<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

(Mark One)

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

     For the quarterly period ended: June 30, 2000

                                       OR

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


     For the transition period from: ________________  To _________________

Commission file number:       333-49715

                        ALADDIN GAMING ENTERPRISES, INC.
-------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)


              Nevada                                   88-0379695
---------------------------------         --------------------------------------
 (State or other jurisdiction of           (I.R.S. Employer Identification No.)
  incorporation or organization)

831 Pilot Road, Las Vegas, Nevada                                        89119
--------------------------------------------------------------------------------
(Address of principal executive offices)                              (Zip Code)


                                 (702) 736-7114
--------------------------------------------------------------------------------
              (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 the number of shares outstanding of the issuer's classes of common
stock, as of June 30, 2000.

<TABLE>
<S>                                                                             <C>
Class A Common Stock, no par value, 2,000,000 shares authorized                 1,107,500 issued
Class B Common Stock, no par value, Non-voting, 8,000,000 shares authorized     2,215,000 issued
</TABLE>

<PAGE>

                        ALADDIN GAMING ENTERPRISES, INC.
                          (A DEVELOPMENT STAGE COMPANY)

                                      INDEX

<TABLE>
<CAPTION>

                                                                       Page No.
                                                                      ----------
<S>                                                                   <C>
PART I         FINANCIAL INFORMATION

   Item 1.     Financial Statements

               Balance Sheets
                 June 30, 2000 and December 31, 1999.................        1

               Statements of Operations
                 For the three months ended June 30, 2000 and
                 1999 and for the period from inception
                 (December 3, 1997) through June 30, 2000 ...........        2

               Statements of Stockholders' Equity
                 For the period from inception (December 3, 1997)
                 through June 30, 2000 ..............................        3

               Statements of Cash Flows
                 For the six months ended June 30, 2000 and 1999 and
                 for the period from inception (December 3, 1997)
                 through June 30, 2000 ...............................       4

               Notes to the Consolidated Financial Statements ........       5

   Item 2.     Management's Discussion and Analysis of Financial
                 Condition and Results of Operations .................       7

   Item 3.     Quantitative and Qualitative Disclosures About
                 Market Risk .........................................      11

PART II        OTHER INFORMATION

   Item 6.     Exhibits and Reports on Form 8-K ......................      13

Signatures     .......................................................      14

Exhibit Index  .......................................................      15
</TABLE>

                                  i
<PAGE>

PART I.        FINANCIAL INFORMATION

ITEM 1.        FINANCIAL STATEMENTS

                   ALADDIN GAMING ENTERPRISES, INC.
                     (A DEVELOPMENT STAGE COMPANY)

                            BALANCE SHEETS
               AS OF JUNE 30, 2000 AND DECEMBER 31, 1999
                            (IN THOUSANDS)


<TABLE>
<CAPTION>

                                                                           June 30, 2000           December 31, 1999
                                                                           -------------           -----------------
                                                                            (unaudited)
<S>                                                                        <C>                     <C>
                             ASSETS

Cash                                                                       $        1                 $        1
Investment in unconsolidated affiliate                                          2,494                      8,562
                                                                           ----------                 ----------
                                                                                2,495                      8,563
                                                                           ==========                 ==========

                LIABILITIES AND MEMBERS' EQUITY

Payable to related party                                                  $        6                  $        4

Common Stock:

Class A, no par value, 2,000,000 shares authorized, 1,107,500
shares issued and outstanding as of June 30, 2000 and
December 31, 1999.
Class B, no par value and non-voting 8,000,000 shares
authorized, 2,215,000 shares issued and outstanding, and
2,215,000 shares reserved pursuant to the warrant agreement as
of June 30, 2000 and December 31, 1999.                                       13,247                      13,247

Additional paid-in capital                                                    14,420                      14,420

Deficit accumulated during the development stage                             (25,178)                    (19,108)
                                                                           ----------                 ----------
                                                                               2,495                       8,563
                                                                           ==========                 ==========
</TABLE>

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


                                  1
<PAGE>

                        ALADDIN GAMING ENTERPRISES, INC.
                          (A DEVELOPMENT STAGE COMPANY)

                            STATEMENTS OF OPERATIONS
            FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2000 AND 1999
                               AND FOR THE PERIOD
             FROM INCEPTION (DECEMBER 3, 1997) THROUGH JUNE 30, 2000
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
                                                                                                                   For the period
                                                                                                                 December 3, 1997
                                                For the three  For the three     For the six      For the six         (inception)
                                                 months ended   months ended    months ended     months ended             through
                                                June 30, 2000  June 30, 1999   June 30, 2000    June 30, 1999       June 30, 2000
                                                  (unaudited)    (unaudited)    (unaudited)      (unaudited)         (unaudited)
                                                -------------  -------------   --------------   -------------    ----------------
<S>                                              <C>           <C>              <C>             <C>               <C>
Other (income) expense                           $        -    $          -      $        1      $          1      $        5

Equity in loss of unconsolidated affiliate            3,687           1,879           6,069             3,848          25,173

Income tax expense                                        -               -               -                 -               -

Net loss accumulated during the development      ----------    ------------      ----------     -------------      ----------
stage                                                 3,687           1,879           6,070             3,849          25,178
                                                 ----------    ------------      ----------     -------------      ----------

Basic and diluted loss per share                     $(1.11)          $(.57)         $(1.83)           $(1.16)         $(7.58)

Shares used in per share calculation              3,322,500       3,322,500       3,322,500         3,322,500       3,322,500
</TABLE>

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


                                   2
<PAGE>

                        ALADDIN GAMING ENTERPRISES, INC.
                          (A DEVELOPMENT STAGE COMPANY)

                       STATEMENTS OF STOCKHOLDERS' EQUITY
                FOR THE PERIOD FROM INCEPTION (DECEMBER 3, 1997)
                              THROUGH JUNE 30, 2000
                                 (IN THOUSANDS)
                                   (UNAUDITED)

<TABLE>
<CAPTION>

                                                 Common
                                                  Stock           Additional
                                                 Class A            Paid-in           Retained
                                               and Class B          Capital           Earnings           Total
                                              -------------      -------------      ------------      ----------
<S>                                           <C>                <C>                <C>               <C>
BALANCE, DECEMBER 3, 1997                        $     -            $     -           $     -          $      -

Issuance of Class A common stock,
  1 share issued                                       -                  1                 -                 1
                                                 -------            -------          --------          --------

BALANCE, DECEMBER 31, 1997                             -                  1                 -                 1

Net loss for the period                                -                  -           (10,620)          (10,620)

Issuance of Class A common stock,
  1,107,499 shares issued, and
  Class B common stock, 2,215,000
  shares issued                                    13,247                 -                 -            13,247

Issuance of Warrants to purchase
  Class B common stock, 2,215,000
  Warrants issued                                      -             15,000                 -            15,000

Equity costs from unconsolidated
  affiliate                                            -               (581)                -              (581)
                                                 -------            -------          --------          --------

BALANCE, DECEMBER 31, 1998                        13,247             14,420           (10,620)           17,047

Net loss for the period                                -                  -            (8,488)           (8,488)
                                                 -------            -------          --------          --------
BALANCE, DECEMBER 31, 1999                        13,247             14,420           (19,108)            8,559

Net loss for the period                                -                  -            (2,383)           (2,383)
                                                 -------            -------          --------          --------
BALANCE, MARCH 31, 2000                           13,247             14,420           (21,491)            6,176

Net Loss for the Period                                -                  -            (3,687)           (3,687)
                                                 -------            -------          --------          --------
BALANCE, JUNE 30, 2000                           $13,247            $14,420          $(25,178)         $  2,489
                                                 =======            =======          ========          ========
</TABLE>

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

                                       3
<PAGE>

                        ALADDIN GAMING ENTERPRISES, INC.
                          (A DEVELOPMENT STAGE COMPANY)

                            STATEMENTS OF CASH FLOWS
       FOR THE SIX MONTHS ENDED JUNE 30, 2000 AND 1999 AND FOR THE PERIOD
             FROM INCEPTION (DECEMBER 3, 1997) THROUGH JUNE 30, 2000
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                                                           For the period
                                                                                                          December 3, 1997
                                                     For the six                 For the six                 (inception)
                                                     months ended             months ended June                through
                                                     June 3 2000                   30, 1999                 June 30, 2000
                                                     (unaudited)                 (unaudited)                 (unaudited)
                                                 --------------------      -----------------------      ---------------------
<S>                                              <C>                       <C>                          <C>
Cash flows used for investing activities:
Investment in unconsolidated affiliate                         -                           -                      (15,000)

Cash flows from financing activities:
Proceeds from the issuance of stock                            -                           -                            1
Proceeds from the issuance of warrants                         -                           -                       15,000

Increase in cash and cash equivalents                          -                           -                            1

Cash and cash equivalents at beginning of
period                                                          1                          1                            -
Cash and cash equivalents at end of
period                                                    $     1                    $     1                    $       1
                                                          =======                    =======                    =========

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

Non-cash investing and financing activities:
Equity contributions - non-cash                                 -                          -                    $  13,247
</TABLE>

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

                                      4

<PAGE>

                        ALADDIN GAMING ENTERPRISES, INC.
                          (A DEVELOPMENT STAGE COMPANY)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 2000

1.   ORGANIZATION AND BUSINESS

     Aladdin Gaming Enterprises, Inc., a Nevada corporation ("Enterprises"),
was formed on December 3, 1997. Enterprises owns a 25% interest in Aladdin
Gaming Holdings, LLC ("Gaming Holdings"). Enterprises is wholly owned by
Sommer Enterprises, LLC, a Nevada limited liability company ("Sommer
Enterprises"). Aladdin Holdings, LLC, a Delaware limited liability company
("Holdings"), holds a majority interest in Sommer Enterprises. The members of
Holdings are the Trust Under Article Sixth u/w/o Sigmund Sommer ("Sommer
Trust") which holds a 95% interest in Holdings, and GW Vegas, LLC, a Nevada
limited liability company ("GW"), a wholly owned subsidiary of Trust Company
of the West ("TCW"), which holds a 5% interest in Holdings.

     Enterprises' interest in Gaming Holdings has been accounted for under
the equity method.

     Enterprises has no other business or activities other than its
investment in Gaming Holdings, which is a development stage company. Gaming
Holdings is a holding company, the material assets of which are 100% of the
outstanding common membership interests and 100% of the outstanding Series A
preferred interests of Aladdin Gaming, LLC, ("Gaming"). Gaming is developing,
constructing and will operate a new hotel and casino, the Aladdin Resort and
Casino as the centerpiece of an approximately 35-acre resort, casino and
entertainment complex in Las Vegas, Nevada. The resort will be located at the
center of Las Vegas Boulevard. Gaming Holdings, through its subsidiaries,
also owns 100% of Aladdin Music, LLC ("Aladdin Music"). Aladdin Music plans
to construct a second hotel and casino with a music and entertainment theme
("Aladdin Music Project") on the southeast corner of the 35-acre parcel.
Aladdin Music is currently seeking a joint venture partner and financing for
the Aladdin Music Project.

     This information should be read in conjunction with the financial
statements set forth in Enterprises' Annual Report on Form 10-K for the year
ended December 31, 1999.

     Accounting policies utilized in the preparation of the financial
information herein presented are the same as set forth in Enterprises' annual
financial statements except as modified for interim accounting policies. The
interim consolidated financial information is unaudited. In the opinion of
management, all adjustments (consisting only of normal recurring adjustments
necessary for a fair presentation of the results for the interim periods) have
been included. Interim results of operations are not necessarily indicative
of the results of operations for the full year.

     Certain prior period amounts have been reclassified to conform with the
current period's presentation.

2.   INCOME TAXES

     Enterprises accounts for income taxes using the liability method as set
forth in the Statement of Financial Accounting Standards No. 109, ACCOUNTING
FOR INCOME TAXES. Under the liability method, deferred taxes are provided
based on the temporary differences between the financial reporting basis and
the tax basis of Enterprises' assets and liabilities.


                                     5

<PAGE>

     There was no income tax expense or benefit recorded for the period from
inception (December 3, 1997) through June 30, 2000 as Enterprises is a
development stage company and the realization of any deferred tax asset is
uncertain.

3.   IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS

     In June 1998, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 133, "Accounting for
Derivative Instruments and Hedging Activities." SFAS No. 133 requires that
entities record all derivatives as assets or liabilities measured at fair value,
with the change in fair value recognized in earnings or in other comprehensive
income, depending on the use of the derivative and whether it qualifies for
hedge accounting. SFAS 133 amends or supercedes several current accounting
statements. In July, 1999, the FASB issued SFAS No. 137 which delays the
effective date of SFAS No. 133 from fiscal year 2000 to fiscal year 2001.
Enterprises is in the process of analyzing SFAS No. 133 and the impact on its
consolidated financial position and results of operations.


                                    6

<PAGE>

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

     The following discussion should be read in conjunction with, and is
qualified in its entirety by, the various other reports which have been
previously filed with the United States Securities and Exchange Commission
("SEC"), which may be inspected, without charge, at the Public Reference Section
of the SEC located at 450 Fifth Street, N.W., Washington, D.C. 20549 or the SEC
internet site address: http://www.sec.gov.

DEVELOPMENT ACTIVITIES

     Aladdin Gaming Enterprises, Inc., a Nevada corporation ("Enterprises"),
was formed on December 3, 1997. Enterprises owns a 25% interest in Aladdin
Gaming Holdings, LLC ("Gaming Holdings"). Enterprise is wholly owned by
Sommer Enterprises, LLC, a Nevada limited liability company ("Sommer
Enterprises"). Aladdin Holdings, LLC, a Delaware limited liability company
("Holdings") holds a majority interest in Sommer Enterprises. The members of
Holdings are the Trust Under Article Sixth u/w/o Sigmund Sommer ("Sommer
Trust") which holds a 95% interest in Holdings, and GW Vegas, LLC, a Nevada
limited liability company ("GW"), a wholly-owned subsidiary of Trust Company
of the West ("TCW"), which holds a 5% interest in Holdings.

     Enterprises has no business or activities other than its investment in
Gaming Holdings, which is a development stage company. Gaming Holdings is a
holding company, the material assets of which are 100% of the outstanding
common membership interests and 100% of the outstanding Series A preferred
membership interests of Aladdin Gaming, LLC ("Gaming"). Aladdin Capital Corp.
("Capital") is a wholly-owned subsidiary of Gaming Holdings and was
incorporated solely for the purpose of serving as a co-issuer of Gaming
Holdings 13 1/2% Senior Discount Notes ("Notes"). Capital does not have any
material operations or assets and does not have any revenues. Gaming
Holdings, through its subsidiaries, also owns 100% of Aladdin Music, LLC
("Aladdin Music").

     The operations of Gaming Holdings and its subsidiaries have been
primarily limited to the design, development, financing and construction of a
new Aladdin Resort and Casino ("Aladdin"). The Aladdin will be the
centerpiece of an approximately 35-acre resort, casino and entertainment
complex ("Complex") located on the site of the former Aladdin hotel and
casino in Las Vegas, Nevada, a premier location on Las Vegas Boulevard. The
Aladdin has been designed to include a luxury themed hotel of approximately
2,567 rooms ("Hotel"), an approximately 116,000 square foot casino ("Casino")
an approximately 1,200 seat production showroom and six restaurants. The
Casino's main gaming area will contain approximately 2,800 slot machines, 87
table games, keno and a race and sports book facility. Included on a separate
level of the Casino will be a 15,000 square foot luxurious gaming section
("The London Club at Aladdin") that is expected to contain an additional 20
to 30 high denomination table games and approximately 100 high denomination
slot machines. The Complex, which has been designed to promote casino traffic
and to provide customers with a wide variety of entertainment alternatives,
will comprise: (i) the Aladdin; (ii) the themed entertainment shopping mall
with approximately 496,000 square feet of retail space ("Desert Passage");
(iii) a planned second hotel and casino with a music and entertainment theme
("Aladdin Music Project"); (iv) the newly renovated 7,000-seat Theater of the
Performing Arts ("Theater"); and (v) the approximately 4,800-space car
parking facility ("Carpark" and, together with the Desert Passage,
hereinafter, "Mall Project"). The Mall Project is separately owned in part by
an affiliate of Gaming Holdings and Aladdin Music is currently seeking a
joint venture partner and financing for the Aladdin Music Project. Gaming
Holdings currently believes that the completion and opening of the Aladdin
will occur during August 2000.

                                  7
<PAGE>

RESULTS OF OPERATIONS

     Enterprises has no business or activities or material assets other than
its investment in Gaming Holdings, which is a development stage company and
has no significant operations to date.

     Gaming Holdings has capitalized all qualifying construction costs.
Accordingly, Gaming Holdings does not have any historical operating income.
The capitalized costs consist primarily of land contributed by certain
members of Gaming Holdings, design fees, financing and commitment fees,
construction costs and interest on debt incurred to finance construction and
development of Aladdin. Capitalized costs include approximately $2.2 million
related to Aladdin Music for necessary predevelopment costs and expenses of
the Aladdin Music Project. Gaming Holdings' operating expenses primarily have
consisted of interest, amortization costs, expenses related to the Notes and
pre-opening costs.

     Gaming Holdings' results of operations from inception to the anticipated
opening of the Aladdin in August, 2000, have been adversely affected by the
expensing of pre-opening costs and interest not qualifying for capitalization
and should not be indicative of future operations. Accordingly, historical
results will not be indicative of future operating results. Future operating
results of Gaming Holdings are subject to significant business, economic,
regulatory and competitive uncertainties and contingencies, many of which are
beyond Gaming Holdings' control. While Gaming Holdings believes that the
Aladdin will be able to attract a sufficient number of patrons and achieve
the level of activity necessary to permit Gaming Holdings to meet its debt
payment obligations, including the Notes and other indebtedness, and its
other obligations, there can be no assurance with respect thereto.

     Because Enterprises' only material asset is its 25% interest in Gaming
Holdings, Enterprises records 25% of Gaming Holdings' losses and preferred
dividends in arrears as equity in loss of unconsolidated affiliate.

     Enterprises recorded a net loss of approximately $3.7 million and $6.1
million for the three and six months ended June 30, 2000, respectively, as
compared to approximately $1.9 million and $3.8 million for the three and six
months ended June 30, 1999, respectively. Enterprises' cumulative loss for
the period of inception (December 3, 1997) to June 30, 2000 was approximately
$25.2 million. Gaming Holdings' losses were due to the pre-opening costs,
interest expense, amortization costs and expenses related to the Notes.

MATERIAL CHANGES IN FINANCIAL CONDITION

     Through June 30, 2000, approximately $604.1 million had been expended
primarily on the development of the Aladdin, of which approximately $74.5
million had been expended on repayment of debt associated with the land
contribution to Gaming Holdings, approximately $474.3 million in
construction, furniture, fixtures and equipment, and capitalized interest,
approximately $39.5 million in debt issuance and member equity costs, and
approximately $15.8 million in pre-opening costs, net interest expense, and
other current assets.


                                      8

<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

     On February 26, 1998, Gaming Holdings and Capital issued $221.5 million
aggregate principal amount of their 13 1/2% Senior Discount Notes due 2010
("Notes"). The proceeds to Gaming Holdings from the Notes were approximately
$115.0 million and all the proceeds have been utilized by Gaming Holdings for
the development and construction of the Aladdin. For further details on the
Notes, including the covenants, restrictions and limitations on Enterprises
pursuant to the Notes Indenture, see Exhibit 10.1 to Enterprises' Form 10-K
for the year ended December 31, 1999.

     Gaming has a credit facility ("Bank Credit Facility" or "Credit
Agreement") with various financial institutions and The Bank of Nova Scotia
as the administrative agent for the lenders (collectively, "Lenders"). The
Credit Agreement consists of four separate term loans. The Term A Loan
comprises a term loan of $129.7 million and matures five and one-half years
after the initial borrowing date. The Term B Loan comprises a term loan of
$114 million and matures eight and one-half years after the initial borrowing
date. The Term C Loan comprises a term loan of $160 million and matures ten
years after the initial borrowing date. The Term D Loan is comprised of a
term loan of $50 million which matures six months after the Term C Loan
matures. As of June 30, 2000, approximately $100.3 million of the Term A Loan
proceeds is available. As of June 30, 2000, Gaming had fully utilized the
Term B and Term C Loan proceeds. As of June 30, 2000, the Term D Loan was not
in place. For further details on the establishment of the Term D Loan, please
see the discussion below. On June 1, 2000, the Credit Agreement was amended
("Third Amendment to Credit Agreement") to provide for: (a) the creation of
wholly-owned subsidiaries of Gaming; (b) the creation of certain operating
bank accounts prior to the opening of the Aladdin; (c) the increase of the
annual amount of permitted operating leases prior to opening of the Aladdin
and to change the date by which such amount of permitted operating leases can
be increased after the opening of the Aladdin; (d) the increase of Gaming's
cash management account to $10 million; and (e) the transfer, for value
received, of certain collateral under the Bank Credit Facility to the FF&E
Financing. For further details on the Third Amendment to Credit Agreement,
see Exhibit 10.1 to Enterprises' Form 10-Q for the period ended June 30,
2000. On July 27, 2000, the Credit Agreement was amended ("Fourth Amendment
to Credit Agreement") to provide for: (a) a new Term D Loan in the amount of
$50 million, subject to reduction in certain events, with an interest rate of
approximately 11%; (b) extending the commencement of measurement date for
certain financial covenants; and (c) other technical amendments to the Credit
Agreement. As of August 7, 2000, none of the Term D Loan had been utilized.
For further details on the Fourth Amendment to Credit Agreement, see Exhibit
10.2 to Enterprises' Form 10-Q for the period ended June 30, 2000. For
further details on the Bank Credit Facility, including the covenants,
restrictions and limitations on Gaming pursuant to the Bank Credit Facility,
see Exhibit 10.12 to Enterprises' Form 10-K for the year ended December 31,
1999.

     Gaming has operating lease financing of up to $60 million and a term
loan facility of $20 million to obtain gaming equipment and other specified
equipment (collectively, "FF&E Financing"). For further details on the
operating lease financing and term loan facility, including the covenants,
restrictions and limitations on Gaming pursuant to the FF&E Financing, see
Exhibit 10.40 to Enterprises' Form 10-K for the year ended December 31, 1999.

     As a result of Gaming Holdings' on-going review of the anticipated
construction and pre-opening costs for the Aladdin, in July, 2000, Gaming
Holdings increased its main project budget by approximately $50 million, from
approximately $973 million to approximately $1.023 billion. Gaming Holdings
will utilize the Term D Loan proceeds to fund this budgetary increase.

     During June and July 2000, The Bank of Nova Scotia, as Administrative
Agent under Gaming's Bank Credit Facility, drew down all of the approximately
$47.3 million letter of credit previously issued for the account of London
Clubs, which London Clubs posted pursuant to the Completion Guaranty. The


                                      9

<PAGE>

proceeds of the drawing under the letter of credit were used to fund various
construction and pre-opening costs.

     Upon the later of (a) the transfer of the real property under the Mall
Project by Gaming to Aladdin Bazaar, LLC ("Aladdin Bazaar") or (b) the
commencement of Aladdin's operations, Aladdin Bazaar will execute a
promissory note of approximately $16.7 million to Gaming. Principal and
interest on the note is payable by Aladdin Bazaar to Gaming in the amount of
$2 million per year. The required payments are subordinated to various
restrictions under the Aladdin Bazaar operating agreement. Due to the
restrictions upon the payments, there can be no assurances that Gaming will
receive any payments under this note.

     London Clubs, the Sommer Trust, and Aladdin Bazaar Holdings, LLC
("Bazaar Holdings"), which is owned 99% by the Sommer Trust, have entered
into a completion guaranty ("Bank Completion Guaranty") for the benefit of
the Lenders under the Bank Credit Facility, under which they have agreed to
guarantee, among other things, the completion of the Aladdin. The Bank
Completion Guaranty is not subject to any maximum dollar limitations. From
January 1, 2000 to June 30, 2000, there has been a total of approximately
$79.4 million in payments pursuant to the Bank Completion Guaranty, which has
been funded by London Clubs. Gaming Holdings issued for these Bank Completion
Guaranty payments (i) Series A Preferred Shares in exchange for the
contribution of such payments and (ii) Series D Preferred Shares representing
a profits only interest in Gaming Holdings. The holders of the Notes are not
a party to the Bank Completion Guaranty, however, London Clubs, the Sommer
Trust and Bazaar Holdings have entered into a limited completion guaranty for
the benefit of the Noteholders ("Noteholder Completion Guaranty") under which
they guarantee completion of the Aladdin, subject to certain important
exceptions, limitations and qualifications. The Noteholder Completion
Guaranty contains certain intercreditor provisions which significantly limit
the rights of the Trustee under the Noteholder Completion Guaranty.

     AHL, Bazaar Holdings and London Clubs have entered into the Keep-Well
Agreement in favor of the lenders under the Bank Credit Facility. In
connection with the Fourth Amendment to Credit Agreement, the Sommer Trust
became a party to the Keep-Well Agreement. The Keep-Well Agreement is the
joint and several agreement of the parties to make certain quarterly cash
equity contributions to the Gaming Holdings if Gaming Holdings fails to
comply with the Minimum Fixed Charges Coverage Ratio set forth in the Bank
Credit Facility, but in no event shall the aggregate cash equity contribution
required to be made in any fiscal year of Gaming Holdings exceed $30.0
million. In exchange for such cash equity contributions, Gaming Holdings will
issue Series A or B Preferred Membership Interests.

     In connection with the development of the Mall Project, Aladdin Bazaar
agreed to reimburse Gaming approximately $14.2 million for the construction
of certain areas shared by the Aladdin and the Mall Project and the facade to
the Aladdin and, as of June 30, 2000, Aladdin Bazaar has paid Gaming
approximately $13.0 million of this amount. Additionally, Aladdin Bazaar is
obligated to spend no more than $36 million for the Carpark. Therefore, any
cost overruns associated with these items will be borne by Gaming. In
addition, Gaming is obligated to pay to Aladdin Bazaar: (i) a $3.2 million
fee per year for a term of 99 years, which is adjusted every fifth year
pursuant to a consumer price index-based formula, for usage of the Carpark;
and (ii) Gaming's proportionate share of the operating costs associated with
the Carpark and other common areas.

     Gaming Holdings believes that the funds provided by the Notes, Bank
Credit Facility, FF&E Financing, London Clubs' equity contribution and
contributions pursuant to the Bank Completion Guaranty (collectively,
"Funding Transactions") will be sufficient to develop, complete and commence
operation of


                                     10

<PAGE>

the Aladdin. However, there can be no assurance that the Funding Transactions
will be sufficient for the development, construction and commencement of the
Aladdin.

     Upon the commencement of operations of the Aladdin, Gaming Holdings will
have approximately $17.0 million of working capital to fund its operations,
debt service and capital needs as currently anticipated. Based on Gaming
Holdings' projection of operating revenues and expenses, required capital
expenditures and other expected expenditures, Gaming Holdings believes that
such working capital is sufficient to address Gaming Holdings' liquidity
needs.

     Although no additional financing is contemplated, Gaming Holdings will
seek, if necessary and to the extent permitted under the Notes Indenture and
the terms of the Bank Credit Facility and the FF&E Financing, additional
financing through additional bank borrowings or debt or equity financings.
There can be no assurance that additional financing, if needed, will be
available to Gaming Holdings, or that, if available, the financing will be on
terms favorable to Gaming Holdings. There can also be no assurance that
estimates by Gaming Holdings of its reasonably anticipated liquidity needs
are accurate or that new business developments or other unforeseen events
will not occur, resulting in the need to raise additional funds.

CERTAIN FORWARD LOOKING STATEMENTS

     Certain information included in this Form 10-Q and other materials filed
or to be filed by Enterprises with the United States Securities and Exchange
Commission (as well as information included in oral statements or other
written statements made, or to be made, by Enterprises) contain statements
that are forward-looking within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange Act of
1934, as amended. Such statements include, without limitation, those relating
to plans for future operations, current construction and development
activities (including completion dates, budgets and cost estimates), other
business development activities, capital spending, financing sources, the
effect of regulation (including gaming and tax regulations) and competition.
Such forward-looking information involves important risks and uncertainties
that could significantly affect anticipated results in the future and,
accordingly, such results may differ from those expressed in any
forward-looking statements made by, or on behalf of, Enterprises. These risks
and uncertainties include, but are not limited to, those relating to the
current development and construction activities and costs and timing thereof,
the sources and extent of financing for the project, dependence on existing
management, leverage and debt service (including sensitivity to fluctuations
in interest rates), domestic or international economic conditions (including
sensitivity to fluctuations in foreign currencies), changes in federal or
state tax laws or the administration of such laws, changes in gaming laws or
regulations (including the legalization of gaming in certain jurisdictions)
and application for licenses and approvals under applicable jurisdictional
laws and regulations (including gaming laws and regulations).

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     Effective June 30, 1999, Gaming restructured its interest rate swap
arrangements in an effort to reduce future expenditures for interest. Gaming
has entered into these agreements to manage interest expense, which is
subject to fluctuations due to the variable nature of the London Interbank
Offered Rate ("LIBOR"). In exchange for entering into the transaction, Gaming
received $500,000 from the counterparty in July, 1999.

     Beginning June 30, 1999, Gaming has the following interest rate swaps,
interest rate ceilings and floor caps, and related notional amounts in
effect: (i) an interest rate swap with an original notional amount of $114
million increasing to a maximum of $222.5 million whereby interest is fixed
at 5.50%


                                       11

<PAGE>

through March 31, 2000; (ii) after March 31, 2000, an interest rate collar
with a notional amount of $250 million, a maximum and minimum interest rate
of 7.5% and 5.15%, respectively, will go into effect and mature on September
30, 2006; and (iii) an interest rate collar with a notional amount of $160
million, a maximum rate of 8.00%, a minimum rate of 5.15% and a maturity date
of March 31, 2003. All rates noted above are LIBOR equivalents only and do
not include the impact of the basis point additions to LIBOR that are used in
calculating interest expense on Gaming's term loans. The LIBOR applicable to
these agreements is adjusted every three months and on June 30, 2000 was set
at 6.28%. The fair market value of the Gaming's interest rate swaps, interest
rate ceilings and floor caps as provided by the counterparty, is a net
receivable of approximately $2.9 million at June 30, 2000.

     The notional amounts do not represent amounts exchanged by the parties,
and thus are not a measure of exposure of Gaming. The amounts exchanged are
normally based on the notional amounts and other terms of the swaps. The
variable rates are subject to change over time as LIBOR fluctuates.

     Neither Gaming nor the counterparty, which is a prominent financial
institution, is required to collateralize their respective obligations under
these swaps. Gaming is exposed to loss if the counterparty defaults. However,
Enterprises considers the risk of non-performance to be minimal as the
counterparty is a member of the Bank Credit Facility.

     Effective July 20, 2000, Gaming restructured its interest rate collar
arrangements in an effort to reduce future expenditures for interest. Gaming
has entered into these agreements to manage interest expense, which is
subject to fluctuations due to the variable nature of the London Interbank
Offered Rate ("LIBOR"). In exchange for entering into the transaction, Gaming
received $1,000,000 from the counterparty in July, 2000.

     Beginning July 20, 2000, Gaming has the following interest rate ceilings
and floor caps, and related notional amounts in effect: (i) an interest rate
collar with a notional amount of $245.7 million, a maximum and minimum
interest rate of 8.00% and 6.25%, respectively, and a maturity date of June
30, 2005, (ii) an interest rate collar with a notional amount of $159.2
million, a maximum rate of 8.00%, a minimum rate of 6.25% and a maturity date
of June 30, 2005; (iii) an interest rate collar with a notional amount of $50
million, a maximum rate of 8.00%, a minimum rate of 6.25%, and a maturity of
June 30, 2005 All rates noted above are LIBOR equivalents only and do not
include the impact of the basis point additions to LIBOR that are used in
calculating interest expense on Gaming's term loans.

     The notional amounts do not represent amounts exchanged by the parties,
and thus are not a measure of exposure of Gaming. The amounts exchanged are
normally based on the notional amounts and other terms of the swaps. The
variable rates are subject to change over time as LIBOR fluctuates.

     Neither Gaming nor the counterparty, which is a prominent financial
institution, is required to collateralize their respective obligations under
these swaps. Gaming is exposed to loss if the counterparty defaults. However,
Gaming Enterprises considers the risk of non-performance to be minimal as the
counterparty is a member of the Bank Credit Facility.


                                      12

<PAGE>

PART II           OTHER INFORMATION

ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K

     (a)  Exhibits

          10.01  Third Amendment to Credit Agreement, dated as of June 1, 2000,
                 among Aladdin Gaming, LLC, Various Financial Institutions, The
                 Bank of Nova Scotia, Merrill Lynch Capital Corporation and CIBC
                 Oppenheimer Corp.

          10.02  Fourth Amendment to Credit Agreement, dated as of July 27,
                 2000, among Aladdin Gaming, LLC, Various Financial
                 Institutions, The Bank of Nova Scotia, Merrill Lynch Capital
                 Corporation and CIBC Oppenheimer Corp.

          10.03  Agreement of Amendment, dated as of June 2, 2000, among General
                 Electric Capital Corporation, GMAC Commercial Mortgage
                 Corporation and Aladdin Gaming, LLC.

          10.04  Agreement of Amendment No. 3, dated as of July 27, 2000, among
                 General Electric Capital Corporation, GMAC Commercial Mortgage
                 Corporation and Aladdin Gaming, LLC.

          10.05  First Amendment to Deed of Trust, Assignment of Rents and
                 Leases, Fixture Filing and Security Agreement, dated as of July
                 27, 2000, made by and between Aladdin Gaming, LLC, as Trustee,
                 and Stewart Title of Nevada, as Trustee, for the benefit of The
                 Bank of Nova Scotia.

          10.06  Amendment of Agreements, effective as of July 27, 2000, by and
                 among Aladdin Gaming, LLC, the various financial institutions
                 and The Bank of Nova Scotia.

          10.07  Amendment No. 1 to the Employment Agreement of William Timmins,
                 dated as of May 26, 2000, between Aladdin Gaming, LLC, Aladdin
                 Gaming Holdings, LLC and William Timmins.

          10.08  Employment Agreement of Patricia Becker, dated as of July 27,
                 2000, between Aladdin Gaming, LLC, Aladdin Gaming Holdings, LLC
                 and Patricia Becker.

          27.01  Financial Data Schedule.


     (b)  Reports on Form 8-K

          None.

                                     13

<PAGE>

                                   SIGNATURES


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

                                        ALADDIN GAMING ENTERPRISES, INC.




August 14, 2000                         By:    /s/ Thomas A. Lettero
                                               ---------------------------------
                                               Thomas A. Lettero, Treasurer


                                     14

<PAGE>

                                  EXHIBIT INDEX

<TABLE>
<CAPTION>

EXHIBIT                                                                      PAGE
NO.         DESCRIPTION                                                      NO.
-------     -----------                                                      ----
<S>         <C>                                                              <C>
10.01       Third Amendment to Credit Agreement, dated as of June 1,
            2000, among Aladdin Gaming, LLC, Various Financial
            Institutions, The Bank of Nova Scotia, Merrill Lynch Capital
            Corporation and CIBC Oppenheimer Corp.

10.02       Fourth Amendment to Credit Agreement, dated as of July 27,
            2000, among Aladdin Gaming, LLC, Various Financial
            Institutions, The Bank of Nova Scotia, Merrill Lynch Capital
            Corporation and CIBC Oppenheimer Corp.

10.03       Agreement of Amendment, dated as of June 2, 2000, among
            General Electric Capital Corporation, GMAC Commercial
            Mortgage Corporation and Aladdin Gaming, LLC.

10.04       Agreement of Amendment No. 3, dated as of July 27, 2000,
            among General Electric Capital Corporation, GMAC Commercial
            Mortgage Corporation and Aladdin Gaming, LLC.

10.05       First Amendment to Deed of Trust, Assignment of Rents and
            Leases, Fixture Filing and Security Agreement, dated as of
            July 27, 2000, made by and between Aladdin Gaming, LLC, as
            Trustee, and Stewart Title of Nevada, as Trustee, for the
            benefit of The Bank of Nova Scotia.

10.06       Amendment of Agreements, effective as of July 27, 2000, by
            and among Aladdin Gaming, LLC, the various financial
            institutions and The Bank of Nova Scotia.

10.07       Amendment No. 1 to the Employment Agreement of William
            Timmins, dated as of May 26, 2000, between Aladdin Gaming,
            LLC, Aladdin Gaming Holdings, LLC and William Timmins.

10.08       Employment Agreement of Patricia Becker, dated as of July
            27, 2000, between Aladdin Gaming, LLC, Aladdin Gaming
            Holdings, LLC and Patricia Becker.

27.01       Financial Data Schedule.
</TABLE>

                                      15