<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-Q

(Mark One)

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

     For the quarterly period ended:              March 31, 1999
                                    -----------------------------------------

                                       OR

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

     For the transition period from:                  to

                                    ------------------   --------------------

Commission file number:     333-49715
                       --------------------


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

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

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

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

                                 NOT APPLICABLE
               ----------------------------------------------------
               (Former name, former address and former fiscal year,
                          if changed since last report)

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 March 31, 1999.

Class A Common Stock, no par value, 
   2,000,000 shares authorized                             1,107,500 issued
Class B Common Stock, no par value, 
Non-voting, 8,000,000 shares authorized                    2,215,000 issued


<PAGE>

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

                                      INDEX

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

   Item 1.    Financial Statements

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

              Statement of Operations 
                For the three months ended March 31, 1999 and 1998 and for the 
                period from inception (December 3, 1997) through March 31, 1999.....     2

              Statement of Stockholders' Equity 
                For the period from inception (December 3, 1997) through March 31,  
                1999................................................................     3

              Statement of Cash Flows 
                For the three months ended March 31, 1999 and 1998 and for the  
                period from inception (December 3, 1997) through March 31, 1999.....     4

              Notes to the Consolidated Financial Statements........................     5-6

   Item 2.    Management's Discussion and Analysis of Financial Condition and 
                Results of Operations...............................................     7-11

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

PART II       OTHER INFORMATION

   Item 1.    Legal Proceedings.....................................................     12

   Item 2.    Changes in Securities and Use of Proceeds.............................     12

   Item 3.    Defaults upon Senior Securities.......................................     12

   Item 4.    Submission of Matters to a Vote of Security Holders...................     12

   Item 5.    Other Information.....................................................     12

   Item 6.    Exhibits and Reports on Form 8-K......................................     12

Signatures      ....................................................................     13

Exhibit Index   ....................................................................     14
</TABLE>


<PAGE>

PART I  FINANCIAL INFORMATION

ITEM 1  FINANCIAL STATEMENTS

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

                                 BALANCE SHEETS
                   AS OF MARCH 31, 1999 AND DECEMBER 31, 1998
                                 (IN THOUSANDS)
<TABLE>
<CAPTION>
                                                                March 31, 1999   December 31, 1998
                                                                --------------   -----------------
                                                                  (unaudited)
                             ASSETS
<S>                                                              <C>                <C>
Cash                                                               $       1        $       1
Investment in unconsolidated affiliate                                15,080           17,049
                                                                   ---------        ---------
                                                                      15,081           17,050
                                                                   ---------        ---------
                                                                   ---------        ---------

                LIABILITIES AND MEMBERS' EQUITY

Payable to related party                                           $       4        $       3

Common Stock:

Class A, no par value, 2,000,000 shares authorized,
1,107,500 shares issued and outstanding as of March 31,
1999 and December 31, 1998. 
Class B, no par value and non-voting 8,000,000 shares 
authorized, 2,215,000 shares issued and outstanding, 
and 2,215,000 shares reserved pursuant to the warrant 
agreement as of March 31, 1999 and December 31, 1998.                 13,247           13,247

Additional paid-in capital                                            14,420           14,420

Deficit accumulated during the development stage                    (12,590)         (10,620)
                                                                   ---------        ---------
                                                                      15,081           17,050
                                                                   ---------        ---------
                                                                   ---------        ---------
</TABLE>

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

                                       1


<PAGE>

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

                             STATEMENT OF OPERATIONS
               FOR THE THREE MONTHS ENDED MARCH 31, 1999 AND 1998
                               AND FOR THE PERIOD
            FROM INCEPTION (DECEMBER 3, 1997) THROUGH MARCH 31, 1999
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
                                                                                                For the period
                                                                                                December 3, 1997
                                                      For the three        For the three          (inception)
                                                      months ended          months ended            through
                                                     March 31, 1999        March 31, 1998        March 31, 1999
                                                       (unaudited)          (unaudited)           (unaudited)
                                                     ----------------     -----------------    -----------------
<S>                                                  <C>                  <C>                  <C>
Other (income) expenses                                $        1            $        0         $        4

Equity in loss of unconsolidated affiliate                  1,969                 3,430             12,586

Income tax expense                                              -                     -                  -
                                                       ----------            ----------         ----------

Net loss accumulated during the development stage      $    1,970            $    3,430         $   12,590
                                                       ----------            ----------         ----------
                                                       ----------            ----------         ----------

Basic and dilutive loss per share                      $    (0.59)           $    (2.27)        $    (4.51)

Shares used in per share calculation                    3,322,500             1,513,584          2,792,826

</TABLE>

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

                                       2

<PAGE>

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

                        STATEMENT OF STOCKHOLDERS' EQUITY
                FOR THE PERIOD FROM INCEPTION (DECEMBER 3, 1997)
                             THROUGH MARCH 31, 1999
                                 (IN THOUSANDS)
                                   (UNAUDITED)

<TABLE>
<CAPTION>

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

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

BALANCE, DECEMBER 31, 1997                          -                1              -               1

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

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

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

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

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

Net loss for the period                             -                -        (1,970)          (1,970)
                                              -------          -------      --------         --------
BALANCE, MARCH 31, 1999                       $13,247          $14,420      $(12,590)        $ 15,077
                                              -------          -------      --------         --------
                                              -------          -------      --------         --------
</TABLE>

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

                                       3

<PAGE>

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

                             STATEMENT OF CASH FLOW
      FOR THE THREE MONTHS ENDED MARCH 31, 1999 AND 1998 AND FOR THE PERIOD
            FROM INCEPTION (DECEMBER 3, 1997) THROUGH MARCH 31, 1999
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                                                     For the period
                                                                                                    December 3, 1997
                                                   For the three            For the three              (inception)
                                                   months ended             months ended            through March 31,
                                                   March 31, 1999           March 31, 1998                1999
                                                    (unaudited)              (unaudited)               (unaudited)
                                                 -------------------    ----------------------    --------------------
<S>                                              <C>                    <C>                       <C>
Cash flows used for investing activities:
Investment in unconsolidated affiliate                     -                  (15,000)                (15,000)

Cash flows from financing activities:
Proceeds from the issuance of stock                        -                        -                       1
Proceeds from the issuance of warrants                     -                   15,000                  15,000
                                                      ------                  -------                 -------
Increase in cash and cash equivalents                      -                        -                       1

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

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

Non-cash investing and financing activities:
Equity contributions - non-cash                            -                  $13,247                 $13,247

</TABLE>

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

                                       4

<PAGE>



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

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 1999

1.   ORGANIZATION AND BUSINESS

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

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

     Enterprises has no other business or activities other than its 
investment in Gaming Holdings which is a development stage company. Gaming 
Holdings, through its wholly-owned subsidiary, Aladdin Gaming, LLC 
("Gaming"), is developing, constructing and will operate a new hotel and 
casino, the Aladdin Hotel and Casino 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"). Aladdin Music plans to construct a second hotel and casino 
with a music and entertainment theme ("Aladdin Music Project") on the 
southeast corner of the 35-acre parcel. Aladdin Music is currently seeking a 
joint venture partner and financing for the Aladdin Music Project.

     This information should be read in conjunction with the financial
statements set forth in Enterprises' Annual Report on Form 10-K for the year
ended December 31, 1998 and the Form 8-K, dated April 27, 1999.

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

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

2.   AMENDMENTS TO THE CREDIT AGREEMENT

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

                                       5

<PAGE>

March Draw on April 2, 1999, Gaming immediately paid the outstanding March 1999
payment to the Design/Builder.

     On April 16, 1999, the Lenders under the Credit Agreement approved,
effective as of March 10, 1999, the Second Amendment to the Credit Agreement,
which cured or waived the events of default discussed in Enterprises' Form 10-K
for the year ended December 31, 1998. Specifically, the Second Amendment to the
Credit Agreement provides: (i) the indebtedness incurred in connection with the
Aladdin Music Project has been paid by or on behalf of Aladdin Music and this
event of default has now been waived by the Lenders; (ii) a capital contribution
in the amount of approximately $18.5 million has been made to bring the Main
Project Budget "In Balance;" (iii) the approximately $6.5 million of letters of
credit, which had been previously posted by London Clubs and the Sommer Trust
to fund a prior increase in the Main Project Budget (and resulting imbalance),
have been drawn and the proceeds deposited in Gaming's guaranty deposit account;
(iv) amending certain definitions of the Credit Agreement, including, "Available
Funds," "Indebtedness," and "Realized Savings;" (v) any costs in excess of $36
million for completing the carpark associated with the project will be funded by
the Sommer Trust and London Clubs; (vi) requiring that Gaming maintain a minimum
"Net Worth" at the close of each calendar month, until the end of the fiscal
quarter during which the project opens (and then reverting to the Credit
Agreement's requirement to maintain the minimum Net Worth on a fiscal quarterly
basis thereafter), of not less than $100 million plus 85% of positive Net Income
(as defined in the Credit Agreement); and (vii) other technical amendments to
the Credit Agreement.

3.   INCOME TAXES

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

     There was no income tax expense or benefit recorded for the period from
inception (December 3, 1997) through March 31, 1999 as Enterprises is a
development stage company and the realization of any deferred tax asset is
uncertain.

4.   IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS

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

                                       6

<PAGE>

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

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

DEVELOPMENT ACTIVITIES

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

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

     The operations of Gaming Holdings and its subsidiaries have been limited 
to the design, development, financing and construction of a new Aladdin Hotel 
and Casino ("Aladdin"). The Aladdin will be the centerpiece of an 
approximately 35-acre world-class resort, casino and entertainment complex 
("Complex") located on the site of the former Aladdin hotel and casino in Las 
Vegas, Nevada, a premier location on Las Vegas Boulevard. The Aladdin has 
been designed to include a luxury themed hotel of approximately 2,600 rooms 
("Hotel"), an approximately 116,000 square foot casino ("Casino"), an 
approximately 1,400-seat production showroom and six restaurants. The 
Casino's main gaming area will contain approximately 2,800 slot machines, 87 
table games, keno and a race and sports book facility. Included on a separate 
level of the Casino will be a 15,000 square foot luxurious gaming section 
("The London Club") that is expected to contain an additional 20 to 30 high 
denomination table games and approximately 100 high denomination slot 
machines. The Complex, which has been designed to promote casino traffic and 
to provide customers with a wide variety of entertainment alternatives, will 
comprise: (i) the Aladdin; (ii) the themed entertainment shopping mall with 
approximately 496,000 square feet of retail space ("Desert Passage"); (iii) a 
planned second hotel and casino with a music and entertainment theme 
("Aladdin Music Project"); (iv) the newly renovated 7,000-seat Theater of the 
Performing Arts ("Theater"); and (v) the approximately 4,800-space car 
parking facility ("Carpark" and, together with the Desert Passage, 
hereinafter, "Mall Project"). The Mall Project is separately owned in part by 
an affiliate of the Gaming Holdings and Aladdin Music is currently seeking a 
joint venture partner and financing for the Aladdin Music Project. Gaming 
Holdings believes that the completion of the Aladdin will occur during the 
second quarter of the year 2000.

                                       7

<PAGE>

RESULTS OF OPERATIONS

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

     Gaming Holdings has capitalized all qualifying construction costs. 
Accordingly, Gaming Holdings does not have any historical operating income. 
The capitalized costs consist primarily of land contributed by certain 
members of Gaming Holdings, design fees, financing and commitment fees, 
construction costs and interest on qualifying assets. Capitalized costs 
include approximately $2.3 million related to the Aladdin Music Project for 
necessary predevelopment costs and expenses of the Aladdin Music Project. 
Gaming Holdings' operating expenses primarily have consisted of interest, 
amortization costs and expenses related to the Notes and pre-opening costs.

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

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

     Enterprises recorded a net loss of approximately $2.0 million for the 
three months ended March 31, 1999 as compared to approximately $3.4 million 
for the three month period ended March 31, 1998. Enterprises' cumulative loss 
for the period of inception (December 3, 1997) to March 31, 1999 was 
approximately $12.6 million. Gaming Holdings' losses were due to the 
pre-opening costs, interest expense, amortization costs and expenses related 
to the Notes. The pre-opening costs include approximately $.5 million related 
to the Aladdin Music Project.

MATERIAL CHANGES IN FINANCIAL CONDITION

     Through March 31, 1999, Gaming Holdings has expended approximately 
$241.0 million primarily on the development of the Aladdin, of which 
approximately $74.5 million had been expended on repayment of debt associated 
with the land contribution to Gaming Holdings, approximately $105.5 million 
in construction, furniture, fixtures and equipment, and capitalized interest, 
approximately $39.5 million in debt issuance and member equity costs, and 
approximately $21.5 million in pre-opening costs, net interest expense, and 
other current assets.

LIQUIDITY AND CAPITAL RESOURCES


                                       8

<PAGE>

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

     Gaming has a $410 million Credit Agreement ("Bank Credit Facility" or
"Credit Agreement") with various financial institutions and the Bank of Nova
Scotia as the administrative agent for the lenders (collectively, "Lenders").
The Credit Agreement consists of three separate term loans. Term A Loan
comprises a term loan of $136 million and matures seven years after the initial
borrowing date. Term B Loan comprises a term loan of $114 million and matures
eight and one-half years after the initial borrowing date. Term C Loan comprises
a term loan of $160 million and matures ten years after the initial borrowing
date. As of March 31, 1999, approximately $69.4 million of the Term B Loan
proceeds, plus accrued interest, and approximately $115.4 million of the Term C
Loan proceeds, plus accrued interest, is available. The Term A Loan has not been
funded. For further details on the Bank Credit Facility, including the
covenants, restrictions and limitations on Gaming pursuant to the Bank Credit
Facility, see Exhibit 10.12 to Enterprises' Form 10-K for the year ended
December 31, 1998 and Exhibit 10.01 to Enterprises' Form 8-K, dated April 27,
1999.

     Gaming has operating lease financing of up to $60 million and a term loan
facility of $20 million to obtain gaming equipment and other specified equipment
(collectively, "FF&E Financing"). For further details on the operating lease
financing and term loan facility, including the covenants, restrictions and
limitations on Gaming pursuant to the FF&E Financing, see Exhibit 10.40 to
Enterprises' Form 10-K for the year ended December 31, 1998.

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

     London Clubs International, plc ("London Clubs"), the Sommer Trust, and
Aladdin Bazaar Holdings, LLC ("Bazaar Holdings"), which is owned 99% by the
Sommer Trust, have entered into a completion guaranty ("Bank Completion
Guaranty") for the benefit of the Lenders under the Bank Credit Facility, under
which they have agreed to guarantee, among other things, the completion of the
Aladdin. The Bank Completion Guaranty is not subject to any maximum dollar
limitations. The holders of the Notes are not a party to the Bank Completion
Guaranty, however, London Clubs, the Sommer Trust and Bazaar Holdings have
entered into a limited completion guaranty for the benefit of the Noteholders
("Noteholder Completion Guaranty") under which they guarantee completion of the
Aladdin, subject to certain important exceptions, limitations and
qualifications. The Noteholder Completion Guaranty contains certain
intercreditor provisions which significantly limit the rights of the Trustee
under the Noteholder Completion Guaranty.

     On April 5, 1999, effective as of March 10, 1999, the Sommer Trust, 
London Clubs, Bazaar Holdings and The Bank of Nova Scotia, as administrative 
agent for the Lenders, entered into the First Amendment to the Completion 
Guaranty, which requires the Sommer Trust, London Clubs and Bazaar Holdings 
to guarantee Gaming's minimum net worth as required by the amended Credit 
Agreement. Gaming Holdings estimates, and has advised the Sommer Trust, 
London Clubs and Bazaar Holdings, that additional capital contributions of 
approximately $33 million will be required to maintain such minimum net 
worth prior to the opening of the Aladdin.

     In connection with the development of the Mall Project, Aladdin Bazaar 
will reimburse Gaming Holdings approximately $14.2 million for the 
construction of certain areas shared by the Aladdin and the Mall Project and 
the facade to the Aladdin. Additionally, Aladdin Bazaar is obligated to spend 
no more than $36 million for the Carpark. Therefore, any cost overruns 
associated with these items will be borne by Gaming Holdings. In addition, 
Gaming Holdings is obligated to pay to Aladdin Bazaar: 

                                       9

<PAGE>


(i) a $3.2 million fee per year for a term of 99 years, which is adjusted 
annually pursuant to a consumer price index-based formula, for usage of the 
Carpark; and (ii) the Gaming Holdings' proportionate share of the operating 
costs associated with the Carpark and other common areas.

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

     Gaming Holdings believes that the funds provided by the Notes, Bank 
Credit Facility, FF&E Financing, London Clubs' equity contribution and 
contributions pursuant to the Bank Completion Guaranty (collectively, 
"Funding Transactions") will be sufficient to develop, complete and commence 
operations of the Aladdin, assuming no further delays or additional 
construction cost overruns, which: (i) are not covered by the $31.8 million 
contingency funds, of which amount $6.8 million is provided for under the 
Design/Build Contract and $25 million is provided for under the Credit 
Agreement; or (ii) Fluor Corporation and/or its subsidiary Fluor Daniel, Inc. 
are not responsible for pursuant to the Fluor Guaranty and the Design/Build 
Contract, respectively. As of March 31, 1999, Gaming Holdings has utilized 
approximately $10.1 million of the $31.8 million. However, there can be no 
assurance that the Funding Transactions will be sufficient for the 
development, construction and commencement of the Aladdin.

     Following the commencement of operations of the Aladdin, Gaming Holdings
expects to fund its operating, debt service and capital needs, as currently
contemplated, with $15 million of working capital from the Funding Transactions
and operating cash flows. Although no additional financing is contemplated,
Gaming Holdings will seek, if necessary and to the extent permitted under the
Notes Indenture and the terms of the Bank Credit Facility and the FF&E
Financing, additional financing through additional bank borrowings or debt or
equity financings. There can be no assurance that additional financing, if
needed, will be available to Gaming Holdings, or that, if available, the
financing will be on terms favorable to Gaming Holdings. There can also be no
assurance that estimates by Gaming Holdings of its reasonably anticipated
liquidity needs are accurate or that new business developments or other
unforeseen events will not occur, resulting in the need to raise additional
funds.

CERTAIN FORWARD LOOKING STATEMENTS

     Certain information included in this Form 10-Q and other materials filed or
to be filed by Enterprises with the SEC (as well as information included in oral
statements or other written statements made, or to be made, by Enterprises)
contain statements that are forward-looking within the meaning of Section 27A
of the Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended. Such statements include, without limitation,
those relating to plans for future 

                                       10

<PAGE>

operations, current construction and development activities (including 
completion dates and budgets), other business development activities, capital 
spending, financing sources, the effect of regulation (including gaming and 
tax regulations) and competition. Such forward-looking information involves 
important risks and uncertainties that could significantly affect anticipated 
results in the future and, accordingly, such results may differ from those 
expressed in any forward-looking statements made by, or on behalf of, 
Enterprises. These risks and uncertainties include, but are not limited to, 
those relating to the current development and construction activities and 
costs and timing thereof, the sources and extent of financing for the 
project, dependence on existing management, leverage and debt service 
(including sensitivity to fluctuations in interest rates), domestic or 
international economic conditions (including sensitivity to fluctuations in 
foreign currencies), changes in federal or state tax laws or the 
administration of such laws, changes in gaming laws or regulations (including 
the legalization of gaming in certain jurisdictions) and application for 
licenses and approvals under applicable jurisdictional laws and regulations 
(including gaming laws and regulations).

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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

                                       11

<PAGE>



PART II  OTHER INFORMATION

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

         (a)  Exhibits

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

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

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

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

              27.01 Financial Data Schedule.

         (b) Reports on Form 8-K

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

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<PAGE>

                                   SIGNATURES

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


                                  ALADDIN GAMING ENTERPRISES, INC.

May 13, 1999                      By:   /s/ RONALD DICTROW
                                        ----------------------------------------
                                        Ronald Dictrow, Secretary


May 13, 1999                      By:   /s/ CORNELIUS T. KLERK
                                        ----------------------------------------
                                        Cornelius T. Klerk,
                                        Treasurer

                                       13

<PAGE>



                                  EXHIBIT INDEX

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

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

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

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

27.01         Financial Data Schedule
</TABLE>

                                       14