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SECURITIES AND EXCHANGE COMMISSIONWASHINGTON, 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, 2001                                      
|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                                                        
|(State or other jurisdiction of incorporation or organization)
|3667 Las Vegas Boulevard South, Las Vegas, Nevada             
|(Address of principal executive offices)                      
|(702) 785-5555                                                
|(Registrant's telephone number, including area code)          
|ALADDIN CAPITAL CORP.                                         
|(Exact name of registrant as specified in its charter)        
|Nevada                                                        
|(State or other jurisdiction of incorporation or organization)
|3667 Las Vegas Boulevard South, Las Vegas, Nevada             
|(Address of principal executive offices)                      
|(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 the latest practicable date.

Aladdin Gaming Holdings, LLCNot applicable

Aladdin Capital Corp.2,500 shares of common stock, no par value as of September 30, 2001.

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ALADDIN GAMING HOLDINGS, LLC  AND SUBSIDIARIES    INDEX

|           |         |                                                                                                                                  |                                                                                       | Page No.
|---------- | ------- | -------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------- | --------
|Part I     |         | FINANCIAL INFORMATION                                                                                                            |                                                                                       |         
|           | Item 1. |                                                                                                                                  | Financial Statements                                                                  |         
|           |         | Condensed Consolidated Balance Sheets as of September 30, 2001 (unaudited) and December 31, 2000                                 |                                                                                       | 2       
|           |         | Condensed Consolidated Statements of Operations for the three months ended September 30, 2001 and September 30, 2000 (unaudited) |                                                                                       | 3       
|           |         | Condensed Consolidated Statements of Operations for the nine months ended September 30, 2001 and September 30, 2000 (unaudited)  |                                                                                       | 4       
|           |         | Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2001 and September 30, 2000 (unaudited)  |                                                                                       | 5       
|           |         | Notes to the Condensed Consolidated Financial Statements                                                                         |                                                                                       | 7       
|           | Item 2. |                                                                                                                                  | Management's Discussion and Analysis of Financial Condition and Results of Operations |         
|           | Item 3. |                                                                                                                                  | Quantitative and Qualitative Disclosures About Market Risk                            |         
|Part II    |         | OTHER INFORMATION                                                                                                                |                                                                                       |         
|           | Item 6. |                                                                                                                                  | Exhibits and Reports on Form 8-K                                                      |         
|Signatures |         | 26                                                                                                                              

1

---



PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

ALADDIN GAMING HOLDINGS, LLC  AND SUBSIDIARIES (ALADDIN GAMING, LLC AS DEBTOR-IN-POSSESSION)  CONDENSED CONSOLIDATED BALANCE SHEETS  AS OF SEPTEMBER 30, 2001 AND DECEMBER 31, 2000  (In Thousands)

|                                                |                                                                                                                                                                                            | September 30, 2001 |         | December 31, 2000 |  
|----------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ------------------ | ------- | ----------------- | -
|
|ASSETS                                          |                                                                                                                                                                                           
|Current assets:                                 |                                                                                                                                                                                            |                    |         |                   |  
|                                                | Cash and cash equivalents                                                                                                                                                                  |                    | $       | 15,697            |  
|                                                | Restricted cash and cash equivalents                                                                                                                                                       |                    |         | 1,400             |  
|                                                | Receivables, related parties                                                                                                                                                               |                    |         | 859               |  
|                                                | Accounts receivables, net of allowance for doubtful accounts of $8,919 and $6,483 as of September 30, 2001 and December 31, 2000 respectively                                              |                    |         | 19,822            |  
|                                                | Inventory                                                                                                                                                                                  |                    |         | 3,022             |  
|                                                | Prepaid assets                                                                                                                                                                             |                    |         | 6,563             |  
|                                                |                                                                                                                                                                                            |                    |         |                   |  
|Total current assets                            |                                                                                                                                                                                            |                    | 47,363  |                   |  
|                                                |                                                                                                                                                                                            |                    |         |                   |  
|Property, plant and equipment, net              |                                                                                                                                                                                            |                    | 620,792 |                   |  
|                                                |                                                                                                                                                                                            |                    |         |                   |  
|Other assets:                                   |                                                                                                                                                                                            |                    |         |                   |  
|                                                | Other assets, net of accumulated amortization of $1,065 and $560 as of September 30, 2001 and December 31, 2000, respectively                                                              |                    |         | 956               |  
|                                                | Debt issuance costs, net of accumulated amortization of $31,985 and $11,302 as of September 30, 2001 and December 31, 2000, respectively                                                   |                    |         | 1,500             |  
|                                                |                                                                                                                                                                                            |                    |         |                   |  
|                                                | Total other assets                                                                                                                                                                         |                    |         | 2,456             |  
|                                                |                                                                                                                                                                                            |                    |         |                   |  
|Total assets                                    |                                                                                                                                                                                            | $                  | 670,611 |                   | $
|                                                |                                                                                                                                                                                            |                    |         |                   |  
|LIABILITIES AND MEMBERS' EQUITY                 |                                                                                                                                                                                           
|Current liabilities:                            |                                                                                                                                                                                            |                    |         |                   |  
|                                                | Current portion of long-term debt                                                                                                                                                          |                    | $       | 177,027           |  
|                                                | Current portion of energy service obligation                                                                                                                                               |                    |         |                  |  
|                                                | Emergency Loan                                                                                                                                                                             |                    |         | 4,500             |  
|                                                | Accounts payable-trade                                                                                                                                                                     |                    |         | 3,816             |  
|                                                | Construction payable                                                                                                                                                                       |                    |         |                  |  
|                                                | Accrued payroll and related expenses                                                                                                                                                       |                    |         | 6,852             |  
|                                                | Accrued interest                                                                                                                                                                           |                    |         |                  |  
|                                                | Other accrued expenses                                                                                                                                                                     |                    |         | 16,532            |  
|                                                |                                                                                                                                                                                            |                    |         |                   |  
|Total current liabilities                       |                                                                                                                                                                                            |                    | 208,727 |                   |  
|                                                |                                                                                                                                                                                            |                    |         |                   |  
|Long-term debt, net of discount                 |                                                                                                                                                                                            |                    |        |                   |  
|Energy service obligation                       |                                                                                                                                                                                            |                    |        |                   |  
|Related party payables and other liabilities    |                                                                                                                                                                                            |                    |        |                   |  
|Advances to purchase membership interests       |                                                                                                                                                                                            |                    |        |                   |  
|                                                |                                                                                                                                                                                            |                    |         |                   |  
|Total long-term liabilities                     |                                                                                                                                                                                            |                    |        |                   |  
|                                                |                                                                                                                                                                                            |                    |         |                   |  
|Liabilities subject to compromise               |                                                                                                                                                                                            |                    | 560,597 |                   |  
|                                                |                                                                                                                                                                                            |                    |         |                   |  
|Total liabilities                               |                                                                                                                                                                                            |                    | 769,324 |                   |  
|Commitments and contingencies                   |                                                                                                                                                                                            |                    |         |                   |  
|Members' equity (deficit)                       |                                                                                                                                                                                            |                    |         |                   |  
|                                                | Preferred membership interest                                                                                                                                                              |                    |         | 218,745           |  
|                                                | Common membership interest, 10,000,000 common membership interests authorized; 1,000,000 common membership interests issued and outstanding as of September 30, 2001 and December 31, 2000 |                    |         | 58,608            |  
|                                                | Accumulated deficit                                                                                                                                                                        |                    |         | (376,066          | )
|                                                |                                                                                                                                                                                            |                    |         |                   |  
|Total members' equity (deficit)                 |                                                                                                                                                                                            |                    | (98,713 | )                 |  
|                                                |                                                                                                                                                                                            |                    |         |                   |  
|Total liabilities and members' equity (deficit) |                                                                                                                                                                                            | $                  | 670,611 |                   | $
|                                                |                                                                                                                                                                                            |                    |         |                   |  

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

2

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ALADDIN GAMING HOLDINGS, LLC  AND SUBSIDIARIES (ALADDIN GAMING, LLC AS DEBTOR-IN-POSSESSION)  CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS  FOR THE THREE MONTHS ENDED SEPTEMBER 30,
2001 AND SEPTEMBER 30, 2000  (In Thousands)

|                                     |                                          | For the three months ended September 30, |        
|------------------------------------ | ---------------------------------------- | ---------------------------------------- | -------
|
|
|Revenues:                            |                                          |                                          |        
|                                     | Casino                                   |                                          | $      
|                                     | Hotel                                    |                                          |        
|                                     | Food and beverage                        |                                          |        
|                                     | Entertainment and other income           |                                          |        
|                                     |                                          |                                          |        
|Gross revenues                       |                                          |                                          | 65,447 
|                                     | Less: promotional allowances             |                                          |        
|                                     |                                          |                                          |        
|Net revenues                         |                                          |                                          | 56,510 
|                                     |                                          |                                          |        
|Costs and expenses:                  |                                          |                                          |        
|                                     | Casino                                   |                                          |        
|                                     | Hotel                                    |                                          |        
|                                     | Food and beverage                        |                                          |        
|                                     | Other operating expenses                 |                                          |        
|                                     | Selling, general and administrative      |                                          |        
|                                     | Pre-opening expenses                     |                                          |        
|                                     | Depreciation and amortization            |                                          |        
|                                     |                                          |                                          |        
|Total costs and expenses             |                                          |                                          | 76,524 
|                                     |                                          |                                          |        
|Loss from operations                 |                                          |                                          | (20,014
|                                     |                                          |                                          |        
|Other income (expense):              |                                          |                                          |        
|                                     | Interest income                          |                                          |        
|                                     | Interest expense                         |                                          |        
|                                     | Net interest rate collar expense         |                                          |        
|                                     | Interest expense  interest rate collars |                                          |        
|                                     | Capitalized interest                     |                                          |        
|                                     |                                          |                                          |        
|Total other income (expense), net    |                                          |                                          | (39,051
|                                     |                                          |                                          |        
|Net loss before reorganization items |                                          |                                          | (59,065
|                                     |                                          |                                          |        
|Reorganization items                 |                                          |                                          | (27,113
|                                     |                                          |                                          |        
|Net loss                             |                                          | $                                        | (86,178
|                                     |                                          |                                          |        

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

3

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ALADDIN GAMING HOLDINGS, LLC  AND SUBSIDIARIES (ALADDIN GAMING, LLC AS DEBTOR-IN-POSSESSION)  CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS  FOR THE NINE MONTHS ENDED SEPTEMBER 30,
2001 AND SEPTEMBER 30, 2000  (In Thousands)

|                                                                                             |                                        | For the nine months ended September 30, |         
|-------------------------------------------------------------------------------------------- | -------------------------------------- | --------------------------------------- | --------
|
|
|Revenues:                                                                                    |                                        |                                         |         
|                                                                                             | Casino                                 |                                         | $       
|                                                                                             | Hotel                                  |                                         |         
|                                                                                             | Food and beverage                      |                                         |         
|                                                                                             | Entertainment and other income         |                                         |         
|                                                                                             |                                        |                                         |         
|Gross revenues                                                                               |                                        |                                         | 232,352 
|                                                                                             | Less: promotional allowances           |                                         |         
|                                                                                             |                                        |                                         |         
|Net revenues                                                                                 |                                        |                                         | 207,001 
|                                                                                             |                                        |                                         |         
|Costs and expenses:                                                                          |                                        |                                         |         
|                                                                                             | Casino                                 |                                         |         
|                                                                                             | Hotel                                  |                                         |         
|                                                                                             | Food and beverage                      |                                         |         
|                                                                                             | Other operating expenses               |                                         |         
|                                                                                             | Selling, general and administrative    |                                         |         
|                                                                                             | Pre-opening expenses                   |                                         |         
|                                                                                             | Depreciation and amortization          |                                         |         
|                                                                                             |                                        |                                         |         
|Total costs and expenses                                                                     |                                        |                                         | 234,172 
|                                                                                             |                                        |                                         |         
|Loss from operations                                                                         |                                        |                                         | (27,171 
|                                                                                             |                                        |                                         |         
|Other income (expense):                                                                      |                                        |                                         |         
|                                                                                             | Interest income                        |                                         |         
|                                                                                             | Interest expense                       |                                         |         
|                                                                                             | Net interest rate collar expense       |                                         |         
|                                                                                             | Interest expense-interest rate collars |                                         |         
|                                                                                             | Capitalized interest                   |                                         |         
|                                                                                             |                                        |                                         |         
|Total other income (expense), net                                                            |                                        |                                         | (88,727 
|Net loss before cumulative effect of change in accounting principle and reorganization items |                                        |                                         | (115,898
|                                                                                             |                                        |                                         |         
|Reorganization items                                                                         |                                        |                                         | (27,113 
|                                                                                             |                                        |                                         |         
|Cumulative effect of change in accounting principle                                          |                                        |                                         | (10,709 
|                                                                                             |                                        |                                         |         
|Net loss                                                                                     |                                        | $                                       | (153,720
|                                                                                             |                                        |                                         |         

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

4

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ALADDIN GAMING HOLDINGS, LLC  AND SUBSIDIARIES (ALADDIN GAMING, LLC AS DEBTOR-IN-POSSESSION)  CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS  FOR THE NINE MONTHS ENDED SEPTEMBER 30,
2001 AND SEPTEMBER 30, 2000  (In Thousands)

|                                                                                            |                                             | For the nine months ended September 30, |        
|------------------------------------------------------------------------------------------- | ------------------------------------------- | --------------------------------------- | -------
|
|
|Cash flows from operating activities:                                                       |                                             |                                         |        
|                                                                                            | Net loss                                    |                                         | $      
|Adjustments to reconcile net income to net cash (used in) provided by operating activities: |                                             |                                         |        
|                                                                                            | Depreciation and amortization               |                                         |        
|                                                                                            | Amortization of debt costs                  |                                         |        
|                                                                                            | Amortization of other assets                |                                         |        
|                                                                                            | Write-off of debt issuance costs            |                                         |        
|                                                                                            | Termination of interest rate collars        |                                         |        
|                                                                                            | Amortization of original issue discount     |                                         |        
|Changes in operating assets and liabilities:                                                |                                             |                                         |        
|                                                                                            | Inventory                                   |                                         |        
|                                                                                            | Prepaid assets                              |                                         |        
|                                                                                            | Receivables, net                            |                                         |        
|                                                                                            | Other assets                                |                                         |        
|                                                                                            | Accounts payable-trade                      |                                         |        
|                                                                                            | Accrued payroll and related expenses        |                                         |        
|                                                                                            | Accrued interest                            |                                         |        
|                                                                                            | Related party payable and other liabilities |                                         |        
|                                                                                            | Other accrued expenses                      |                                         |        
|                                                                                            |                                             |                                         |        
|Net cash used in operating activities                                                       |                                             | $                                       | (18,591
|                                                                                            |                                             |                                         |        

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

5

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ALADDIN GAMING HOLDINGS, LLC  AND SUBSIDIARIES (ALADDIN GAMING, LLC AS DEBTOR-IN-POSSESSION)  CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS  FOR THE NINE MONTHS ENDED SEPTEMBER 30,
2001 AND SEPTEMBER 30, 2000  (In Thousands)

|                                                                                                  |                                          | For the nine months ended September 30, |       
|------------------------------------------------------------------------------------------------- | ---------------------------------------- | --------------------------------------- | ------
|
|
|Cash flows from investing activities:                                                             |                                          |                                         |       
|                                                                                                  | Payments for construction in progress    |                                         | $     
|                                                                                                  | Payments for furniture and equipment     |                                         |       
|                                                                                                  | Decrease in restricted cash              |                                         |       
|                                                                                                  |                                          |                                         |       
|Net Cash provided by (used in) investing activities                                               |                                          |                                         | 5,075 
|                                                                                                  |                                          |                                         |       
|Cash flows from financing activities:                                                             |                                          |                                         |       
|                                                                                                  | Proceeds from issuance of long-term debt |                                         |       
|                                                                                                  | Proceeds from Emergency Loan             |                                         |       
|                                                                                                  | Repayment of long-term debt              |                                         |       
|                                                                                                  | Debt issuance costs                      |                                         |       
|                                                                                                  | Members' contributions                   |                                         |       
|                                                                                                  |                                          |                                         |       
|Net cash provided by financing activities                                                         |                                          |                                         | 9,004 
|                                                                                                  |                                          |                                         |       
|Net (decrease) increase in cash                                                                   |                                          |                                         | (4,512
|Cash and cash equivalents at beginning of period                                                  |                                          |                                         | 20,209
|                                                                                                  |                                          |                                         |       
|Cash and cash equivalents at end of period                                                        |                                          | $                                       | 15,697
|                                                                                                  |                                          |                                         |       
|SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION AND NON-CASH INVESTING AND FINANCING ACTIVITIES: |                                          |                                         |       
|Cash paid for interest, net of amount capitalized                                                 |                                          | $                                       | 37,231
|Non-cash investing and financing activities:                                                      |                                          |                                         |       
|                                                                                                  | Preferred dividends                      |                                         |       
|                                                                                                  | Energy service obligation                |                                         |       

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

6

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ALADDIN GAMING HOLDINGS, LLC  AND SUBSIDIARIES  (ALADDIN GAMING, LLC AS DEBTOR-IN-POSSESSION)  NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  September 30, 2001

1. Nature of Business and Summary of Significant Accounting Policies

The Company

The accompanying condensed consolidated financial statements present the financial position, results of operations and cash flows of Aladdin Gaming Holdings,
LLC ("Gaming Holdings") and its wholly-owned subsidiaries, Aladdin Gaming, LLC ("Gaming"), Aladdin Capital Corp. ("Capital") and Aladdin Music Holdings, LLC (collectively, the "Company").

Gaming
Holdings through its wholly-owned subsidiary Gaming developed, constructed and began operating a new hotel and casino on August 18, 2000, the Aladdin Resort and Casino
("Aladdin"), as the centerpiece of an approximately 35-acre resort, casino and entertainment complex in Las Vegas, Nevada. Gaming Holdings, through its subsidiaries, also owns 100% of
Aladdin Music, LLC ("Aladdin Music").

On
September 28, 2001 (the "Petition Date"), Gaming filed a voluntary petition for Chapter 11 reorganization ("Chapter 11") pursuant to the United States Bankruptcy Code (the
"Bankruptcy Code") with the United States Bankruptcy Court for the District of Nevada (the "Bankruptcy Court"). Pursuant to Sections 1107 and 1108 of the Bankruptcy Code, Gaming continues to manage
and operate its assets and business as debtor-in-possession pending the confirmation of a reorganization plan and subject to the supervision and orders of the Bankruptcy Court
in Gaming's Chapter 11 proceedings (the "Chapter 11 Case"). As of November 14, 2001, Gaming Holdings has not filed for relief under the Bankruptcy Code. The condensed consolidated
financial statements have been prepared assuming that the Company will continue as a going concern. These condensed consolidated financial statements do not include any adjustments that might result
if Gaming is unable to successfully emerge from bankruptcy.

Principles of Presentation

The Condensed Consolidated Financial Statements have been prepared in accordance with the accounting policies described in the Company's 2000 Annual Report on
Form 10-K. Although the Company believes that the disclosures are adequate to make the information presented not misleading, it is suggested that these financials be read in
conjunction with the notes to consolidated financial statements, which appear in that report. Accounting policies utilized in the preparation of the financial information herein presented are the same
as set forth in the Company's annual financial statements except as modified for interim accounting policies. The interim condensed consolidated financial information is unaudited.

The
American Institute of Certified Public Accountant's Statement of Position 90-7, "Financial Reporting by Entities in Reorganization Under the Bankruptcy Code" ("SOP
90-7") provides guidance for financial reporting by entities that have filed petitions under the Bankruptcy Code and expect to reorganize under Chapter 11. Under SOP 90-7, the
financial statements of an entity in a Chapter 11 reorganization proceeding should distinguish transactions and events that are directly associated with the reorganization from those of the ongoing
business as it evolves. Accordingly, SOP 90-7 requires that the balance sheet separately classify pre-petition liabilities as those subject to compromise (see Note 3).
Additional liabilities may arise as a result of rejection of executory contracts, including leases, or the Bankruptcy Court's resolution of claims for contingencies and other disputed amounts.

7

---

In the opinion of management, the accompanying financial statements include all adjustments (of a normal recurring nature), which are necessary for a fair presentation of the results
for the interim periods presented. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been
condensed or omitted pursuant to rules and regulations of the United States Securities and Exchange Commission.

Reclassification

Certain amounts in the 2000 condensed consolidated financial statements have been reclassified to conform with the presentation for the year 2001. These
reclassifications have no effect on net income.

Revenues and Expenses

Casino revenue is the net win from gaming activities (the difference between gaming wins and losses). Casino revenues are net of incentive discounts to casino
patrons, redemption of players' club points for cash and accruals for anticipated payouts of progressive and certain other slot machine jackpots.

Revenues
include the retail value of rooms, food and beverage, and other items provided to customers on a complimentary basis. A corresponding amount is deducted as promotional
allowances. The costs of such complimentaries are included in casino expenses in the accompanying condensed consolidated statements of operations.

Property and Equipment

Property and equipment are stated at cost. Expenditures for additions, renewals, and improvements are capitalized. Costs of repairs and maintenance are
expensed when incurred.

Depreciation
and amortization of property and equipment is computed using the straight-line method over the following estimated useful lives:

Building and Leasehold Improvements

39 yearsFurniture and Equipment

5 yearsEnergy Service Asset

17-20 years


Statement
of Financial Accounting Standards No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of"
("SFAS 121"), requires that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate that the book value of the asset may not be
recoverable. The Company considers the defaults on Gaming's required debt service payments and significant operating losses to be its primary indicator of potential impairment. In the opinion of
management, a substantial impairment in the carrying of value of the Company's long-lived assets has occurred under SFAS 121. The Company has engaged an independent appraiser to perform a full
appraisal of the fair value of the Company's assets. Upon completion of the independent appraisal, management anticipates recording a significant impairment write-down under SFAS 121 in the
consolidated financial statements for the three months ended December 31, 2001.

8

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2. Chapter 11 Financing

On the Petition Date, the Bankruptcy Court authorized Gaming to pay pre-petition and employee wages, salaries, benefits and certain other employee
obligations during the Chapter 11 Case. In addition, the Bankruptcy Court authorized the payment of certain pre-petition obligations owed to critical trade and other creditors. The
Bankruptcy Court also authorized Gaming to continue various programs for the benefit of its operations, including the honoring of pre-petition customer deposits,
gaming wagers and chips and tokens. Gaming sought and the Bankruptcy Court approved an emergency debtor-in-possession loan for $9 million (the "Emergency Loan") from a
syndicate of banks, including BNY Asset Solutions, as Collateral Agent and Administrative Agent (the "DIP Lenders"). The Emergency Loan is part of a proposed facility totaling up to $50 million
(the "DIP Loan") from the DIP Lenders. The Emergency Loan is secured by a Bankruptcy Code Section 364(c)(1) super-priority claim, and a Section 364(d) priming lien on the collateral
securing the Bank Credit Facility (as defined below) and matures 35 days from the entry of the order approving the Emergency Loan. The DIP Loan would permit Gaming to borrow up to
$50 million from time to time for general operating and business purposes, subject to satisfaction of drawing conditions, and the existence of no events of default, that are customary in such
facilities. The DIP Loan will be secured by the same Section 364(d) priming lien and Section 364(c)(1) super-priority claim subject to certain carve-outs for allowed
administrative claims. The Bankruptcy Court has not yet approved the DIP Loan in its entirety. As of November 14, 2001 Gaming has borrowed approximately $4.6 million pursuant to the
Emergency Loan. Interest on the DIP Loan will be calculated at Prime (as defined in the underlying agreement) plus 2.5% and will be paid monthly based on the average unpaid balance. The DIP loan also
provides for an unused commitment fee of 1.5% annually on the average unused balance and is paid monthly.

Debt
issuance costs incurred in connection with the issuance of the Emergency Loan and negotiation of the DIP Loan have been capitalized and will be amortized to interest expense
based on the related debt agreement using the effective interest method or a method which approximates the effective interest method.

3. Liabilities Subject to Compromise

Liabilities subject to compromise under reorganization proceedings consist of the following as of September 30, 2001 (In Thousands):

Accounts Payable Trade

$
4,862Accounts Payable Construction


2,140Accrued Interest


6,778Accrued Interest  Interest Rate Collars


2,793Other Accrued Expenses


8,161Bank Credit Facility


434,736FF&E Facility


18,050Related Party Payable


14,420Interest Rate Collars Payable


32,342Energy Service Obligation


36,313Total Liabilities Subject to Compromise

$
560,597


9

---

By
virtue of the Chapter 11 filing, depending on the value of any collateral for various secured obligations, including the Bank Credit Facility (as defined below), and the
characterization of various capital leases and similar obligations as credit facilities, such as the furniture, fixture and equipment financing facility with General Electric Capital Corporation
("FF&E Facility") and energy service obligations, interest and related fees and charges may not accrue on a number of those obligations from the Petition Date. Gaming ceased accruing interest on the
Bank Credit Facility, FF&E Facility, interest rate collars and energy service obligation as of the Petition Date.

As
of November 14, 2001 Gaming Holdings has not filed for relief under the Bankruptcy Code and the 131/2% Senior Discount Notes (the "Notes") have not been
classified as subject to compromise as the Notes are an obligation of Gaming Holdings and not Gaming. Gaming Holdings has no assets or operations or sources of capital other than 100% of the
outstanding common membership interests and 100% of the outstanding Series A preferred membership interests of Gaming. The Notes have not been recorded at their fully accreted-value at maturity
and have been classified as a current liability in the accompanying Condensed Consolidated Balance Sheet.

The
September 30, 2001 Condensed Consolidated Balance Sheets do not reflect, as liabilities, the total amount of the claims filed against Gaming in the Chapter 11 Case
since a reasonable estimate of additional bankruptcy claims and pre-petition liabilities and settlement value of certain contingent and/or disputed bankruptcy claims could not be made at
September 30, 2001.

4. Reorganization Items

Reorganization items consisted of the following as of September 30, 2001 (In Thousands):

Write-off of debt issuance costs

$
27,113Professional Fees


Total Reorganization Items

$
27,113


The
Company expensed unamortized deferred debt issuance costs as of the Petition Date. Prior to the Petition Date, deferred debt issuance costs were amortized over the life of the
related notes and included in interest expense.

Pre-petition
professional fees of $1.04 million related to the reorganization have been included in selling, general and administrative expenses in the accompanying
Condensed Consolidated Statements of Operations. Post-petition professional fees related to the reorganization are subject to Bankruptcy Court approval and will be expensed as incurred as
a reorganization item.

5. Supplemental Condensed Combined Financial Statements

SOP 90-7 requires that consolidated financial statements that include one or more entities in reorganization proceedings and one or more entities
not in reorganization proceedings include condensed combined financial statements of the entities in reorganization proceedings.

The
following supplemental condensed combined financial statements as of September 30, 2001 and December 31, 2000, and for the quarters and nine months ended
September 30, 2001 and September 30, 2000, reflect the financial position, results of operations, and cash flows of Gaming. The

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condensed combined financial statements have been prepared on the same basis as the condensed consolidated financial statements.

11

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Aladdin Gaming, LLC  (Debtor-in-Possession)  Unaudited Condensed Balance Sheets  As of September 30, 2001 and December 31, 2000  (In Thousands)

September 30, 2001
(Unaudited)

December 31, 2000Total current assets

$
47,363

$
82,416Property, plant and equipment, net


620,792


631,834Total other assets


2,456


27,203Total assets

$
670,611

$
741,453Total current liabilities

$
27,200

$
91,414Total long-term liabilities


30,102


492,218Liabilities subject to compromise


560,597


Total member's equity


52,712


157,821Total liabilities and member's equity

$
670,611

$
741,453


The
Condensed Balance Sheet at December 31, 2000 has been derived from the audited financial statements at that date but does not include all of the information and footnotes
required by generally accepted accounting principles.

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Aladdin Gaming, LLC  (Debtor-in-Possession)  Unaudited Condensed Statements of Operations  (In Thousands)

|                                                                |  | For the three
months ended
September 30, 2001 |         | For the three
months ended
September 30, 2000 |   | For the nine
months ended
September 30, 2001 |   | For the nine
months ended
September 30, 2000 |         
|--------------------------------------------------------------- |  | --------------------------------------------- | ------- | --------------------------------------------- | - | -------------------------------------------- | - | -------------------------------------------- | --------
|Net revenues                                                    |  | $                                             | 56,510  |                                               | $ | 36,781                                       |   | $                                            | 207,001 
|Total costs and expenses                                        |  |                                               | 76,524  |                                               |   | 65,242                                       |   |                                              | 234,172 
|Loss from operations                                            |  |                                               | (20,014 | )                                             |   | (28,461                                      | ) |                                              | (27,171 
|Total other expense                                             |  |                                               | (17,433 | )                                             |   | (7,274                                       | ) |                                              | (67,109 
|Loss before reorganization items                                |  |                                               | (37,447 | )                                             |   | (35,735                                      | ) |                                              | (94,280 
|Reorganization items                                            |  |                                               | (23,104 | )                                             |   |                                             |   |                                              | (23,104 
|Loss before cumulative effect of change in accounting principle |  |                                               | (60,551 | )                                             |   |                                             |   |                                              | (117,384
|Cumulative effect of change in accounting principle             |  |                                               |        |                                               |   |                                             |   |                                              | (10,709 
|Net Loss                                                        |  | $                                             | (60,551 | )                                             | $ | (35,735                                      | ) | $                                            | (128,093
|                                                                |  |                                               |         |                                               |   |                                              |   |                                              |         

Aladdin Gaming, LLC  (Debtor-in-Possession)  Unaudited Condensed Statements of Cash Flows  (In Thousands)

Nine months ended
September 30, 2001Net cash used in operating activities

$
(18,591
)Net cash provided by investing activities


5,075Net cash provided by financing activities


9,004Net change in cash and cash equivalents

$
(4,512
)


6. Classes of Interest

As of September 30, 2001, Gaming Holdings Common Membership Interests were held: 39.953125% by London Clubs Nevada Inc., a subsidiary of London
Clubs International plc ("London Clubs"); 31.859375% by Sommer Enterprises, LLC ("Sommer Enterprises"), an entity controlled by the Trust under Article Sixth u/w/o Sigmund Sommer (the "Sommer Trust");
25.0% by Aladdin Gaming Enterprises, Inc., an entity owned by Sommer Enterprises; 3.0% by GAI, LLC, an entity owned by Richard J. Goeglein, a former executive of the Company; and 0.1875% by
Jose Rueda, a former executive of the Company.

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As of September 30, 2001, Gaming Holdings Preferred Membership Interests were comprised of the following:

|          |  | London Clubs
Nevada, Inc. |  | Sommer
Enterprises, LLC |  | Total  
|--------- |  | ------------------------- |  | ----------------------- |  | -------
|
|Series A  |  | 154,725                   |  | 9,352                   |  | 164,077
|Series CC |  | 4,069                     |  |                        |  | 4,069  
|Series D  |  | 42,135                    |  |                        |  | 42,135 
|Series E  |  |                          |  | 8,464                   |  | 8,464  
|          |  |                           |  |                         |  |        
|TOTAL     |  | 200,929                   |  | 17,816                  |  | 218,745
|          |  |                           |  |                         |  |        

The
Series CC Preferred Membership Interests are entitled to a return equal to twenty percent (20%) per annum, cumulative and compounded semi-annually. The Series A
Preferred Membership Interests are entitled to a return equal to twelve percent (12%) per annum, cumulative and compounded semi-annually. Pursuant to a Letter Agreement between the Sommer
Trust and London Clubs, dated February 23, 2000, the Series D Preferred Membership Interests and the Series A Preferred Membership Interests are entitled to a combined preferred
return equal to the return earned on the Series E Preferred Membership Interests (i.e., thirty percent (30%) per annum, cumulative and compounded semi-annually). The Series E
Preferred Membership Interests are entitled to a return equal to thirty percent (30%) per annum, cumulative and compounded semi-annually. With respect to the allocation of Profits and
Losses, and Distributions (including distributions in liquidation), the following is the order of priority of the Preferred Shares: Series A Preferred Membership Interests, Series D
Preferred Membership Interests, Series C Convertible Membership Interests, and Series CC Preferred Membership Interests, and collectively (pari
passu) Series E and B Preferred Membership Interests.

If
cash equity contributions are made to Gaming Holdings pursuant to the Keep-Well Agreement ("Keep-Well Agreement") entered into by Aladdin Holdings, LLC (95%
owned by the Sommer Trust), Aladdin Bazaar Holdings, LLC (99% indirectly owned by the Sommer Trust), London Clubs and the Sommer Trust for the benefit of the lenders under the Bank Credit Facility (as
defined below), Series A Preferred Membership Interests (or in the case of any payment required by London Clubs to repay in part Gaming's bank credit facility with various lenders and The Bank
of Nova Scotia as Administrative Agent (the "Bank Credit Facility") pursuant to Section 13 of the Keep-Well Agreement, Series B Preferred Membership Interests), will be
issued in return for such cash equity contributions. During the nine months ended September 30, 2001, 229,850 Series A and no Series B Preferred Membership Interests were issued
pursuant to the Keep-Well Agreement. A total of 1,640,772 Series A Preferred Membership Interests were outstanding at September 30, 2001.

7. Income Taxes

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

8. 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

14

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Activities" ("SFAS 133"). SFAS 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 delayed the effective date of SFAS 133 from fiscal year 2000 to fiscal year 2001. During June of 2000, the FASB issued SFAS
No. 138 which amended certain sections of SFAS No. 133. During the quarter ended March 31, 2001, Gaming changed its method of accounting for interest rate collars to comply with
SFAS 133. Gaming's interest rate collars do not qualify for accounting hedges according to
SFAS 133, and accordingly, changes to the fair value of the interest rate collars are recognized in earnings. On January 1, 2001, Gaming recorded a liability of $10.7 million for
the fair value of its interest rate collars at that date with a corresponding cumulative effect adjustment in the Condensed Consolidated Statements of Operations. The interest rate collars were
terminated as of the Petition Date (see Note 9).

In
November 2000, the Emerging Issues Task Force of the FASB ("EITF") reached a consensus on EITF Issue No. 00-14, "Accounting for Certain Sales Incentives"
("EITF 00-14"). EITF 00-14 requires that discounts which result in a reduction in or refund of the selling price of a product or service in a single exchange transaction be
recorded as a reduction of revenues. The Company adopted EITF 00-14 in the first quarter 2001. The amount of "free plays" and coupons to date has not been significant. The Company's
accounting policy related to free or discounted rooms, food and beverage and other services already complies with EITF 00-14.

The
Company's player club allows customers to earn "points" based on the volume of their gaming activity. These points are redeemable for certain complimentary services and/or cash
rebates. In February 2001, the "EITF" reached a consensus in EITF Issue No. 00-22, "Accounting for 'Points' and Certain Other Time-Based or Volume-Based Sales
Incentive Offers" ("EITF 00-22"). EITF 00-22 requires that the redemption of points for cash be recorded as a reduction of revenue. The Company has complied with the
requirements of EITF 00-22 in the accompanying Condensed Consolidated Statements of Operations. The adoption of EITF 00-22 does not affect net income. The amount of
player club points earned through September 30, 2001 and recorded as a reduction of revenue is $2.3 million.

9. Long-Term Debt
  Interest Rate Swaps

Beginning July 20, 2000, Gaming had the following interest rate derivative financial instruments in effect: (i) an interest rate collar with an
amortizing 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 an amortizing 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 the three-months LIBOR equivalents
only and do not include the impact of the basis point additions to LIBOR that are used in calculating interest expense on Gaming's term loans.

The
notional amounts do not represent amounts exchanged by the parties, and thus are not a measure of exposure of the Company. The amounts exchanged are normally based on the notional

15

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amounts and other terms of the swaps. The variable rates are subject to change over time as LIBOR fluctuates.

The
interest rate collars were terminated as of the Petition Date. The market value of the outstanding swap agreements as of that date was determined to be $32.3 million.
Gaming recorded the cost of terminating the swap agreements as net interest rate collar expense in the Condensed Consolidated Statements of Operations. The interest rate collar payable of
$32.3 million and related accrued interest of $2.8 million have been classified as liabilities subject to compromise in the accompanying Condensed Consolidated Balance Sheets.

10. Commitments and Contingencies

In May 2001, Mr. Timmins, Mr. Lettero, and Ms. Becker ("Executives") each signed Senior Executive Retention Agreements ("Retention
Agreements") with the Company. The Retention Agreements provide that the Executives will continue to render services to the Company until the later of: eighteen months from the date of the
Retention Agreements; the effective date of a plan of reorganization for the Company; or, ninety days after a change of control. The Retention Agreements provide for incentive bonus payments if
certain EBITDA numbers are met for the calendar year 2001 and 2002. If the Executive is employed and a change of control or reorganization of the Company occurs during the term of the Retention
Agreements, the Retention Agreements provide for a retention bonus payment equal to three (3) times the Executive's then-existing aggregate annual base salary. To date, no motion
has been brought in the Chapter 11 Case to assume the Retention Agreements.

On
Sept. 28, 2001, Richard J. Goeglein, a former officer of the Company, and GAI, LLC, which is owned by Mr. Goeglein, filed a complaint in the District Court, Clark
County, Nevada, case number A440597, against Gaming, Gaming Holdings and other persons alleging breach of contract, breach of implied covenant of good faith and fair dealing, negligence and negligent
misrepresentation, and intentional misrepresentation. The plaintiffs' claims relate to the termination of Mr. Goeglein's
employment contract and GAI, LLC's consulting agreement. The plaintiffs are seeking compensatory and punitive damages of an unspecified amount in excess of $10,000. Because the action was filed after
commencement of the Chapter 11 Case and in violation of the automatic stay provisions of the Bankruptcy Code, the action is void as to Gaming. The case can proceed against the remaining defendants,
however. Gaming Holdings has filed an answer denying the plaintiffs' allegations in all material respects.

In
December 2000, Aladdin Bazaar, LLC ("Bazaar") initiated an arbitration against Gaming alleging various defaults by Gaming under the respective agreements between the
parties. Gaming has filed counter-claims against Bazaar. Such arbitration has been continuing since it was initiated prior to commencement of the Bankruptcy Case, with the parties developing a
discovery plan. The arbitration hearings have been tentatively set to commence in mid-Summer 2002.

In
December 2000, Korte-Bellew & Associates ("KBA") initiated a Nevada State District Court action, case number 79E100 00047 01TMS seeking
foreclosure on its mechanic's lien and payment of approximately $4.7 million. Pursuant to the construction contract between Gaming and KBA, prior to commencement of the Chapter 11 Case the
matter had been removed from the District Court and the parties were to attempt mediation, and if the mediation did not result in agreement between the parties, the matter was to be sent to binding
arbitration to resolve the disputes.

16

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11. Liquidity

As discussed in Note 2, Gaming expects to obtain a DIP Loan from the DIP Lenders. The Company believes the DIP Loan and cash from operations should
provide the Company with adequate liquidity to conduct its business during the Chapter 11 Case, although no assurance can be given in this regard. The Company anticipates that the Emergency Loan will
be sufficient to fund operations through December 31, 2001.

17

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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.

General

Aladdin Gaming Holdings, LLC, a Nevada limited liability 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"). 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 the Gaming Holdings 131/2% Senior Discount Notes ("Notes"). Capital
does not have any material operations or assets and has no revenues.

Aladdin
Holdings, LLC, a Delaware limited liability company ("AHL"), indirectly holds a majority interest in Gaming Holdings. The members of AHL are the Trust Under
Article Sixth u/w/o Sigmund Sommer ("Sommer Trust"), which holds a 95% interest in AHL, and GW Vegas, LLC, a Nevada limited liability company, a wholly owned subsidiary of the Trust Company of the
West, which holds a 5% interest in AHL.

On
September 28, 2001 (the "Petition Date"), Gaming filed a voluntary petition for Chapter 11 reorganization ("Chapter 11") pursuant to the United States Bankruptcy Code with
the United States Bankruptcy Court for the District of Nevada (the "Bankruptcy Court"). Pursuant to Sections 1107 and 1108 of the Bankruptcy Code, Gaming continues to manage and operate its assets and
business as debtor-in-possession pending the confirmation of a reorganization plan and subject to the supervision and orders of the Bankruptcy Court in Gaming's
Chapter 11 proceedings (the "Chapter 11 Case"). As of November 14, 2001, Gaming Holdings has not filed for relief under the Bankruptcy Code. The Condensed Consolidated Financial
Statements have been prepared assuming that the Company will continue as a going concern. These Condensed Consolidated Financial Statements do not include any adjustments that might result if Gaming
is unable to successfully emerge from bankruptcy.

As
of September 30, 2001, Gaming Holdings common membership interests were held 39.953125% by London Clubs Nevada Inc, a subsidiary of London Clubs International plc ("London
Clubs"); 31.859375% by Sommer Enterprises, LLC, a Nevada limited liability company ("Sommer Enterprises"), which is a subsidiary of AHL; 25.0% by Aladdin Gaming Enterprises, Inc., a Nevada
corporation ("Gaming Enterprises"), which is a subsidiary of Sommer Enterprises; 3.0% by GAI, LLC, a Nevada limited liability company, which is owned by Richard J. Goeglein, the former President and
Chief Executive Officer of Gaming Holdings; and 0.1875% by Jose Rueda, a former executive of Gaming Holdings.

Except
where the context otherwise requires, Gaming Holdings and its subsidiaries are collectively referred to herein as the "Company."

The
operations of the Company were primarily limited to the design, development, construction and, as of August 18, 2000, have primarily consisted of the operation of a new
Aladdin Resort & Casino ("Aladdin"). The Aladdin is the centerpiece of an approximately 35-acre world-class resort,

18

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casino and entertainment complex ("Complex"). The Aladdin includes a hotel which has 2,567 rooms ("Hotel"), an approximately 116,000 square foot Casino ("Casino"), five restaurants and one leased
restaurant. The Casino's main gaming area contains approximately 2,150 slot machines, 66 table games, and a race and sports book facility. Included on a separate level of the Casino is an
approximately 15,000 square foot luxurious gaming section ("The London Club at Aladdin") that contains approximately 30 high denomination table games and approximately 85 high denomination slot
machines. The Hotel will contain an approximately 32,000 square foot spa, which is currently being constructed, and will be operated, by a subsidiary of Steiner Leisure Limited, and is expected to be
completed on or about December 1, 2001. Gaming's lease with Steiner Leisure Limited was assumed under the Chapter 11 Case. The Complex is comprised of: (i) the Aladdin; (ii) a
themed entertainment shopping mall with approximately 496,000 square feet of retail space ("Desert Passage"); (iii) the renovated 7,000 seat Theater for the Performing Arts; and (iv) an
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
Sommer Trust.

Results of Operations

Until August 18, 2000, the Company was in the development stage and did not have any historical operating income as there were no operating revenues.
Prior to August 18, 2000, the Company's operating expenses primarily consisted of interest, amortization costs, expenses related to the Notes and pre-opening costs. Due to the short
operating period (43 days during 2000 compared to 92 days during 2001), 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.

For
the quarter ended September 30, 2001, the Aladdin produced gross revenues of $65.4 million. Casino revenue (which includes both the main Casino and The London Club
at Aladdin) represented 41% of gross revenue, hotel 31% of gross revenue, food and beverage 24% of gross revenue, and entertainment and other revenue 4% of gross revenue. The net loss for the quarter
was $86.2 million. The net loss includes reorganization expense of $27.1 million related to the write-off of unamortized debt issuance costs as of the Petition Date and
$16.3 million in interest rate collar expense related to the termination of the interest rate collar agreements.

For
the nine months ended September 30, 2001, the Aladdin produced gross revenues of $232.4 million. Casino revenue (which includes both the main Casino and The London
Club at Aladdin) represented 43% of gross revenue, hotel 31% of gross revenue, food and beverage 22% of gross revenue, and entertainment and other revenue 4% of gross revenue. The net loss for the
nine months ended September 30, 2001 was $153.7 million including the non-recurring expenses recorded on the Petition Date.

Revenues

Casino revenues for the quarter (inclusive of The London Club at Aladdin) of $26.6 million were derived $15.5 million from slot operations,
$10.9 million from table games and $.2 million from other sources of gaming revenue.

For
the nine months ended September 30, 2001, casino revenues (inclusive of The London Club at Aladdin) were $99.1 million; $47.9 million from slot operations,
$50.3 million from table games and $.9 million from other gaming.

19

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The overall table games gross win percentage was 12.6% and 16.2% for the quarter and nine months ended September 30, 2001, respectively, while the average daily win per table
game was $1,459 and $2,182. The Company expects the normal gross win percentage to be approximately 17.5% for table games. For the three and nine months ended September 30, 2001, the overall
average slot gross daily win per unit was $98 and $92 respectively.

Casino
marketing efforts have been focused on enhancing the customer database, implementing an aggressive direct mail program, increasing the number of special entertainment events in
the Theater for Performing Arts and expanding the number of Casino events and promotions. Currently, the company operates approximately 2,195 slot machines and 96 table games. Slot gross daily win per
unit improved during the quarter from $93 for the quarter ended June 30, 2001 to $98 for the quarter ended September 30, 2001.

For
the quarter ended September 30, 2001, hotel occupancy was at 89.6% with an average daily rate of $95. Hotel occupancy for the nine months ended September 30, 2001
was 91.8% with an average daily rate of $115.

Since
the terrorist attacks of September 11, 2001, airline passenger travel to Las Vegas has been reduced. As a result, hotel occupancy levels are expected to decrease to
approximately 75% during the fourth quarter 2001. The average daily rate is expected to be approximately $100 during the same period. Since September 11, 2001, the competition for hotel visits
from southern California has become more intense as many Strip casino properties have discounted hotel room pricing and other amenities to generate higher occupancy. Although weekend occupancy levels
and rates are returning closer to normal, weekday occupancy levels and rates continue to struggle. The Company anticipates this trend to continue into the 2002 first quarter.

Costs and Expenses

Since the terrorist attacks, the Company has reevaluated its operations and has reduced labors hours in certain areas of its food and beverage department. The
Company has also reduced its administrative labor and other costs. The Company reduced its full time employees by approximately five hundred individuals. As of November 6, 2001, the Company
employed approximately 2,250 full time equivalents. The Company continues to evaluate its operations for additional efficiencies. The estimated labor savings from the staffing reductions are
approximately $18.0 million annually.

Other Factors Affecting Earnings

On January 1, 2001, the Company adopted Statement of Financial Accounting Standards No. 133 "Accounting for Derivative Instruments and Hedging
Activities." Corresponding to the adoption of SFAS No. 133, the Company recorded the $10.7 million cumulative effect of change in accounting principle. The net loss of
$153.7 million for the nine months ended September 30, 2001 includes reorganization expense of $27.1 million related to the write-off of unamortized debt issuance
costs as of the Petition Date and $21.6 million in interest rate collar expense related to the termination of the interest rate collar agreements.

Statement
of Financial Accounting Standards No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of"
("SFAS 121"), requires that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate that the book value of the asset may not be
recoverable. The Company considers the defaults on Gaming's

20

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required debt service payments and significant operating losses to be its primary indicator of potential impairment. In the opinion of management, a substantial impairment in the carrying of value of
the Company's long-lived assets has occurred under SFAS 121. The Company has engaged an independent appraiser to perform a full appraisal of the fair value of the Company's assets. Upon
completion of the independent appraisal, management anticipates recording a significant impairment write-down under SFAS 121 in the consolidated financial statements for the three months ended
December 31, 2001.

The
Company will expense future professional fees as a reorganization item that will be recorded separately in the Consolidated Statement of Operations.

Liquidity and Capital Resources

During the nine months ended September 30, 2001, the Company used net cash of approximately $18.6 million for operating activities and raised
$22.0 million from the Sponsors' (as defined below) contributions pursuant to the Keep-Well Agreement (the "Keep Well Agreement") entered into by AHL, Aladdin Bazaar Holdings, LLC
(99% indirectly owned by the Sommer Trust), London Clubs and The Sommer Trust (collectively, the "Sponsors") for the benefit of the lenders under Gaming's bank credit facility ("Bank Credit
Facility"). The unrestricted cash balance during the period decreased approximately $4.5 million to $15.7 million as of September 30, 2001 (see the Condensed Consolidated Statement of
Cash Flows for the nine months ended September 30, 2001, contained in this Form 10-Q).

As
of November 12, 2001, the Company had unrestricted funds available of approximately $2.2 million (excluding casino bankroll of approximately $4.8 million).
Gaming expects to obtain a DIP Loan from the DIP Lenders. The Company believes the DIP Loan and cash from operations should provide the Company with adequate liquidity to conduct its business during
the Chapter 11 Case, although no assurance can be given in this regard. The Company anticipates that the Emergency Loan will be sufficient to fund operations through December 31, 2001.

Market Risk

Beginning July 20, 2000, Gaming had the following interest rate derivative financial instruments in effect: (i) an interest rate collar with an
amortizing 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 an amortizing 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 the three-months LIBOR equivalents
only and do not include the impact of the basis point additions to LIBOR that are used in calculating interest expense on Gaming's term loans.

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

The
interest rate collars were terminated as of the Petition Date. The market value of the outstanding swap agreements as of that date was determined to be $32.3 million.
Gaming recorded the cost of terminating the swap agreements as net interest rate collar expense in the Condensed Consolidated Statements of Operations. The interest rate collar payable of
$32.3 million and related

21

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accrued interest of $2.8 million have been classified as liabilities subject to compromise in the accompanying Condensed Consolidated Balance Sheets.

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 United States Securities and
Exchange Commission (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 (the "Securities Act"). Such statements include, without
limitation, those relating to the Bank Credit Facility, FF&E Facility (as defined below), the Keep-Well Agreement and other agreements, plans for future operations, current operations,
other business development activities, capital spending, financing sources and 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 operations, the Company's liquidity and
the extent of the Company's alternatives thereto, the sources and extent of the Sponsors' liquidity and the Sponsors' payments under the Keep-Well Agreement, dependence on existing
management, leverage and debt service, domestic or international economic conditions, 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 retention of licenses and approvals under applicable jurisdictional laws and regulations (including gaming laws and regulations).

Item 3. Quantitative and Qualitative Disclosures About Market Risk

There is incorporated by reference the information appearing under the caption "Market Risk" in Item 2 of this Form 10-Q.

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Part II.

Item 1. Legal Proceedings

On
Sept. 28, 2001, Richard J. Goeglein, a former officer of the Company, and GAI, LLC, which is owned by Mr. Goeglein, filed a complaint in the District Court, Clark County, Nevada,
case number A440597, against Gaming, Gaming Holdings and other persons alleging breach of contract, breach of implied covenant of good faith and fair dealing, negligence and negligent
misrepresentation, and intentional misrepresentation. The plaintiffs' claims relate to the termination of Mr. Goeglein's employment contract and GAI, LLC's consulting agreement. The plaintiffs are
seeking compensatory and punitive damages of an unspecified amount in excess of $10,000. Because the action was filed after commencement of the Chapter 11 Case and in violation of the automatic
stay provisions of the Bankruptcy Code, the action is void as to Gaming. The case can proceed against the remaining defendants, however. Gaming Holdings has filed an answer denying the plaintiffs'
allegations in all material respects.

As
reported in Item 5 of the Company's Current Report on form 8-K filed with the SEC on October 1, 2001 and in the Notes to Condensed Consolidated Financial Statements and Part I.,
Item 2 of this Form 10-Q, on September 28, 2001, Gaming filed a voluntary petition for reorganization under Chapter 11. Gaming continues to manage and operate its assets and business as a
debtor-in-possession under Chapter 11 and subject to the supervision and orders of the Bankruptcy Court in the Chapter 11 Case.

As
described in Part I., Item 3 of the Company's Annual Report on Form 10-K filed with the SEC on April 2, 2001 and in Note 9 to the Condensed Consolidated Financial Statements in
this Form 10-Q, Gaming is a defendant and counter-claimant in an arbitration initiated by Bazaar and is a defendant in a lawsuit filed by KBA. Both actions were initiated prior to commencement of the
Chapter 11 Case.

Item 2. Changes in Securities and Use of Proceeds

(c) During the nine months ended September 30, 2001, Gaming Holdings issued a total of 229,850 Series A Preferred Membership Interests (the
"Interests"). The Interests were issued pursuant to the Keep-Well Agreement in return for cash equity contributions made to Gaming Holdings.

The
Interests were issued without registration under the Securities Act of 1933, as amended (the "Securities Act"), in reliance on the exemption in section 4(2) of the
Securities Act for transactions not involving any public offering.

Item 3. Defaults Upon Senior Securities.

(a) As reported in Gaming Holdings' Current Reports on Form 8-K filed with the SEC on September 20 and 24 and October 1, 2001
and in Part I. of this Form 10-Q, Gaming is in default under the Bank Credit Facility, the furniture, fixture and equipment financing facility with General Electric Capital
Corporation (the "FF&E Facility"). The respective amounts in default under the Bank Credit Facility and the FF&E Facility are $434.7 million and $18.1 million as of the Petition Date.
All of such indebtedness is subject to the proceedings in the Chapter 11 Case.

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In addition, Gaming Holdings and Capital, which are co-issuers of the Notes, are in default under the Notes as a result of (i) commencement of the Chapter 11 Case.
Neither Gaming Holdings nor Capital has filed for relief under the Bankruptcy Code. Under the Indenture governing the Notes (the "Indenture"), the entire outstanding amount of the Notes, which totals
$177.0 million as of the Petition Date, has been accelerated and is now due and payable as a result of the default. Neither Gaming Holdings nor Capital would have sufficient funds to pay this
indebtedness if the trustee under the Indenture or holders of the Notes take action to enforce the acceleration provisions.

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Item 6. Exhibits and Reports on Form 8-K

|10.01* |  | Seventh Amendment to Credit Agreement, dated as of June 15, 2001, effective as of May 29, 2001, between Aladdin Gaming, LLC and The Bank of Nova Scotia, as the Administrative Agent for Various Financial
Institutions.                                                                                                                                     
|------ |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.02* |  | Eighth Amendment to Credit Agreement, dated as of July 30, 2001, between Aladdin Gaming, LLC and The Bank of Nova Scotia, as the Administrative Agent for Various Financial Institutions.                                                                                                                                                                    
|10.03* |  | Second Amendment to Keep-Well Agreement, dated as of June 15, 2001, effective as of May 29, 2001 between London Clubs International plc, The Trust under Article Sixth under the will of Sigmund Sommer, Aladdin
Bazaar Holdings, LLC, and Aladdin Holdings LLC and The Bank of Nova Scotia, as the Administrative Agents for Various Financial Institutions.
|10.04* |  | Agreement of Amendment No. 6, dated as of June 15, 2001, effective as of May 29, 2001 among General Electric Capital Corporation, for itself and as agent for certain participants, GMAC Commercial Mortgage
Corporation and Aladdin Gaming, LLC.                                                                                                            
|10.05* |  | Retention Agreement dated as of June 11, 2001 between Aladdin Gaming, LLC and William Timmins, Chief Operating Officer.                                                                                                                                                                                                                                      
|10.06* |  | Retention Agreement dated as of June 11, 2001 between Aladdin Gaming, LLC and Thomas A. Lettero, Chief Financial Officer.                                                                                                                                                                                                                                    
|10.07* |  | Retention Agreement dated as of June 11, 2001 between Aladdin Gaming, LLC and Patricia Becker, Esq., Senior Vice President, Corporate-Legal Affairs.                                                                                                                                                                                                         

*Previously
filed as the same Exhibit No. in the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2001.

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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
|----------------- |  | ----------------------------
|November 14, 2001 |  | By:                         
|November 14, 2001 |  | By:                         
|                  |  | ALADDIN CAPITAL CORP.       
|November 14, 2001 |  | By:                         
|November 14, 2001 |  | By:                         

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EXHIBIT INDEX

|Exhibit No. |  | Description                                                                                                                                                                                                                                                                                                                                                   
|----------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.01*      |  | Seventh Amendment to Credit Agreement, dated as of June 15, 2001, effective as of May 29, 2001, between Aladdin Gaming, LLC and The Bank of Nova Scotia, as the Administrative Agent for Various Financial
Institutions.                                                                                                                                      
|10.02*      |  | Eighth Amendment to Credit Agreement, dated as of July 30, 2001, between Aladdin Gaming, LLC and The Bank of Nova Scotia, as the Administrative Agent for Various Financial Institutions.                                                                                                                                                                     
|10.03*      |  | Second Amendment to Keep-Well Agreement, dated as of June 15, 2001, effective as of May 29, 2001, between London Clubs International plc, The Trust under Article Sixth under the will of Sigmund Sommer, Aladdin
Bazaar Holdings, LLC, and Aladdin Holdings LLC and The Bank of Nova Scotia, as the Administrative Agents for Various Financial Institutions.
|10.04*      |  | Agreement of Amendment No. 6, dated as of June 15, 2001, effective as of May 29, 2001 among General Electric Capital Corporation, for itself and as agent for certain participants, GMAC Commercial Mortgage
Corporation and Aladdin Gaming, LLC.                                                                                                             
|10.05*      |  | Retention Agreement dated as of June 11, 2001 between Aladdin Gaming, LLC and William Timmins, Chief Operating Officer.                                                                                                                                                                                                                                       
|10.06*      |  | Retention Agreement dated as of June 11, 2001 between Aladdin Gaming, LLC and Thomas A. Lettero, Chief Financial Officer.                                                                                                                                                                                                                                     
|10.07*      |  | Retention Agreement dated as of June 11, 2001 between Aladdin Gaming, LLC and Patricia Becker, Esq., Senior Vice President.                                                                                                                                                                                                                                   

*Previously
filed as the same Exhibit No. in the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2001.

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