<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:               March 31, 1999
                                       ----------------------------------------

                                       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:  333-49717 and 333-49717-01
                       ---------------------------------------------------------

                          ALADDIN GAMING HOLDINGS, LLC
-------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

             Nevada                                    88-0379607
----------------------------------            -------------------------
 (State or other jurisdiction of                   (I.R.S. Employer 
  incorporation or organization)                  Identification No.)

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

                                 (702) 736-7114
------------------------------------------------------------------------------
              (Registrant's telephone number, including area code)

                              ALADDIN CAPITAL CORP.
-----------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

           Nevada                                        88-0379606
-------------------------------                    -------------------------
(State or other jurisdiction of                      (I.R.S. Employer 
incorporation or organization)                      Identification No.)

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

                                 (702) 736-7114
-------------------------------------------------------------------------------
              (Registrant's telephone number, including area code)



<PAGE>

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 the latest practicable date.


                          ALADDIN GAMING HOLDINGS, LLC

                                 Not applicable

                           ALADDIN CAPITAL CORPORATION

     2,500 shares of common stock, no par value as of March 31, 1999.



<PAGE>

                          ALADDIN GAMING HOLDINGS, LLC
                                AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)

                                      INDEX
<TABLE>
<CAPTION>
                                                                                        PAGE NO.
                                                                                      -----------
<S>           <C>                                                                         <C>
PART I        FINANCIAL INFORMATION

   Item 1.    Financial Statements

              Consolidated Balance Sheets                                                    
                March 31, 1999 and December 31, 1998.................................        1

              Consolidated Statements of Operations                                           
                For the three months ended March 31, 1999 and 1998 and for the                
                period from inception (December 1, 1997) through March 31, 1999......        2

              Consolidated Statements of Members' Equity                                                     
                For the period from inception (December 1, 1997) through March 31,                           
                1999.................................................................        3

              Consolidated Statements of Cash Flows                                                          
                For the three months ended March 31, 1999 and 1998 and for the                               
                period from inception (December 1, 1997) through March 31, 1999......      4-5

              Notes to the Consolidated Financial Statements.........................      6-7

   Item 2.    Management's Discussion and Analysis of Financial Condition and                                
                Results of Operations................................................     8-12

   Item 3.    Quantitative and Qualitative Disclosures About Market Risk.............       12

PART II       OTHER INFORMATION

   Item 1.    Legal Proceedings......................................................       13

   Item 2.    Changes in Securities and Use of Proceeds..............................       13

   Item 3.    Defaults upon Senior Securities........................................       13

   Item 4.    Submission of Matters to a Vote of Security Holders....................       13

   Item 5.    Other Information......................................................       13

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

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

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


<PAGE>
PART I.   FINANCIAL INFORMATION

ITEM 1.   FINANCIAL STATEMENTS

                          ALADDIN GAMING HOLDINGS, LLC
                                AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)

                           CONSOLIDATED BALANCE SHEETS
                   AS OF MARCH 31, 1999 AND DECEMBER 31, 1998
                                 (IN THOUSANDS)
<TABLE>
<CAPTION>
                                                                         March 31, 1999           December 31, 1998
                                                                         --------------           ----------------
                                                                           (unaudited)
<S>                                                                       <C>                    <C>
                             ASSETS
Current assets:
       Cash                                                                      $       26             $       1,248
       Restricted land                                                                6,842                     6,842
       Other current assets                                                             972                     1,021
                                                                      ----------------------    ----------------------
              Total current assets                                                    7,840                     9,111
                                                                      ----------------------    ----------------------

Property and equipment:
       Land                                                                          33,407                    33,407
       Furniture and equipment                                                          304                       272
       Construction in progress                                                     123,808                    86,557
       Capitalized interest                                                          12,977                     8,213
                                                                      ----------------------    ----------------------
                                                                                    170,496                   128,449
       Less accumulated depreciation                                                     37                        17
                                                                      ----------------------    ----------------------
                                                                                    170,459                   128,432
                                                                      ----------------------    ----------------------

Other assets
       Restricted cash                                                              198,037                   227,983
       Other assets                                                                   3,270                     2,920
       Debt issuance costs, net of accumulated amortization of
       $3,701 and $2,831                                                             33,441                    34,315
                                                                      ----------------------    ----------------------
              Total other assets                                                    234,748                   265,218
                                                                      ----------------------    ----------------------

                                                                               $    413,047              $    402,761
                                                                      ----------------------    ----------------------
                                                                      ----------------------    ----------------------
                LIABILITIES AND MEMBERS' EQUITY
Current liabilities:
       Accounts payable                                                               3,636                     3,394
       Construction payable                                                          23,244                    12,063
       Obligation to transfer land                                                    6,842                     6,842
       Accrued expenses                                                               2,987                     1,847
                                                                      ----------------------    ----------------------
              Total current liabilities                                              36,709                    24,146
                                                                      ----------------------    ----------------------

Long-term debt, net of discount                                                     392,972                   388,353

Related party payables and other liabilities                                          5,102                     4,122

Members' equity:
       Common membership interest                                                    28,608                    28,608
       Deficit accumulated during the development stage                             (50,344)                  (42,468)
                                                                      ----------------------    ----------------------
              Total members' equity                                                 (21,736)                  (13,860)
                                                                      ----------------------    ----------------------

                                                                               $    413,047              $    402,761
                                                                      ----------------------    ----------------------
                                                                      ----------------------    ----------------------
</TABLE>
    The accompanying notes are an integral part of these financial statements.

                                       1
<PAGE>

                          ALADDIN GAMING HOLDINGS, LLC
                                AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)

                      CONSOLIDATED STATEMENTS OF OPERATIONS
 FOR THE THREE MONTHS ENDED MARCH 31, 1999 AND 1998 AND FOR THE PERIOD
            FROM INCEPTION (DECEMBER 1, 1997) THROUGH MARCH 31, 1999
                                 (IN THOUSANDS)
<TABLE>
<CAPTION>
                                                                                                      For the period
                                                                                                        December 1,
                                                                                                           1997
                                                             For the three         For the three         (inception)
                                                              months ended          months ended           through
                                                             March 31, 1999        March 31, 1998       March 31, 1999
                                                              (unaudited)          (unaudited)           (unaudited)
                                                           ----------------     -----------------    ----------------
<S>                                                         <C>                  <C>                  <C>
Pre-opening costs                                                $   2,297            $   11,463           $   27,034

Other (income) expense:
       Interest income                                              (2,548)               (1,585)             (15,020)
       Interest expense                                             12,891                 4,388               51,307
       Less:  Interest capitalized                                 (4,764)                 (544)              (12,977)
                                                           ----------------     -----------------    -----------------
              Total other (income) expense                           5,579                 2,259               23,310
                                                           ----------------     -----------------    -----------------

Net loss accumulated during the development stage                $   7,876            $   13,722           $   50,344
                                                           ----------------     -----------------    -----------------
                                                           ----------------     -----------------    -----------------
</TABLE>



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

                                        2

<PAGE>

                          ALADDIN GAMING HOLDINGS, LLC
                                AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)

                   CONSOLIDATED STATEMENTS OF MEMBERS' EQUITY
                FOR THE PERIOD FROM INCEPTION (DECEMBER 1, 1997)
                             THROUGH MARCH 31, 1999
                                 (IN THOUSANDS)

                                   (UNAUDITED)
<TABLE>
<CAPTION>
                                                             Aladdin         London
                                            Sommer           Gaming           Clubs
                                          Enterprises,     Enterprises,      Nevada,
                                              LLC              LLC            Inc.           GAI, LLC        Total
                                          ------------     ------------    ------------     -----------    -----------
<S>                                       <C>              <C>              <C>              <C>           <C>
BALANCE, DECEMBER 1, 1997                  $       -          $     -         $      -       $      -      $        -

Members' contribution                              1                -                -               2              3
                                          ------------     ------------    ------------     -----------    -----------

BALANCE, DECEMBER 31, 1997                         1                -                -               2              3

Net loss for the period                      (19,960)          (10,617)        (10,617)         (1,274)       (42,468)

Members' contributions                       (43,317)           28,247          50,000               -         30,930

Members' equity costs                         (1,093)             (581)           (581)            (70)        (2,325)
                                          ------------     ------------    ------------     -----------    -----------

BALANCE, DECEMBER 31, 1998                   (68,369)           17,049          38,802          (1,342)       (13,860)

Net loss for the period                       (3,702)           (1,969)         (1,969)           (236)        (7,876)
                                          ------------     ------------    ------------     -----------    -----------

BALANCE, MARCH 31, 1999                    $ (72,071)         $ 15,080        $ 36,833       $ (1,578)     $ (21,736)
                                          ------------     ------------    ------------     -----------    -----------
                                          ------------     ------------    ------------     -----------    -----------
</TABLE>





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

                                        3

<PAGE>

                          ALADDIN GAMING HOLDINGS, LLC
                                AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
 FOR THE THREE MONTHS ENDED MARCH 31, 1999 AND 1998 AND FOR THE PERIOD
            FROM INCEPTION (DECEMBER 1, 1997) THROUGH MARCH 31, 1999
                                 (IN THOUSANDS)
<TABLE>
<CAPTION>
                                                                                                    For the period
                                                                                                   December 1, 1997
                                                   For the three            For the three             (inception)
                                                   months ended             months ended           through March 31,
                                                   March 31, 1999           March 31, 1998               1999
                                                    (unaudited)              (unaudited)              (unaudited)
                                                 -------------------    ----------------------    --------------------
<S>                                              <C>                    <C>                       <C>
Cash used in operating activities                          $   (303)               $  (9,300)             $  (20,962)
                                                 -------------------    ----------------------    --------------------

Cash flows from investing activities:
       Payments for construction in
       progress, furniture, equipment and
       capitalized interest                                 (30,865)                  (7,037)               (105,534)
     Decrease (increase) in restricted cash                  29,947                 (308,293)               (198,036)
                                                 -------------------    ----------------------    --------------------
Net cash used in investing activities                          (918)                (315,330)               (303,570)
                                                 -------------------    ----------------------    --------------------

Cash flows from financing activities:
       Proceeds from issuance of notes                           -                   100,047                 100,047
       Proceeds from long-term debt                              -                   274,000                 274,000
       Repayment of long-term debt                               -                       (45)                   (547)
       Debt issuance costs                                       -                   (37,170)                (37,146)
       Members' contributions                                    -                    65,000                  65,003
       Payment of debt on contributed land                       -                   (74,477)                (74,477)
       Members' equity costs                                     -                    (2,325)                 (2,325)
       Payable to related parties                               (1)                        -                       -
       Advances to purchase membership
         interests                                               -                         -                       3
                                                 -------------------    ----------------------    --------------------
Net cash provided by financing activities                       (1)                  325,030                 324,558
                                                 -------------------    ----------------------    --------------------
Net (decrease)/increase in cash                             (1,222)                      400                      26
Cash and cash equivalents at the beginning
   of the period                                             1,248                         7                      26
                                                 -------------------    ----------------------    --------------------
                                                 -------------------    ----------------------    --------------------
Cash and cash equivalents at the end of the
   period                                                  $    26                 $     407              $       26
                                                 -------------------    ----------------------    --------------------
                                                 -------------------    ----------------------    --------------------
</TABLE>

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


                                        4


<PAGE>


                          ALADDIN GAMING HOLDINGS, LLC
                                AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)

                     CONSOLIDATED STATEMENTS OF CASH FLOWS 
 FOR THE THREE MONTHS ENDED MARCH 31, 1999 AND 1998 AND FOR THE PERIOD
 FROM INCEPTION (DECEMBER 1, 1997) THROUGH MARCH 31, 1999 -- (CONTINUED)
                                 (IN THOUSANDS)

<TABLE>
<S>                                              <C>                    <C>                       <C>
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
   INFORMATION:

Cash paid for interest, net of amount
   capitalized                                             $   832                 $     365              $   12,164
Non-cash investing and financing activities:
   Members' contributions - book value
       Land                                                      -                    33,407                  33,407
       Construction in progress                                  -                     7,000                   7,000
   Equipment acquired equal to assumption
     of debt                                                     -                       547                     547
   Increase in construction payables                        11,182                         -                  11,182
</TABLE>


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

                                        5

<PAGE>



                          ALADDIN GAMING HOLDINGS, LLC
                                AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 1999

1.       BUSINESS DESCRIPTION AND BASIS OF PRESENTATION

         Aladdin Gaming Holdings, LLC, a Nevada limited liability company 
("Gaming Holdings"), through its wholly-owned subsidiary Aladdin Gaming, LLC 
("Gaming"), is developing, constructing and will operate a new hotel and 
casino, the Aladdin Hotel and Casino ("Aladdin"), 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.

         The consolidated financial statements include the accounts of Gaming 
Holdings and all of its subsidiaries. This information should be read in 
conjunction with the financial statements set forth in Gaming Holdings' 
Annual Report on Form 10-K for the year ended December 31, 1998 and the Form 
8-K, dated April 27, 1999.

         Accounting policies utilized in the preparation of the financial 
information herein presented are the same as set forth in Gaming Holdings' 
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.       AMENDMENTS TO THE CREDIT AGREEMENT

         On April 2, 1999, pursuant to the Bank Completion Guaranty, London 
Clubs International, plc ("London Clubs") funded approximately $18.5 million 
in order to bring the Main Project Budget "In Balance" (as defined in the 
Credit Agreement) and the Lenders funded Gaming's March 1999 funding draw 
("March Draw") under the Credit Agreement. Upon receipt of the March Draw on 
April 2, 1999, Gaming immediately paid the outstanding March 1999 payment to 
the Design/Builder.

         On April 16, 1999, the Lenders under the Credit Agreement approved, 
effective as of March 10, 1999, the Second Amendment to the Credit Agreement, 
which cured or waived the events of default discussed in Gaming Holdings' 
Form 10-K for the year ended December 31, 1998. Specifically, the Second 
Amendment to the Credit Agreement provides: (i) the indebtedness incurred in 
connection with the Aladdin Music Project has been paid by or on behalf of 
Aladdin Music and this event of default has now been waived by the Lenders; 
(ii) a capital contribution in the amount of approximately $18.5 million has 
been made to bring the Main Project Budget "In Balance;" (iii) the 
approximately $6.5 million of letters of credit, which had been previously 
posted by London Clubs and the Trust Under Article Sixth u/w/o Sigmund Sommer 
("Sommer Trust") to fund a


                                       6

<PAGE>

prior increase in the Main Project Budget (and resulting imbalance), have 
been drawn and the proceeds deposited in Gaming's guaranty deposit account; 
(iv) amending certain definitions of the Credit Agreement, including, 
"Available Funds," "Indebtedness," and "Realized Savings;" (v) any costs in 
excess of $36 million for completing the carpark associated with the project 
will be funded by the Sommer Trust and London Clubs; (vi) requiring that 
Gaming maintain a minimum "Net Worth" at the close of each calendar month, 
until the end of the fiscal quarter during which the project opens (and then 
reverting to the Credit Agreement's requirement to maintain the minimum Net 
Worth on a fiscal quarterly basis thereafter), of not less than $100 million 
plus 85% of positive Net Income (as defined in the Credit Agreement); and 
(vii) other technical amendments to the Credit Agreement.

3.       INCOME TAXES

         Gaming Holdings will file federal information tax returns only. Each 
member reports taxable income or loss on their respective tax returns.

4.       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, 
which becomes effective in the Year 2000, but may be adopted earlier, 
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. Gaming Holdings is in the process of 
analyzing SFAS No. 133 and the impact on its consolidated financial position 
and results of operations.

                                        7

<PAGE>

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

         The following discussion should be read in conjunction with 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 Holdings, LLC, a Nevada limited liability company 
("Gaming Holdings"), was established on December 1, 1997. Gaming Holdings was 
initially owned by Aladdin Gaming Enterprises, Inc., a Nevada corporation 
(25%), Sommer Enterprises, LLC, a Nevada limited liability company (72%), and 
GAI, LLC, a Nevada limited liability company (3%). On February 26, 1998, 
London Clubs International, plc ("London Clubs"), through its subsidiary 
London Clubs Nevada, Inc. ("LCNI"), contributed $50.0 million for a 25% 
interest of Gaming Holdings common membership interests ("Gaming Holdings 
Common Membership Interests"). Sommer Enterprises, LLC ("Sommer Enterprises") 
contributed a portion of land for Gaming Holdings Common Membership 
Interests. Aladdin Gaming Enterprises, Inc. ("Gaming Enterprises"), which is 
owned 100% by Sommer Enterprises, contributed a portion of land, $7 million 
of predevelopment costs and $15 million in cash for Gaming Holdings Common 
Membership Interests. After the additional contributions, Sommer Enterprises, 
LLC owns 47% of Gaming Holdings, LCNI owns 25% of Gaming Holdings, Gaming 
Enterprises owns 25% of Gaming Holdings and GAI, LLC owns 3% of Gaming 
Holdings. On November 30, 1998, the Trust Under Article Sixth u/w/o Sigmund 
Sommer ("Sommer Trust") and its affiliates agreed that they shall vote their 
respective Gaming Holdings Common Membership Interests and cause Gaming 
Enterprises to vote its Gaming Holdings Common Membership Interests so that 
(taking into account Gaming Holdings Common Membership Interests held by 
London Clubs or its affiliates) London Clubs controls fifty percent of the 
voting power of Gaming Holdings.

         Aladdin Holdings, LLC, a Delaware limited liability company ("AHL"), 
indirectly holds a majority interest in Gaming Holdings. The members of AHL 
are the Sommer Trust, which holds a 95% interest in AHL, 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.

         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"). 
Aladdin Capital Corporation ("Capital") is a wholly owned subsidiary of 
Gaming Holdings and was incorporated solely for the purpose of serving as a 
co-issuer of the 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, a Nevada limited liability company ("Aladdin Music"). 
Gaming Holdings and its subsidiaries are collectively referred to herein as 
"Company."

         The operations of the Company have been limited to the design, 
development, financing and construction of a new Aladdin Hotel and Casino 
("Aladdin"). The Aladdin will be the centerpiece of an approximately 35-acre 
world-class 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 2,600 rooms ("Hotel"), an 
approximately 116,000 square foot casino ("Casino"), an approximately 
1,400-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 

                                       8

<PAGE>

level of the Casino will be a 15,000 square foot luxurious gaming section 
("The London Club") 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 the Company and Aladdin Music is currently seeking a joint 
venture partner and financing for the Aladdin Music Project. The Company 
believes that the completion of the Aladdin will occur during the second 
quarter of the year 2000.

RESULTS OF OPERATIONS

         The Company is in the development stage and has no significant 
operations to date. The Company has capitalized all qualifying construction 
costs. Accordingly, the Company 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 qualifying assets. Capitalized costs 
include approximately $2.3 million related to the Aladdin Music Project for 
necessary predevelopment costs and expenses of the Aladdin Music Project. The 
Company's operating expenses primarily have consisted of interest, 
amortization costs and expenses related to the Notes and pre-opening costs.

         The Company anticipates that its results of operations from 
inception to the opening of the Aladdin will be 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 the Company are subject to significant business, economic, 
regulatory and competitive uncertainties and contingencies, many of which are 
beyond the Company's control. While the Company believes that the Aladdin 
will be able to attract a sufficient number of patrons and achieve the level 
of activity necessary to permit the Company to meet its debt payment 
obligations, including the Notes and other indebtedness, and its other 
obligations, there can be no assurance with respect thereto.

         The Company recorded a net loss of approximately $7.9 million for 
the three months ended March 31, 1999 as compared to a net loss of 
approximately $13.7 million for the three month period ended March 31, 1998. 
The cumulative loss for the period of inception (December 1, 1997) to March 
31, 1999 was approximately $50.3 million. The Company had no operations for 
the period of inception (December 1, 1997) to March 31, 1999. The losses were 
due to the pre-opening costs, interest expense, amortization costs and 
expenses related to the Notes. The pre-opening costs include approximately 
$.5 million related to the Aladdin Music Project.

MATERIAL CHANGES IN FINANCIAL CONDITION

         Through March 31, 1999, approximately $241.0 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 the Company, approximately $105.5 million in construction, 
furniture, fixtures and equipment, and capitalized interest, approximately 
$39.5 million in debt issuance and member equity costs, and approximately 
$21.5 million in pre-opening costs, net interest expense, and other current 
assets.

                                        9

<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 the Company from the Notes were approximately 
$115.0 million. For further details on the Notes, including the covenants, 
restrictions and limitations on the Company pursuant to the Notes Indenture, 
see Exhibit 4.1 to the Company's Form 10-K for the year ended December 31, 
1998.

         Gaming has a $410 million Credit Agreement ("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 three separate term loans. Term 
A Loan comprises a term loan of $136 million and matures seven years after 
the initial borrowing date. Term B Loan comprises a term loan of $114 million 
and matures eight and one-half years after the initial borrowing date. Term C 
Loan comprises a term loan of $160 million and matures ten years after the 
initial borrowing date. As of March 31, 1999, approximately $69.4 million of 
the Term B Loan proceeds, plus accrued interest, and approximately $115.4 
million of the Term C Loan proceeds, plus accrued interest, is available. The 
Term A Loan has not been funded. For further details on the Bank Credit 
Facility, including the covenants, restrictions and limitations on Gaming 
pursuant to the Bank Credit Facility, see Exhibit 10.7 to the Company's Form 
10-K for the year ended December 31, 1998 and Exhibit 10.01 to the Company's 
Form 8-K, dated April 27, 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 10.35 to the Company's Form 10-K for the year ended December 31, 1998.

         Upon the later of (a) the transfer of the real property under the 
Mall Project by the Company 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. 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.

         On April 5, 1999, effective as of March 10, 1999, the Sommer Trust, 
London Clubs, Bazaar Holdings and The Bank of Nova Scotia, as administrative 
agent for the Lenders, entered into the First Amendment to the Completion 
Guaranty, which requires the Sommer Trust, London Clubs and Bazaar Holdings 
to guarantee Gaming's minimum net worth as required by the amended Credit 
Agreement. Gaming Holdings


                                        10

<PAGE>

estimates, and has advised the Sommer Trust, London Clubs and Bazaar Holdings 
that additional capital contributions of approximately $33 million will be 
required to maintain such minimum net worth prior to the opening of the 
Aladdin.

         In connection with the development of the Mall Project, Aladdin 
Bazaar will reimburse the Company approximately $14.2 million for the 
construction of certain areas shared by the Aladdin and the Mall Project and 
the facade to the Aladdin. 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 the Company. In addition, the 
Company is obligated to pay to Aladdin Bazaar: (i) a $3.2 million fee per 
year for a term of 99 years, which is adjusted annually pursuant to a 
consumer price index-based formula, for usage of the Carpark; and (ii) the 
Company's proportionate share of the operating costs associated with the 
Carpark and other common areas.

         It is anticipated that Aladdin Music will carry out an approximately 
$8 million renovation to the Theater. However, because Gaming has an 
obligation to have the Theater renovated and operational by the opening of 
the Aladdin, to the extent a joint venture partner and financing have not 
been secured for the Aladdin Music Project in time to meet this obligation, 
Gaming will be required to renovate the Theater. Under the Credit Agreement, 
$8 million has been designated for the Theater renovation.

         The Company 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 the Aladdin, assuming no future delays or additional 
construction cost overruns, which: (i) are not covered by the $31.8 million 
contingency funds, of which amount $6.8 million is provided for under the 
Design/Build Contract and $25 million is provided for under the Credit 
Agreement; or (ii) Fluor Corporation and/or its subsidiary Fluor Daniel, Inc. 
are not responsible for pursuant to the Fluor Guaranty and the Design/Build 
Contract, respectively. As of March 31, 1999, the Company has utilized 
approximately $10.1 million of the $31.8 million contingency. However, there 
can be no assurance that the Funding Transactions will be sufficient for the 
development, construction and commencement of the Aladdin.

         Following the commencement of operations of the Aladdin, the Company 
expects to fund its operating, debt service and capital needs, as currently 
contemplated, with $15 million of working capital from the Funding 
Transactions and operating cash flows. Although no additional financing is 
contemplated, the Company 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 the Company, or that, if 
available, the financing will be on terms favorable to the Company. There can 
also be no assurance that estimates by the Company 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.


                                        11

<PAGE>

CERTAIN FORWARD LOOKING STATEMENTS

         Certain information included in this Form 10-Q and other materials 
filed or to be filed by the Company with the SEC (as well as information 
included in oral statements or other written statements made, or to be made, 
by the Company) 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 
and budgets), 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, the 
Company. 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

         As of March 31, 1999, there have been no material changes in the 
information which the Company reported in its Form 10-K for the year ended 
December 31, 1999, regarding its market risk.

                                        12


<PAGE>

PART II  OTHER INFORMATION

ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K
<TABLE>
<S>      <C>
(a)      Exhibits

         10.01    Amendment No. 2 to the Employment Agreement between Aladdin Gaming,
                  LLC, Aladdin Gaming Holdings,  LLC and James H. McKennon, dated
                  January 27, 1999.

         10.02    Amendment No. 2 to the Employment Agreement between Aladdin Gaming,
                  LLC, Aladdin Gaming Holdings, LLC and Cornelius T. Klerk, dated
                  January 27, 1999.

         10.03    Amendment No. 2 to the Employment Agreement between Aladdin Gaming,
                  LLC, Aladdin Gaming Holdings, LLC and Jose A. Rueda, dated
                  January 27, 1999.

         10.04    Amendment No. 2 to the Employment Agreement between Aladdin Gaming,
                  LLC, Aladdin Gaming Holdings, LLC and Lee Galati, dated
                  January 27, 1999.

         27.01    Financial Data Schedule.

(b)      Reports on Form 8-K

</TABLE>

         On April 28, 1999, the Company filed a Form 8-K, dated April 27, 
1999, with the United States Securities and Exchange Commission. The Form 8-K 
reported on certain amendments to the Company's credit agreement and attached 
revised consolidated financial statements for Aladdin Gaming Holdings, LLC 
and its subsidiaries.

                                       13
<PAGE>

                                   SIGNATURES

         Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrants have duly caused this report to be signed on their behalf by the
undersigned thereunto duly authorized.


                   ALADDIN GAMING HOLDINGS, LLC


May 13, 1999       By:   /s/ Richard J. Goeglein
                         ---------------------------------------------------
                         Richard J. Goeglein, President and Chief
                         Executive Officer


May 13, 1999       By:   /s/ Cornelius T. Klerk
                         ---------------------------------------------------
                         Cornelius T. Klerk, Senior Vice President and
                         Chief Financial Officer





                   ALADDIN CAPITAL CORP.


May 13, 1999       By:   /s/ Richard J. Goeglein
                         ---------------------------------------------------
                         Richard J. Goeglein, Chief Executive Officer


May 13, 1999       By:   /s/ Cornelius T. Klerk
                         ---------------------------------------------------
                         Cornelius T. Klerk, Senior Vice President and
                         Chief Financial Officer


                                        14

<PAGE>

                                  EXHIBIT INDEX
<TABLE>

                                                                   PAGE NO.
                                                                   --------
<S>            <C>                                                 <C>
EXHIBIT NO.    DESCRIPTION
10.01          Amendment No. 2 to the Employment Agreement between 
               Aladdin Gaming, LLC, Aladdin Gaming Holdings, LLC 
               and James H. McKennon, dated January 27, 1999.

10.02          Amendment No. 2 to the Employment Agreement between 
               Aladdin Gaming, LLC, Aladdin Gaming Holdings, LLC 
               and Cornelius T. Klerk, dated January 27, 1999

10.03          Amendment No. 2 to the Employment Agreement between 
               Aladdin Gaming, LLC, Aladdin Gaming Holdings, LLC 
               and Jose A. Rueda, dated January 27, 1999

10.04          Amendment No. 2 to the Employment Agreement between 
               Aladdin Gaming, LLC, Aladdin Gaming Holdings, LLC 
               and Lee Galati, dated January 27, 1999

27.01          Financial Data Schedule
</TABLE>

                                         15