<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:        SEPTEMBER 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)

3667 Las Vegas Boulevard South, Las Vegas, Nevada                   89109
----------------------------------------------------------    ------------------
(Address of principal executive offices)                         (Zip Code)

                                 (702) 785-5555
--------------------------------------------------------------------------------
              (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 September 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.

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

   Item 1.          Financial Statements

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

                    Statements of Operations
                      For the three and nine months ended September 30, 2000 and 1999................       2

                    Statements of Cash Flows
                      For the nine months ended September 30, 2000 and 1999..........................       3

                    Notes to the Consolidated Financial Statements...................................       4

   Item 2.          Management's Discussion and Analysis of Financial Condition and
                      Results of Operations..........................................................       6

   Item 3.          Quantitative and Qualitative Disclosures About Market Risk.......................       9

PART II             OTHER INFORMATION

   Item 1.          Legal Proceedings................................................................      11

   Item 6.          Exhibits and Reports on Form 8-K.................................................      11

Signatures          .................................................................................      12

Exhibit Index       .................................................................................      13
</TABLE>


                                       i
<PAGE>

PART I            FINANCIAL INFORMATION

ITEM 1            FINANCIAL STATEMENTS

                        ALADDIN GAMING ENTERPRISES, INC.
                                 BALANCE SHEETS
                 AS OF SEPTEMBER 30, 2000 AND DECEMBER 31, 1999
                                 (In Thousands)
<TABLE>
<CAPTION>
                                                                       SEPTEMBER 30, 2000       DECEMBER 31, 1999
                                                                      ----------------------    ----------------------
                                                                           (unaudited)
<S>                                                                    <C>                      <C>
                             ASSETS

Cash                                                                                    $ 1                       $ 1
Investment in unconsolidated affiliate                                                   --                     8,562
                                                                      ----------------------    ----------------------
                                                                                          1                     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 September 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 September 30, 2000 and December 31, 1999.                                         13,247                    13,247

Additional paid-in capital                                                           14,420                    14,420

Deficit accumulated during the development stage                                    (27,672)                  (19,108)
                                                                      ----------------------    ----------------------
                                                                                          1                     8,563
                                                                      ======================    ======================
</TABLE>













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


                                       1
<PAGE>

                        ALADDIN GAMING ENTERPRISES, INC.
                            STATEMENTS OF OPERATIONS
         FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999

                      (In Thousands, except per share data)
<TABLE>
<CAPTION>
                                                           FOR THE THREE      FOR THE THREE        FOR THE NINE       FOR THE NINE
                                                            MONTHS ENDED       MONTHS ENDED        MONTHS ENDED       MONTHS ENDED
                                                           SEPTEMBER 30,      SEPTEMBER 30,       SEPTEMBER 30,      SEPTEMBER 30,
                                                                    2000               1999                2000               1999
                                                             (UNAUDITED)       ( UNAUDITED)         (UNAUDITED)        (UNAUDITED)
                                                       ------------------   ----------------   -----------------   ----------------
<S>                                                    <C>                  <C>                <C>                 <C>
Other (income) expense                                             $ -                  $ -               $ 1                  $ 1

Equity in loss of unconsolidated affiliate                       4,715                1,882             8,563                5,730

                                                       ------------------   ----------------   -----------------   ----------------
Net loss accumulated during the development stage                4,715                1,882             8,564                5,731
                                                       ------------------   ----------------   -----------------   ----------------

Basic and diluted loss per share                               $ (1.42)              $ (.57)          $ (2.58)             $ (1.72)

Shares used in per share calculation                         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.

                            STATEMENTS OF CASH FLOWS
              FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
                                 (In Thousands)
<TABLE>
<CAPTION>
                                                    FOR THE NINE             FOR THE NINE
                                                    MONTHS ENDED             MONTHS ENDED
                                                 SEPTEMBER 30 2000        SEPTEMBER 30, 1999
                                                    (UNAUDITED)              (UNAUDITED)
                                                 -------------------    ----------------------
<S>                                              <C>                    <C>
Cash flows used for investing activities:
Investment in unconsolidated affiliate                            -                         -

Cash flows from financing activities:
Proceeds from the issuance of stock                               -                         -
Proceeds from the issuance of warrants                            -                         -
                                                 -------------------    ----------------------

Increase in cash and cash equivalents                             -                         -

Cash and cash equivalents at beginning of
period                                                            1                         1
                                                 -------------------    ----------------------
Cash and cash equivalents at end of period                      $ 1                       $ 1
                                                 ===================    ======================
</TABLE>

















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


                                       3
<PAGE>

                        ALADDIN GAMING ENTERPRISES, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 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. However, Enterprises has discontinued applying the
equity method as the investment in Gaming Holdings has been reduced to zero.
Enterprises will resume applying the equity method after cumulative net
income exceeds the unrecognized losses.

         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 developed,
constructed and operates 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 is located at the
center of Las Vegas Boulevard. Gaming Holdings has evaluated its options in
connection with an approximately 5-acre parcel of land which evaluation
included: (a) seeking a joint venture partner and financing the Aladdin Music
Project; or (b) selling the parcel to a third party. In October, 2000, Gaming
entered into a non-binding term sheet to sell the parcel to a third party who
plans on developing a 350-room five-star non-gaming hotel as well as an
approximately 800,000-square-foot luxury condominium development.

         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 and the Form 10-Q, for the quarters ended March 31 and
June 30, 2000.

         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.


                                       4
<PAGE>

         There was no income tax expense or benefit recorded for the period
from January 1, 2000 through September 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.

4.       Other

         As of November 9, 2000, the Company had unrestricted funds of
approximately $10.3 million.  The estimated next twelve months of principal
and interest payments pursuant to the Bank Credit Facility are as follows:

<TABLE>
<S>                             <C>              <C>
               12/29/00         Principal        $ 5.0 million
                 2/1/01          Interest         11.7 million
                3/29/01         Principal          5.0 million
                 5/1/01          Interest         11.3 million
                6/29/01         Principal          5.0 million
                 8/1/01          Interest         11.0 million
                9/28/01         Principal          6.0 million

                  TOTAL                          $55.0 million
                                                 =============
</TABLE>

         Cash on hand and projected internally generated funds may not be
sufficient to fund the Company's operations and future principal and interest
payments on the Company's debt and the Company's planned capital
improvements. The Company is seeking, to the extent permitted under the Notes
Indenture and the terms of the Bank Credit Facility and the FF&E financing,
additional sources of financing, if needed, through additional bank borrowing
or debt or equity financing and/or contributions by London Clubs and the
Sommer Trust pursuant to the Keep-Well Agreement and/or Completion Guaranty,
discussed below. However, there can be no assurance that the Company will be
able to secure alternative sources of financing, or if able to do so, that
such financing will be sufficient to meet the Company's anticipated needs.

         London Clubs, the Sommer Trust, and Aladdin Bazaar Holdings, LLC
("Bazaar Holdings"), which is owned 99% by the Sommer Trust, and Jack and
Laura Sommer, individually, 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. For payments made pursuant to the Bank
Completion Guaranty, Gaming Holdings issues (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. There can be no assurance that the parties to either
the Bank Completion Guaranty or the Noteholder Completion Guaranty will be
able to make such payments to the Company if required pursuant to these
agreements.

         AHL, Aladdin Bazaar Holdings, LLC ("Bazaar Holdings"), London Clubs
and Sommer Trust have entered into the Keep-Well Agreement in favor of the
Lenders under the Gaming Bank

                                      5
<PAGE>

Credit Facility. The Keep-Well Agreement is the joint and several agreement
of the parties to make certain quarterly cash equity contributions to the
Company if the Company fails to comply with the Minimum Fixed Charge Coverage
Ratio set forth in the Bank Credit Facility, but in no event shall the
aggregate cash equity contributions required to be made in any fiscal year of
the Company exceed $30.0 million and such obligations continue until the
satisfaction of certain conditions. In exchange for such cash equity
contributions, the Company will issue Series A or B Preferred Membership
Interests. The Company's Operating Agreement makes provision for adjustment
of the proportion of Gaming Holdings' Common Membership Interests held by the
Sommer Trust and London Clubs for circumstances where the portion of payment
made by either party is in excess of 25% with respect to London Clubs and 75%
with respect to Sommer Enterprises. There can be no assurance that AHL,
Bazaar Holdings, Sommer Trust and/or London Clubs will be able to make such
cash equity contributions to the Company if required pursuant to the
Keep-Well Agreement.

                                       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 (and including its subsidiaries,
"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 has no business or activities other than its investment
in Gaming Holdings, which 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").

         Until August, 2000, the operations of Gaming Holdings have been
primarily limited to the design, development, financing and construction of
the new Aladdin Resort and Casino ("Aladdin"), which opened August 18, 2000.
The Aladdin is the centerpiece of an approximately 35-acre resort, casino and
entertainment complex ("Complex"). The Aladdin includes a luxury-themed hotel
of approximately 2,567 rooms ("Hotel"), an approximately 116,000 square foot
casino ("Casino"), five restaurants and one leased restaurant which began
operations on November 4, 2000. As of November 6, 2000, the Casino's main
gaming area contains approximately 2,571 slot machines, 68 table games, keno
and a race and sports book facility. Included on a separate level of the
Casino is a 15,000 square foot luxurious gaming section ("The London Club at
Aladdin") that contains an additional 28 high denomination table games and
approximately 80 high denomination slot machines. The Complex comprises: (i)
the Aladdin; (ii) the themed entertainment shopping mall with approximately
496,000 square feet of retail space ("Desert Passage"); (iii) the 7,000-seat
Theater of the Performing Arts ("Theater"); and (iv) 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.

         Gaming Holdings has evaluated its options in connection with an
approximately 5-acre parcel of land which evaluation included: (a) seeking a
joint venture partner and financing for a second hotel casino; or (b)
selling the parcel to a third party. In October, 2000, Gaming entered into a
non-binding term sheet to sell the parcel to a third party who plans on
developing a 350-room five-star non-gaming hotel as well as an approximately
800,000-square-foot luxury condominium development. There can be no
assurance that Gaming will reach definitive agreement on the terms of such sale.
In October, 2000, Gaming entered into a fifteen-year lease with an


                                       7
<PAGE>

option to renew for an additional five years with a subsidiary of Steiner
Leisure Limited ("SLL"), wherein SLL shall construct, equip and operate an
approximately 32,000 square foot spa and fitness center at the Aladdin.

RESULTS OF OPERATIONS

         Enterprises has no business or activities or material assets other than
its investment in Gaming Holdings. 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.

         Until August 18, 2000, Gaming Holdings was in the development stage and
did not have any historical operating income as there were no operating
revenues. Gaming Holdings' operating expenses primarily have consisted of
interest, amortization costs, expenses related to the Notes and pre-opening
costs. Due to the short operating period, there will not be a comparative
discussion of prior periods included in this Form 10-Q. Historical results may
not be indicative of future operating results.

THREE MONTHS ENDED SEPTEMBER 30, 2000

         Gaming Holdings operated forty-four days during the third quarter of
2000 producing gross revenues of $40.6 million. Casino revenue (which includes
both the main casino and The London Club at Aladdin) represented 48% of gross
revenue, hotel 28%, food and beverage 21%, and entertainment and other revenue
4%. The net loss for the quarter was $40.2 million inclusive of pre-opening
expenses totaling $19.2 million.

REVENUES

         The Casino revenues (inclusive of The London Club at Aladdin) of $19.4
million were derived $11.0 million from slot operations, $8.2 million from table
games and $.2 million from other sources of gaming revenue. The London Club at
Aladdin produced $4.0 million of casino revenues, $3.1 million from table games
and $.9 million from slot operations.

         The overall table games win percentage was 15.7% for the forty-four
day period while the average daily win per table game was $1,658. This trend
improved during October, 2000, as the table games win percentage increased to
approximately 34% and the average daily win per table game increased to
approximately $5,200. The London Club at Aladdin produced table game revenue
of $10.9 million while the main casino provided $4.9 million during October,
2000. The average daily slot win per unit was $90 during the forty-four day
period. During October, 2000, the average daily slot win per unit decreased
to $80.

         Gaming Holdings has implemented programs and promotions aimed at
improving slot revenues and increasing the size of its database. The slot
floor layout is also in the process of being redesigned with the intention to
enhance traffic flow and customer satisfaction. Management anticipates the
number of slot machines to be reduced from approximately 2,800 to 2,400. At
2,800 slot machines, Gaming Holdings had a substantially higher ratio of slot
machines to hotel rooms than its competition.

         In an effort to capitalize on the unique gaming and dining facilities
located within The London Club at Aladdin, Gaming Holdings has aggressively
pursued the premium customer markets both internationally and domestically.
Gaming Holdings offers competitive incentives to specific premium customers in
their markets.


                                       8
<PAGE>

         Gaming Holdings experienced hotel occupancy of 77% at an average
daily rate of $130 during the forty-four day period. The Company did not book
any substantial convention groups until October, 2000. In addition, the
property experienced normal issues relating to the initial occupancy of the
facilities. These issues were resolved during September, 2000. Gaming
Holdings believes the occupancy and average daily rate were negatively
impacted by the lack of free and independent traveler demand and the lack of
booking convention room occupancy. This trend improved significantly during
October, 2000, as hotel occupancy increased to 94% and the average daily rate
increased to approximately $135. The Company has experienced an improvement
in convention occupancy, free and independent traveler demand and casino room
night bookings beginning the first quarter of 2001.

OTHER FACTORS AFFECTING EARNINGS

         Gaming Holdings incurred pre-opening expenses of $19.2 million during
the first forty-four days of operations. Gaming Holdings expenses pre-opening
costs as incurred.

         Gaming Holdings has implemented profit enhancement programs focusing on
the generation of additional revenues while improving operational efficiency.
The full-time equivalent number of employees has decreased from approximately
4,500 at opening to approximately 3,500 as of November 5, 2000. There can be no
assurances that the measures implemented will significantly improve Gaming
Holdings' results of operations.

NINE MONTHS ENDED SEPTEMBER 30, 2000

         As indicated above, Gaming Holdings operated forty-four days during the
entire nine month period. Accordingly, operating revenues were the same as
indicated for the three months ended and the net loss was $52.6 million,
inclusive of pre-opening expenses totaling $31.6 million.

LIQUIDITY AND CAPITAL RESOURCES

         For the nine months ended September 30, 2000, approximately $356.1
million had been expended primarily on the development of the Aladdin, of
which approximately $332.6 million has been expended in construction,
furniture, fixtures and equipment, and capitalized interest, approximately
$4.1 million in debt issuance and member equity costs, and approximately
$19.4 million in pre-opening costs, net interest expense, and other current
assets.

         As of November 9, 2000, Gaming Holdings had unrestricted funds
available of $10.3 million.

         The estimated next twelve months of principal and interest payments
pursuant to the Bank Credit Facility are as follows:

<TABLE>
<S>                           <C>               <C>
             12/29/00         Principal         $ 5.0 million
               2/1/01          Interest          11.7 million
              3/29/01         Principal           5.0 million
               5/1/01          Interest          11.3 million
              6/29/01         Principal           5.0 million
               8/1/01          Interest          11.0 million
              9/28/01         Principal           6.0 million

                TOTAL                           $55.0 million
                                                =============
</TABLE>


         Cash on hand and projected internally generated funds may not be
sufficient to fund Gaming Holdings' operations and future principal and
interest payments on Gaming Holdings' debt and Gaming Holdings' planned
capital improvements. Gaming Holdings is seeking, to the extent permitted
under the Notes Indenture and the terms of the Bank Credit Facility and the
FF&E financing, additional sources of financing, if needed, through
additional bank borrowing or debt or equity financing and/or contributions by
London Clubs and the Sommer Trust pursuant to the Keep-Well Agreement and/or
Completion Guaranty, discussed below. However, there can be no assurance that
Gaming Holdings will be able to secure alternative sources of financing, or
if able to do so, that such financing will be sufficient to meet Gaming
Holdings' anticipated needs.

         London Clubs, the Sommer Trust, and Aladdin Bazaar Holdings, LLC
("Bazaar Holdings"), which is owned 99% by the Sommer Trust, and Jack and
Laura Sommer, individually, 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. For payments made pursuant to the Bank Completion
Guaranty, Gaming Holdings issues (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. There can be no assurance that the parties to either the Bank
Completion Guaranty or the Noteholder Completion Guaranty will be able to
make such payments to the Company if required pursuant to these agreements.

         AHL, Bazaar Holdings, London Clubs and Sommer Trust have entered
into the Keep-Well Agreement in favor of the Lenders under the Gaming Bank
Credit Facility. The Keep-Well Agreement is the joint and several agreement
of the parties to make certain quarterly cash equity contributions to Gaming
Holdings if Gaming Holdings fails to comply with the Minimum Fixed Charge
Coverage Ratio set forth in the Bank Credit Facility, but in no event shall
the aggregate cash equity

                                       9
<PAGE>

contributions required to be made in any fiscal year of Gaming Holdings exceed
$30.0 million and such obligations continue until the satisfaction of certain
conditions. In exchange for such cash equity contributions, Gaming Holdings
will issue Series A or B Preferred Membership Interests. Gaming Holdings'
Operating Agreement makes provision for adjustment of the proportion of Gaming
Holdings' Common Membership Interests held by the Sommer Trust and London Clubs
for circumstances where the portion of payment made by either party is in excess
of 25% with respect to London Clubs and 75% with respect to Sommer Enterprises.
There can be no assurance that AHL, Bazaar Holdings, Sommer Trust and/or London
Clubs will be able to make such cash equity contributions to Gaming Holdings if
required pursuant to the Keep-Well Agreement.

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 operating activities, 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 and future operations, the sources and
extent of financing, 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



                                       10
<PAGE>

         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 fair market
value of the Gaming's interest rate ceilings and floor caps as provided by
the counterparty, is a net payable of approximately $3.2 million at September
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,
Gaming Holdings considers the risk of non-performance to be minimal as the
counterparty is a member of the Bank Credit Facility.


                                       11
<PAGE>

PART II  OTHER INFORMATION

ITEM 1.           LEGAL PROCEEDINGS

         In August, 2000, Gaming and Fluor Daniel, Inc. ("Fluor"), the
design/builder of the Aladdin, entered into an agreement with regard to the
arbitration between the parties previously reported in Gaming Holdings's Form
10-K for the year ended December 31, 1999. The agreement provided as follows:
(a) Gaming and Fluor cease all further action against each other set forth in
the arbitration between the parties except for claims against certain of Fluor's
subcontractors, which Aladdin and Fluor will jointly pursue; (b) Fluor released
Gaming from any claims Fluor may have against Gaming arising prior to the
settlement agreement; (c) Gaming generally released Fluor from claims Gaming may
have against Fluor arising prior to the settlement agreement, while Gaming
preserved (i) any claims covered under applicable warranties and (ii) certain
claims against Fluor but limited Gaming's recovery to that which is recovered
from either certain of Fluor's subcontractors or other third parties; (d) Fluor
will provide Gaming with $8 million of enumerated work at no charge to Gaming;
(e) Gaming and Fluor reached agreement on various outstanding changes, and costs
thereof, which represented a substantial reduction in the initial amounts
claimed by Fluor for such work; and (f) payment by Gaming to Fluor of $11.1
million upon the opening of the Aladdin.

         Mr. Jack Sommer, the Chairman of the Gaming Holdings Board and the
Gaming Board and a trustee of the Sommer Trust, and the other trustees of the
Sommer Trust, are co-defendants in a legal action relating to the then existing
Aladdin hotel and casino. The suit was commenced by members of the Aronow family
("Aronow Plaintiffs") in May 1995 in the Supreme Court of the State of New York,
County of New York. In their complaint, the Aronow Plaintiffs alleged that Mr.
Sommer and the Aronow Plaintiffs were parties to a joint venture to acquire and
develop the Aladdin hotel and casino and that Mr. Sommer breached such alleged
agreement when the Sommer Trust acquired an interest in the Aladdin hotel and
casino in December, 1994. The Aronow Plaintiffs are seeking (among other
remedies) to impress a constructive trust upon the Sommer Trust's interest in
the Aladdin hotel and casino, an accounting, compensatory damages of not less
than $200 million and punitive damages of not less than $500 million. On January
27, 2000, each of the Aronow Plaintiffs' claims against the trustees was
dismissed. On or about October 17, 2000, the appellate court affirmed the
dismissal of the Aronow Plaintiffs' claims. If this decision stands, there can
be no liability as a result of the Aronow Plaintiffs' lawsuit. It is not known
at this time whether the Aronow Plaintiffs will decide to attempt to reargue or
decide to seek permission to appeal, or whether any reargument or appeal would
be successful. As such there is no way to evaluate the likelihood of success of
any appeal. An adverse decision could have a material and adverse affect on
Gaming Holdings.

ITEM 6.           EXHIBITS AND REPORTS ON FORM 8-K

         (a)      Exhibits

                  10.01    Amendment No. 3 to the Employment Agreement of
                           Jose Rueda, dated August 31, 2000
                  27.01    Financial Data Schedule

         (b)      Reports on Form 8-K

                  None.


                                       12
<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.





November 14, 2000                     By:   /s/ THOMAS A. LETTERO
                                            ------------------------------------
                                            Thomas A. Lettero, Treasurer


                                       13
<PAGE>

                                  EXHIBIT INDEX
<TABLE>
<CAPTION>
                                                                        PAGE NO.
EXHIBIT NO.       DESCRIPTION
-----------       -----------
<S>               <C>
10.01             Amendment No. 3 to the Employment Agreement of
                  Jose Rueda, dated August 31, 2000

27.01             Financial Data Schedule
</TABLE>

                                       14