<PAGE>



                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

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

         For the quarterly period ended:        September 30, 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)



Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
                                                        YES   X       NO
                                                           ------        -----

Indicate the number of shares outstanding of the issuer's classes of common
stock, as of September 30, 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
               September 30, 1999 and December 31, 1998.......................................1

             Statements of Operations
               For the three and nine months ended September 30, 1999 and 1998 and
               for the period from inception (December 3, 1997) through September
               30, 1999.......................................................................2

             Statements of Stockholders' Equity
               For the period from inception (December 3, 1997) through September
               30, 1999.......................................................................3

             Statements of Cash Flows
               For the nine months ended September 30, 1999 and 1998 and for the
               period from inception (December 3, 1997) through September 30, 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...................11-12

PART II      OTHER INFORMATION

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

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

Exhibit Index................................................................................15

</TABLE>

                                     i

<PAGE>

PART I    FINANCIAL INFORMATION

ITEM 1    FINANCIAL STATEMENTS

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

                                 BALANCE SHEETS
                 AS OF SEPTEMBER 30, 1999 AND DECEMBER 31, 1998
                                 (IN THOUSANDS)
<TABLE>
<CAPTION>

                                                     September 30, 1999  December 31, 1998
                                                         (unaudited)
                            ASSETS
<S>                                                  <C>                 <C>
Cash                                                      $      1           $      1
Investment in unconsolidated affiliate                      11,319             17,049
                                                       -----------        -----------
                                                            11,320             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 September 30, 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 September 30, 1999
and December 31, 1998                                       13,247             13,247

Additional paid-in capital                                  14,420             14,420

Deficit accumulated during the development stage           (16,351)           (10,620)
                                                       -----------        -----------
                                                            11,320             17,050
                                                       -----------        -----------
                                                       -----------        -----------

</TABLE>



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

                                     1

<PAGE>


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

                             STATEMENTS OF OPERATIONS
         FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
                               AND FOR THE PERIOD
          FROM INCEPTION (DECEMBER 3, 1997) THROUGH SEPTEMBER 30, 1999
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)


<TABLE>
<CAPTION>
                                                       For the three     For the three       For the nine          For the nine
                                                        months ended      months ended       months ended          months ended
                                                      September  30,     September 30,      September 30,         September 30,
                                                                1999              1998               1999                  1998
                                                          (unaudited)       (unaudited)        (unaudited)           (unaudited)
                                                     ---------------     -------------      -------------        --------------
<S>                                                  <C>                 <C>                <C>                  <C>
Other (income) expense                                $       --             $     ---        $        1            $         2

Equity in loss of unconsolidated affiliate                 1,882                 2,791             5,730                  8,214

Income tax expense                                            --                    --               --                      --
                                                     ---------------     -------------      -------------        --------------
Net loss accumulated during the development stage          1,882                  2,791            5,731                  8,216
                                                     ---------------     -------------      -------------        --------------
Basic and diluted loss per share                      $     (.57)            $     (.84)      $    (1.72)            $    (3.01)

Shares used in per share calculation                   3,322,500              3,322,500        3,322,500              2,726,154



                                                      For the period
                                                         December 3,
                                                                1997
                                                          (inception)
                                                             through
                                                        September 30,
                                                                 1999
                                                           (unaudited)
                                                      ---------------
<S>                                                   <C>
Other (income) expense                                      $       5

Equity in loss of unconsolidated affiliate                     16,346

Income tax expense                                                  --
                                                      ---------------
Net loss accumulated during the development stage               16,351
                                                      ---------------
Basic and diluted loss per share                            $    (5.56)

Shares used in per share calculation                         2,938,367

</TABLE>



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

                                     2
<PAGE>


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

                        STATEMENTS OF STOCKHOLDERS' EQUITY
                FOR THE PERIOD FROM INCEPTION (DECEMBER 3, 1997)
                           THROUGH SEPTEMBER 30, 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                           --                --        (5,731)              (5,731)
                                         ------------      -----------     ---------          -----------
BALANCE, SEPTEMBER 30, 1999                 $ 13,247          $ 14,420      $(16,351)            $ 11,316
                                         ------------      -----------     ---------          -----------
                                         ------------      -----------     ---------          -----------
</TABLE>

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

                                     3

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

                            STATEMENTS OF CASH FLOWS
                  FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999
                   AND 1998 AND FOR THE PERIOD FROM INCEPTION
                  (DECEMBER 3, 1997) THROUGH SEPTEMBER 30, 1999
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>

                                                                                                    For the period
                                                                                                   December 3, 1997
                                                    For the nine             For the nine             (inception)
                                                    Months ended             months ended               through
                                                 September 30, 1999       September 30, 1998      September 30, 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
                               SEPTEMBER 30, 1999

1.       ORGANIZATION AND BUSINESS

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

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

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

         This information should be read in conjunction with the financial
statements set forth in Enterprises' Annual Report on Form 10-K for the year
ended December 31, 1998, the Form 8-K, dated April 27, 1999, and the Form 10-Qs
for the quarters ended March 31, 1999 and June 30, 1999.

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

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

2.       INCOME TAXES

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


                                     5

<PAGE>

         There was no income tax expense or benefit recorded for the period from
inception (December 3, 1997) through September 30, 1999 as Enterprises is a
development stage company and the realization of any deferred tax asset is
uncertain.

3.       IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS

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

                                     6


<PAGE>



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

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

DEVELOPMENT ACTIVITIES

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

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

         The operations of Gaming Holdings and its subsidiaries have been
limited to the design, development, financing and construction of a new Aladdin
Resort and Casino ("Aladdin"). The Aladdin will be the centerpiece of an
approximately 35-acre 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") and six
restaurants. The Casino's main gaming area will contain approximately 2,800 slot
machines, 87 table games 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 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 and has
no significant operations to date.

         Gaming Holdings has capitalized all qualifying construction costs.
Accordingly, Gaming Holdings does not have any historical operating income. The
capitalized costs consist primarily of land contributed by certain members of
Gaming Holdings, design fees, financing and commitment fees, construction costs
and interest on qualifying assets. Capitalized costs include approximately $2.2
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, 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 and preferred
dividends in arrears as equity in loss of unconsolidated affiliate.

         Enterprises recorded a net loss of approximately $1.9 million and $5.7
million for the three and nine months ended September 30, 1999, respectively, as
compared to approximately $2.8 million and $8.2 million for the three and nine
month period ended September 30, 1998, respectively. Enterprises' cumulative
loss for the period of inception (December 3, 1997) to September 30, 1999 was
approximately $16.4 million. Gaming Holdings' losses were due to the pre-opening
costs, interest expense, amortization costs and expenses related to the Notes.

MATERIAL CHANGES IN FINANCIAL CONDITION

         Through September 30, 1999, approximately $365.5 million had been
expended primarily on the development of the Aladdin, of which approximately
$74.5 million had been expended on repayment of debt associated with the land
contribution to Gaming Holdings, approximately $230.7 million in construction,
furniture, fixtures and equipment, and capitalized interest, approximately $39.5
million in debt issuance and member equity costs, and approximately $20.8
million in pre-opening costs, net interest expense, and other current assets.


LIQUIDITY AND CAPITAL RESOURCES

         On February 26, 1998, Gaming Holdings and Capital issued $221.5
million aggregate principal amount of their 13 1/2% Senior Discount Notes due
2010 ("Notes"). The proceeds to Gaming Holdings from the Notes were
approximately $115.0 million and all the proceeds have been utilized by
Gaming Holdings for the

                                     8

<PAGE>

development and construction of the Aladdin. For further details on the Notes,
including the covenants, restrictions and limitations on Enterprises pursuant to
the Notes Indenture, see Exhibit 10.1 to Enterprises' Form 10-K for the year
ended December 31, 1998.

         Gaming has a credit facility ("Bank Credit Facility" or "Credit
Agreement") with various financial institutions and The Bank of Nova Scotia
as the administrative agent for the lenders (collectively, "Lenders"). The
Credit Agreement consists of three separate term loans. Term A Loan comprises
a term loan of $129.7 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 September 30, 1999, approximately $26.1 million of the
Term B Loan proceeds, plus accrued interest, and approximately $72.1 million
of the Term C Loan proceeds, plus accrued interest, is available. The Term A
Loan has not been funded. Under the Credit Agreement, Gaming had $21.3
million available for its investment in Aladdin Music. However, during the
Third Quarter of 1999, pursuant to the Credit Agreement, Gaming could, and
did, allocate $15.0 million of such funds to the Theater renovation and
reduced the Term A Loan by the remaining $6.3 million. 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 subordinated to various restrictions under the
Aladdin Bazaar operating agreement. Due to the restrictions upon the payments,
there can be no assurances that Gaming will receive any payments under this
note.

         London Clubs, the Sommer Trust, and Aladdin Bazaar Holdings, LLC
("Bazaar Holdings"), which is owned 99% by the Sommer Trust, have entered
into a completion guaranty ("Bank Completion Guaranty") for the benefit of
the Lenders under the Bank Credit Facility, under which they have agreed to
guarantee, among other things, the completion of the Aladdin. The Bank
Completion Guaranty is not subject to any maximum dollar limitations. From
January 1, 1999 to September 30, 1999, there has been a total of
approximately $46.2 million in payments pursuant to the Bank Completion
Guaranty, which has been funded approximately $41.8 million by London Clubs
and approximately $4.4 million by the Sommer Trust. Pursuant to a
contribution agreement ("Contribution Agreement"), dated as of February 26,
1998, the Sommer Trust and London Clubs agreed to share all obligations under
the Bank Completion Guaranty, 75% and 25%, respectively, and to the extent
that one of the parties could not fund its proportionate amount under the
Contribution Agreement, the other party could fund the non-contributing
party's proportionate amount. 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.

         During the Third Quarter of 1999, Gaming Holdings increased the Main
Project Budget by approximately $10.2 million, of which $6.2 million was
funded in the Fourth Quarter of 1999. This amount reflected an increase in
construction costs of approximately $7.6 million, an increase in pre-opening
costs of approximately $1.6 million and an increase in capitalized interest
of $1 million. Pursuant to the Bank Completion Guaranty, the Sommer Trust and
London Clubs

                                     9

<PAGE>


funded to Gaming approximately $1 million and $9.2 million, respectively, to
fund the Main Project Budget increase.

         As required by Gaming Holdings' Operating Agreement upon advances
under the Bank Completion Guaranty, Gaming Holdings will issue, effective as
of the dates of the respective fundings, Series A Preferred Shares in the
names of Sommer Enterprises and London Clubs Nevada, Inc. in the amounts
specified in Gaming Holdings' Operating Agreement. All said shares are
required to be pledged in favor of the Lenders, and, on a subordinated basis,
the shares issued in the name of Sommer Enterprises (as well as its Common
Shares in Gaming Holdings) are required to be pledged in favor of London
Clubs.

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

         Gaming Holdings is evaluating the amount of additional increases to
the Main Project Budget which will be necessary to complete and open the
Aladdin. The Bank Completion Guaranty requires that increases to the Main
Project Budget be funded by the Sommer Trust and London Clubs. Gaming
Holdings believes that the funds provided by the Notes, Bank Credit Facility,
FF&E Financing, London Clubs' equity contribution and contributions pursuant
to the Bank Completion Guaranty (collectively, "Funding Transactions") will
be sufficient to develop, complete and commence operation of the Aladdin.
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. In addition, upon the opening of the
Aladdin, Gaming Holdings is expected to have an aggregate of $10.0 million
available under a working capital facility; however, there can be no assurance
such facility will be available to Gaming Holdings, or that, if available, the
facility will be on terms favorable to Gaming Holdings.

         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.

YEAR 2000

         Gaming Holdings and its subsidiaries are development stage companies
that are developing, constructing, and upon completion, will operate a hotel
casino. The selection of software applications, hardware and other technology
currently in use principally occurred within the last twelve months. The only
computer systems in place at the current time are several financial
applications, word processing and an internal email system that are Year 2000
compliant. Accordingly, it is not expected that Gaming Holdings will incur
significant amounts, if any, to modify its systems for Year 2000 compliance.
Further, Gaming Holdings has requested representation for software applications,
hardware or other technology

                                     10

<PAGE>

regarding the Year 2000 compliance by the vendors from whom Gaming Holdings
has purchased or will purchase such products.

         Gaming Holdings has requested representations regarding the Year 2000
compliance from Fluor Corporation and/or its subsidiary, Fluor Daniel, the
design/builder for the Aladdin ("Design/Builder"), and has requested
Design/Builder to seek similar representations of the other contractors and
subcontractors for the construction of the Aladdin (collectively, "Contractors")
to assess the impact of Year 2000 noncompliance on the construction of the
Aladdin. Construction delays will have a significant impact on the financial
results of Gaming Holdings. There can be no assurance that the systems of the
Contractors or other companies on which the company may rely, such as vendors,
will be properly converted before the Year 2000 and that failure to convert by
another company will not have an adverse effect on Gaming Holdings' operations.

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 operations, current construction
and development activities (including completion dates, budgets and cost
estimates), other business development activities, capital spending, financing
sources, the Year 2000 compliance, the effect of regulation (including gaming
and tax regulations) and competition. Such forward-looking information involves
important risks and uncertainties that could significantly affect anticipated
results in the future and, accordingly, such results may differ from those
expressed in any forward-looking statements made by, or on behalf of,
Enterprises. These risks and uncertainties include, but are not limited to,
those relating to the current development and construction activities and costs
and timing thereof, the sources and extent of financing for the project,
dependence on existing management, leverage and debt service (including
sensitivity to fluctuations in interest rates), domestic or international
economic conditions (including sensitivity to fluctuations in foreign
currencies), changes in federal or state tax laws or the administration of such
laws, changes in gaming laws or regulations (including the legalization of
gaming in certain jurisdictions) and application for licenses and approvals
under applicable jurisdictional laws and regulations (including gaming laws and
regulations).

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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

         Beginning June 30, 1999, Gaming has the following interest rate swaps,
interest rate ceilings and floor caps, and related notional amounts in effect:
(i) an interest rate swap with an original notional amount of $114 million
increasing to a maximum of $222.5 million whereby interest is fixed at 5.50%
through March 31, 2000; (ii) after March 31, 2000, an interest rate collar with
a notional amount of $250 million, a maximum and minimum interest rate of 7.5%
and 5.15%, respectively, will go into effect and mature on September 30, 2006;
and (iii) an interest rate collar with a notional amount of $160 million, a
maximum rate of 8.00%, a minimum rate of 5.15% and a maturity date of March 31,
2003. All rates

                                     11

<PAGE>

noted above are LIBOR equivalents only and do not include the impact of the
basis point additions to LIBOR that are used in calculating interest expense
on Gaming's term loans. The LIBOR applicable to these agreements is adjusted
every three months and on September 30, 1999 was set at 5.51%. The fair
market value of Gaming's interest rate swaps, interest rate ceilings and
floor caps as provided by the counterparty, is a net receivable of
approximately $4.6 million at October 22, 1999.

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

         Neither Gaming nor the counterparty, which is a prominent financial
institution, is required to collateralize their respective obligations under
these swaps. Gaming is exposed to loss if the counterparty defaults. Gaming does
not hold or issue rate agreements for trading purposes.

                                     12

<PAGE>


PART II  OTHER INFORMATION

ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K

         (a)      Exhibits

                  27.01    Financial Data Schedule


         (b)      Reports on Form 8-K

         None.


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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.


November 15, 1999                           By:   /s/  RONALD DICTROW
                                            --------------------------
                                            Ronald Dictrow, Secretary


November 15, 1999                           By:   /s/ CORNELIUS T. KLERK
                                            --------------------------
                                            Cornelius T. Klerk, Treasurer


                                     14

<PAGE>


                                  EXHIBIT INDEX


                                                         PAGE
EXHIBIT    DESCRIPTION                                   NO.
NO.
27.01      Financial Data Schedule


                                     15