
Insurance Company of New York, Clarendon America Insurance Company, RSUI
Indemnity Corporation and Great American E & S Insurance Company, four of the
insurers that have provided property insurance coverage for the Hard Rock
Biloxi. The Company, via the complaint, seeks declaratory relief, compensatory
damages and punitive damages against the respective insurers for their failure
to pay insurance proceeds under the insurers' respective policies following
Hurricane Katrina in the total amount of $45.0 million. As a result of the
settlement of the Company's insurance claims as described above, upon receipt of
the settlement amount in accordance with the terms of the settlement agreements,
this litigation will be dismissed.

In June 2006, upon receipt of insurance proceeds in settlement of the Company's
claims, the Company's previously disclosed litigation with SRI was dismissed.


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

Upon consummation of the change of control as disclosed in Note 1 - "Basis of
Presentation" to the Financial Statements, the AA-designated members of the
Company's Board of Managers, Charles L. Wall, Jr., John A. Orecchio and Matthew
R. Friesl, resigned from their positions with the Company, and Ian M. Cumming,
Joseph S. Steinberg, Lawrence S. Hershfield and Joseph O'Connor, designees of
LRE and Leucadia, were appointed to the Board of Managers by GAR. Ian M. Cumming
is the Chairman of the Board of Leucadia, Joseph S. Steinberg is a Director and
President of Leucadia, Joseph O'Connor is an employee of Leucadia and Lawrence
S. Hershfield is Chief Executive Officer of Ranch Capital, LLC. Lawrence
Hershfield was elected Chairman of the Board and will serve on the compensation
committee with Joseph O'Connor. Joseph O'Connor and David Ross will serve on the
audit committee.





                                       24
<PAGE>






ITEM 6. EXHIBITS

                                  EXHIBIT INDEX

Exhibit
Number         Description of Exhibit

3.1         Composite Amended Limited Liability Company Operating Agreement of
            Premier Entertainment Biloxi LLC,
10.1        Promissory Note by Premier Entertainment Biloxi LLC in favor of BHR
            Holdings, LLC, dated May 23, 2006,
10.2        Amended and Restated Employment Agreement by and between Premier
            Entertainment Biloxi LLC and Joseph Billhimer, dated June 14, 2006.
10.3        Amended and Restated Employment Agreement by and between Premier
            Entertainment Biloxi LLC and Robert Callaway, dated June 15, 2006.
10.4        Amended and Restated Employment Agreement by and between Premier
            Entertainment Biloxi LLC and Todd Raziano, dated June 15, 2006.
10.5        Receivables Purchase Agreement by and between BHR Holdings, Inc.,
            Roy Anderson Corp. and Premier Entertainment Biloxi LLC, dated June
            16, 2006.
10.6        Amended and Restated Agreement between Owner and Contractor, dated
            as of June 16, 2006, between Premier Entertainment Biloxi LLC and
            Roy Anderson Corp.
31.1        Chief Executive Officer Certification Pursuant to Section 13a-14 of
            the Securities Exchange Act, as amended.
31.2        Chief Financial Officer Certification Pursuant to Section 13a-14 of
            the Securities Exchange Act, as amended.



                                    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.

                                               PREMIER ENTERTAINMENT BILOXI LLC
                                               (Registrant)

Date: August 14, 2006                          /s/    Todd J. Raziano
                                               ----------------------------
                                               Todd J. Raziano
                                               Senior Vice President and Chief
                                               Financial Officer (Principal
                                               Financial and Accounting Officer)




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