UNITED STATES
               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:        June 30,  1998
                                    -----------------------------
                               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
 incorporation or organization)              Identification No.)
                                
831 Pilot Road, Las Vegas, Nevada                     89119
-----------------------------------------------------------------
(Address of principal executive offices)            (Zip Code)

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

                         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       NO    X
                                                 ------   -------

Indicate the number of shares outstanding of the issuer's classes
of common stock, as of the latest practicable date.

      Class A Common Stock,  2,000,000 shares authorized
               1,107,500 issued, no par value

 Class B Common Stock, Non-voting, 8,000,000 shares authorized
                 2,215,000 issued, no par value
                                
<PAGE>

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

                                                        PAGE NO.
PART I      FINANCIAL INFORMATION                         
                                                          
Item 1.     Financial Statements                          
                                                          
            Balance Sheets -                               1
             June 30, 1998 and December 31, 1997
                                                          
            Statements of Operations -                     2
             For the three and six months ended
             June 30, 1998 and for the period
             from inception (December 3, 1997)
             through June 30, 1998
                                                          
            Statements of Stockholders' Equity -           3
             For the six months ended June 30, 1998
             and for the period from inception
             (December 3, 1997) through June 30,
             1998
                                                          
            Statements of Cash Flows -                     4
             For the six months ended June 30, 1998
             and for the period from inception
             (December 3, 1997) through June 30, 1998
                                                          
            Notes to the Financial Statements          5 - 6
                                                          
Item 2.     Management's Discussion and               7 - 12
             Analysis of Financial Condition
             and Results of Operations
                                                          
Item 3.     Quantitative and Qualitative Disclosures      12
            About Market Risks
                                                          
PART II     OTHER INFORMATION                             
                                                          
Item 1.     Legal Proceedings                             13
                                                          
Item 2.     Changes in Securities and Use of              13
            Proceeds
                                                          
Item 3.     Defaults upon Senior Securities               13
                                                          
Item 4.     Submission of Matters to a Vote of            13
            Security Holders
                                                          
Item 5.     Other Information                             13

Item 6.     Exhibits and Reports on Form 8-K              13
                                                          
Signatures                                                14
                                                          
Exhibit Index                                             15
                                                          

<PAGE>

PART I.   Financial Information

ITEM 1.   FINANCIAL STATEMENTS

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

<TABLE>
<CAPTION>
                         BALANCE SHEETS
               JUNE 30, 1998 AND DECEMBER 31, 1997
                                
                                                                      June 30,         December 31,
                                                                       1998                1997
                                                                   ------------       -------------
                                                                   (unaudited)
<S>                                                                <C>                 <C>
ASSETS

Cash                                                               $       669         $       669
Investment in unconsolidated affiliate                              22,243,339                 331
                                                                   ------------        ------------
                                                                   $22,244,008         $     1,000
                                                                   ============        ============

LIABILITIES AND STOCKHOLDERS' EQUITY

Payable to related party                                           $     1,500         $         -

Common Stock
 Class A, no par value, 2,000,000 and 2,500 shares authorized,     
 1,107,500 and 1 shares issued and outstanding as of June 30,
 1998 and December 31, 1997, respectively.
 Class B, no par value and non-voting, 8,000,000 and 0 shares
 issued and outstanding, and 2,215,000 and 0 shares reserved
 pursuant to the warrant agreement as of June 30, 1998 and
 December 31, 1997, respectively.                                   13,247,203                   1

Additional paid-in capital                                          15,000,999                 999

Deficit accumulated during the development stage                    (6,005,694)                  -
                                                                   ------------        ------------
                                                                   $22,244,008         $     1,000
                                                                   ============        ============

</TABLE>

  The accompanying notes are an integral part of this financial
                           statement.
                                
                               -1-
<PAGE>

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

                    STATEMENTS OF OPERATIONS
     FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 1998 AND
       FOR THE PERIOD FROM INCEPTION (DECEMBER 3, 1997)
                     THROUGH JUNE 30, 1998
                                
                                                                                                    For the period
                                                          For the three     For the six months    December 3, 1997
                                                          months ended         ended June 30,    (inception) through
                                                          June 30, 1998            1998             June 30, 1998
                                                           (unaudited)         (unaudited)           (unaudited)
                                                          -------------     ------------------   ------------------
<S>                                                       <C>                <C>                  <C>
Other expenses                                            $     (1,500)      $     (1,500)        $     (1,500)

Equity in loss of unconsolidated affiliate                  (1,992,585)         (5,422,944)         (5,422,944)

Income tax expense (benefit)                                         -                   -                   -
                                                          -------------      --------------       -------------
   Net loss accumulated during the development stage      $ (1,994,085)      $  (5,424,444)       $ (5,424,444)
                                                          =============      ==============       =============
Basic and Dilutive loss per share                         $      (0.60)      $       (2.24)       $      (2.24)

Shares used in per share calculation                         3,322,500           2,423,040           2,423,040
                                
</TABLE>                                

  The accompanying notes are an integral part of this financial
                           statement.
                                
                               -2-
<PAGE>
                                
                ALADDIN GAMING ENTERPRISES, INC.
                  (A DEVELOPMENT STAGE COMPANY)

<TABLE>
<CAPTION>

               STATEMENTS OF STOCKHOLDERS' EQUITY
        FOR THE PERIOD FROM INCEPTION (DECEMBER 3, 1997)
                      THROUGH JUNE 30, 1998
                           (UNAUDITED)

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

Issuance of Class A common stock, 1 share
 issued                                                                  1               999                -           1,000
                                                               ------------      ------------     ------------    ------------
BALANCE, DECEMBER 31, 1997                                               1               999                -           1,000

Net loss accumulated during the
 development stage                                                       -                 -       (5,424,444)     (5,424,444)

Issuance of Class A common stock,
 1,107,499 shares issued, and Class B  
 common stock, 2,215,000 shares issued                          13,247,202                 -                -      13,247,202

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

Equity costs from unconsolidated
 affiliate                                                               -                 -         (581,250)       (581,250)
                                                               ------------      ------------     ------------    ------------
BALANCE, JUNE 30, 1998                                         $13,247,203       $15,000,999      $(6,005,694)    $22,242,508
                                                               ============      ============     ============    ============
                                
</TABLE>                                
                                
  The accompanying notes are an integral part of this financial
                           statement.
                                
                               -3-
<PAGE>
                ALADDIN GAMING ENTERPRISES, INC.
                  (A DEVELOPMENT STAGE COMPANY)
                                
<TABLE>
<CAPTION>

                    STATEMENTS OF CASH FLOWS
    FOR THE SIX MONTHS ENDED JUNE 30, 1998 AND FOR THE PERIOD
     FROM INCEPTION (DECEMBER 3, 1997) THROUGH JUNE 30, 1998
                                

                                                                                      For the period
                                                              For the six            December 3, 1997
                                                              months ended         (inception) through
                                                             June 30, 1998            June 30, 1998
                                                              (Unaudited)              (Unaudited)
                                                           ----------------        -------------------
<S>                                                        <C>                     <C>
Cash Flows used for investing activities:

 Investment in unconsolidated affiliate                    $  (15,000,000)         $    (15,000,331)

Cash Flows from financing activities:
 Proceeds from the issuance of stock                                    -                     1,000
 Proceeds from the issuance of warrants                        15,000,000                15,000,000
                                                           ---------------         -----------------
Increase in cash and cash equivalents                                   -                       669

Cash and cash equivalents at beginning of period                      669                         -
                                                           ---------------         -----------------
Cash and cash equivalents at end of period                 $          669          $            669
                                                           ===============         =================
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

Non-cash investing and financing activities:
 Equity contributions - non-cash                           $   13,247,202          $              -

</TABLE>

  The accompanying notes are an integral part of this financial
                           statement.
                                
                               -4-
<PAGE>
                ALADDIN GAMING ENTERPRISES, INC.
                  (A DEVELOPMENT STAGE COMPANY)
                                
                  NOTES TO FINANCIAL STATEMENTS
                          JUNE 30, 1998
                                
                                
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 (the "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  subsidiaries  plans  to
develop,  construct  and  operate a new  hotel  and  casino,  the
Aladdin  Hotel  and Casino as the centerpiece of an approximately
35  acre world-class resort, casino and entertainment complex  in
Las Vegas, Nevada.

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.

     There was no income tax expense or benefit recorded for  the
period from inception (December 3, 1997) through June 30, 1998 as
Enterprises is a development stage company and the realization of
any deferred tax asset is uncertain.

3.   AGREEMENTS
  
     Enterprises intends to enter into a Shareholders'  Agreement
with  the Sommer Trust providing that the Sommer Trust shall have
the  right  to  elect the Board of Directors of  Enterprises  and
otherwise manage the day to day affairs of Enterprises unless and
until  a qualified public offering occurs or the Sommer Trust  no
longer owns any equity in Enterprises.

4.   PRIVATE OFFERINGS
  
     On February 26, 1998, Gaming Holdings, Aladdin Capital Corp.
("Capital"  together  with Gaming Holdings,  the  "Issuers")  and
Enterprises consummated a private offering (the "Offering") under
Rule  144A  of the Securities Exchange Act of 1933.  The  private
offering  consisted  of 221,500 units (the  "Units"),  each  unit
consisting of (i) $1,000 principal amount at maturity  of 13 1/2%
Senior  Discount Notes due 2010 (the "Notes") of Gaming  Holdings
and Capital and (ii) 10 Warrants (the "Warrants") to purchase 10

                               -5-
                                
<PAGE>

shares  of  Class  B non-voting Common Stock, no  par  value,  of
Enterprises.   The  Notes  and  the  Warrants  became  separately
transferable on July 23, 1998 and the Warrants became exercisable
on July 23, 1998 and will expire on March 1, 2010.

     The  initial  accreted value of the Notes  was  $519.40  per
$1,000 principal amount at maturity of the Notes.  The Notes will
mature  on  March  1,  2010.  The Notes  will, accrete at 13 1/2%
(computed  on a semi-annual bond equivalent basis) based  on  the
initial accreted value, calculated from February 26, 1998.   Cash
interest  on  the Notes will not accrue prior to March  1,  2003.
Thereafter, cash interest on the Notes will accrue at the rate of
13 1/2% per annum based on the accreted value at maturity  of  the
Notes and will be payable semi-annually in arrears on March 1 and
September 1 of each year, commencing on September 1, 2003.

     The  Notes are secured by a first priority pledge of all  of
the issued and outstanding Series A Preferred Interests of Gaming
Holdings in Aladdin Gaming, LLC.

     The  Indenture to the Notes contains certain covenants  that
(subject  to  certain exceptions) restrict  the  ability  of  the
Issuers and certain of their subsidiaries to, among other things:
(i)  make restricted payments, (ii) incur additional indebtedness
and issue preferred stock;  (iii) incur liens; (iv) pay dividends
or   make   other  distributions;  (v)  enter  into  mergers   or
consolidations;   (vi)  enter  into  certain  transactions   with
affiliates or (vii) enter into new lines of business.

5.   EQUITY CONTRIBUTIONS
  
     On February 26, 1998, Sommer Enterprises, LLC contributed  a
portion  of  land  and  $7.0 million of predevelopment  costs  in
exchange  for  100% of the Class A Common Stock  in  Enterprises.
Enterprises contributed the portion of land, the $7.0 million  of
predevelopment costs and the net proceeds $15.0 million allocable
from the sale of the Warrants to Gaming Holdings in exchange  for
25% of the common membership interests in Gaming Holdings.

6.   IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS
  
     In  June  1997,  the  FASB issued SFAS No.  130,  "Reporting
Comprehensive  Income."   SFAS  No.  130  requires  companies  to
classify items of other comprehensive income by their nature in a
financial statement and display the accumulated balance of  other
comprehensive  income  separately  from  retained  earnings   and
additional paid-in capital in the equity sections of a  statement
of  financial position, and is effective for financial statements
issued  for fiscal years beginning after December 15, 1997.   The
Company  has adopted SFAS No. 130, during the three-month  period
ended  March  31,1998 and has determined that such adoption  will
not  result in comprehensive income different from net income  as
reported in the accompanying financial statements.

     In  June  1997,  the FASB issued SFAS no.  131,  "Disclosure
about  Segments of an Enterprise and Related Information."   SFAS
No. 131 establishes additional standards for segment reporting in
financial  statements and is effective for fiscal years beginning
after  December 15, 1997.  The Company currently operates as  one
segment.

                               -6-
                                
<PAGE>

     
     
ITEM 2.   MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OF   FINANCIAL
          CONDITION AND RESULTS OF OPERATIONS
          
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
(the "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 other business or activities  other  than
its  investment  in Gaming Holdings which is a development  stage
company.   Gaming  Holdings is a holding  company,  the  material
assets  of  which  are 100% of the outstanding common  membership
interests   and  100%  of  the  outstanding  Series  A  preferred
membership interests of Aladdin Gaming, LLC ("Gaming").   Aladdin
Capital  Corporation ("Capital") is a wholly owned subsidiary  of
Gaming  Holdings and was incorporated solely for the  purpose  of
serving  as  a  co-issuer  of  the  13 1/2% Senior Discount Notes
("Notes").   Capital  is  not  expected  to  have  any   material
operations or assets and will not have any revenues.

     The  operations of Enterprises and Gaming Holdings  and  its
subsidiaries,  collectively  known  as  the  Company,  have  been
limited to the design, development, financing and construction of
a  new  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  at  the  center of  the  Las  Vegas  Boulevard
("Strip").   The  Aladdin has been designed to include  a  luxury
themed  hotel  of  approximately 2,600  rooms,  an  approximately
116,000   square   foot   casino,  an  approximately   1,400-seat
production  showroom and seven 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  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 522,000 square feet  of  retail
space ("Desert Passage"); (iii) a second hotel and casino, with a
music  and  entertainment theme, expected to be known  as  "Sound
Republic  Hotel  Casino"  ("Sound  Republic");  (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 will be separately owned by an
affiliate  of  the Company and Sound Republic is expected  to  be
owned  49% by the Company, with an option to acquire 50%  of  the
project.   The  grand opening date for the Aladdin and  the  Mall
Project  is currently anticipated to occur during the  spring  of
the year 2000, with the opening of the Sound Republic expected to
occur within six months after the opening of the Aladdin.

RESULTS OF OPERATIONS

     The  Company  is  in  the  development  stage  and  has   no
significant operations to date.  The Company has capitalized  all
qualifying  construction  costs  except  for  a  portion  of  the
interest  expense  incurred during the period.  Accordingly,  the
Company  does  not  have  any historical operating  income.   The
capitalized  costs  consist  primarily  of  land  contributed  by
certain  members of Gaming Holdings, design fees,  financing  and
commitment  fees, construction costs and interest  on  qualifying
assets.    The   Company's  operating  expenses  primarily   have
consisted of interest, amortization costs and expenses related to
the Notes and the preopening costs of the Aladdin.

                               -7-
                                
<PAGE>

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

     Gaming  Holdings  recorded a net loss of approximately  $8.0
million   for   the  three  months  ended  June  30,   1998   and
approximately  $21.7 million for the six months  ended  June  30,
1998.   The  loss was due to the preopening costs of the  Aladdin
and  the interest, amortization costs and expenses related to the
Notes.

     Enterprises  recorded its 25% share of the Gaming  Holdings'
losses as equity in loss of unconsolidated affiliate and reported
a net loss of approximately $2.0 million and $5.4 million for the
three months and six months ended June 30, 1998, respectively.

MATERIAL CHANGES IN FINANCIAL CONDITION

     The  $826.2  million  necessary  to  fund  the  development,
financing,  construction  and opening  of  the  Aladdin  will  be
derived  from  a combination of (i) borrowings of  up  to  $410.0
million  under the Bank Credit Facility (as defined below);  (ii)
operating  lease  and  loan obligations aggregating  $80  million
under  FF&E financing; (iii) equity contribution by London  Clubs
Nevada,  Inc.  of  $50.0 million in cash, $7.0  million  in  pre-
development costs and $150.0 million appraised fair market  value
in land by Holdings and $115.0 million of gross proceeds from the
Notes  offering; and (iv) anticipated site work reimbursement  of
$14.2 million.

     The uses of such funds are budgeted at $826.2 million, which
includes  $295.6  million for the Aladdin's construction,  $107.5
million   for  furniture,  fixtures  and  equipment  and   gaming
equipment,  $135.0  million for land,  $74.5  million  to  retire
existing  debt,  and  the  balance for  other  preopening  costs,
working  capital and financing costs.  The uses of  such  funding
are  estimates,  which the Company reviews on a  periodic  basis.
There  can be no assurance that these estimates will not  change.
The  Company believes that the construction budget is  reasonable
and  the  Company has entered into a fixed or guaranteed  maximum
price  contract  (which is subject to price  adjustments  if  the
plans and specifications are changed) for the construction  of  a
substantial portion of the Aladdin.  Given the risks inherent  in
the  construction process, however, actual construction costs may
be higher.

     Through June 30, 1998 approximately $160.2 million had  been
expended  on  development of the Aladdin, of which  approximately
$74.5  million had been expended on repayment of debt  associated
with  the  land  contributed to the Company, approximately  $36.7
million  in  construction and capitalized interest, approximately
$39.4  million  in  debt issuance and member  equity  costs,  and
approximately $9.6 million in preopening costs and  net  interest
expense.

     On    February   26,   1998,   Gaming   Holdings,    Capital
(collectively, "Issuers") and Enterprises, consummated a  private
offering  ("Offering") under Rule 144A of the Securities  Act  of
1933.  The private offering consisted of 221,500 units ("Units"),
each  unit consisting of (i) $1,000 principal amount of  maturity
of 13 1/2% Senior Discount  Notes due 2010  ("Notes")  of  Gaming
Holdings  and  Capital  and  (ii)  10  Warrants  ("Warrants")  to
purchase  10  shares of Class B non-voting Common Stock,  no  par
value, of Enterprises.

                               -8-
                                
<PAGE>

     The  initial  accreted value of the Notes  was  $519.40  per
$1,000 principal amount at maturity of the Notes.  The Notes will
mature  on  March 1, 2010.   The Notes will  accrete  at  13 1/2%
(computed  on a semi-annual bond equivalent basis) based  on  the
initial accreted value, calculated from February 26, 1998.   Cash
interest  on  the Notes will not accrue prior to March  1,  2003.
Thereafter, cash interest on the Notes will accrue at the rate of
13 1/2% per annum based on the accreted value at maturity of  the
Notes and will be payable semi-annually in arrears on March 1 and
September 1 of each year, commencing on September 1, 2003.

     The  Notes are secured by a first priority pledge of all  of
the issued and outstanding Series A preferred member interests of
Aladdin  Gaming.  As of June 30, 1998, all of the  proceeds  from
the  Offering  had  been  disbursed to repay  certain  previously
existing  indebtedness, construction costs and certain  fees  and
expenses.

     The  Indenture to the Notes contains certain covenants  that
(subject  to  certain exceptions) restrict  the  ability  of  the
Issuers and certain of their subsidiaries to, among other things:
(i)  make restricted payments; (ii) incur additional indebtedness
and  issue preferred stock; (iii) incur liens; (iv) pay dividends
or   make   other  distributions;  (v)  enter  into  mergers   or
consolidations;   (vi)  enter  into  certain  transactions   with
affiliates or (vii) enter into new lines of business.

     On  February  26, 1998, Aladdin Gaming, LLC entered  into  a
$410.0  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.
The Credit Agreement consists of three separate term loans.  Term
A  Loan comprises a term loan of $136.0 million and matures seven
years after the initial borrowing date.  Term B Loan comprises  a
term  loan of $114.0 million and matures eight and one-half years
after  the initial borrowing date.  Term C Loan comprises a  term
loan  of $160.0 million and matures ten years after the borrowing
date.   The  Term B Loan and the Term C Loan were funded  by  the
lenders on February 26, 1998 and the funds are held by Gaming  in
a  cash  collateral  account for the future  development  of  the
Aladdin.  The Term B Loan and the Term C Loan proceeds could  not
be  utilized  until the proceeds from the Notes  were  completely
exhausted.  As of June 30, 1998 all of the $115.0 million of  the
Note  proceeds had been utilized.  The proceeds from the  Term  B
Loan  and Term C Loan have been funded and the funds placed in  a
cash  collateral account from which the Company withdraws amounts
monthly.  As of June 30, 1998, approximately $2.0 million of  the
Term  B Loan had been drawn down from the cash collateral account
and  approximately $2.8 million of the Term C Loan had been drawn
down  from the cash collateral account; and Term A loan  had  not
been funded.

     The  Company  pays  interest on the term loans  as  follows:
Term  A  Loan,  LIBOR  plus 300 basis points  until  the  Aladdin
commences operations, then LIBOR plus an amount between 150 basis
points  and 275 basis points depending upon the Company's  EBITDA
results; Term B Loan, LIBOR plus 200 basis points while the funds
are  held in the cash collateral account and LIBOR plus 350 basis
points  once the funds are utilized for the construction  of  the
Aladdin;  and Term C Loan, LIBOR plus 200 basis points while  the
funds are held in the cash collateral account and LIBOR plus  400
basis points once the funds are utilized for the construction  of
the   Aladdin.   The  Company  has  entered  into  various  hedge
arrangements  for  the  LIBOR  as  follows:  (a)  until   Aladdin
commences  operation, for the Term A Loan and  the  Term  B  Loan
LIBOR  is fixed at 5.883% and for the Term C Loan LIBOR is  fixed
at 6.485%; and (b) once the Aladdin has commenced operations, for
the  Term A Loan and Term B Loan, the maximum LIBOR is 7.00%  and
the minimum is 5.65%, and for the Term C Loan, the LIBOR has been
fixed at 6.485%.   The hedge arrangements for the Term A Loan and
Term  B Loan are in place until the respective loan maturity date
and for the Term C Loan the hedge arrangements are cancelable  at
the call date of March 2003. No principal repayments are required
prior to the opening of the casino.

     On  June  30, 1998, the Company entered into FF&E  financing
which  provides  for operating lease financing  of  up  to  $60.0
million and term loan facility of $20.0 million to obtain  gaming
equipment and

                               -9-
<PAGE>

other  specified equipment.  Funding under the FF&E financing  is
available   beginning  six  months  prior  to  the   construction
completion  date  of  the Aladdin.  Repayment  of  principal  and
interest  is  due in quarterly installments upon the construction
completion date of the Aladdin.  The term of the operating  lease
financing  is  36 months (with the Company having two,  one  year
options  to  renew)  and the term of the loan  facility  is  five
years.   The  interest  rate  from the  funding  date  until  the
construction  of  the Aladdin is completed is either  the  30-day
LIBOR  plus 478 basis points or the Prime Rate (as defined)  plus
275  basis  points.  After the construction completion date,  the
interest rate shall be the 90-day LIBOR plus 478 basis points.

     London Clubs International, plc ("London Clubs"), the Sommer
Trust,  and  Aladdin Bazaar Holdings, LLC ("Bazaar Holdings"),  a
subsidiary  of 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
party to the Bank Completion Guaranty, however, London Clubs, the
Sommer  Trust  and Bazaar Holdings have entered  into  a  limited
completion   guarantee  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.

     London Clubs, Holdings and Bazaar Holdings have entered into
the  Keep-Well  Agreement for the benefit of  the  bank  lenders.
Pursuant  to the Keep-Well Agreement, London Clubs, Holdings  and
Bazaar Holdings have agreed to contribute funds to the Company to
ensure the Company's compliance with certain financial ratios and
other  requirements under the Bank Credit Facility for the period
up  to the earlier of the date on which the Company complies with
all the financial covenants set forth in the Bank Credit Facility
for   six  consecutive  quarterly  periods  from  and  after  the
Conversion  Date  or the date on which the aggregate  outstanding
principal  amounts of the Bank Credit Facility are reduced  below
certain  amounts and prior to certain dates, subject  to  certain
conditions.

     In  connection  with the development of  the  Mall  Project,
Aladdin   Bazaar,   LLC,   will  only   reimburse   the   Company
approximately $14.2 million for the construction of certain areas
shared by the Aladdin and the Mall Project and the facade to  the
Aladdin.  Additionally, Aladdin Bazaar, LLC is obligated to spend
no  more  than $36.0 million for a car park associated  with  the
Aladdin  project.   Therefore, any cost overruns associated  with
these  items  will  be borne by the Company.   In  addition,  the
Company  is  obligated to pay to Aladdin Bazaar, LLC (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 car park and (ii) the Company's proportionate share
of the operating costs associated therewith.

     The  funds provided by the funding transactions are expected
to  be sufficient to develop, complete and commence operations of
the  Aladdin,  assuming no delays or construction cost  overruns,
which  are not covered by the $31.8 million contingency or  Fluor
Corporation    and/or   its   subsidiary   Fluor   Daniel,    the
design/builder for the Aladdin.  As of June 30, 1998, the Company
expended  $1.8  million of the contingency.  It is  not  expected
that  additional  external funding will need to  be  obtained  in
order  to  develop and commence the operations  of  the  Aladdin.
However,  there  can  be no assurance that  such  funds  will  be
sufficient for the development, construction and commencement  of
the Aladdin.

     Following the commencement of operations of the Aladdin, the
Company  expects to fund its operating, debt service and  capital
needs,  as currently contemplated, with $15.0 million of  working
capital  from the funding transactions and operating cash  flows.
In  addition,  upon the opening of the Aladdin,  the  Company  is
expected to have an aggregate of $10.0 million available under  a
working capital facility.

                              -10-
                                
<PAGE>

     Although  no  additional  financing  is  contemplated,   the
Company will seek, if necessary and to the extent permitted under
the  Note  Indenture and the terms of the Bank  Credit  Facility,
additional financing through additional bank borrowings  or  debt
or  equity financings.  There can be no assurance that additional
financing, if needed, will be available to the Company, or  that,
if  available,  the financing will be on terms favorable  to  the
Company.   There can also be no assurance that estimates  by  the
Company  of  its  reasonably  anticipated  liquidity  needs   are
accurate  or  that new business developments or other  unforeseen
events  will not occur, resulting in the need to raise additional
funds.

YEAR 2000

     The  Company  and  its  subsidiaries are  development  stage
companies  that are developing, constructing, and upon completion
(currently anticipated to occur in the spring of the year  2000),
will   operate  a  hotel  casino.   The  selection  of   software
applications,  hardware  and other technology  currently  in  use
principally occurred within approximately the last twelve months.
The  only  computer  systems in place at  the  current  time  are
several financial applications, word processing and an internal e-
mail system that are Year 2000 compliant.  Accordingly, it is not
expected that the Company will incur significant amounts, if any,
to modify its systems for Year 2000 compliance.

     The  Company  has requested representations  regarding  Year
2000  compliance  from  Fluor Corporation and/or  its  subsidiary
Fluor   Daniel,   the  design/builder  for   the   Aladdin   (the
"Design/Builder"), and through Design/Builder will  seek  similar
representations  of the other contractors and subcontractors  for
the construction of the Aladdin (collectively, the "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  the  Company.
Notwithstanding,  the  Company  has  entered  into  a  guaranteed
maximum   price   contract  with  the  Design/Builder   for   the
construction  of  the  Aladdin that contains  liquidated  damages
provisions  in the event that the substantial completion  of  the
construction  of  the Aladdin is not completed  by  the  contract
time,  as  defined by, and adjusted pursuant to, the Design/Build
Contract.   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 the Company's operations.

START-UP ACTIVITIES

     In  April 1998, the Accounting Standards Executive Committee
of  the American Institute of Certified Public Accountants issued
Statement of Position No. 98-5 REPORTING ON THE COSTS OF START-UP
ACTIVITIES ("SOP 98-5).  The provisions of SOP 98-5 are effective
for  fiscal  years beginning after December 15, 1998 and  require
that  the  costs  associated with start-up activities  (including
preopening costs of casinos) be expensed as incurred.   SOP  98-5
permits early adoption in fiscal years for which annual financial
statements have not yet been issued.

     Effective  January  1,  1998 the  Company  has  adopted  the
provisions of SOP 98-5.

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 Securities
and  Exchange Commission (as well as information included in oral
statements or other written statements made or to be made by  the
Company) contains 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  relating  to  plans   for   future
operations,   construction   and  development,   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

                              -11-
                                
<PAGE>

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 development and  construction
activities, 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  June  30,  1998,  the  Company  did  not  hold  any
investments in market risk sensitive instruments.

                              -12-
                                
<PAGE>

PART II   Other Information

ITEM 1.   LEGAL PROCEEDINGS

     Not Applicable

ITEM 2.   CHANGES IN SECURITIES AND USE OF PROCEEDS

     (A)  Not applicable

     (b)   On  July  24, 1998, Aladdin Gaming Holdings,  LLC  and
Aladdin   Capital   Corp.   (collectively,   "Company")   offered
("Exchange  Offer"), subject to certain terms and conditions,  to
exchange $1,000 in principal amount of its 13 1/2% Series B Senior
Discount  Notes  due  2010  ("New  Notes")  for  each  $1,000  in
principal  amount  of  its outstanding  13 1/2% Series  A  Senior
Discount  Noted  due  2010 ("Old Notes"), of which  an  aggregate
principal amount of $221.5 million is outstanding.

     Under the terms of the Exchange Offer, the Company agreed to
accept  for  exchange  any and all Old  Notes  that  are  validly
tendered  prior to 5:00 p.m., New York City time, on  August  25,
1998,  unless  extended.  The Exchange Offer is  subject  to  the
terms  and  provisions of the Note Registration Rights Agreement,
dated February 26, 1998, among the Company, Merrill Lynch, Pierce
Fenner   &   Smith  Incorporated,  Credit  Suisse  First   Boston
Corporation,  CBIC  Oppenheimer Corp. and Scotia  Capital  Market
(USA) Inc.

     The  Old Notes were, and the New Notes will also be,  issued
pursuant  to  an  Indenture, dated February 26, 1998,  among  the
Company and State Street Bank and Trust Company, as trustee.  The
terms of the New Notes are identical in all material respects  to
the  Old Notes, except that the Old Notes (but not the New Notes)
provide  that  the certain liquidated damages if  a  registration
statement  has not been filed or is not effective  by  a  certain
deadline, liquidated damages will accrue.

ITEM 3.   DEFAULTS UPON SENIOR SECURITIES

     Not Applicable

ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     Not Applicable

ITEM 5.   OTHER INFORMATION

     Not Applicable

ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K

     (A)  Exhibits
          
          10.01     Facilities Agreement between General Electric
                    Capital  Corporation and Aladdin Gaming,  LLC
                    dated June 26, 1998

          10.02     Intercreditor Agreement by and among The Bank
                    of  Nova  Scotia,  General  Electric  Capital
                    Corporation and Aladdin Gaming, LLC dated  as
                    of June 30, 1998

          27.01     Financial Data Schedule
                    
     (b)  Reports on Form 8-K
          
          None
          
                              -13-
                                
<PAGE>
                                
                           SIGNATURES
                                
                                
  Pursuant to the requirements of the Securities Exchange Act
of  1934, the  registrants have duly caused this report to be
signed  on their  behalf by  the undersigned  thereunto  duly
authorized.

                               ALADDIN GAMING ENTERPRISES, INC.
                               
                               
August 14, 1998                By:   /s/  Ronald Dictrow
                                     Ronald Dictrow, Secretary
                               
                               
August 14, 1998                By:   /s/  Cornelius T. Klerk
                                     Cornelius T. Klerk, Chief
                                     Accounting Officer and
                                     Treasurer
                               

                              -14-
<PAGE>
                          EXHIBIT INDEX
                                
                                
                                
                                                           PAGE
EXHIBIT NO.  DESCRIPTION                                    NO.
                                
   10.01     Facilities Agreement between General Electric   16
             Capital Corporation and Aladdin  Gaming,  LLC
             dated June 26, 1998

   10.02     Intercreditor Agreement by and among The Bank  199
             of  Nova  Scotia,  General  Electric  Capital
             Corporation and Aladdin Gaming, LLC dated  as
             of June 30, 1998

   27.01     Financial Data Schedule                        234
             
                                
                              -15-
<PAGE>