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                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                            ------------------------
 
                                   FORM 10-K
 
                    FOR ANNUAL REPORT AND TRANSITION REPORTS
                    PURSUANT TO SECTIONS 13 OR 15(D) OF THE
                        SECURITIES EXCHANGE ACT OF 1934
 
(MARK ONE)
 
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/X/        ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
           [FEE REQUIRED]
                              FOR THE FISCAL YEAR ENDED JUNE 30, 1997
                                                OR
/ /        TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
           [NO FEE REQUIRED]
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       FOR THE TRANSITION PERIOD FROM TO            TO
 
                         COMMISSION FILE NUMBER 0-23124
                            ------------------------
 
                                 ANCHOR GAMING
 
             (Exact name of Registrant as specified in its charter)
 
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                NEVADA                                  88-0304253
   (State or other jurisdiction of                   (I.R.S. Employer
    incorporation or organization)                 Identification No.)
</TABLE>
 
                                 815 PILOT ROAD
                                    SUITE G
                               LAS VEGAS, NEVADA
                                     89119
                    (Address of principal executive offices)
 
                 REGISTRANT'S TELEPHONE NUMBER: (702) 896-7568
                            ------------------------
 
          SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
 
        TITLE OF EACH CLASS        NAME OF EACH EXCHANGE ON WHICH REGISTERED
   COMMON STOCK, $.01 PAR VALUE    THE NASDAQ STOCK MARKET'S NATIONAL MARKET
 
        SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: NONE
                            ------------------------
 
    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 by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K: / /
 
    The aggregate market value of the Registrant's voting stock held by
non-affiliates of the Registrant at September 26, 1997 based on the $86.38 per
share closing price for the Company's common stock on the Nasdaq National Market
was approximately $522,142,317.
 
    The number of shares of the Registrant's Common Stock outstanding as of
September 26, 1997 was 12,958,107.
 
                      DOCUMENTS INCORPORATED BY REFERENCE
 
    Portions of the Registrant's definitive Proxy Statement for its Annual
Meeting of Stockholders to be held on or about November 24, 1997 (to be filed)
are incorporated by reference into Part III of this Form 10-K.
 
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                               TABLE OF CONTENTS
 
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   ITEM                                                                                                         PAGE
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<C>          <S>                                                                                             <C>
     PART I
 
          1  Business......................................................................................           1
 
          2  Properties....................................................................................          23
 
          3  Legal Proceedings.............................................................................          24
 
          4  Submission of Matters to a Vote of Securityholders............................................          24
 
    PART II
 
          5  Market for Registrant's Common Equity and Related Stockholder Matters.........................          25
 
          6  Selected Financial Data.......................................................................          26
 
          7  Management's Discussion and Analysis of Financial Condition and Results of Operations.........          27
 
          8  Financial Statements and Supplementary Data...................................................          33
 
          9  Changes in and Disagreements with Accountants on Accounting and Financial Disclosure..........          51
 
   PART III
 
         10  Directors and Executive Officers of the Registrant............................................          51
 
         11  Executive Compensation........................................................................          51
 
         12  Security Ownership of Certain Beneficial Owners and Management................................          51
 
         13  Certain Relationships and Related Transactions................................................          51
 
    PART IV
 
         14  Exhibits, Financial Statement Schedules, and Reports on Form 8-K..............................          52
</TABLE>
 
                                       i
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                                     PART I
 
ITEM 1.  BUSINESS.
 
GENERAL
 
    Anchor Gaming ("Anchor" or the "Company") is a diversified gaming company
that seeks to capitalize on its experience as an operator and developer of
gaming machines and casinos by developing gaming oriented businesses. Anchor
develops and distributes unique proprietary games, operates two casinos in
Colorado, and operates one of the largest gaming machine routes in Nevada.
References in this Annual Report on Form 10-K to Anchor or the Company include
subsidiaries unless the context requires otherwise.
 
    REORGANIZATION.  The current structure of the Company is the result of a
reorganization (the "Reorganization") effected by the Company and its current
subsidiaries, which were previously controlled by the Company's principal
stockholder, Stanley E. Fulton, and his family--Anchor Coin, Colorado Grande
Enterprises, Inc., C.G. Investments, Inc., and D D Stud, Inc. (the
"Subsidiaries"). The reorganization was completed concurrently with the closing
of the Company's initial public offering in February 1994 (the "IPO"). Pursuant
to the Reorganization, stockholders of the Subsidiaries exchanged their capital
stock for common stock of Anchor Gaming according to exchange ratios based on
the fair market value of the respective Subsidiary. The Company then repurchased
shares of its common stock from certain minority stockholders of Colorado Grande
Enterprises, Inc. Minority stockholders unaffiliated with the Fulton family
continue to own a 20% interest in Colorado Grande Enterprises, while all other
Subsidiaries are wholly owned by the Company. In addition to the Reorganization,
in connection with the IPO, the Company also acquired Global Gaming Products,
L.L.C. and Global Gaming Distributors, Inc.'s rights to the game Silver Strike.
Prior to the acquisition, Stanley E. Fulton owned 50% of Global Gaming Products,
L.L.C.
 
SPECIAL NOTE ON FORWARD-LOOKING STATEMENTS
 
    THIS ANNUAL REPORT ON FORM 10-K CONTAINS CERTAIN FORWARD-LOOKING STATEMENTS
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
REFER TO EVENTS THAT COULD OCCUR IN THE FUTURE OR MAY BE IDENTIFIED BY THE USE
OF WORDS SUCH AS "INTEND," "PLAN," "BELIEVE," CORRELATIVE WORDS, AND OTHER
EXPRESSIONS INDICATING THAT FUTURE EVENTS ARE CONTEMPLATED. SUCH STATEMENTS ARE
SUBJECT TO INHERENT RISKS AND UNCERTAINTIES, AND ACTUAL RESULTS COULD DIFFER
MATERIALLY FROM THOSE PROJECTED IN THE FORWARD-LOOKING STATEMENTS AS A RESULT OF
CERTAIN OF THE RISK FACTORS SET FORTH BELOW AND ELSEWHERE IN THIS ANNUAL REPORT
ON FORM 10-K. IN ADDITION TO THE OTHER INFORMATION CONTAINED IN THIS ANNUAL
REPORT ON FORM 10-K, INVESTORS SHOULD CAREFULLY CONSIDER THE RISK FACTORS
BEGINNING ON PAGE 16.
 
PROPRIETARY GAMES
 
    GENERAL.  Anchor develops proprietary games, which it both markets to
unaffiliated casinos and uses in its own gaming operations. The Company's
strategy is to develop games that provide casinos with a higher win per machine
than their existing gaming devices while generating significant recurring
revenues to the Company from royalty, revenue participation, or other similar
agreements. Although the Company initially developed proprietary games as a
complement to its own gaming machine operations, since February 1993 the Company
has been actively marketing its proprietary games to unaffiliated casinos. The
Company currently provides proprietary games to virtually every major casino in
the United States, as well as its own casinos. In September 1996, the Company
entered into a strategic alliance (the "Strategic Alliance") with International
Game Technology ("IGT"), the largest manufacturer of computerized gaming casino
products, to enhance the Company's ability to develop and distribute proprietary
games. Through this strategic alliance the Company and IGT have formed a joint
venture (the "Anchor IGT JV") to develop, integrate, and distribute proprietary
game concepts on a wide area progressive system ("WAP").
 
                                       1
<PAGE>
    The Company, seeking to capitalize on its established sales and marketing
infrastructure, its extensive base of existing casino customers, and its
licenses in virtually all major domestic gaming jurisdictions, has been actively
developing proprietary games, which can be classified as either a dedicated
proprietary game, a proprietary game on a WAP, or a converted proprietary game.
The Company's proprietary games are designed to increase gaming customer play
levels by either enticing the customer to play longer or to wager more coins per
play.
 
    DEDICATED PROPRIETARY GAMES.  The Company has successfully developed or
acquired the rights to five proprietary games that are currently installed and
approved for use in unaffiliated casinos. Anchor's dedicated proprietary games
include Wheel of Gold, Totem Pole, Silver Strike, Clear Winner, and
Rock'N'Reels. All of the machines are placed in casinos free of charge allowing
the casino to avoid up-front purchase costs and providing significant recurring
revenues to Anchor under royalty, revenue participation, or other similar
agreements. The machines utilize numerous unique concepts and designs in order
to increase overall gaming customer play levels. For example, the Company's two
most popular dedicated proprietary games, Totem Pole and Wheel of Gold, each
incorporate innovative game features that contribute to higher play levels.
Totem Pole comprises three games in one slot machine creating a unique visual
presentation in the casino environment. Greater play levels are realized on
Totem Pole because the player must insert the maximum number of coins to
activate all three games and benefit from the addition of a "wild" symbol.
Players on the Wheel of Gold machine have the opportunity to activate on the
same machine a three dimensional "roulette" type wheel with significantly higher
potential winnings, providing a secondary game event and additional excitement
to the customer through the Company's "game within a game" concept. Anchor's
"game within a game" concept provides the player an incentive to increase play
through the secondary game event, thereby maximizing customer playing time.
Wheel of Gold is the first generation of the Company's "game within a game"
concept that management believes will form the basis of a significant portion of
its future dedicated game designs. The Company has additional innovative game
machine concepts in various stages of development using the Company's "game
within a game" concept and other unique concepts.
 
    WAP PROPRIETARY GAMES.  A WAP is a system that electronically links
individual slot machines among multiple locations, allowing all the machines to
share a common jackpot. The WAP jackpot increases, or progresses, by a certain
percentage of each coin inserted into any one of the machines on the WAP
network, thereby allowing the jackpot to increase rapidly to a significant
amount. Management believes that the large jackpots offered by WAP machines
attract a distinct portion of a customer's gaming budget as compared to a
non-progressive slot machine. In order to capture this portion of a customer's
gaming budget, the Company has entered into a strategic alliance resulting in
the Anchor IGT JV for the purpose of developing and installing WAP machines
based on both existing dedicated proprietary games and other proprietary
designs. The Company and IGT share in the management of the Anchor IGT JV and
will share equally in its profits and losses. The first WAP machine introduced
by the Anchor IGT JV is the Wheel of Fortune-TM-, a game that is very similar to
the Company's Wheel of Gold. Additionally, the Anchor IGT JV has recently
introduced Totem Pole on a WAP and has other WAP concepts at various stages of
development.
 
                                       2
<PAGE>
    The following is a description of the Company's proprietary games that are
currently being distributed.
 
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- Double Down Stud....  Double Down Stud is a software conversion kit introduced in 1993
                        that is installed in casino customers' gaming machines to allow
                        players to play a unique version of video poker.
 
- Silver Strike.......  Silver Strike is a standard slot machine, the rights to which were
                        acquired at the time of the IPO in 1994, that pays out souvenir
                        tokens for certain winning combinations. Anchor furnishes Silver
                        Strike machines free of charge to its casino customers, who agree to
                        purchase the silver tokens exclusively from the Company.
 
- Clear Winner........  Clear Winner is a standard slot machine introduced in 1995 that is
                        remanufactured into a clear cabinet so that players can observe all
                        of its inner workings. The game includes state of the art signage
                        and a custom designed cabinet.
 
- Wheel of Gold.......  Wheel of Gold is a standard slot machine introduced in 1995 that has
                        the added dimension of giving players the opportunity to activate on
                        the same machine a three-dimensional "roulette type" wheel with
                        significantly higher potential winnings, providing additional
                        excitement to the player through the Company's "game within a game"
                        concept.
 
- Totem Pole..........  Introduced in 1996, Totem Pole incorporates three games in one
                        device, each of which is activated by inserting two coins. Each
                        successive game played provides the possibility of greater payback
                        to the player. When the player activates all three games by playing
                        six coins, the player is rewarded with a "wild" symbol common to all
                        three games.
 
- Rock'N'Reels........  Introduced in 1996, Rock'N'Reels is a specially packaged standard
                        slot machine designed to evoke the image of a vintage juke box. The
                        game is enhanced with state of the art sound and signage.
</TABLE>
 
    The Company derives recurring revenues on these machines in various forms,
including daily or similar royalties, revenue participation agreements, and
other similar agreements with casinos, and, in the case of Silver Strike, by
selling the souvenir tokens to casinos.
 
    DEVELOPMENT.  Anchor is continually engaged both in the development of new
proprietary games and in the improvement of existing games. After the Company
has identified the basic concept for a new game, it works to refine the new game
to maximize player appeal. The Company's efforts include computer simulated
studies of the game probabilities to determine the optimal pay schedules;
research of, and application for, any significant intellectual property rights
that can be claimed; design of packaging for the game; establishment of a
pricing strategy for the game; and application for the necessary regulatory
approvals. Anchor then solicits feedback from potential casino customers to
further refine the game. At the production stage, Anchor and the manufacturer
refine the technology and construction of the game. Prior to the release of any
new game, Anchor must receive necessary regulatory approvals.
 
    DISTRIBUTION.  Anchor has an established sales organization with offices in
Nevada, Missouri, Mississippi, Louisiana, and New Jersey servicing an
established customer base of over 200 casinos at June 30, 1997. The Company
distributes its proprietary games primarily through a direct sales effort in
which sales representatives call on casinos and other potential customers.
Anchor also uses distributors in a limited number of jurisdictions.
 
    ANCHOR IGT STRATEGIC ALLIANCE.  As part of the Strategic Alliance, the
Anchor IGT JV is using IGT's WAP system for a variety of the Company's dedicated
proprietary game concepts including Wheel of Gold
 
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and Totem Pole. Property, including intellectual property, developed through the
Anchor IGT JV is owned by the Anchor IGT JV. The Anchor IGT JV joint venture
agreement has an initial duration of ten years and terminates unless the parties
thereto agree to an extension. After the initial ten year term, either party may
terminate the Anchor IGT JV upon at least one year's prior notice. The Anchor
IGT JV does not acquire any rights to the intellectal property rights of each of
Anchor and IGT that are developed outside of the Anchor IGT JV. In the event
that any particular state jurisdiction prohibits the equal share of profits and
losses, management responsibility, or allocation of expenses in the Anchor IGT
JV, it is contemplated that alternative arrangements will be made to satisfy
such regulatory objections.
 
    INTELLECTUAL PROPERTY RIGHTS.  Anchor has secured and endeavors to secure,
to the extent possible, exclusive rights in its games, primarily through federal
and foreign intellectual property rights, such as patents and trademarks. The
United States Patent and Trademark Office has issued four patents covering the
Double Down Stud games in the United States. These patents expire on March 31,
2009. The United States Patent and Trademark Office has issued one patent
covering innovations of the Silver Strike game in the United States, but there
is no independent protection of the game itself. This patent expires on March
14, 2012. In 1993, the Company received a U.S. patent relating to a system it
developed that allows players of gaming devices to participate in a group game,
such as bingo, without leaving the gaming device they are playing. In order to
protect potential foreign sources of income, the Company has filed patent
applications and trademark applications in strategically selected foreign
countries. There can be no assurance that any of the pending U.S. or foreign
patent or trademark applications will issue as patents or trademark
registrations, respectively, or that any of these rights will not be infringed
by others or that already issued patents or trademark registrations will not be
invalidated or canceled. None of the foregoing measures provides assurance that
Anchor's proprietary games or the concepts incorporated in the games could not
be successfully duplicated by third parties. Third parties could infringe on
Anchor's rights, or Anchor's proprietary games could be successfully duplicated
without infringing on Anchor's legal rights. Many elements incorporated in
Anchor's proprietary games are in the public domain or otherwise not susceptible
to legal protection, and the steps taken by Anchor will not, in and of
themselves, preclude competition with Anchor's proprietary games.
 
    Double Down Stud, Colorado Central Station Casino, Silver Strike, and Fast
Track Express are registered trademarks of Anchor. Anchor also has applications
pending on several other trademarks and/ or service marks, including Anchor
Coin, Anchor Gaming, Anchor Games, Spin for Cash, Wheel of Gold, Clear Winner,
Colorado Grande, Totem Pole, CashBall, KenoBucks, Rock'N'Reels, Maggie's Slot
Club, and Fast Track Slot Club. There can be no assurance that the pending
trademark or patent applications will be issued, that the Company's applications
will not be opposed by a third party, or that Anchor will not face third
parties' claims to prior use of one or more of these marks or patents.
 
    Double Down Stud-Registered Trademark-, Colorado Central Station
Casino-Registered Trademark-, Silver Strike-Registered Trademark-, and Fast
Track Express-Registered Trademark- are registered trademarks, and Anchor
Coin-TM-, Anchor Gaming-TM-, Anchor Games-TM-, Spin for Cash-TM-, Wheel of
Gold-TM-, Clear Winner-TM-, Colorado Grande-TM-, Totem Pole-TM-, CashBall-TM-,
KenoBucks-TM-, Rock'N'Reels-TM-, Maggie's Slot Club-TM-, and Fast Track Slot
Club-TM- are trademarks of the Company.
 
CASINOS
 
    GENERAL.  In November 1990, the state of Colorado approved limited stakes
gaming ($5.00 or less per wager) in two historic gold mining areas, Black
Hawk/Central City and Cripple Creek. Because of the $5.00 maximum bet, Anchor's
casinos in Colorado emphasize gaming machine play. Anchor currently operates a
casino in each of these markets, the Colorado Central Station Casino in Black
Hawk and the Colorado Grande Casino in Cripple Creek. Black Hawk and Central
City are contiguous and are located approximately 40 miles from Denver and 10
miles from Interstate 70, the main highway connecting Denver to many of
Colorado's major ski resorts. Cripple Creek is located approximately 45 miles
from Colorado Springs and 75 miles from Pueblo. Casinos located in the Black
Hawk/Central City area serve primarily the residents of Denver and Boulder,
Colorado and surrounding communities, an area with a total population
 
                                       4
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in excess of 1.8 million. Approximately three million people live within a
100-mile radius of the Black Hawk/Central City area. Casinos located in Cripple
Creek serve primarily the residents of Colorado Springs, Pueblo, and surrounding
communities. More than two million people live within a 100-mile radius of
Cripple Creek.
 
    COLORADO CENTRAL STATION CASINO.  On December 25, 1993, the Company opened
the Colorado Central Station Casino in Black Hawk at a cost of approximately
$25.0 million. The Colorado Central Station Casino is currently the highest
revenue producing and most profitable casino in the state. After completion of a
2,750 square foot expansion in 1996, the casino building has approximately
49,000 square feet of main facility area, with 16,637 square feet of gaming
space over three floors. The Colorado Central Station Casino features more than
680 gaming machines, ten blackjack tables, nine poker tables, and a food court
restaurant area. The casino is the first casino encountered by customers
traveling from Denver to the Black Hawk/Central City area. In addition, the
Colorado Central Station Casino offers more than 770 parking spaces. The
Colorado Central Station Casino is also the closest casino to Black Hawk's 3,000
space public parking facility, located one and one-half miles from the casino,
and is the first stop from the parking facility on the parking lot shuttle bus
route. The Colorado Central Station Casino is situated on approximately 1.8
acres of land on the south end of Black Hawk, near Main Street and Colorado
State Highway 119.
 
    The Colorado Central Station Casino is fashioned in the style of a 19th
century mining town railroad station. According to information on file with the
Colorado Historic Preservation Office, the Colorado Central Station Casino
property is within the Black Hawk Registered Historic District and meets the
historical guidelines for use as a gaming establishment. In contrast, the
Colorado Central Station Casino was constructed specifically for gaming
activities, and as a result offers a more open, spacious gaming area, while
using the maximum square footage allowed under Colorado law, which limits the
square footage of a casino that may be used for gaming activities to 35% of the
building and 50% of any one floor. At June 30, 1997, the Colorado Central
Station Casino employed approximately 444 people and by law is allowed to be
open seven days a week from 8:00 a.m. to 2:00 a.m.
 
    All gaming machines at the Colorado Central Station Casino offer bill
validators that accept $1, $5, $10, $20, $50, and $100 bills. In addition, the
Company has installed an automated player tracking system at the casino that is
tied into the Company's accounting system to provide detailed management reports
regarding gaming machine use. The system facilitates the casino's Fast Track
Slot Club, which is designed to attract and retain gaming patrons by enabling
the Company to identify, market to, and reward its loyal customers.
 
    COLORADO GRANDE CASINO.  The Company operates (through an 80% owned
subsidiary) the Colorado Grande Casino in Cripple Creek, which is located
approximately 45 miles from Colorado Springs and 75 miles from Pueblo. The
Colorado Grande Casino, which opened October 11, 1991, is located at one of the
principal intersections in Cripple Creek and features more than 210 gaming
machines, 44 adjacent parking spaces, and a full service restaurant and bar. In
August 1995, the Company completed the installation of an automated player
tracking system and a player slot club, "Maggie's Slot Club." Maggie's Slot Club
and the player tracking system have enabled the casino to implement marketing
programs designed to attract and increase the number of loyal casino customers.
At June 30, 1997, the Colorado Grande Casino employed approximately 101 people
and by law is allowed to be open seven days a week from 8:00 a.m. to 2:00 a.m.
 
    CANADA.  In January 1997, the Company entered into an agreement with Revenue
Properties Company (the "Anchor RPC JV") for the purpose of submitting a
proposal to operate charity based gaming club operations in the Province of
Ontario. In September 1997 the Ontario provincial government granted the Anchor
RPC JV permission to run six permanent full-time and one part-time seasonal
charity based gaming clubs in Ontario, Canada. The full-time charity gaming
clubs awarded to the Anchor RPC JV are located in: Toronto-North York; Fort
Erie; Toronto-South Etobicoke/York; Hamilton/Oakville/ Burlington;
Kitchner/Waterloo; and Sarnia. The part-time seasonal gaming club awarded to the
Anchor
 
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RPC JV is in South Western Ontario (Branford). Fort Erie is located directly
across the U.S. border from Buffalo, NY and Sarnia is located directly across
the U.S. border from Port Huron, MI. The charity based gaming clubs are being
introduced by the provincial government to stabilize funding to charities and to
increase control, supervision, and accountability in this gaming sector. Each
permanent charity based gaming club will be limited to a total of 150 video
lottery terminals and 40 table games. The permanent charity based gaming clubs
will be operated under management agreement with the provincial government,
which will provide the Anchor RPC JV with 10% of video lottery terminal revenue,
5% of table game, retail, food and beverage and all other revenue, and 10% of
defined net income. See "Risk Factors--Risks of Pursuing New Casino Gaming
Operations."
 
ROUTE OPERATIONS
 
    GENERAL.  Anchor is one of the largest gaming machine route operators in
Nevada with 801 gaming
machines in 58 locations at June 30, 1997, up from 692 gaming machines in 50
locations at June 30, 1996. The Company's gaming machine route operations in
Nevada involve the installation, operation, and service of gaming machines
(virtually all video poker machines) under space leases with retail chains and
under revenue participation agreements with local taverns and retail stores,
principally in the Las Vegas area. In 1996, the Company extended its exclusive
space lease agreement with Smith's Food and Drug Centers, Inc. ("Smiths"), its
largest route customer, for an additional five years at current rates through
2010. At June 30, 1997, 716 of the Company's 801 gaming machines in Nevada were
located in or near Las Vegas, which has been one of the fastest growing cities
in the United States in recent years.
 
    LOCATIONS AND LEASES.  Anchor's agreements for its locations generally are
in the form of either written space lease agreements or revenue sharing
contracts and generally give Anchor the exclusive right to install gaming
machines at such locations. Two of the Company's gaming route agreements are
space leases with major retail chains that require payments of fixed monthly
fees based on the amount of space used or the number of gaming machines
installed at each location. The remainder of the Company's gaming route
agreements are revenue participation arrangements, which provide for the payment
to the location owner of a percentage of revenues generated by Anchor's machines
at such location. A location owner is not permitted to receive a percentage of
revenues unless such owner is licensed by the Nevada Gaming Commission. See
"--Regulation--Nevada."
 
    In 1996, Anchor extended its space lease agreement with its largest gaming
machine route customer, Smiths, which was scheduled to expire in the year 2005,
for five additional years at current rates through 2010. Anchor paid $5.0
million to Smiths for this extension. The agreement with Smiths provides for a
fixed monthly rental fee per store throughout the term of the agreement and
grants Anchor the exclusive right to install gaming machines at all Smiths
stores in Nevada, including stores opened in the future.
 
    Anchor's space leases and revenue participation arrangements generally
require Anchor to pay all installation, maintenance, and insurance expenses
related to its operations at each location. Applicable taxes are paid by Anchor
under space leases and are generally shared on the same basis as revenues under
revenue participation arrangements. The leases generally provide that if Anchor
fails to pay the required rental or license fees or defaults in the performance
of any of its other obligations, the location operator can terminate the lease.
Anchor believes that it is not in default under any of its present space leases
or revenue participation arrangements. Generally, in the ordinary course of
business, Anchor has lease and other security deposits, prepaid rent, and
advances held by the owners of chain stores and other location operators.
 
    SERVICES AND OPERATIONS.  Anchor attempts to attract and retain gaming
machine route patrons by offering an attractive selection of gaming machines.
Prior to installing machines at a location, Anchor studies the market potential
and customer base and determines the appropriate machine mix for the location.
Progressive jackpots are also offered at most of the Company's locations.
Virtually all of the gaming machines operated by the Company's route operation
are video poker machines because Anchor
 
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believes that interactive electronic games, such as video poker, are more
attractive to its gaming machine route patrons than simple, mechanical reel-type
slot machines.
 
    In marketing its services to the owners of retail stores and taverns, the
Company also emphasizes quality service. The Company operates and services its
machines using its own employees, who routinely repair and maintain the
Company's gaming machines in order to improve reliability and in-service time.
Management believes that the Company's gaming machines and related equipment are
well maintained and in good working condition. In addition to physical service
of the gaming machines, employees of the Company remove coins from the machines,
refill machines that have exhausted their supply of coins, and provide payment
of jackpots in excess of machine limits. Anchor also operates change booths at
certain of its retail store locations.
 
SUPPLIERS
 
    Anchor has contracted with several manufacturers to develop both Anchor's
existing and future product requirements. To date, the Company has purchased
substantially all of the gaming machines used in its route operations from IGT.
Silver Strike machines are currently produced by either IGT or Sigma Game, Inc.
The primary components of Wheel of Gold are purchased from Bally Gaming
International, Inc. and Acres Gaming. Totem Pole was originally manufactured for
the Company by Universal Distributing of Nevada, Inc. Since that time, the
Company has also contracted with Bally Gaming International, Inc. and IGT for
the manufacture of Totem Pole. The Company is expected to continue its reliance
on third parties for the manufacture of its proprietary games. An inability to
obtain quality gaming machines, production parts, and replacement parts on
reasonable terms or on a timely basis could have an adverse effect on Anchor.
 
                                       7
<PAGE>
COMPETITION
 
    GENERAL.  Anchor is subject to intense competition in all of its markets,
and management believes that national, regional, state, and local competition in
the gaming industry in general will be extremely high during the foreseeable
future, as gaming activities continue to expand in both traditional and new
gaming jurisdictions. In addition, many of the Company's competitors have
greater financial resources than the Company. See "Risk Factors--Competition."
 
    PROPRIETARY GAMES.  Intense competition characterizes the market for
proprietary games. Management believes that the primary bases for competition in
the casino game market are price and potential profit to gaming location
operators that install the games. The perceived popularity of games with casino
patrons as well as the economics of the game are, management believes, factors
considered by potential casino customers. The popularity of any of the Company's
games may decline over time as consumer preferences change or as new, competing
games are introduced. As a result, Anchor must continually anticipate and adapt
its products to consumer preferences to maximize the economics of the game to
the Company. There can be no assurance, however, that Anchor will continue to be
successful in developing and marketing its products. If the Company fails to
develop games that achieve market acceptance or if existing games become
obsolete due to the introduction of popular games by Anchor's competitors the
effects on Anchor could be material and adverse. Competitors in the game
industry include manufacturers of gaming devices and other companies marketing
gaming products and conversion kits that compete directly with the Company for
the limited gaming spaces available at casinos.
 
    Anchor's strategy of creating recurring revenues from its proprietary games
by placing the games in casinos under a royalty, revenue participation, or
similar agreements involves a departure from the traditional practice of casinos
of owning or leasing gaming devices. To the extent that casinos are reluctant to
enter into arrangements that generate recurring revenues for suppliers of casino
games, the market for Anchor's proprietary games could be limited. Competition
within the market for games that generate recurring revenues could intensify as
other suppliers of gaming devices enter this market or offer competitive
products or terms.
 
    CASINOS.  Intense competition also characterizes the Black Hawk/Central City
and Cripple Creek markets. Since limited stakes gaming was instituted in
Colorado in 1991, a number of Colorado casinos have ceased operations and others
have filed for protection under Chapter 11 of the Bankruptcy Code. Others have
closed temporarily or reduced the number of employees, and many casinos may not
be operating profitably. Several proposals have been made to open new casinos or
to expand existing casinos in Black Hawk, some of which have been abandoned or
modified. Two casinos are being developed in Black Hawk located across the
intersection from the Company's Colorado Central Station Casino. Casino America
and Nevada Gold & Casinos have commenced construction of a casino scheduled to
open in early 1999, which facility is expected to include 1,100 slot machines,
24 table games, and a 1,000 car parking garage. Riviera Holdings Corporation has
announced that it plans to develop a gaming facility with 1,000 slot machines,
14 table games, and a 500 space covered parking garage, scheduled to open in the
Spring of 1999. A joint venture between Black Hawk Gaming & Development Company,
Inc. and Jacobs Entertainment Ltd. is constructing a gaming facility located
near Colorado Central Station. The facility is scheduled to be completed in June
1998 and is expected to include 800 slot machines, 20 table games, and 500
parking spaces. In addition, construction is proceeding on a third major
intersection off State Highway 119, which will provide access directly to one of
the new casinos from State Highway 119, which is the primary access from the
Denver metropolitan area. From time to time other casino companies have publicly
expressed an interest in pursuing development or expansion in the Black
Hawk/Central City market, and proposals to develop competitive projects are
ongoing.
 
    It appears that national, regional, state, and local competition for the
casino gaming market in general will remain extremely high during the
foreseeable future, as casino gaming activities expand in traditional gaming
states and in new jurisdictions. In addition, passage of the Indian Gaming
Regulatory Act in 1988
 
                                       7
<PAGE>
has led to rapid increases in Native American gaming operations, and the
Company's two casinos may compete for customers with casinos located on Indian
reservations in far southwestern Colorado. The Company expects many competitors
to enter new jurisdictions that authorize gaming, some of whom may have greater
financial and other resources than the Company. Such proliferation of gaming
activities could adversely affect the Company's business. In particular, the
legalization of casino gaming in or near any metropolitan area, such as Denver,
Colorado, from which the Company draws customers would have a material adverse
effect on the Company's business. The Company believes, however, that
proliferation of gaming activities into new jurisdictions presents an
opportunity for it to expand its proprietary games operations.
 
    Colorado law requires an amendment to the State Constitution followed by
local voter approval for any expansion of limited stakes gaming. State and local
public initiatives regarding limited gaming in Colorado are being actively
pursued by many persons. Several cities within Colorado have active citizens'
lobbies that were able to place limited gaming initiatives on the November 1994
and November 1996 statewide ballot. Although these initiatives failed by
substantial margins, new initiatives could be introduced on future statewide
ballots to allow expansion of gaming in Colorado. Future initiatives, if passed,
could significantly increase the competition for gaming customers, thereby
adversely affecting Anchor's current casino operations in Colorado. In addition,
Anchor's casinos in Colorado compete with casinos in other parts of the United
States, as legalized gambling continues to proliferate.
 
    ROUTE OPERATIONS.  Gaming machines and gaming of all types are available in
Nevada casinos and in restricted gaming locations similar to those in which the
Company operates gaming machines, and all of these gaming establishments compete
directly or indirectly with Anchor's route operations. In addition, Anchor is
subject to substantial competition for the operation of gaming machines in
approved locations from numerous small gaming machine route operators and some
large operators, located principally in Las Vegas and Reno, Nevada, and their
surrounding areas. The principal methods of competition for gaming machine
locations are the lease, sublease, license, or revenue sharing terms, the
service provided by the route operator, the reputation of the route operator,
and the financial strength of the route operator. As existing space lease and
revenue participation arrangements expire, competition for renewals can be
expected to increase the amounts payable to location owners as compared to
amounts payable under existing agreements. Anchor's route is the only route
operation that features Double Down Stud, as the Company does not offer the game
to competing route operators. Providing a proprietary game in its route
operation is one of the ways Anchor differentiates itself from its competitors.
 
SECURITY
 
    Anchor's casino and gaming machine route operations generate, and require
the Company to maintain, a large supply of available cash. In order to mitigate
the risks of loss associated with maintaining such a supply, the Company employs
physical security measures and utilizes strict internal accounting and custodial
controls on receipts and disbursements. There can be no assurance, however, that
the Company's precautions, internal controls, and physical security will provide
security for its employees or prevent cash shortages resulting from employee
errors or from theft. In addition, the Company maintains insurance to mitigate
this risk.
 
EMPLOYEES
 
    At June 30, 1997, Anchor employed 869 persons, the substantial majority of
whom are nonmanagement personnel. Of this total, approximately 545 people worked
at the Colorado Central Station Casino and the Colorado Grande Casino. The
balance of the Company's nonmanagement employees is involved in route and
proprietary games operations. None of Anchor's employees is covered by a
collective bargaining agreement, and Anchor believes that it has satisfactory
employee relations.
 
                                       8
<PAGE>
SEASONALITY
 
    The Company's operations as a whole are not subject to significant seasonal
variations. However, in general, the highest levels of business activity at its
Colorado casinos occurs during the tourist season from July to October of each
year. In addition, operations at the Colorado casinos during the winter months
could be significantly affected by weather and road conditions in Colorado. The
Company's proprietary games operations typically have their highest levels of
business during the summer tourist season when its casino customers experience
heavier tourist traffic.
 
REGULATION
 
    NEVADA.  The manufacturing and distribution of gaming devices and the
ownership and operation of gaming machine routes in Nevada are subject to (i)
the Nevada Gaming Control Act and the regulations promulgated thereunder
(collectively, the "Nevada Act") and (ii) various local regulations. Generally,
gaming activities may not be conducted in Nevada unless licenses are obtained
from the Nevada Gaming Commission (the "Nevada Commission") and appropriate
county and city licensing agencies. The Nevada Commission, the Nevada State
Gaming Control Board (the "Nevada Board"), and the various county and city
licensing agencies are collectively referred to as the "Nevada Gaming
Authorities."
 
    The laws, regulations, and supervisory procedures of the Nevada Gaming
Authorities are based upon declarations of public policy that are concerned
with, among other things, (i) the prevention of unsavory or unsuitable persons
from having a direct or indirect involvement with gaming at any time or in any
capacity; (ii) the establishment and maintenance of responsible accounting
practices and procedures; (iii) the maintenance of effective controls over the
financial practices of licensees, including the establishment of minimum
procedures for internal fiscal affairs and the safeguarding of assets and
revenues, providing reliable record keeping, and requiring the filing of
periodic reports with the Nevada Gaming Authorities; (iv) the prevention of
cheating and fraudulent practices; and (v) providing a source of state and local
revenues through taxation and licensing fees. Changes in such laws, regulations,
and procedures could have an adverse effect on Anchor.
 
    Anchor Coin, which is the Company's subsidiary engaged in the distribution
of gaming devices and route operations, is licensed by the Nevada Gaming
Authorities. Anchor Coin is also licensed as a manufacturer to enable it to
develop its proprietary games. Anchor Coin's gaming licenses require the
periodic payment of fees and taxes and are not transferable. Anchor is
registered by the Nevada Commission as a publicly traded corporation
("Registered Corporation") and, as such, is required periodically to submit
detailed financial and operating reports to the Nevada Commission and furnish
any other information that the Nevada Commission may require. No person may
become a stockholder of, or receive any percentage of profits from, Anchor Coin
without first obtaining licenses and approvals from the Nevada Gaming
Authorities. The Company and Anchor Coin have obtained from the Nevada Gaming
Authorities the various registrations, approvals, permits, and licenses required
in order to engage in gaming activities in Nevada.
 
    Anchor Coin's operator's license enables it to operate gaming machines on
premises owned by others. At locations with 15 or fewer gaming machines, the
operation is considered to be a "restricted" gaming location. At locations with
more than 15 gaming machines, the operation is considered to be a
"nonrestricted" gaming location. Only one of the Company's route locations is a
nonrestricted location. The nonrestricted regulatory requirements are reduced to
some extent because no more than 35 gaming machines, and no table games, are
operated at this location. Slot machines operated at restricted and
nonrestricted locations are subject to various fixed fees and per-machine taxes
levied on a quarterly and annual basis by the Nevada Gaming Authorities.
Nonrestricted locations are subject to a tax on their gross revenues (the
difference between amounts wagered by casino patrons and payments to casino
patrons) that ranges from 3.0% to 6.25%. In its space lease agreements with
retail chains, Anchor has agreed to pay all taxes and fees relating to the
operation of gaming machines, and in its participation arrangements, taxes
 
                                       9
<PAGE>
and fees are typically shared on the same basis as revenues. Significant
increases in the fixed fees or taxes currently levied per machine or the tax
currently levied on gross revenues could have a material adverse effect on the
Company.
 
    The Nevada Gaming Authorities may investigate any individual who has a
material relationship to, or material involvement with, the Company or Anchor
Coin in order to determine whether such individual is suitable or should be
licensed as a business associate of a gaming licensee. Officers, directors, and
certain key employees of Anchor Coin must file applications with the Nevada
Gaming Authorities and are required to be licensed by the Nevada Gaming
Authorities. Officers, directors, and key employees of the Company who are
actively and directly involved in the gaming activities of Anchor Coin may be
required to be licensed or found suitable by the Nevada Gaming Authorities. The
Nevada Gaming Authorities may deny an application for licensing or a finding of
suitability for any cause they deem reasonable. A finding of suitability is
comparable to licensing, and both require submission of detailed personal and
financial information followed by a thorough investigation. The applicant for
licensing or a finding of suitability must pay all the costs of the
investigation. Changes in licensed positions must be reported to the Nevada
Gaming Authorities, and, in addition to their authority to deny an application
for a finding of suitability or licensure, the Nevada Gaming Authorities have
jurisdiction to disapprove a change in a corporate position.
 
    If the Nevada Gaming Authorities were to find an officer, director, or key
employee unsuitable for licensing or to have a continuing relationship with the
Company or Anchor Coin, the companies involved would have to sever all
relationships with such person. In addition, the Nevada Commission may require
the Company or Anchor Coin to terminate the employment of any person who refuses
to file appropriate applications. Determinations of suitability or of questions
pertaining to licensing are not subject to judicial review in Nevada.
 
    The Company and Anchor Coin are required to submit detailed financial and
operating reports to the Nevada Commission. Substantially all material loans,
leases, sales of securities, and similar financing transactions by Anchor Coin
must be reported to or approved by, the Nevada Commission.
 
    If it were determined that the Nevada Act was violated by Anchor Coin, the
gaming licenses it holds could be limited, conditioned, suspended, or revoked,
subject to compliance with certain statutory and regulatory procedures. In
addition, Anchor Coin, the Company, and the persons involved could be subject to
substantial fines for each separate violation of the Nevada Act at the
discretion of the Nevada Commission. Further, a supervisor could be appointed by
the Nevada Commission to operate the Company's nonrestricted locations, and,
under certain circumstances, earnings generated during the supervisor's
appointment (except for the reasonable rental value of the Company's gaming
property) could be forfeited to the state of Nevada. Limitation, conditioning,
or suspension of any gaming license or the appointment of a supervisor could
(and revocation of any gaming license would) materially and adversely affect
Anchor.
 
    Any beneficial holder of the Company's voting securities, regardless of the
number of shares owned, may be required to file an application, be investigated,
and have his or her suitability as a beneficial holder of the Company's voting
securities determined if the Nevada Commission has reason to believe that such
ownership would otherwise be inconsistent with the declared policies of the
state of Nevada. The applicant must pay all costs of investigation incurred by
the Nevada Gaming Authorities in conducting any such investigation.
 
    The Nevada Act requires any person who acquires more than five percent of
the Company's voting securities to report the acquisition to the Nevada
Commission. The Nevada Act requires that beneficial owners of more than 10% of
the Company's voting securities apply to the Nevada Commission for a finding of
suitability within thirty days after the Chairman of the Nevada Board mails a
written notice requiring such filing. Under certain circumstances, an
"institutional investor," as defined in the Nevada Act, that acquires more than
10% but not more than 15% of the Company's voting securities, may apply to the
Nevada Commission for a waiver of such finding of suitability if such
institutional investor holds the
 
                                       10
<PAGE>
voting securities for investment purposes only. An institutional investor will
not be deemed to hold voting securities for investment purposes unless the
voting securities were acquired and are held in the ordinary course of business
as an institutional investor and not for the purpose of causing, directly or
indirectly, the election of a majority of the members of the board of directors
of the Company, any change in the Company's corporate charter or bylaws,
management, policies, or operations of the Company or any of its gaming
affiliates, or any other action that the Nevada Commission finds to be
inconsistent with holding the Company's voting securities for investment
purposes only. Activities that are not deemed to be inconsistent with holding
voting securities for investment purposes only include (i) voting on all matters
voted on by stockholders; (ii) making financial and other inquiries of
management of the type normally made by securities analysts for informational
purposes and not to cause a change in its management, policies, or operations;
and (iii) such other activities as the Nevada Commission may determine to be
consistent with such investment intent. If the beneficial holder of voting
securities that must be found suitable is a corporation, partnership, or trust,
it must submit detailed business and financial information including a list of
its beneficial owners. The applicant is required to pay all costs of
investigation.
 
    Any person who fails or refuses to apply for a finding of suitability or a
license within 30 days after being ordered to do so by the Nevada Commission or
the Chairman of the Nevada Board, may be found unsuitable. The same restrictions
apply to a record owner if the record owner, after request, fails to identity
the beneficial owner. Any stockholder found unsuitable and who holds, directly
or indirectly, any beneficial ownership of the common stock of a Registered
Corporation beyond such period of time as may be prescribed by the Nevada
Commission may be guilty of a criminal offense. The Company is subject to
disciplinary action if, after it receives notice that a person is unsuitable to
be a stockholder or to have any other relationship with the Company or Anchor
Coin, the Company (i) pays that person any dividend or interest upon voting
securities of the Company; (ii) allows that person to exercise, directly or
indirectly, any voting right conferred through securities held by that person;
(iii) pays remuneration in any form to that person for services rendered or
otherwise; or (iv) fails to pursue all lawful efforts to require such unsuitable
person to relinquish his or her voting securities for cash at fair market value.
Additionally, the Clark County, Nevada Liquor and Gaming Licensing Board has
taken the position that it has the authority to approve all persons owning or
controlling the stock of any corporation controlling a gaming license.
 
    The Nevada Commission may, in its discretion, require the holder of any debt
security of a Registered Corporation to file applications, be investigated, and
be found suitable to own the debt security of a Registered Corporation. If the
Nevada Commission determines that a person is unsuitable to own such security,
then pursuant to the Nevada Act, the Registered Corporation can be sanctioned,
including the loss of its approvals, if without the prior approval of the Nevada
Commission, it (i) pays to the unsuitable person any dividend, interest, or any
distribution whatsoever; (ii) recognizes any voting right by such unsuitable
person in connection with such securities; (iii) pays the unsuitable person
remuneration in any form; or (iv) makes any payment to the unsuitable person by
way of principal, redemption, conversion, exchange, liquidation, or similar
transaction.
 
    The Company is required to maintain a current stock ledger in Nevada that
may be examined by the Nevada Gaming Authorities at any time. If any securities
are held in trust by an agent or by a nominee, the record holder may be required
to disclose the identity of the beneficial owner to the Nevada Gaming
Authorities. A failure to make such disclosure may be grounds for finding the
record holder unsuitable. The Company is also required to render maximum
assistance in determining the identity of the beneficial owner. The Nevada
Commission has the power to require the Company's stock certificates to bear a
legend indicating that such securities are subject to the Nevada Act. However,
to date, the Nevada Commission has not imposed such a requirement on the
Company.
 
    The Company may not make a public offering of its securities without the
prior approval of the Nevada Commission if the securities or the proceeds
therefrom are intended to be used to construct, acquire, or finance gaming
facilities in Nevada, or to retire or extend obligations incurred for such
purposes.
 
                                       11
<PAGE>
    Changes in control of the Company through merger, consolidation, stock or
asset acquisitions, management or consulting agreements, or any act or conduct
by a person whereby such person obtains control, may not occur without the prior
approval of the Nevada Commission. Entities seeking to acquire control of a
Registered Corporation must satisfy the Nevada Board and the Nevada Commission
concerning a variety of stringent standards prior to assuming control of such
Registered Corporation. The Nevada Commission may also require controlling
stockholders, officers, directors, and other persons having a material
relationship or involvement with the entity proposing to acquire control to be
investigated and licensed as part of the approval process of the transaction.
 
    The Nevada legislature has declared that some corporate acquisitions opposed
by management, repurchases of voting securities, and corporate defense tactics
affecting Nevada gaming licensees and Registered Corporations that are
affiliated with those operations may be injurious to stable and productive
corporate gaming. The Nevada Commission has established a regulatory scheme to
ameliorate the potentially adverse effects of these business practices upon
Nevada's gaming industry and to further Nevada's policy to (i) assure the
financial stability of corporate gaming operators and their affiliates; (ii)
preserve the beneficial aspects of conducting business in the corporate form;
and (iii) promote a neutral environment for the orderly governance of corporate
affairs. Approvals are, in certain circumstances, required from the Nevada
Commission before the Company can make exceptional repurchases of voting
securities above the current market price thereof and before a corporate
acquisition opposed by management can be consummated. The Nevada Act also
requires prior approval of a plan of recapitalization proposed by the Company's
board of directors in response to a tender offer made directly to the Registered
Corporation's stockholders for the purpose of acquiring control of the
Registered Corporation.
 
    Any person who is licensed, required to be licensed, registered, required to
be registered, or is under common control with such persons (collectively,
"Licensees"), and who proposes to become involved in a gaming venture outside of
Nevada, is required to deposit with the Nevada Board, and thereafter maintain, a
revolving fund in the amount of $10,000 to pay the expenses of investigation by
the Nevada Board of the Licensees' participation in such foreign gaming. The
revolving fund is subject to increase or decrease in the discretion of the
Nevada Commission. Thereafter, Licensees are also required to comply with
certain reporting requirements imposed by the Nevada Act. Licensees are also
subject to disciplinary action by the Nevada Commission if they knowingly
violate any laws of the foreign jurisdiction pertaining to the foreign gaming
operation, fail to conduct the foreign gaming operation in accordance with the
standards of honesty and integrity required of Nevada gaming operations, engage
in activities that are harmful to the state of Nevada or its ability to collect
gaming taxes and fees, or employ a person in the foreign operation who has been
denied a license or a finding of suitability in Nevada on the ground of personal
unsuitability.
 
    The placement and number of gaming machines that may be operated in various
locations are subject to limitation and control by local city and county laws
and ordinances. Acting through their zoning powers and their powers to regulate
gaming, local government entities determine the number of gaming machines that
may be operated at non-casino locations and the types of locations where gaming
operations may be conducted. Accordingly, changes in such local zoning laws and
ordinances could have a material adverse effect on Anchor.
 
    COLORADO.  The ownership and operation of gaming facilities in Colorado are
subject to extensive state and local regulation. No gaming may be conducted in
Colorado unless licenses are obtained from the Colorado Limited Gaming Control
Commission (the "Colorado Commission"). In addition, the State of Colorado
created the Division of Gaming (the "Colorado Division") within its Department
of Revenue to license, implement, regulate, and supervise the conduct of limited
stakes gaming. The Director (the "Colorado Director") of the Colorado Division,
under the supervision of the Colorado Commission, has been granted broad powers
to ensure compliance with the law and regulations. The Colorado Commission, the
Colorado Division, the Colorado Director, and city authorities in Black Hawk,
Central City, and Cripple Creek that have responsibility for regulation of
gaming are collectively referred to as the "Colorado Gaming Authorities."
 
                                       12
<PAGE>
    The laws, regulations, and supervisory procedures of the Colorado Gaming
Authorities seek to maintain public confidence and trust that licensed limited
gaming is conducted honestly and competitively, that the rights of the creditors
of licensees are protected, and that gaming is free from criminal and corruptive
elements. It is the stated policy of the Colorado Gaming Authorities that public
confidence and trust can be maintained only by strict regulation of all persons,
locations, practices, associations, and activities related to the operation of
licensed gaming establishments and the manufacture or distribution of gaming
devices and equipment.
 
    The Colorado Commission is empowered to issue five types of gaming and
gaming related licenses. Anchor's casinos in Colorado each require a retail
gaming license, which must be renewed each year, and the Colorado Division has
broad discretion to revoke, suspend, condition, limit, or restrict a licensee at
any time. No person or entity can have an ownership interest in more than three
retail gaming licenses. The Colorado Grande Casino and the Colorado Central
Station Casino have each obtained the required retail gaming licenses.
 
    In addition to retail gaming licenses for its casinos, all of Anchor's
casino employees involved in gaming activities must apply for and receive a
support gaming license prior to commencing employment. "Key" employees, which
are defined as any executive, employee, or agent of a licensee having the power
to exercise a significant influence over decisions concerning any part of the
operations of any licensee, must obtain key licenses. At least one key license
holder must be on the premises of each casino at all times. Anchor pays the cost
of obtaining and maintaining key licenses. All licenses are revocable,
nontransferable, and valid only for the particular location initially
authorized, except that support and key employee licenses move with the approved
individual and are not location specific.
 
    Any person or group of related persons that acquires beneficial ownership of
between 5.0% and 9.99% of the outstanding Common Stock must report the
acquisition to the Colorado Commission within ten days of acquiring such
interest and may be required to provide additional information to the Colorado
Commission and be found suitable. Any person or group of related persons that
acquires beneficial ownership of 10% (or, with respect to institutional
investors, 15%) or more of the outstanding Common Stock must apply to the
Colorado Commission within 45 days after acquiring such interest and submit to
investigation for suitability by the Colorado Commission. Certain qualifying
institutional investors, at the Colorado Commission's discretion, may acquire up
to 15% ownership before a finding of suitability is required if such investors
provide certain information to the Colorado Commission regarding investment
intent and other matters. In order to be found suitable, a stockholder must be a
person of good moral character, honesty, integrity, and, in general terms, must
be free from previous criminal or unsavory convictions or similar acts. The
Colorado Commission may require substantial information in connection with a
suitability investigation, including personal background and financial
information, source of funding information, and a sworn statement that such
person or entity is not holding the Common Stock for any other party, and also
may require fingerprints. Until a finding of suitability occurs for a
stockholder who is undergoing a suitability investigation, Anchor cannot pay any
dividends to such stockholder nor may the stockholder exercise any voting rights
with respect to the Common Stock. A stockholder that is found to be unsuitable
must transfer its Common Stock to a suitable person within 60 days after the
finding of unsuitability. Otherwise, Anchor may offer such person the lesser of
the cash equivalent of such person's investment in the Common Stock or the
current market price of the Common Stock as of the date of the finding of
unsuitability, and the stockholder will be required to sell his or her Common
Stock to Anchor. Anchor's Articles of Incorporation include a statement that all
transfers of voting securities are subject to the regulations of the Colorado
Commission and each other regulatory body to which the Company's activities are
subject and detail the possibility of a repurchase if a stockholder is found
unsuitable.
 
    The Colorado Commission has adopted comprehensive rules and regulations that
require Anchor to maintain adequate books and records and prescribe minimum
operating, security, and payoff procedures. Regulated operating procedures
include hours of operation and rules of play. Rules regarding gaming, cheating,
and fraudulent practices have also been adopted, which Anchor is obligated to
police and
 
                                       13
<PAGE>
enforce. Upon request, Anchor must submit copies of all written gaming contracts
and summaries of all oral gaming contracts to which it is a party or intends to
become a party. Anchor and its subsidiaries must also promptly inform the
Colorado Commission of any change in their officers or directors and any such
new officer or director will be subject to possible investigation prior to
approval. Further, if any casino employee possessing a support license changes
employment, is terminated, or resigns, Anchor must notify the Colorado Director.
 
    Anchor may not make a public offering of its securities without notifying
the Colorado Commission. The notification must occur within 10 business days
after the initial filing of a registration statement with the Securities and
Exchange Commission or, if the offering will not be registered with the
Securities and Exchange Commission, 10 days prior to the public use or
distribution of any offering document. The notification procedures apply to any
offering by Anchor where the proceeds will be used or intended for use (i) in
constructing gaming facilities; (ii) in financing the operation of gaming
facilities by any licensee; (iii) in acquiring any direct or indirect interest
in Colorado gaming facilities; or (iv) in retiring or extending obligations
incurred for any of the above purposes. The notification must disclose, among
other things, a description of the securities to be offered, the proposed terms
of the offering, its anticipated gross and net proceeds, and the use of the
proceeds.
 
    Colorado law requires statewide voter approval of an amendment to the State
Constitution for any expansion of limited gaming into additional locations and,
depending on the authorization approved by the statewide vote, requires, in
addition, voter approval from the locality in question. In 1994, Colorado voters
defeated by a margin of 93% to 7% a proposal to permit gaming in Manitou Springs
(located near Colorado Springs and Cripple Creek) and slot machines in airports.
On November 5, 1996, Colorado voters defeated by a margin of 69% to 31% a
proposal to allow gaming in the community of Trinidad, located on the New Mexico
border. Recently, the state legislature passed, but the Governor vetoed, a bill
that would have permitted video lottery terminals at dog and horse racetracks
under certain terms and conditions. Several cities within Colorado have active
citizens' lobbies that were able to place gaming initiatives on recent statewide
ballots. Although these initiatives have failed, new initiatives could be
introduced on future statewide ballots to allow expansion of gaming in Colorado
or prohibit gaming in the particular markets in Colorado where the Company
operates. Future initiatives, if passed, could significantly increase the
competition for gaming customers, thereby adversely affecting the Company's
operations in Colorado. Additionally, there can be no assurance that future
legislation will not be enacted that would impose additional restrictions or
prohibitions on, or assess additional fees with respect to, the Company's
business.
 
    The sale of alcoholic beverages at Anchor's casinos is subject to licensing,
control, and regulation by the applicable state and local authorities. All
alcoholic beverages licenses are revocable and are not transferable. The
agencies involved have full power to limit, condition, suspend, or revoke any
such license, and any such disciplinary action could (and revocation would) have
a material adverse effect on Anchor.
 
    The State of Colorado has enacted an annual tax on adjusted gross proceeds,
as defined under Colorado law ("AGP") (gross gaming revenue being defined
generally as the total amount wagered minus the total amount paid out in prizes)
of 2% of the first $2.0 million of AGP, 4% from $2.0 million to $4.0 million of
AGP, 14% from $4.0 million to $5.0 million of AGP, 18% from $5.0 million to
$10.0 million of AGP, and 20% of amounts in excess of $10.0 million of AGP.
 
    During the first year of gaming, casinos operated under a three-tiered tax
system in which they paid 4% on the first $440,000 of AGP, 8% from $440,000 to
$1.2 million of AGP, and 15% above $1.2 million of AGP. During the second gaming
year, October 1, 1992 to September 30, 1993, casinos paid 2% on the first $1.0
million of AGP and 20% on any amount above $1.0 million of AGP. In the third
year, October 1, 1993 to September 30, 1994, casinos paid 2% on the first $1.0
million of AGP, 8% from $1.0 million to $2.0 million of AGP, 15% from $2.0
million to $3.0 million of AGP, and 18% above $3.0 million of AGP. During the
fourth and fifth years, October 1, 1994 through September 30, 1996, casinos paid
2% on the first $2.0 million of AGP, 8% from $2.0 million to $4.0 million of
AGP, 15% from $4.0 million to
 
                                       14
<PAGE>
$5.0 million of AGP, and 18% above $5.0 million of AGP. During the sixth year,
October 1, 1996 through September 30, 1997, casinos paid 2% on the first $2.0
million of AGP, 4% from $2.0 million to $4.0 million of AGP, 14% from $4.0
million to $5.0 million of AGP, 18% from $5.0 million to $10.0 million of AGP,
and 20% of amounts in excess of $10.0 million of AGP. During the sixth year,
October 1, 1996 through September 30, 1997, casinos paid 2% of the first $2.0
million of AGP, 4% from $2.0 million to $4.0 million, 14% from $4.0 million to
$5.0 million, 18% from $5.0 million to $10.0 million, and 20% of amounts in
excess of $10.0 million. Effective October 1 of each year, the Colorado Gaming
Commission establishes the gross gaming revenue tax for the following 12 months.
Under the Colorado Constitution, the Commission is authorized to increase the
gaming tax rate to as much as 40%. There can be no assurance that the taxes or
fees applicable to the Company will not be increased in the future, either by
the Colorado electorate, legislation, or action by the Colorado Commission
resulting in an adverse effect on the Company's operations.
 
    In addition, a "device fee" is required for each gaming device (i.e., each
gaming machine and each gaming table). The State of Colorado currently imposes
an annual fee of $75 per device (reduced from $100 effective October 1, 1994),
and Black Hawk and Cripple Creek currently impose annual fees per device of $750
and $1,200, respectively. Black Hawk and Cripple Creek also impose liquor
licensing fees, restaurant fees, and parking impact fees. Further, Anchor has
paid, and in the future may be required to pay, local parking and other
municipal "impact fees" based on the square footage of its facilities.
Significant increases in the applicable taxes or fees, or the imposition of new
taxes or fees, could have a material adverse effect on Anchor, and it is not
unreasonable to expect that such taxes or fees could be increased or new taxes
or fees imposed.
 
PROPRIETARY GAMES APPROVAL
 
    Anchor is licensed in several gaming jurisdictions as a distributor or
manufacturer of gaming machines. These jurisdictions exert substantial
regulatory controls over the Company and may impose restrictions on ownership of
the Company's securities and require findings of suitability of individuals
associated with the Company. Each of the Company's games must be approved and
licensed in each jurisdiction in which it is played. Obtaining required
approvals and licenses can be time consuming and costly and there can be no
assurance of success. In addition, there can be no assurance that regulations
adopted or taxes imposed by other states will permit profitable operations by
the Company.
 
OTHER JURISDICTIONS
 
    FEDERAL GAMBLING DEVICES ACT OF 1962.  The Federal Gambling Devices Act of
1962 (the "Federal Act") makes it unlawful, in general, for a person to
manufacture, deliver, or receive gaming machines, gaming machine type devices,
and components across state lines or to operate gaming machines unless that
person has first registered with the Attorney General of the United States. The
Federal Act does not apply to the Company's proprietary table games but does
apply to the Company's proprietary gaming machines. Anchor has registered under
the Federal Act and must renew its registration annually. In addition, various
record keeping and equipment identification requirements are imposed by the
Federal Act. Violation of the Federal Act may result in seizure and forfeiture
of the equipment, as well as other penalties. Any expansion of Anchor's gaming
activities in Nevada and Colorado may require, and any expansion into other
jurisdictions would require, additional approvals, licenses, and permits from
various gaming authorities.
 
    NATIONAL GAMBLING IMPACT AND POLICY COMMISSION.  In August 1996, the United
States Congress passed legislation creating the National Gambling Impact and
Policy Commission to conduct a comprehensive study of all matters relating to
the economic and social impact of gaming in the United States. The legislation
provides that, not later than two years after the enactment of such legislation,
the commission must issue a report to the President and to Congress containing
its findings and conclusions, together with recommendations for legislation and
administrative actions. Any such recommendations, if enacted into
 
                                       15
<PAGE>
law, could adversely impact the gaming industry and have a material adverse
effect on the Company's business or results of operations. The Company is unable
to predict whether this study will result in legislation that would impose
regulations on gaming industry operators, including the Company, or whether such
legislation, if any, would have a material adverse effect on the Company.
Additionally, from time to time, certain federal legislators have proposed the
imposition of a federal tax on gaming revenues. Any such tax could have a
material adverse effect on the Company's financial condition or results of
operations.
 
ENVIRONMENTAL CONSIDERATIONS
 
    The Colorado Central Station Casino is located in an area that has been
designated by the Environmental Protection Agency (the "EPA") as a superfund
site on the National Priorities List, known as the Central City-Clear Creek
Superfund Site (the "Site"), as a result of contamination from historic mining
activity in the area. The EPA is entitled to proceed against owners and
operators of properties located within the Site for remediation and response
costs associated with their properties and with the entire Site. The Colorado
Central Station Casino is located within the drainage basin of North Clear Creek
and is therefore subject to potentially contaminated surface and ground water
from upstream mining-related sources. Soil and ground water samples on the Site
indicate that several contaminants exist in concentrations exceeding drinking
water standards. Records relating to historical uses of the Site are uncertain
as to whether mining actually occurred below the Company's property. Records do
indicate, however, that an ore loading dock for a railroad depot was once
located on adjacent property, and railroad tracks were present on the Company's
property. Management is not aware of any environmental issues associated with
these activities.
 
RISK FACTORS
 
    THIS ANNUAL REPORT ON FORM 10-K CONTAINS CERTAIN FORWARD-LOOKING STATEMENTS
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
REFER TO EVENTS THAT COULD OCCUR IN THE FUTURE OR MAY BE IDENTIFIED BY THE USE
OF WORDS SUCH AS "INTEND," "PLAN," "BELIEVE," CORRELATIVE WORDS, AND OTHER
EXPRESSIONS INDICATING THAT FUTURE EVENTS ARE CONTEMPLATED. SUCH STATEMENTS ARE
SUBJECT TO INHERENT RISKS AND UNCERTAINTIES, AND ACTUAL RESULTS COULD DIFFER
MATERIALLY FROM THOSE PROJECTED IN THE FORWARD-LOOKING STATEMENTS AS A RESULT OF
CERTAIN OF THE RISK FACTORS SET FORTH BELOW AND ELSEWHERE IN THIS ANNUAL REPORT
ON FORM 10-K. IN ADDITION TO THE OTHER INFORMATION CONTAINED IN THIS ANNUAL
REPORT ON FORM 10-K, INVESTORS SHOULD CAREFULLY CONSIDER THE FOLLOWING RISK
FACTORS.
 
    RISKS OF PROPRIETARY GAMES.  The Company places its proprietary games in
casinos at no cost to the casinos under short-term arrangements, making these
games susceptible to replacement due to pressure from competitors, changes in
economic conditions, obsolescence, and declining popularity. Anchor intends to
maintain and expand the number of installed proprietary games through
enhancement of existing games, introduction of new games, and customer service,
but there can be no assurance that these efforts will be successful.
 
    Introduction of new proprietary games involves significant risks, including
whether the Company will be able to place its games with casinos, the economic
terms on which casinos will accept the machines, the popularity of the games
with gaming patrons, and whether a successful game can maintain its popularity
over the long term. If the Company is not successful in introducing new games,
the effects on Anchor could be adverse.
 
    Anchor derives revenues from the sale of souvenir tokens that are paid out
by Silver Strike machines. The primary raw material for the tokens is silver,
the price of which is subject to wide fluctuations. As silver prices rise, the
Company may be unable to pass price increases through to its casino customers.
 
    Anchor has filed trademark and patent applications to protect its
intellectual property rights in certain of its trademarks and innovations on
certain of its proprietary games, respectively. At this time, however,
 
                                       16
<PAGE>
the United States Patent and Trademark Office has not acted upon all of these
applications. There can be no assurance that the pending patent or trademark
applications will actually issue as patents or trademark registrations or that
any of these rights will not be infringed by others. Certain of the Company's
games, including Silver Strike, Totem Pole, and Clear Winner, do not have
independent protection of the game itself. Anchor intends to promote
aggressively its trademarks to build goodwill and customer loyalty. In addition,
Anchor intends to improve and add innovations to certain of its games, which may
be subject to legal protection. There can be no assurance, however, that the
Company will be successful in these efforts, that innovations will be subject to
legal protection, or that the innovations will give a competitive advantage to
the Company. None of the foregoing measures provides assurance that Anchor's
proprietary games or the concepts incorporated in the games could not be
successfully duplicated by third parties. Third parties could infringe on
Anchor's rights, or Anchor's proprietary games could be successfully duplicated
without infringing on Anchor's legal rights. Many elements incorporated in
Anchor's proprietary games are in the public domain or otherwise not susceptible
to legal protection, and the steps taken by Anchor will not, in and of
themselves, preclude competition with Anchor's proprietary games.
 
    Anchor also derives revenues from the sale of souvenir tokens that are paid
out by Silver Strike machines. The primary raw material for the tokens is
silver, the price of which is subject to wide fluctuations. As silver prices
rise, the Company may be unable to pass price increases through to its casino
customers.
 
    COMPETITION.  Intense competition characterizes the market for proprietary
games. Competitors in the game industry include manufacturers of gaming devices
and other companies marketing gaming products and conversion kits, which compete
directly with the Company for the limited gaming spaces available at casinos.
The popularity of any of the Company's games may decline over time as consumer
preferences change or as new, competing games are introduced. The Company's
competitors are engaged in intense efforts to produce proprietary games that
compete with those of the Company. As a result, Anchor must continually
anticipate and adapt its products to consumer preferences in order to maximize
the economics of the game to the Company. There can be no assurance, however,
that Anchor will continue to be successful in developing and marketing its
products. If the Company fails to develop games that achieve market acceptance
or if existing games become obsolete due to the introduction of popular games by
Anchor's competitors the effects on Anchor could be material and adverse.
 
    Anchor's strategy of creating recurring revenues from its proprietary games
by placing the games in casinos under a royalty, revenue participation, or
similar agreements involves a departure from the traditional practice of casinos
of owning or leasing gaming devices. To the extent that casinos are reluctant to
enter into arrangements that generate recurring revenues for suppliers of casino
games, the market for Anchor's proprietary games could be limited. Competition
within the market for games that generate recurring revenues could intensify as
other suppliers of gaming devices enter this market or offer competitive
products or terms.
 
    Intense competition also characterizes the Black Hawk/Central City and
Cripple Creek markets. Since limited stakes gaming was instituted in Colorado in
1991, a number of Colorado casinos have ceased operations and others have filed
for protection under Chapter 11 of the Bankruptcy Code. Others have closed
temporarily or reduced the number of employees, and many casinos may not be
operating profitably. Several proposals have been made to open new casinos or to
expand existing casinos in Black Hawk, some of which have been abandoned or
modified. Two casinos are being developed in Black Hawk located across the
intersection from the Company's Colorado Central Station Casino. Casino America
and Nevada Gold & Casinos have commenced construction of a casino scheduled to
open in early 1999, which facility is expected to include 1,100 slot machines,
24 table games, and a 1,000 car parking garage. Riviera Holdings Corporation has
announced that it plans to develop a gaming facility with 1,000 slot machines,
14 table games, and a 500 space covered parking garage, scheduled to open in the
Spring of 1999. A joint venture between Black Hawk Gaming & Development Company,
Inc. and Jacobs Entertainment Ltd. is constructing a gaming facility located
near Colorado Central Station. The facility is scheduled to be
 
                                       17
<PAGE>
completed in June 1998 and is expected to include 800 slot machines, 20 table
games, and 500 parking spaces. In addition, construction is proceeding on a
third major intersection off State Highway 119, which will provide access
directly to one of the new casinos from State Highway 119, which is the primary
access from the Denver metropolitan area. From time to time other casino
companies have publicly expressed an interest in pursuing development or
expansion in the Black Hawk/Central City market, and proposals to develop
competitive projects are ongoing.
 
    It appears that national, regional, state, and local competition for the
casino gaming market in general will remain extremely high during the
foreseeable future, as casino gaming activities expand in traditional gaming
states and in new jurisdictions. In addition, passage of the Indian Gaming
Regulatory Act in 1988 has led to rapid increases in Native American gaming
operations, and the Company's two casinos may compete for customers with casinos
located on Indian reservations in southwestern Colorado. The Company expects
many competitors to enter new jurisdictions that authorize gaming, some of whom
may have greater financial and other resources than the Company. Such
proliferation of gaming activities could adversely affect the Company's
business. In particular, the legalization of casino gaming in or near any
metropolitan area, such as Denver, Colorado, from which the Company draws
customers would have a material adverse effect on the Company's business. The
Company believes, however, that proliferation of gaming activities into new
jurisdictions presents an opportunity for it to expand its proprietary games
operations.
 
    Gaming machines and gaming of all types are available in Nevada casinos and
in restricted gaming locations similar to those in which the Company operates
gaming machines, and all of these gaming establishments compete directly or
indirectly with Anchor's route operations. In addition, Anchor is subject to
substantial competition for the operation of gaming machines in approved
locations from numerous small gaming machine route operators and some large
operators, located principally in Las Vegas and Reno, Nevada, and their
surrounding areas. The principal methods of competition for gaming machine
locations are the lease, sublease, license, or revenue sharing terms, the
service provided by the route operator, the reputation of the route operator,
and the financial strength of the route operator. As existing space lease and
revenue participation arrangements expire, competition for renewals can be
expected to increase the amounts payable to location owners as compared to
amounts payable under existing agreements.
 
    RISKS OF PURSUING NEW CASINO GAMING OPPORTUNITIES.  The Company is actively
seeking to expand its casino operations into jurisdictions that have legalized
or are expected to legalize gaming in the future. There can be no assurance,
however, that the Company will be able to identify suitable casino projects in
which to invest or will be able to complete any such project as scheduled or
contemplated. The Company's ability to complete and operate new casino projects
will be dependent on a number of factors, many of which are beyond Anchor's
control, including identifying suitable investment partners (if appropriate),
negotiating acceptable terms, securing required state, foreign, and local
licenses, permits, and approvals, securing adequate financing on acceptable
terms, identifying and securing suitable locations (which management expects
will be limited and in high demand), voter and other political approvals,
demographic trends, and consumers' gaming preferences. As a result, there can be
no assurance that the Company will be able to develop new or expand its current
casino operations. In particular, there can be no assurance that Anchor will be
successful in its effort to secure management contracts or multiple site
contracts or if successful, which locations, the number of contracts, the time
frame in which they might be awarded, or when the sites will be operational, in
Ontario, Canada. See "Business--Casinos--Canadian Opportunity." In addition, the
Company may incur costs in connection with pursuing new gaming opportunities
that it cannot recover and may be required to expense certain of these costs,
which may negatively affect the Company's reported operating performance for the
periods during which such costs are expensed.
 
    RISKS OF DEPENDENCE ON SUPPLIERS.  The Company utilizes outside vendors,
some of which are competitors of the Company, to manufacture a significant
portion of its proprietary game machines and
 
                                       18
<PAGE>
parts. An inability to obtain gaming machines and components, production parts,
and replacement parts on reasonable terms or on a timely basis could have an
adverse effect on Anchor.
 
    GAMING REGULATIONS AND TAXES.  The Company's operations are subject to
extensive state and local regulation and taxation in Nevada, Colorado, and other
jurisdictions in which Anchor operates, and any future activities in additional
jurisdictions will be similarly regulated and taxed. State and local authorities
require various licenses, permits, and approvals to be held by the Company, and
these authorities may, among other things, revoke the license of any entity
licensed as a gaming corporation, the registration of any entity registered as a
holding company of a gaming corporation, or the license of any individual
licensed as an officer, director, control person, employee, or stockholder of a
licensed or registered entity. Gaming licenses and related approvals are deemed
to be privileges under Nevada and Colorado law and the laws of other
jurisdictions, and no assurances can be given that existing licenses will not be
revoked. Regulatory changes or increases in applicable taxes or fees in Nevada
or Colorado or the laws of other jurisdictions in which the Company operates
could have a material adverse effect on the Company. There can be no assurance
that regulations adopted or taxes imposed by Nevada, Colorado, or other
jurisdictions will not have a material adverse effect on the Company. See
"Regulation."
 
    Colorado law requires statewide voter approval of an amendment to the State
Constitution for any expansion of limited gaming into additional locations and,
depending on the authorization approved by the statewide vote, requires, in
addition, voter approval from the locality in question. In 1994, Colorado voters
defeated by a margin of 93% to 7% a proposal to permit gaming in Manitou Springs
(located near Colorado Springs and Cripple Creek) and slot machines in airports.
On November 5, 1996, Colorado voters defeated by a margin of 69% to 31% a
proposal to allow gaming in the community of Trinidad, located on the New Mexico
border. Recently, the state legislature passed, but the Governor vetoed, a bill
that would have permitted video lottery terminals at dog and horse racetracks
under certain terms and conditions. Several cities within Colorado have active
citizens' lobbies that were able to place gaming initiatives on recent statewide
ballots. Although these initiatives have failed, new initiatives could be
introduced on future statewide ballots to allow expansion of gaming in Colorado
or prohibit gaming in the particular markets in Colorado where the Company
operates. Future initiatives, if passed, could significantly increase the
competition for gaming customers, thereby adversely affecting the Company's
operations in Colorado. Additionally, there can be no assurance that future
legislation will not be enacted that would impose additional restrictions or
prohibitions on, or assess additional fees with respect to, the Company's
business.
 
    Each of the Company's proprietary games must be approved and licensed in
each jurisdiction in which it is placed. The Company must still obtain approvals
for certain of its games in certain gaming jurisdictions before it can fill all
of its orders to place machines. Obtaining required licenses can be time
consuming and costly and there can be no assurance that any game will be
successfully licensed in any jurisdiction.
 
    Any beneficial holder of the Common Stock may be subject to investigation by
gaming authorities in Nevada, Colorado, and other jurisdictions in which Anchor
does business if such authorities have reason to believe that such ownership may
be inconsistent with a state's gaming policies. Persons who acquire beneficial
ownership of more than certain designated percentages of the Common Stock may be
subject to certain reporting and qualification procedures. The Company's
Articles of Incorporation provide that all transfers of voting securities are
subject to the regulations of each regulatory body to which the Company's
activities are subject and provide for a mandatory repurchase of Common Stock if
a stockholder is found unsuitable. In addition, changes in control of the
Company and certain other corporate transactions may not be effected without the
prior approval of gaming authorities in Nevada, Colorado, and other
jurisdictions in which the Company does business. Such provisions could
adversely affect the marketability of the Common Stock or prevent certain
corporate transactions, including mergers or other business combinations. See
"Regulation."
 
                                       19
<PAGE>
    In August 1996, the United States Congress passed legislation creating the
National Gambling Impact and Policy Commission to conduct a comprehensive study
of all matters relating to the economic and social impact of gaming in the
United States. The legislation provides that, not later than two years after the
enactment of such legislation, the commission must issue a report to the
President and to Congress containing its findings and conclusions, together with
recommendations for legislation and administrative actions. Any such
recommendations, if enacted into law, could adversely impact the gaming industry
and have a material adverse effect on the Company's business or results of
operations. The Company is unable to predict whether this study will result in
legislation that would impose additional regulations on gaming industry
operators, including the Company, or whether such legislation, if any, would
have a material adverse effect on the Company. Additionally, from time to time,
certain federal legislators have proposed the imposition of a federal tax on
gaming revenues. Any such tax could have a material adverse effect on the
Company's financial condition or results of operations.
 
    RISKS OF EXISTING COLORADO OPERATIONS: ACCESS TO BLACK HAWK AND CRIPPLE
CREEK.  The cities of Black Hawk and Cripple Creek are located in the Colorado
Rockies and each is serviced by winding mountain roads that require extremely
cautious driving, especially in bad weather. These roads also have tunnels that
are subject to closure. Congestion on the roads leading into Black Hawk and
Cripple Creek is not uncommon during the peak summer season, holidays, and other
times of the year, and such congestion may discourage potential customers from
traveling to the Company's casinos. In addition, concerns about the overall
availability of convenient parking in Black Hawk and, to a lesser extent,
Cripple Creek may discourage some potential customers. Further, Black Hawk and,
to a lesser extent, Cripple Creek have experienced unanticipated demands for
their municipal systems, including water and sewage treatment facilities.
Increased levels of activity in the area may exacerbate old or pose new
municipal and environmental problems, the costs of which could be imposed on the
gaming industry and in part by the Company.
 
    RISKS OF EXISTING COLORADO OPERATIONS: ENVIRONMENTAL CONSIDERATIONS.  The
Colorado Central Station Casino is located in an area that has been designated
by the Environmental Protection Agency (the "EPA") as a superfund site on the
National Priorities List, known as the Central City-Clear Creek Superfund Site
(the "Site"), as a result of contamination from historic mining activity in the
area. The EPA is entitled to proceed against owners and operators of properties
located within the Site for remediation and response costs associated with their
properties and with the entire Site. The Colorado Central Station Casino is
located within the drainage basin of North Clear Creek and is therefore subject
to potentially contaminated surface and ground water from upstream
mining-related sources. Soil and ground water samples on the Site indicate that
several contaminants exist in concentrations exceeding drinking water standards.
Records relating to historical uses of the Site are uncertain as to whether
mining actually occurred below the Company's property. Records do indicate,
however, that an ore loading dock for a railroad depot was once located on
adjacent property, and railroad tracks were present on the Company's property.
Management is not aware of any environmental issues associated with these
activities.
 
    DEPENDENCE ON KEY PERSONNEL.  The success of Anchor is largely dependent on
the efforts and skills of Stanley E. Fulton, its Chairman of the Board, and
other key officers and employees of Anchor. The loss of Mr. Fulton's or such
other key officers' or employees' services could have a material adverse effect
on Anchor. The expansion of Anchor's businesses may require additional managers
with gaming industry experience, as well as additional skilled employees. A
shortage of skilled management personnel exists in the gaming industry, which
may make it more difficult and expensive to attract and retain qualified
managers and employees. In addition, some of the Company's key employees perform
their services under contracts that do not contain covenants not to compete with
the Company, and it is therefore possible that competitors could attempt to hire
certain of the Company's key employees. One of the Company's key game
development employees has a contract that allows him to pursue certain gaming
related businesses for an entity not controlled by Anchor, and it is therefore
possible that this key employee could devote substantial attention to
enterprises other than Anchor.
 
                                       20
<PAGE>
    CONTROL OF THE COMPANY.  On August 29, 1997, Anchor Gaming filed a
Registration Statement on Form S-3 with the Securities and Exchange Commission
covering an offering (the "Offering") of 1,800,000 shares of common stock, of
Anchor (the "Common Stock") to be offered by certain selling stockholders,
including Stanley E. Fulton, Chairman and Chief Executive Officer of the Company
(657,700 shares), and Elizabeth Fulton and the six Fulton children (1,142,300
shares). Stanley E. Fulton will also grant to the underwriters of the Offering
an over-allotment option to purchase an additional 270,000 shares of Common
Stock. Upon completion of the Offering, the officers and directors of the
Company and members of their respective families will own beneficially
approximately 40.5% of the outstanding Common Stock (38.4% if the Underwriters'
over-allotment option is exercised in full). The ability to vote these shares
gives such persons the ability to exert substantial influence over any matter
coming to a vote of stockholders of the Company, including the election of
directors and certain mergers, asset sales, or other major corporate
transactions affecting the Company. All six of Mr. Fulton's children and a third
party have granted him an irrevocable proxy expiring on December 31, 1998 to
vote their shares of Common Stock. As a result, Mr. Fulton will have voting
control of 39.2% of the Common Stock to be outstanding after the Offering. Such
voting power, together with certain anti-takeover provisions included in the
Company's Articles of Incorporation and Bylaws and a Shareholder Rights Plan
(described below), could have the effect of delaying or discouraging an
unsolicited takeover of the Company.
 
    RIGHTS PLAN.  The board of directors of Anchor has authorized the Company to
enter into a Stockholder Rights Plan (the "Rights Plan") providing that one
right (a "Right") will be attached to each share of Common Stock as of a record
date to be determined by the board of directors (the "Record Date"). Each Right
will entitle the registered holder to purchase from the Company a unit (a
"Unit") consisting of one one-thousandth of a share of Series A Preferred at a
Purchase Price of $400.00 per Unit (the "Purchase Price"), subject to
adjustment. The description and terms of the Rights are to be set forth in the
Rights Agreement (the "Rights Agreement"), between the Company and a bank or
financial institution to be selected by the Company as Rights Agent (the "Rights
Agent").
 
    Initially, the Rights will be attached to all Common Stock certificates
representing shares outstanding as of the Record Date, and no separate
certificate (a "Rights Certificate") will be distributed. The Rights will
separate from the Common Stock and a "Distribution Date" will occur upon the
earlier of (i) 10 days following a public announcement that a person or group of
affiliated or associated persons (an "Acquiring Person") has acquired, or
obtained the right to acquire, beneficial ownership of 15% or more of the
outstanding shares of Common Stock (the "Stock Acquisition Date"), (ii) 10
business days following the commencement of a tender offer or exchange offer
that would result in a person or group beneficially owning 15% or more of such
outstanding shares of Common Stock, or (iii) 10 business days after the board of
directors of the Company determines that any person or entity or group has
become the beneficial owner of an amount of Common Stock that the board of
directors determines to be substantial (which amount will in no event be less
than 10% of the shares of Common Stock outstanding) and that (a) such person or
entity or group intends to cause the Company to repurchase the Common Stock
beneficially owned by such person or entity or group or to exert pressure
against the Company to take any action or enter into any transaction or series
of transactions with the intent or the effect of providing such person or entity
or group with short-term gains or profits under circumstances in which the board
of directors determines that the long-term interests of the Company and its
stockholders would not be served by taking such action or entering into such
transactions or series of transactions, or (b) beneficial ownership by such
person or entity or group is reasonably likely to have a material adverse effect
on the business, competitive position, prospects, or financial condition of the
Company and its subsidiaries (an "Adverse Person"). Until the Distribution Date,
(i) the Rights will be evidenced by the Common Stock certificates and will be
transferred with and only with such Common Stock certificates; (ii) new Common
Stock certificates will contain a notation incorporating the Rights Agreement by
reference; and (iii) the surrender for transfer of any certificates for Common
Stock outstanding will also constitute the transfer of the Rights associated
with the Common Stock represented by such certificate. The Rights Agreement
provides that Stanley E. Fulton, and certain of his transferees, donees, or
successors, who together were beneficial owners of more
 
                                       21
<PAGE>
than 52.4% of the Common Stock of the Company outstanding on August 27, 1997,
are excluded from the definition of "Acquiring Person." Mr. Fulton is also
excluded from the definition of "Adverse Person."
 
    The Rights are not exercisable until the Distribution Date and will expire
at the close of business on the tenth anniversary of the Rights Agreement,
unless earlier redeemed by the Company as described below.
 
    As soon as practicable after the Distribution Date, Rights Certificates will
be mailed to holders of record of the Common Stock as of the close of business
on the Distribution Date and, thereafter, the separate Rights Certificates alone
will represent the Rights. Except as otherwise determined by the board of
directors, only shares of Common Stock outstanding prior to the Distribution
Date will be issued with Rights.
 
    In the event that (i) the Company is the surviving corporation in a merger
or combination with any Acquiring Person or any Adverse Person, or any associate
or affiliate of any Acquiring Person or Adverse Person, and its Common Stock
remains outstanding; (ii) any Acquiring Person or any Adverse Person, or any
associate or affiliate of any Acquiring Person or Adverse Person, engages in one
or more "self-dealing" transactions to be set forth in the Rights Agreement;
(iii) an Acquiring Person becomes the beneficial owner of 15% or more of the
then outstanding shares of Common Stock (unless such acquisition is made
pursuant to a tender or exchange offer for all outstanding shares of the
Company, at a price determined by a majority of the Continuing Directors of the
Company (as defined below) who are not representatives, nominees, affiliates, or
associates of an Acquiring Person, to be fair and otherwise in the best interest
of the Company and its stockholders); (iv) during such time as there is an
Acquiring Person or Adverse Person an event occurs that results in such
Acquiring Person's or Adverse Person's ownership interest being increased by
more than 1% (E.G., a reverse stock split or recapitalization); or (v) the board
of directors determines that a person is an Adverse Person, each holder of a
Right will thereafter have the right to receive, upon exercise, Common Stock
(or, in certain circumstances, cash, property, or other securities of the
Company), having a value equal to two times the Exercise Price of the Right. The
Exercise Price is the Purchase Price times the number of shares of Common Stock
associated with each Right (initially, one). Notwithstanding any of the
foregoing, following the occurrence of any of the events set forth in this
paragraph (the "Flip-In Events"), all Rights that are, or (under certain
circumstances specified in the Rights Agreement) were, beneficially owned by any
Acquiring Person or any Adverse Person, or an associate or affiliate of any
Acquiring Person or Adverse Person, will be null and void. However, Rights are
not exercisable following the occurrence of any of the Flip-In Events set forth
above until such time as the Rights are no longer redeemable by the Company as
set forth below.
 
    In the event that following the Stock Acquisition Date, (i) the Company is
acquired in a merger or consolidation in which the Company is not the surviving
corporation (other than a merger that follows a tender offer that the board of
directors has found to be fair to the stockholders of the Company, as described
above); or (ii) 50% or more of the Company's assets or earning power is sold or
transferred, each holder of a Right (except Rights which have previously been
voided as set forth above) will thereafter have the right to receive, upon
exercise of the Right, Common Stock of the acquiring company having a value
equal to two times the Exercise Price of the Right.
 
    The Purchase Price payable, and the number of Units of Series A Preferred or
other securities or property issuable, upon exercise of the Rights are subject
to adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination, or reclassification of, the Series A
Preferred; (ii) if holders of the Series A Preferred are granted certain rights
or warrants to subscribe for Series A Preferred or convertible securities at
less than the current market price of the Series A Preferred; or (iii) upon the
distribution to holders of the Series A Preferred of evidences of indebtedness
or assets (excluding regular quarterly cash dividends) or of subscription rights
or warrants (other than those referred to above).
 
                                       22
<PAGE>
    With certain exceptions, no adjustments in the Purchase Price will be
required until cumulative adjustments amount to at least 1% of the Purchase
Price. No fractional Units will be issued and, in lieu thereof, an adjustment in
cash will be made based on the market price of the Series A Preferred on the
last trading date prior to the date of exercise.
 
    At any time until 10 days following the Stock Acquisition Date, the Company
may redeem the Rights in whole, but not in part, at a price of $.01 per Right.
The ten day redemption period may be extended by the board of directors so long
as the Rights are still redeemable. Under certain circumstances, the decision to
redeem will require the concurrence of a majority of the Continuing Directors
referred to below. Immediately upon the action of the board of directors
ordering redemption of the Rights, the Rights will terminate and the only right
of the holders of Rights will be to receive the $.01 redemption price.
 
    The term "Continuing Director" means any member of the board of directors of
the Company who was a member of the board of directors prior to the adoption of
the Rights Plan and any person who is subsequently elected to the board of
directors if such person is recommended or approved by a majority of the
Continuing Directors, but will not include an Acquiring Person or any Adverse
Person, or an affiliate or associate of an Acquiring Person or Adverse Person,
or any representative of the foregoing entities.
 
    Until a Right is exercised, the holder thereof, as such, will have no rights
as a stockholder of the Company, including, without limitation, the right to
vote or to receive dividends. While the distribution of the Rights will not be
taxable to stockholders or to the Company, stockholders may, depending upon the
circumstances, recognize taxable income in the event that the Rights become
exercisable for Common Stock (or other consideration) of the Company as set
forth above.
 
    Other than those provisions relating to the principal economic terms of the
Rights, any of the provisions of the Rights Agreement may be amended by the
board of directors of the Company prior to the Distribution Date. After the
Distribution Date, the provisions of the Rights Agreement may be amended by the
board of directors (in certain circumstances, with the concurrence of the
Continuing Directors) in order to cure any ambiguity, to make changes which do
not adversely affect the interests of holders of Rights (excluding the interest
of any Acquiring Person or any Adverse Person), or to shorten or lengthen any
time period under the Rights Agreement; provided that no amendment to adjust the
time period governing redemption will be made at such time as the Rights are not
redeemable.
 
    The Rights have certain anti-takeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire the Company
in certain circumstances. Accordingly, the existence of the Rights may deter
certain acquirors from making takeover proposals or tender offers. However, the
Rights are not intended to prevent a takeover, but rather are designed to
enhance the ability of the board of directors to negotiate with an acquiror on
behalf of all of the shareholders.
 
ITEM 2.  PROPERTIES.
 
    The Company's principal properties consist of (i) the Colorado Central
Station Casino in Black Hawk, Colorado, (ii) the Colorado Grande Casino in
Cripple Creek, Colorado, and (iii) corporate headquarters in Las Vegas, Nevada.
 
    The Colorado Central Station Casino is situated on approximately 1.8 acres
of land on the south end of Black Hawk, near Main Street and Colorado State
Highway 119. Black Hawk, Colorado is approximately 40 miles from Denver,
Colorado. The Colorado Central Station has more than 680 gaming machines, 19
table games, and food-court restaurant area. The Colorado Central Station Casino
building has approximately 49,000 square feet of floor space, with 16,637 square
feet of gaming area over three floors. The casino has more than 770 parking
spaces and is the first shuttle stop from Black Hawk's 3000-space public
facility.
 
    The Colorado Grande Casino is located 45 miles from Colorado Springs and 75
miles from Pueblo, Colorado. The facility, which is leased, occupies 15,000
square feet of a commercial facility, of which 3,125
 
                                       23
<PAGE>
square feet are devoted to gaming. The casino is located at one of the principal
intersections in Cripple Creek and has 44 adjacent parking spaces and a separate
lot for employee parking. The casino features more than 210 gaming machines, a
full service restaurant, and bar.
 
    In October 1994, the Company consolidated its Las Vegas offices into a new
headquarters facility, also located in Las Vegas. Since that time it has
expanded to 17,000 square feet of office space and 30,000 square feet of
sub-assembly and warehouse space, all of which is leased.
 
ITEM 3.  LEGAL PROCEEDINGS.
 
    The Company is from time to time a party to legal proceedings that arise in
the ordinary course of business. Management does not believe that any such
pending or threatened legal proceedings are material.
 
ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITYHOLDERS.
 
    Not applicable.
 
                                       24
<PAGE>
                                    PART II
 
ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
 
    The Company's common stock is listed on the Nasdaq National
Market-Registered Trademark- and trades under the symbol "SLOT." The following
table sets forth the high and low closing prices per share of the Company's
Common Stock on the Nasdaq National Market for the described periods. The
Company has not declared any dividends from the time of the IPO until the
present.
<TABLE>
<CAPTION>
                                              PRICE RANGE
                                           ------------------
FISCAL 1996                                 HIGH        LOW
----------------------------------------   -------    -------
<S>                                        <C>        <C>
First quarter...........................   $26 1/4    $20 1/2
 
Second quarter..........................   $25        $18 7/8
 
Third quarter...........................   $32 1/4    $21 3/4
 
Fourth quarter..........................   $69        $32 3/4
 
<CAPTION>
 
FISCAL 1997                                 HIGH        LOW
----------------------------------------   -------    -------
<S>                                        <C>        <C>
First quarter...........................   $68 3/4    $50 1/2
 
Second quarter..........................   $64 1/2    $30 1/8
 
Third quarter...........................   $40 3/4    $27 7/8
 
Fourth quarter..........................   $47 3/4    $25
</TABLE>
 
    As of September 18, 1997, there were approximately 4,000 beneficial holders
of the Company's common stock.
 
    The board of directors intends to retain any earnings of the Company to
support operations and to finance expansion and does not intend to pay cash
dividends on the Common Stock of Anchor in the foreseeable future. The Company
is a party to a revolving credit facility with a bank that prohibits the payment
of dividends. Subject to contractual restrictions, any future determinations as
to the payment of dividends will be at the discretion of the board of directors
of the Company, and will depend on the Company's financial condition, results of
operations, capital requirements, and such other factors as the board of
directors deems relevant.
 
    Because the Company's principal operating entities were S corporations from
their inception until the consummation of the initial public offering, a
substantial portion of Anchor Gaming's net income in past years was distributed
to its stockholders.
 
                                       25
<PAGE>
ITEM 6.  SELECTED FINANCIAL DATA.
 
    The following selected financial and operating information should be read in
conjunction with "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and the consolidated financial statements and related
notes included elsewhere or incorporated by reference in this Prospectus. The
income statement and balance sheet data for each of the five fiscal years ended
June 30, 1997 are derived from the audited consolidated financial statements of
the Company.
 
<TABLE>
<CAPTION>
                                                                               FISCAL YEAR ENDED JUNE 30,
                                                                  -----------------------------------------------------
                                                                    1997       1996       1995     1994 (1)     1993
                                                                  ---------  ---------  ---------  ---------  ---------
                                                                    (DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S>                                                               <C>        <C>        <C>        <C>        <C>
INCOME STATEMENT DATA:
  Revenues:
    Casino operations...........................................  $  69,223  $  65,125  $  56,184  $  23,713  $   3,896
    Proprietary games...........................................     49,716     21,457     14,159      4,147        117
    Route operations............................................     33,509     28,651     25,818     26,123     25,018
    Food and beverage...........................................      1,300      1,233      1,250        786        446
                                                                  ---------  ---------  ---------  ---------  ---------
      Total revenues............................................    153,749    116,466     97,411     54,769     29,477
  Total costs and expenses:
    Casino operations...........................................     29,100     26,830     21,500      8,199      1,326
    Proprietary games...........................................     11,039     12,114      9,851      3,047        141
    Route operations............................................     19,905     17,158     15,659     15,416     14,869
    Food and beverage...........................................      1,432      1,300      1,387        768        478
    Selling, general, and administrative........................     28,164     21,074     20,949     10,375      3,573
    Preopening costs............................................     --         --         --            731     --
    Project cost write-downs....................................      2,117     --         --         --         --
    Depreciation and amortization...............................      8,798      4,110      3,215      2,121      1,317
                                                                  ---------  ---------  ---------  ---------  ---------
      Total costs and expenses..................................    100,555     82,586     72,561     40,657     21,704
                                                                  ---------  ---------  ---------  ---------  ---------
 
  Income from operations........................................     53,194     33,881     24,850     14,112      7,773
  Interest income...............................................      3,793      2,028      1,105        379         88
  Interest expense..............................................       (288)      (429)      (732)    (1,314)      (954)
  Other income (expense) (2)....................................        (22)        43        244        244         87
                                                                  ---------  ---------  ---------  ---------  ---------
  Income before provision for income taxes......................     56,677     35,523     25,467     13,421      6,994
  Historical and pro forma provision for income taxes (3).......     21,001     13,188      9,486      4,702      2,378
                                                                  ---------  ---------  ---------  ---------  ---------
  Net income and pro forma net income (3).......................  $  35,676  $  22,335  $  15,981  $   8,719  $   4,616
                                                                  ---------  ---------  ---------  ---------  ---------
                                                                  ---------  ---------  ---------  ---------  ---------
  Weighted average common and common equivalent shares
    outstanding (4).............................................     13,691     12,153     11,447      8,481      6,459
  Earnings and pro forma earnings per common and common
    equivalent share (3)........................................  $    2.61  $    1.84  $    1.40  $    1.03  $    0.71
 
OTHER DATA:
  EBITDA (5)....................................................  $  61,992  $  37,990  $  28,065  $  16,233  $   9,088
  Capital expenditures..........................................     38,108     27,916      7,834     17,921      5,142
</TABLE>
 
<TABLE>
<CAPTION>
                                                                                     AS OF JUNE 30,
                                                                  -----------------------------------------------------
                                                                    1997       1996       1995     1994 (1)     1993
                                                                  ---------  ---------  ---------  ---------  ---------
                                                                                     (IN THOUSANDS)
<S>                                                               <C>        <C>        <C>        <C>        <C>
BALANCE SHEET DATA:
  Cash and cash equivalents.....................................  $  66,427  $  78,113  $  26,132  $  10,472  $   3,872
  Total assets..................................................    188,876    162,312     79,266     58,903     22,576
  Long term notes payable, principal stockholder................      2,800      3,650      5,989      6,927     17,243
  Stockholders' equity (6)......................................    171,331    146,307     64,832     47,001      3,840
</TABLE>
 
------------------------------
 
(1) Reflects six months of operations at the Company's Colorado Central Station
    Casino in Black Hawk, Colorado, which opened December 25, 1993, and five
    months of proprietary games operations acquired in conjunction with the
    Company's IPO.
 
(2) Other income (expense) consists of minority interest in earnings of
    consolidated subsidiary, and other income (expense).
 
                                       26
<PAGE>
(3) A pro forma provision for federal income taxes (assuming a 34% effective tax
    rate through fiscal 1994) has been calculated for all periods prior to the
    IPO as if the principal subsidiaries of the Company had not elected to be
    treated as S corporations during those periods.
 
(4) Weighted average shares outstanding are presented as if the reorganization
    completed in conjunction with the Company's IPO took place July 1, 1992.
 
(5) EBITDA consists of income from operations plus depreciation and
    amortization. EBITDA is not a measure of performance or financial condition
    under generally accepted accounting principles, but is presented solely as
    supplemental disclosure because the Company believes that it enhances the
    understanding of the ability to service debt. EBITDA should not be
    considered in isolation or as a substitute for other measures of financial
    performance or liquidity under generally accepted accounting principles.
 
(6) Because the principal subsidiaries of the Company elected to be treated as S
    corporations prior to the Company's IPO, a substantial portion of the
    Company's net income prior to the IPO was distributed to its stockholders.
    Subsequent to its IPO, earnings have been retained to support operations and
    to finance expansion.
 
ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
  OF OPERATIONS.
 
OVERVIEW
 
    In February 1994, Anchor completed its IPO of 3,162,500 shares of Common
Stock at a price of $12 per share. Simultaneously with the closing of the IPO,
Anchor became the holding company for its current subsidiaries, Anchor Coin,
Colorado Grande Enterprises, Inc., C.G. Investments, Inc., and D D Stud, Inc.,
each of which had been operated under different ownership structures controlled
primarily by Stanley E. Fulton, the Chairman of the Board, Chief Executive
Officer, and acting Chief Financial Officer of Anchor. Also at the time of the
IPO, the Company acquired all of the beneficial ownership of Global Gaming
Products, L.L.C. and certain related assets from Global Distributors, Inc. (the
"Acquisition"), which were primarily involved in the distribution of the
proprietary game Silver Strike. Stanley E. Fulton also owned 50% of Global
Gaming Products, L.L.C. prior to the Acquisition. The financial position and
operating results of Colorado Grande Enterprises, Inc. are included in the
consolidated financial statements as an 80% consolidated subsidiary.
 
    On April 23, 1996, the Company completed a secondary offering of 2.3 million
shares of Common Stock at a price of $37 per share. 1.55 million of these shares
were sold by the Company (the "Secondary Offering") and the remaining 750,000
shares were sold by selling stockholders. Net proceeds to the Company from the
Secondary Offering were $53.9 million.
 
    The following table sets forth the percentage of Anchor's total revenues
attributable to casino operations, proprietary games operations, gaming machine
route operations, and food and beverage operations during the fiscal years ended
June 30, 1997, 1996, and 1995. The growth in proprietary games revenue as a
percentage of total revenues is attributable primarily to the Company's
introduction of the new proprietary game Wheel of Gold, which began generating
revenue in the third quarter of fiscal 1996 and to a lesser extent, the
commencement of the Strategic Alliance with IGT during the second half of fiscal
1997. The Company's food and beverage revenues are derived primarily from its
casino operations and, to a lesser extent, from its route operations.
 
<TABLE>
<CAPTION>
                                                                               FISCAL YEARS ENDED JUNE 30,
                                                                          -------------------------------------
                                                                             1997         1996         1995
                                                                          -----------  -----------  -----------
<S>                                                                       <C>          <C>          <C>
SOURCES OF REVENUES:
Casino operations.......................................................       45.0%        55.9%        57.7%
Proprietary games operations............................................       32.4         18.4         14.5
Route operations........................................................       21.6         24.6         26.5
Food and beverage operations............................................        0.8          1.1          1.3
                                                                              -----        -----        -----
    Total revenues......................................................      100.0%       100.0%       100.0%
                                                                              -----        -----        -----
                                                                              -----        -----        -----
</TABLE>
 
                                       27
<PAGE>
FISCAL YEAR 1997 COMPARED TO FISCAL YEAR 1996
 
    REVENUES. Total revenues were $153.7 million for the fiscal year ended June
30, 1997, an increase of $37.2 million or 31.9% from $116.5 million for the
fiscal year ended June 30, 1996.
 
    Revenues from casino operations were $69.2 million for the fiscal year ended
June 30, 1997, an increase of $4.1 million or 6.3% from $65.1 million for the
fiscal year ended June 30, 1996. The increase is primarily due to increased
revenues at the Colorado Central Station Casino and, to a lesser extent, due to
increased revenues at the Colorado Grande Casino.
 
    Revenues from proprietary games operations were $49.7 million for the fiscal
year ended June 30, 1997, an increase of $28.2 million or 131.2% from $21.5
million for the fiscal year ended June 30, 1996. The increase is primarily due
to revenues generated from the Company's proprietary game, Wheel of Gold,
introduced December 29, 1995, as well as revenues from the Company's strategic
alliance with IGT and, to a lesser extent, from its newest proprietary game,
Totem Pole, and increased revenues generated from the proprietary game Clear
Winner. These increases were offset to some extent by decreased revenues
generated from the proprietary game Silver Strike.
 
    Revenues from route operations were $33.5 million for the fiscal year ended
June 30, 1997, an increase of $4.8 million or 16.7% from $28.7 million for the
fiscal year ended June 30, 1996. Machines on route increased to 801 at June 30,
1997, from 692 at June 30, 1996, while average machines on route during fiscal
1997 were 106 machines greater than fiscal 1996.
 
    COSTS AND EXPENSES. Total costs and expenses were $100.6 million for the
fiscal year ended June 30, 1997, an increase of $18.0 million or 21.8% from
$82.6 million for the fiscal year ended June 30, 1996. Total costs and expenses
as a percentage of total revenues decreased to 65.5% during fiscal 1997 from
70.9% during fiscal 1996.
 
    Costs and expenses of casino operations were $29.1 million for the fiscal
year ended June 30, 1997, an increase of $2.3 million or 8.6% from $26.8 million
for the fiscal year ended June 30, 1996. Casino costs and expenses as a
percentage of casino revenue increased to 42.0% during fiscal year 1997 from
41.2% during fiscal year 1996. The increase in casino costs and expenses was
primarily due to increased gaming taxes and promotions at both of the Company's
casinos.
 
    Costs and expenses of proprietary games operations were $11.0 million for
the fiscal year ended June 30, 1997, a decrease of $1.1 million or 9.1% from
$12.1 million for the fiscal year ended June 30, 1996. Prior to the introduction
of Wheel of Gold, most of the proprietary games operations' costs were
associated with the production of Silver Strike tokens. Costs and expenses of
proprietary games operations decreased primarily due to a decrease in Silver
Strike token sales in fiscal year 1997 compared to fiscal year 1996. Proprietary
games costs and expenses as a percentage of proprietary games revenues decreased
to 22.1% during fiscal year 1997 from 56.3% during fiscal year 1996. The
decrease in proprietary games costs and expenses as a percentage of revenue is a
result of increased revenues from the Company's newer proprietary games, which
incur less costs and expenses as a percentage of revenue than the Company's
Silver Strike game, which previously accounted for most of the Company's
proprietary games revenue.
 
    Costs and expenses of route operations were $19.9 million for the fiscal
year ended June 30, 1997, an increase of $2.7 million or 15.7% from $17.2
million for the fiscal year ended June 30, 1996. Costs and expenses of route
operations as a percentage of route revenue remained fairly constant at 59.4%
during fiscal year 1997 compared to 59.9% during fiscal year 1996. The increase
in route costs and expenses was primarily due to increased location costs and,
to a lesser extent, increased direct payroll costs, both related to increased
machines on route.
 
    Selling, general, and administrative ("SG&A") expenses were $28.2 million
for the fiscal year ended June 30, 1997, an increase of $7.1 million or 33.7%
from $21.1 million for the fiscal year ended June 30, 1996. SG&A expenses as a
percentage of total revenue remained fairly constant at 18.4% during fiscal year
 
                                       28
<PAGE>
1997 compared to 18.1% during fiscal year 1996. The increase in total SG&A
expenses is primarily due to increased expenses in the Company's proprietary
games operations of approximately $4.7 million primarily due to increased
research, development, and licensing costs and an increase in SG&A expenses at
the Colorado Central Station Casino of approximately $2.0 million.
 
    In November 1996, the Company announced it was re-evaluating the scope and
nature of its proposed addition of a new casino across the street from the
Colorado Central Station Casino. During the fourth quarter of fiscal year 1997,
the Company determined it was necessary to recognize a project cost write-down
of $2.1 million. The project costs were specifically related to architectural
fees, building design costs, and deferred rent that were determined to have no
future benefit.
 
    Depreciation and amortization expense was $8.8 million for the fiscal year
ended June 30, 1997, an increase of $4.7 million or 114.6% from $4.1 million for
the fiscal year ended June 30, 1996. This increase is primarily due to increased
depreciation and amortization expense incurred in the Company's proprietary
games operations.
 
    INCOME FROM OPERATIONS. As a result of the factors discussed above, income
from operations was $53.2 million for the fiscal year ended June 30, 1997, an
increase of $19.3 million or 56.9% from $33.9 million for the fiscal year ended
June 30, 1996. As a percentage of total revenues, income from operations
increased to 34.6% during fiscal year 1997 from 29.1% during fiscal year 1996.
 
    INTEREST INCOME. Interest income was $3.8 million for the fiscal year ended
June 30, 1997, an increase of $1.8 million or 90.0% from $2.0 million for the
fiscal year ended June 30, 1996. The increase is due to increased short-term
investments resulting from an increase in working capital generated from
operations as well as cash invested from the Secondary Offering.
 
    INTEREST EXPENSE. Interest expense was $288,000 for the fiscal year ended
June 30, 1997, a decrease of $141,000 or 32.9% from $429,000 for the fiscal year
ended June 30, 1996. The decrease is due to reduced average notes payable during
fiscal year 1997 as compared to fiscal year 1996.
 
    NET INCOME. As a result of the factors discussed above, net income was $35.7
million for the fiscal year ended June 30, 1997, an increase of $13.4 million or
60.1% from $22.3 million for the fiscal year ended June 30, 1996.
 
FISCAL YEAR 1996 COMPARED TO FISCAL YEAR 1995
 
    REVENUES. Total revenues were $116.5 million for the fiscal year ended June
30, 1996, an increase of $19.1 million or 19.6% from $97.4 million for the
fiscal year ended June 30, 1995.
 
    Revenues from casino operations were $65.1 million for the fiscal year ended
June 30, 1996, an increase of $8.9 million or 15.8% from $56.2 million for the
fiscal year ended June 30, 1995. The increase is primarily due to increased
revenue at the Colorado Central Station Casino and, to a lesser extent, due to
increased revenues at the Colorado Grande Casino.
 
    Revenues from proprietary games operations were $21.5 million for the fiscal
year ended June 30, 1996, an increase of $7.3 million or 51.4% from $14.2
million for the fiscal year ended June 30, 1995. The increase is primarily due
to revenues generated from the Company's proprietary game, Wheel of Gold,
introduced December 29, 1995, as well as increased revenues generated from the
proprietary games Clear Winner and Silver Strike.
 
    Revenues from route operations were $28.7 million for the fiscal year ended
June 30, 1996, an increase of $2.9 million or 11.2% from $25.8 million for the
fiscal year ended June 30, 1995. Machines on route increased to 692 at June 30,
1996, from 606 at June 30, 1995, while average machines on route during fiscal
year 1996 were 70 machines greater than fiscal year 1995.
 
                                       29
<PAGE>
    COSTS AND EXPENSES. Total costs and expenses were $82.6 million for the
fiscal year ended June 30, 1996, an increase of $10.0 million or 13.8% from
$72.6 million for the fiscal year ended June 30, 1995. Total costs and expenses
as a percentage of total revenues decreased to 70.9% during fiscal 1996 from
74.5% during fiscal 1995.
 
    Costs and expenses of casino operations were $26.8 million for the fiscal
year ended June 30, 1996, an increase of $5.3 million or 24.7% from $21.5
million for the fiscal year ended June 30, 1995. Casino costs and expenses as a
percentage of casino revenue increased to 41.2% during fiscal year 1996 from
38.3% during fiscal year 1995. The increase in casino costs and expenses was
primarily due to increased gaming taxes, direct payroll, and promotions at both
of the Company's casinos.
 
    Costs and expenses of proprietary games operations were $12.1 million for
the fiscal year ended June 30, 1996, an increase of $2.2 million or 22.2% from
$9.9 million for the fiscal year ended June 30, 1995. Proprietary games costs
and expenses as a percentage of proprietary games revenues decreased to 56.3%
during fiscal year 1996 from 69.7% during fiscal year 1995. The decrease in
proprietary games costs as a percentage of revenue is a result of the
introduction during fiscal year 1996 of Wheel of Gold which incurs less costs
and expenses as a percentage of revenue than the Company's other proprietary
games.
 
    Costs and expenses of route operations were $17.2 million for the fiscal
year ended June 30, 1996, an increase of $1.5 million or 9.6% from $15.7 million
for the fiscal year ended June 30, 1995. Costs and expenses of route operations
as a percentage of route revenue decreased to 59.9% during fiscal year 1996 from
60.9% during fiscal year 1995. The increase in route costs and expenses was
primarily due to increased location costs, related to increased machines on
route and, to a lesser extent, increased direct payroll costs.
 
    SG&A expenses were $21.1 million for the fiscal year ended June 30, 1996, an
increase of $125,000 or 0.6% from $20.9 million for the fiscal year ended June
30, 1995. SG&A expenses as a percentage of total revenue decreased to 18.1%
during fiscal year 1996 from 21.5% during fiscal year 1995. The increase in SG&A
expenses is primarily due to increased expenses at the Company's Colorado
Central Station Casino of approximately $1.2 million and an increase in SG&A
expenses in the Company's proprietary games operations of approximately
$828,000, mostly offset by a reduction in corporate development costs. The
Company incurred $269,000 in development costs during the fiscal year ended June
30, 1996 as compared to approximately $2.1 million during the fiscal year ended
June 30, 1995.
 
    Depreciation and amortization expense was $4.1 million for the fiscal year
ended June 30, 1996, an increase of $895,000 or 28.0% from $3.2 million for the
fiscal year ended June 30, 1995. The increase is primarily due to increased
depreciation and amortization expense incurred in the Company's proprietary
games operations.
 
    INCOME FROM OPERATIONS. As a result of the factors discussed above, income
from operations was $33.9 million for the fiscal year ended June 30, 1996, an
increase of $9.0 million or 36.1% from $24.9 million for the fiscal year ended
June 30, 1995. As a percentage of total revenues, income from operations
increased to 29.1% during fiscal year 1996 from 25.6% during fiscal year 1995.
 
    INTEREST INCOME. Interest income was $2.0 million for the fiscal year ended
June 30, 1996, an increase of $923,000 or 83.9% from $1.1 million for the fiscal
year ended June 30, 1995. The increase is due to increased short-term
investments resulting from an increase in working capital generated from
operations as well as cash invested from the Secondary Offering.
 
    INTEREST EXPENSE. Interest expense was $429,000 for the fiscal year ended
June 30, 1996, a decrease of $303,000 or 41.4% from $732,000 for the fiscal year
ended June 30, 1995. The decrease is due to reduced average notes payable during
fiscal year 1996 as compared to fiscal year 1995.
 
                                       30
<PAGE>
    NET INCOME. As a result of the factors discussed above, net income was $22.3
million for the fiscal year ended June 30, 1996, an increase of $6.3 million or
39.4% from $16.0 million for the fiscal year ended June 30, 1995.
 
LIQUIDITY AND CAPITAL RESOURCES
 
    Anchor's principal sources of liquidity have been cash flows from operations
and the net proceeds from the Secondary Offering in April 1996 and the IPO in
February 1994. Net proceeds to the Company from the Secondary Offering were
$53.9 million, and net proceeds from the IPO were $34.1 million. Net cash
provided by operating activities was $43.4 million during fiscal year 1997 and
$28.8 million during fiscal year 1996. At June 30, 1997, the Company had cash
and cash equivalents of $66.4 million, working capital of $64.6 million, and a
$10.0 million unsecured revolving bank line of credit (the "Bank Revolver").
 
    In fiscal year 1997, the Company spent $38.1 million on capital
expenditures, primarily related to the purchase of gaming devices and equipment
for use in its proprietary games operations of approximately $30.0 million. In
addition, the Company spent $5.7 million during fiscal year 1997 related to
projects in Colorado including the expansion of the existing Colorado Central
Station Casino to accommodate an additional 65 gaming machines, the expansion
and improvement of parking facilities at the Colorado Central Station Casino,
and the planned development of a second casino in Black Hawk, Colorado. The
Company spent $2.1 million on architectural and design costs for the planned
development of the second casino in fiscal year 1997 and fiscal year 1996 which
was ultimately written off in fiscal year 1997. The Company anticipates that
capital expenditures for the fiscal year ending June 30, 1998 will be at least
$17.0 million, which will consist primarily of expenditures to purchase gaming
devices and equipment for use in its proprietary games operations.
 
    In April 1997, the board of directors authorized a repurchase of up to
1,000,000 shares of Common Stock. At September 26, 1997, the Company had
repurchased 514,000 shares of Common Stock at a cost of $23.9 million.
 
    During fiscal year 1997, the Company made $3.1 million in advances to a 50%
owned joint venture engaged in the operation of proprietary gaming devices.
 
    In November 1996, the Company's $20 million secured bank line of credit
expired. In April 1997, the Company entered into the Bank Revolver, which
expires November 30, 1998. The Bank Revolver bears interest at the prime rate of
interest or LIBOR plus 2%, at the Company's option. The Company has agreed to
maintain certain financial and non-financial covenants customary with lending
arrangements of this type. The Company has complied with the covenants
throughout the term of the expired credit facility and the Bank Revolver. During
fiscal year 1997 the Company did not borrow under the Bank Revolver or the line
of credit.
 
    The Company believes its principal liquidity requirements will be the
purchase of additional proprietary gaming machines in formats that have already
been introduced to the market, the development and purchase of proprietary
gaming machines in formats that have not yet been introduced, and depending upon
the outcome of the Company's re-evaluation of the scope and nature of its
Colorado expansion options, the funding of such an expansion. At June 30, 1997,
the Company had commitments to purchase gaming equipment for approximately $5.6
million. The Company believes that cash on hand, cash flow from operations, and
available borrowings under the Bank Revolver will be sufficient to fund its
currently planned capital projects and operations.
 
    The Company continually seeks opportunities to expand its gaming oriented
businesses in new and existing gaming jurisdictions. If successful in pursuing
another opportunity in any gaming oriented business and depending on the amount
of funding required, the Company may be required to obtain additional financing.
 
                                       31
<PAGE>
RECENTLY ADOPTED ACCOUNTING STANDARDS
 
    In March 1995, the Financial Accounting Standards Board ("FASB") issued
Statement No. 121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed of" ("SFAS 121"). SFAS 121 requires that
long-lived assets and certain identifiable intangibles be reviewed for
impairment whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. SFAS 121 is effective for
fiscal years beginning after December 15, 1995. Adoption of SFAS 121 in the
current year did not have a material effect on the consolidated financial
statements of the Company.
 
    In October 1995, the FASB issued Statement No. 123, "Accounting for
Stock-Based Compensation" ("SFAS 123"), which establishes financial accounting
and reporting standards for stock-based employee compensation plans and for
transactions in which an entity issues its equity instruments to acquire goods
or services from nonemployees. The Company continues to account for stock based
compensation arrangements in accordance with Accounting Principles Board No. 25,
"Accounting for Stock Issued to Employees," and therefore the adoption of SFAS
123 had no effect on the financial position or results of operations of the
Company. The Company has included additional disclosures about stock-based
employee compensation plans as required by SFAS 123 in its financial statements.
 
RECENTLY ISSUED ACCOUNTING STANDARDS
 
    In February 1997, the FASB issued Statement No. 128, "Earnings per Share."
This statement establishes standards for computing and presenting earnings per
share and is effective for financial statements issued for periods ending after
December 15, 1997. Earlier application of this statement is not permitted and
upon adoption requires restatement (as applicable) of all prior-period earnings
per share data presented. Management believes that the implementation of this
standard will not have a significant effect on earnings per share.
 
    In February 1997, the FASB issued Statement No. 129, "Disclosure of
Information about Capital Structure." This statement establishes standards for
disclosing information about an entity's capital structure. Management intends
to comply with the disclosure requirements of this statement, which are
effective for periods ending after December 15, 1997.
 
    In June 1997, the FASB issued Statement No. 130, "Reporting Comprehensive
Income" ("SFAS 130"). This statement 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 section of a statement of
financial position. SFAS 130 is effective for financial statements issued for
fiscal years beginning after December 15, 1997. Management does not believe that
SFAS 130 will have a material effect on Anchor's financial statements.
 
    In June 1997, the FASB issued Statement No. 131, "Disclosure About Segments
of an Enterprise and Related Information" ("SFAS 131"). This statement
establishes additional standards for segment reporting in the financial
statements and is effective for fiscal years beginning after December 15, 1997.
The Company believes the segment information required to be disclosed under SFAS
131 will be more comprehensive than previously provided, including expanded
disclosure of income statement and balance sheet items for each of its
reportable segments under SFAS 131. However, the Company has not yet completed
its analysis of which operating segments will be subject to this reporting
requirement.
 
                                       32
<PAGE>
ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
 
                     INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
 
<TABLE>
<CAPTION>
                                                                                                            PAGE NO.
                                                                                                          -------------
 
<S>                                                                                                       <C>
Independent Auditors' Report of Deloitte & Touche LLP...................................................           34
 
Consolidated Balance Sheets as of June 30, 1997 and 1996................................................           35
 
Consolidated Statements of Income for Fiscal Years Ended June 30, 1997, 1996, and 1995..................           36
 
Consolidated Statements of Stockholders' Equity for Fiscal Years Ended June 30, 1997, 1996, and 1995....           37
 
Consolidated Statements of Cash Flows for the Fiscal Years Ended June 30, 1997, 1996, and 1995..........           38
 
Notes to Consolidated Financial Statements..............................................................           39
</TABLE>
 
                                       33
<PAGE>
                          INDEPENDENT AUDITORS' REPORT
 
To the Board of Directors
Anchor Gaming and Subsidiaries:
 
    We have audited the accompanying consolidated balance sheets of Anchor
Gaming and subsidiaries (the "Company") as of June 30, 1996 and 1997, and the
related consolidated statements of income, stockholders' equity, and cash flows
for each of the three years in the period ended June 30, 1997. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
 
    We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatements. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principals used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
 
    In our opinion, such consolidated financial statements present fairly, in
all material respects, the financial position of Anchor Gaming and subsidiaries
at June 30, 1996 and 1997, and the results of its operations and its cash flows
for each of the three years in the period ended June 30, 1997 in conformity with
generally accepted accounting principles.
 
DELOITTE & TOUCHE LLP
 
Las Vegas, Nevada
August 1, 1997
 
                                       34
<PAGE>
                                 ANCHOR GAMING
                          CONSOLIDATED BALANCE SHEETS
                                     ASSETS
 
<TABLE>
<CAPTION>
                                                                                              JUNE 30,
                                                                                   ------------------------------
                                                                                        1997            1996
                                                                                   --------------  --------------
<S>                                                                                <C>             <C>
Current assets:
  Cash and cash equivalents......................................................  $   66,427,369  $   78,112,530
  Accounts receivable, net.......................................................       6,358,052       4,720,689
  Current portion of notes receivable, net.......................................          45,619         881,173
  Inventory......................................................................       3,196,918       3,197,955
  Prepaid expenses...............................................................       1,835,913       1,739,263
  Other current assets...........................................................         400,180         300,761
                                                                                   --------------  --------------
      Total current assets.......................................................      78,264,051      88,952,371
Property and equipment, net......................................................      85,033,436      57,776,237
Long-term notes receivable, net..................................................       1,543,159         311,856
Intangible assets, net...........................................................       2,128,306       2,054,710
Deposits and other...............................................................      21,907,417      13,216,623
                                                                                   --------------  --------------
      Total assets...............................................................  $  188,876,369  $  162,311,797
                                                                                   --------------  --------------
                                                                                   --------------  --------------
 
                                      LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Current portion, long-term notes payable.......................................  $     --        $      100,000
  Accounts payable...............................................................       2,663,156       4,574,213
  Accrued salaries, wages and vacation pay.......................................       2,712,764       2,488,014
  Income tax payable.............................................................       2,138,934         281,886
  Other current liabilities......................................................       6,103,394       3,530,130
                                                                                   --------------  --------------
      Total current liabilities..................................................      13,618,248      10,974,243
Long-term notes payable, principal stockholder...................................       2,800,000       2,800,000
Long-term notes payable, net of current portion..................................        --               850,000
Other long-term liabilities......................................................         143,691         707,318
Minority interest in consolidated subsidiary.....................................         983,562         672,955
                                                                                   --------------  --------------
      Total liabilities and minority interest in consolidated subsidiary.........      17,545,501      16,004,516
                                                                                   --------------  --------------
Commitments and contingencies....................................................        --              --
Stockholders' equity:
  Preferred stock, $.01 par value, 1,000,000 shares authorized, 0 shares issued
    and outstanding at June 30, 1997 and 1996....................................        --              --
  Common Stock, $.01 par value, 50,000,000 shares authorized, 13,579,575 issued,
    and 13,052,807 outstanding at June 30, 1997; 25,000,000 shares authorized,
    13,474,150 issued, and 13,283,382 outstanding at June 30, 1996...............         135,796         134,742
  Additional paid-in capital.....................................................     107,267,684     104,448,080
  Treasury stock at cost, 526,768 shares at June 30, 1997, 190,768 shares at June
    30, 1996.....................................................................     (16,569,329)     (3,095,830)
  Retained earnings..............................................................      80,496,717      44,820,289
                                                                                   --------------  --------------
      Total stockholders' equity.................................................     171,330,868     146,307,281
                                                                                   --------------  --------------
      Total liabilities and stockholders' equity.................................  $  188,876,369  $  162,311,797
                                                                                   --------------  --------------
                                                                                   --------------  --------------
</TABLE>
 
                See notes to consolidated financial statements.
 
                                       35
<PAGE>
                                 ANCHOR GAMING
                       CONSOLIDATED STATEMENTS OF INCOME
 
<TABLE>
<CAPTION>
                                                                               YEARS ENDED JUNE 30,
                                                                  ----------------------------------------------
                                                                       1997            1996            1995
                                                                  --------------  --------------  --------------
<S>                                                               <C>             <C>             <C>
Revenues:
  Casino operations.............................................  $   69,223,321  $   65,125,194  $   56,183,629
  Proprietary games operations..................................      49,715,779      21,457,135      14,158,737
  Route operations..............................................      33,509,497      28,650,989      25,818,170
  Food and beverage.............................................       1,300,002       1,233,003       1,250,593
                                                                  --------------  --------------  --------------
    Total revenues..............................................     153,748,599     116,466,321      97,411,129
                                                                  --------------  --------------  --------------
Costs and expenses:
  Casino operations.............................................      29,100,285      26,830,475      21,500,172
  Proprietary games operations..................................      11,039,227      12,113,595       9,850,963
  Route operations..............................................      19,904,608      17,158,172      15,659,336
  Food and beverage.............................................       1,431,734       1,300,012       1,386,438
  Selling, general and administrative...........................      28,163,608      21,073,631      20,949,047
  Project cost write-downs......................................       2,116,968        --              --
  Depreciation and amortization.................................       8,798,163       4,109,835       3,215,017
                                                                  --------------  --------------  --------------
    Total costs and expenses....................................     100,554,593      82,585,720      72,560,973
                                                                  --------------  --------------  --------------
Income from operations..........................................      53,194,006      33,880,601      24,850,156
                                                                  --------------  --------------  --------------
Other income (expense):
  Interest income...............................................       3,792,739       2,028,347       1,105,212
  Interest expense..............................................        (287,711)       (428,991)       (731,954)
  Other income..................................................         288,703         260,439         405,831
  Minority interest in earnings of consolidated subsidiary......        (310,607)       (217,793)       (162,262)
                                                                  --------------  --------------  --------------
    Total other income..........................................       3,483,124       1,642,002         616,827
                                                                  --------------  --------------  --------------
Income before provision for income taxes........................      56,677,130      35,522,603      25,466,983
Income tax provision............................................      21,000,702      13,187,559       9,486,451
                                                                  --------------  --------------  --------------
Net income......................................................  $   35,676,428  $   22,335,044  $   15,980,532
                                                                  --------------  --------------  --------------
                                                                  --------------  --------------  --------------
Weighted average common and common equivalent shares
  outstanding...................................................      13,691,158      12,153,419      11,446,646
                                                                  --------------  --------------  --------------
                                                                  --------------  --------------  --------------
Earnings per common and common equivalent share.................  $         2.61  $         1.84  $         1.40
                                                                  --------------  --------------  --------------
                                                                  --------------  --------------  --------------
</TABLE>
 
                See notes to consolidated financial statements.
 
                                       36
<PAGE>
                                 ANCHOR GAMING
 
                           CONSOLIDATED STATEMENTS OF
 
                              STOCKHOLDERS' EQUITY
 
<TABLE>
<CAPTION>
                                           COMMON STOCK            TREASURY STOCK
                                     ------------------------  ----------------------    ADDITIONAL       RETAINED
                                       SHARES       AMOUNT      SHARES      AMOUNT     PAID-IN CAPITAL    EARNINGS       TOTAL
                                     -----------  -----------  --------  ------------  ---------------   -----------  ------------
<S>                                  <C>          <C>          <C>       <C>           <C>               <C>          <C>
Balance--July 1, 1994..............   11,377,100  $   113,771  (163,789) $ (1,799,830)  $ 42,181,989     $ 6,504,713  $ 47,000,643
  Stock issued for exercise of
    options........................      128,450        1,285                              1,544,615                     1,545,900
  Tax effects of stock option
    transactions...................                                                          304,495                       304,495
  Net income.......................                                                                       15,980,532    15,980,532
                                     -----------  -----------  --------  ------------  ---------------   -----------  ------------
Balance--June 30, 1995.............   11,505,550      115,056  (163,789)   (1,799,830)    44,031,099      22,485,245    64,831,570
  Stock issued for exercise of
    warrants and options...........      418,600        4,186   (26,979)   (1,296,000)     5,694,414                     4,402,600
  Shares issued in public
    offering.......................    1,550,000       15,500                             53,859,015                    53,874,515
  Tax effects of stock option
    transactions...................                                                          863,552                       863,552
  Net income.......................                                                                       22,335,044    22,335,044
                                     -----------  -----------  --------  ------------  ---------------   -----------  ------------
Balance--June 30, 1996.............   13,474,150      134,742  (190,768)   (3,095,830)   104,448,080      44,820,289   146,307,281
  Stock issued for exercise of
    warrants and options...........      105,425        1,054                              1,285,403                     1,286,457
  Treasury shares purchased........                            (336,000)  (13,473,499)                                 (13,473,499)
  Tax effects of stock option
    transactions...................                                                        1,534,201                     1,534,201
  Net income.......................                                                                       35,676,428    35,676,428
                                     -----------  -----------  --------  ------------  ---------------   -----------  ------------
Balance--June 30, 1997.............   13,579,575  $   135,796  (526,768) $(16,569,329)  $107,267,684     $80,496,717  $171,330,868
                                     -----------  -----------  --------  ------------  ---------------   -----------  ------------
                                     -----------  -----------  --------  ------------  ---------------   -----------  ------------
</TABLE>
 
                See notes to consolidated financial statements.
 
                                       37
<PAGE>
                                 ANCHOR GAMING
 
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
 
<TABLE>
<CAPTION>
                                                                                   YEARS ENDED JUNE 30,
                                                                         -----------------------------------------
                                                                             1997           1996          1995
                                                                         -------------  ------------  ------------
<S>                                                                      <C>            <C>           <C>
Cash flows from operating activities:
  Net income...........................................................  $  35,676,428  $ 22,335,044  $ 15,980,532
                                                                         -------------  ------------  ------------
  Adjustments to reconcile net income to net cash provided by operating
    activities:
    (Gain) loss on disposal of assets, including project cost write-
      downs............................................................      2,208,878       --           (140,022)
    Depreciation and amortization......................................      8,955,446     4,085,573     3,337,356
    Provision for doubtful accounts and notes..........................        364,000       105,000        10,000
    Minority interest in earnings of consolidated subsidiary...........        310,607       217,793       162,262
  (Increase) decrease in assets:
    Accounts receivable................................................     (2,001,363)   (1,802,054)   (1,206,323)
    Inventory..........................................................          1,037      (842,765)     (472,432)
    Other current assets...............................................        (83,898)       34,772       836,890
    Prepaid expenses...................................................        (96,650)     (105,769)       40,788
    Deposits and other assets..........................................     (5,606,169)       58,925     1,490,739
  Increase (decrease) in liabilities:
    Accounts payable...................................................     (1,911,057)    2,763,320       828,756
    Accrued salaries, wages and vacation pay...........................        224,750       380,048       593,835
    Income tax payable.................................................      2,955,801       776,683     1,173,316
    Other liabilities..................................................      2,394,423       762,794     1,015,529
                                                                         -------------  ------------  ------------
      Total adjustments................................................      7,715,805     6,434,320     7,670,694
                                                                         -------------  ------------  ------------
Net cash provided by operating activities..............................     43,392,233    28,769,364    23,651,226
                                                                         -------------  ------------  ------------
Cash flows from investing activities:
  Acquisition and construction of property and equipment...............    (38,108,284)  (27,916,341)   (7,834,258)
  Expenditures for intangible assets...................................       (488,715)     (274,013)     (250,000)
  Proceeds from sale of equipment......................................        117,254       530,377       514,166
  Issuance of notes receivable.........................................     (1,405,157)     (114,614)     (252,557)
  Principal reductions on notes receivable.............................      1,009,408       947,678       973,243
  Payments to extend operating leases..................................       --          (5,000,000)   (1,750,000)
  Advances to joint venture............................................     (3,100,000)      --            --
                                                                         -------------  ------------  ------------
    Net cash used in investing activities..............................    (41,975,494)  (31,826,913)   (8,599,406)
                                                                         -------------  ------------  ------------
Cash flows from financing activities:
  Net proceeds from sale of stock and warrants.........................      1,321,600    58,277,115     1,545,900
  Treasury stock purchases.............................................    (13,473,500)      --            --
  Principal payments on loans from related parties.....................       --          (3,189,447)     (937,393)
  Principal payments on other loans....................................       (950,000)      (50,000)      --
                                                                         -------------  ------------  ------------
    Net cash provided by (used in) financing activities................    (13,101,900)   55,037,668       608,507
                                                                         -------------  ------------  ------------
Net increase (decrease) in cash and cash equivalents...................    (11,685,161)   51,980,119    15,660,327
Cash and cash equivalents, beginning of period.........................     78,112,530    26,132,411    10,472,084
                                                                         -------------  ------------  ------------
Cash and cash equivalents, end of period...............................  $  66,427,369  $ 78,112,530  $ 26,132,411
                                                                         -------------  ------------  ------------
                                                                         -------------  ------------  ------------
Supplemental disclosure of cash flow information:
  Cash paid for interest...............................................  $     257,994  $    392,643  $    636,602
                                                                         -------------  ------------  ------------
                                                                         -------------  ------------  ------------
  Cash paid for income taxes...........................................  $  18,044,900  $ 12,404,763  $  7,710,000
                                                                         -------------  ------------  ------------
                                                                         -------------  ------------  ------------
Supplemental schedule of noncash investing and financing transactions:
  Stock issued for warrants in cashless exercise.......................                 $  1,296,000
                                                                                        ------------
                                                                                        ------------
  Property and equipment acquired by assuming debt.....................                 $  1,000,000
                                                                                        ------------
                                                                                        ------------
</TABLE>
 
                  See notes to consolidated financial statements.
 
                                       38
<PAGE>
                         ANCHOR GAMING AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 
1.  BASIS OF PRESENTATION
 
    Anchor Gaming ("Anchor" or the "Company") is a diversified gaming company
that seeks to capitalize on its experience as an operator and developer of
gaming machines and casinos by developing gaming oriented businesses. Anchor
develops and distributes unique proprietary games, currently operates two
casinos in Colorado, and operates one of the largest gaming machine routes in
Nevada.
 
    Anchor Gaming was formed July 28, 1993 and completed its initial public
offering ("IPO") in February 1994. Simultaneous with the closing of the IPO,
Anchor became the holding company of Anchor Coin, C.G. Investments, Inc.
("CGI"), Colorado Grande Enterprises, Inc. ("Colorado Grande") and D D Stud,
Inc. ("DD Stud") (collectively the "Subsidiaries"), which had been operated
under different ownership structures controlled primarily by Stanley E. Fulton,
the Chairman of the Board, Chief Executive Officer and principal stockholder of
Anchor. Also at the time of the IPO, the Company acquired all of the beneficial
ownership of Global Gaming Products, L.L.C. and certain related assets from
Global Distributors, Inc. (the "Acquisition"), which were primarily involved in
the distribution of the proprietary game Silver Strike. The accounts of the
Subsidiaries are consolidated in the accompanying financial statements. All
significant intercompany accounts and transactions have been eliminated. The
financial position and operating results of Colorado Grande Enterprises, Inc.
are included in the consolidated financial statements as an 80% consolidated
subsidiary.
 
    On April 23, 1996, Anchor completed a secondary offering of 2.3 million
shares of common stock at a price of $37 per share, with 1.55 million of these
shares being sold by the Company (the "Secondary Offering") and the remaining
750,000 shares were sold by selling stockholders. Net proceeds to the Company
from the Secondary Offering were $53.9 million.
 
2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
    CASH AND CASH EQUIVALENTS
 
    Cash and cash equivalents include highly liquid investments purchased with
maturities of three months or less.
 
    FAIR VALUE OF FINANCIAL INSTRUMENTS
 
    The carrying value of the Company's cash and cash equivalents, trade
receivables, and trade payables approximates fair value because of the short
maturities of these instruments. The Company estimates fair value on its
long-term obligations based on quoted market prices or on the current rates
offered to the Company for debt of the same remaining maturities. The estimated
fair values of the obligations closely approximated the carrying values at June
30, 1997 and 1996.
 
    INVESTMENTS IN DEBT SECURITIES
 
    The Company's investment securities, along with certain cash and cash
equivalents that are not deemed securities under Statement No. 115 ("SFAS 115"),
are carried on the consolidated balance sheets in the cash and cash equivalents
category. Management determines the appropriate classification of its investment
securities at the time of purchase as either held-to-maturity, trading, or
available for sale and re-evaluates such determination at each balance sheet
date. The Company has classified its investment securities as of June 30, 1997
and 1996 as held-to-maturity. Held-to-maturity securities are required to be
 
                                       39
<PAGE>
                         ANCHOR GAMING AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
carried at amortized cost. The securities classified as held-to-maturity consist
of the following amortized costs at June 30:
 
<TABLE>
<CAPTION>
                                             1997         1996
                                          -----------  -----------
<S>                                       <C>          <C>
Debt securities issued by the U.S.
  Treasury and other U.S. government
  agencies..............................  $52,734,000  $34,915,000
Repurchase agreements...................      --        30,013,000
                                          -----------  -----------
                                          $52,734,000  $64,928,000
                                          -----------  -----------
                                          -----------  -----------
</TABLE>
 
    All of the Company's investment securities mature in three months or less
from the date of purchase. The estimated fair value of the Company's portfolio
of investment securities at June 30, 1997 and 1996 closely approximated
amortized cost because of the short term nature of the portfolio.
 
    ACCOUNTS RECEIVABLE
 
    Accounts receivable result from the sale of products and services to gaming
properties primarily in the United States. The Company performs credit
evaluations of its customers and does not require collateral. Management reviews
customer balances for potential credit losses and maintains an allowance for
amounts deemed uncollectible. The amounts reserved at June 30, 1997 and 1996
were $665,605 and $278,821, respectively.
 
    INVENTORY
 
    Inventory consists of silver and silver tokens, parts for gaming machines,
and food and beverage items. Silver inventory of $594,615 and $1,092,671 at June
30, 1997 and 1996, respectively, is classified as raw material. The remainder of
inventory is classified as finished goods. All inventories are stated at the
lower of cost (first-in, first-out) or market.
 
    PROPERTY AND EQUIPMENT
 
    Property and equipment are recorded at cost. Ordinary maintenance and
repairs are charged to expense as incurred. Costs that materially increase the
life or value of existing assets are capitalized. Assets that have been placed
in service are depreciated over their estimated useful lives or amortized over
lease terms using either straight-line or accelerated methods. Estimated useful
lives for furniture and equipment are 5 to 7 years, for leasehold improvements
are 4 1/2 years to 31 1/2 years and for buildings and improvements are 30 years.
 
    INTANGIBLE ASSETS
 
    Intangible assets include goodwill associated with the Acquisition, which is
amortized on a straight-line basis over 10 years. Intangible assets also include
amounts paid to acquire leases for route locations and casino property, amounts
to acquire route participation agreements, costs of patents issued, and
organization costs. These amounts are amortized on a straight-line basis over
the lives of the leases or agreements ranging from 2 to 15 years.
 
                                       40
<PAGE>
                         ANCHOR GAMING AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
    EQUITY INVESTMENTS
 
    Equity investments in joint ventures and other entities that are 20% to 50%
owned are included in deposits and other assets and are accounted for using the
equity method. Income from the joint ventures is included in proprietary games
revenue on the income statements. During fiscal year 1997, the Company made $3.1
million in advances to a 50% owned Joint Venture.
 
    REVENUE RECOGNITION
 
    In accordance with industry practice, the Company recognized gaming revenues
as the net win from gaming operations, which is the difference between amounts
wagered by customers and payments to customers. Proprietary games revenue is
derived from royalty, revenue participation, or other similar short-term
recurring revenue arrangements.
 
    Revenues exclude the retail value of complimentary food and beverage
furnished gratuitously to customers. The estimated departmental costs of
providing such goods and services as included in casino expense are $1,365,897,
$1,162,495, and $822,467 for the fiscal years ended June 30, 1997, 1996, and
1995, respectively.
 
    RESEARCH AND DEVELOPMENT COSTS
 
    Research and development costs are expensed as incurred and are included in
selling, general, and administrative costs.
 
    EARNINGS PER SHARE
 
    Earnings per share on the income statement is computed by dividing net
income by the weighted average number of common and common equivalent shares
outstanding. Common equivalent shares include the effect of shares issuable upon
the exercise of warrants and stock options. Fully diluted earnings per share
amounts are substantially the same as primary per share amounts for the periods
presented.
 
    ESTIMATES AND ASSUMPTIONS
 
    The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Significant estimates in the financial statements include the
estimated depreciable lives of property and equipment and certain estimated
liabilities and valuation reserves. Actual results could differ from those
estimates.
 
    RECENTLY ADOPTED ACCOUNTING STANDARDS
 
    In March 1995, the Financial Accounting Standards Board ("FASB") issued
Statement No. 121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed of" ("SFAS 121"). SFAS 121 requires that
long-lived assets and certain identifiable intangibles be reviewed for
impairment whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. SFAS 121 is effective for
fiscal years beginning after December 15, 1995. Adoption of SFAS 121 in the
current year did not have a material impact on the consolidated financial
statements of the Company.
 
                                       41
<PAGE>
                         ANCHOR GAMING AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
    In October 1995, the FASB issued Statement No. 123 "Accounting for
Stock-Based Compensation" ("SFAS 123"), which establishes financial accounting
and reporting standards for stock-based employee compensation plans and for
transactions in which an entity issues its equity instruments to acquire goods
or services from nonemployees. The Company continues to account for stock based
compensation arrangements in accordance with Accounting Principles Board No. 25,
"Accounting for Stock Issued to Employees", and therefore the adoption of SFAS
123 had no effect on the financial position or results of operations of the
Company. The Company has included additional disclosures about stock-based
employee compensation plans as required by SFAS 123 (see Note 8).
 
    RECENTLY ISSUED ACCOUNTING STANDARDS
 
    In February 1997, the FASB issued Statement No. 128, "Earnings per Share."
This statement establishes standards for computing and presenting earnings per
share and is effective for financial statements issued for periods ending after
December 15, 1997. Earlier application of this statement is not permitted and
upon adoption requires restatement (as applicable) of all prior-period earnings
per share data presented. Management believes that the implementation of this
standard will not have a significant impact on earnings per share.
 
    In February 1997, the FASB issued Statement No. 129, "Disclosure of
Information about Capital Structure." This statement establishes standards for
disclosing information about an entity's capital structure. Management intends
to comply with the disclosure requirements of this statement which are effective
for periods ending after December 15, 1997.
 
    In June 1997, the FASB issued Statement No. 130, "Reporting Comprehensive
Income" ("SFAS 130"). This statement 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 section of a statement of
financial position. SFAS 130 is effective for financial statements issued for
fiscal years beginning after December 15, 1997. Management does not believe this
new standard will have a material impact on the Company's financial statements.
 
    In June 1997, the FASB issued Statement No. 131 "Disclosure About Segments
of an Enterprise and Related Information" ("SFAS 131"). This statement
establishes additional standards for segment reporting in the financial
statements and is effective for fiscal years beginning after December 15, 1997.
The Company believes the segment information required to be disclosed under SFAS
131 will be more comprehensive than previously provided, including expanded
disclosure of income statement and balance sheet items for each of its
reportable segments under SFAS 131. However, the Company has not yet completed
its analysis of which operating segments it will report on.
 
3.  NOTES RECEIVABLE
 
    Notes receivable include notes due from an unaffiliated gaming company and
its stockholders for business development, which accrue interest at the prime
rate (8.5% at June 30, 1997) and notes due from various slot route location
owners with interest rates ranging from 8% to 12% to be paid over periods
ranging from three months to 5 years. At June 30, 1996, notes receivable also
include a note due from an unaffiliated Nevada gaming company with route
operations in Louisiana with interest accruing at the
 
                                       42
<PAGE>
                         ANCHOR GAMING AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
3.  NOTES RECEIVABLE (CONTINUED)
prime rate plus a percentage of net cash flow (as defined in the loan
documents). This note was paid in full during the year ended June 30, 1997.
Notes receivable consist of the following at June 30:
 
<TABLE>
<CAPTION>
                                                                        1997          1996
                                                                    ------------  ------------
<S>                                                                 <C>           <C>
Loans to unaffiliated gaming companies............................  $    610,905  $  1,418,338
Location loans for operating rights...............................       700,435       662,918
Loans to employees................................................     1,200,000       --
Loans to related parties..........................................       --             27,142
                                                                    ------------  ------------
                                                                       2,511,340     2,108,398
 
Less allowance for doubtful accounts..............................       922,562       915,369
                                                                    ------------  ------------
                                                                       1,588,778     1,193,029
                                                                    ------------  ------------
Less current portion:.............................................
  Loans to unaffiliated gaming companies..........................       --            829,315
  Location loans for operating rights.............................        45,619        24,716
  Loans to related parties........................................       --             27,142
                                                                    ------------  ------------
Notes receivable, current.........................................        45,619       881,173
                                                                    ------------  ------------
Long-term notes receivable, net...................................  $  1,543,159  $    311,856
                                                                    ------------  ------------
                                                                    ------------  ------------
</TABLE>
 
    Loans to related parties at June 30, 1996 consist of advances made by the
Company to a slot route operation owned by the principal stockholder of the
Company, which were paid in full on July 11, 1996.
 
    Loans to employees at June 30, 1997 consist of a $1.2 million line of credit
arrangement with an entity controlled by an employee of the Company. Loans
outstanding under the line of credit bear interest at prime rate plus 1%.
Payment of all principal and accrued interest is due on August 13, 1998 if
certain licensing events have not occurred as of that date. If the licensing
events have occurred, payment terms may be extended.
 
4.  PROPERTY AND EQUIPMENT
 
    Property and equipment consist of the following at June 30:
 
<TABLE>
<CAPTION>
                                                                     1997           1996
                                                                --------------  -------------
<S>                                                             <C>             <C>
Land and improvements.........................................  $   15,316,178  $  14,725,645
Buildings and improvements....................................      13,023,440     11,326,850
Gaming equipment..............................................      61,641,351     30,276,982
Furniture, fixtures and equipment.............................       5,144,212      3,953,544
Leasehold improvements........................................       6,143,415      3,657,726
Construction in progress......................................       1,496,089      3,362,235
                                                                --------------  -------------
                                                                   102,764,685     67,302,982
Less accumulated depreciation.................................      17,731,249      9,526,745
                                                                --------------  -------------
    Total.....................................................  $   85,033,436  $  57,776,237
                                                                --------------  -------------
                                                                --------------  -------------
</TABLE>
 
                                       43
<PAGE>
                         ANCHOR GAMING AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
4.  PROPERTY AND EQUIPMENT (CONTINUED)
    On November 11, 1996, the Company announced that it was re-evaluating the
scope and nature of its proposed addition of a new casino across the street from
the Colorado Central Station Casino. During the fourth quarter of the year ended
June 30, 1997, the Company determined that it was necessary to recognize a
write-down of costs associated with the new casino in the amount of $2,116,968.
The costs were specifically related to architectural fees, building design
costs, and deferred rent that were determined to have no future benefit.
Although the Company has proceeded with this asset write-down, it has not
abandoned the concept of an expansion and will continue to re-evaluate its
Colorado expansion options.
 
5.  INTANGIBLE ASSETS
 
    Intangible assets consist of the following at June 30:
 
<TABLE>
<CAPTION>
                                                                        1997          1996
                                                                    ------------  ------------
<S>                                                                 <C>           <C>
Lease acquisition costs...........................................  $  2,312,951  $  2,085,857
Goodwill..........................................................     1,134,865     1,134,865
Patents...........................................................        98,595        98,595
Organization costs and other......................................       221,310       221,310
                                                                    ------------  ------------
                                                                       3,767,721     3,540,627
Less accumulated amortization.....................................     1,639,415     1,485,917
                                                                    ------------  ------------
    Total.........................................................  $  2,128,306  $  2,054,710
                                                                    ------------  ------------
                                                                    ------------  ------------
</TABLE>
 
6.  NOTES PAYABLE
 
    Notes payable consist of the following at June 30:
 
<TABLE>
<CAPTION>
                                                                        1997          1996
                                                                    ------------  ------------
<S>                                                                 <C>           <C>
PRINCIPAL STOCKHOLDER
  Unsecured note payable to principal stockholder, interest at 8%,
    due July 1, 1998(a)...........................................  $  2,300,000  $  2,300,000
  Unsecured note payable to principal stockholder, interest at 8%,
    due July 1, 1998..............................................       500,000       500,000
                                                                    ------------  ------------
  Long-term notes payable, principal stockholder..................  $  2,800,000  $  2,800,000
                                                                    ------------  ------------
                                                                    ------------  ------------
OTHER
  Note payable secured by land, interest at 6%, due in 120 equal
    monthly principal installments plus interest, final payment
    due December 2005. Paid in full during the year ended June 30,
    1997..........................................................  $    --       $    950,000
  Less current portion............................................       --            100,000
                                                                    ------------  ------------
  Long-term portion...............................................  $    --       $    850,000
                                                                    ------------  ------------
                                                                    ------------  ------------
</TABLE>
 
------------------------
 
(a) At June 30, 1997, the stockholder amended the terms of the notes to be due
    July 1, 1998.
 
                                       44
<PAGE>
                         ANCHOR GAMING AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
6.  NOTES PAYABLE (CONTINUED)
    Notes payable to the principal stockholder and related party resulted in
interest expense of $223,693, $289,373, and $623,060 for the years ended June
30, 1997, 1996, and 1995, respectively, and accrued interest payable of $18,400
at June 30, 1997 and 1996.
 
7.  OTHER DEBT
 
    In April 1997, the Company entered into a $10 million unsecured revolving
bank line of credit (the "Bank Revolver") expiring November 30, 1998. The Bank
Revolver bears interest at the prime rate, or LIBOR plus 2%, at the Company's
option. The Company has agreed to maintain certain financial and non-financial
covenants customary with lending arrangements of this type. Financial covenants
include maintenance of minimum cash and cash equivalent balances, tangible net
worth, annual EBITDA, and maximum funded debt to EBITDA ratio. The covenants
also restrict payment of cash dividends. The Company has remained in compliance
with the covenants throughout the term of the credit facility. As of June 30,
1997, the Company had not borrowed under the Bank Revolver.
 
8.  OPTIONS AND WARRANTS
 
    As of June 30, 1997, 1,085,000 shares of common stock were reserved for
issuance upon exercise of employee and director stock options under an employee
stock option plan. Employee and director options to purchase 930,500 shares at
the fair market values at the grant dates have been granted as of June 30, 1997.
As of June 30, 1997, options to purchase 402,475 shares had been exercised. Of
the 930,500 options, 100,000 vest in equal quarterly increments over two years,
93,000 vest in equal annual increments over five years, 50,000 vest in a single
installment six months after issuance, 20,000 vest in decreasing annual
increments over five years, 250,000 vest in varying increments and periods over
five years, 8,000 vest at the end of three years and the remainder vest in equal
quarterly increments over five years.
 
    An additional 40,000 shares are reserved for issuance upon exercise of
vested options at the IPO price that were granted to a relative of certain
minority stockholders (none of which were exercised at June 30, 1997), and
250,000 shares are reserved for issuance upon exercise of vested warrants
granted to the managing underwriters of the IPO (and their designees)
exercisable at 120% of the IPO price, all of which were exercised at June 30,
1997.
 
    Options to purchase an additional 600,000 shares were granted at the fair
market value at the grant date to certain employees outside of the employee
stock option plan. These options vest in varying increments over periods from
nine months to eight years.
 
                                       45
<PAGE>
                         ANCHOR GAMING AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
8.  OPTIONS AND WARRANTS (CONTINUED)
    Summarized information for all options is as follows for the years ended
June 30:
 
<TABLE>
<CAPTION>
                                             1997                     1996                     1995
                                    -----------------------  -----------------------  -----------------------
                                                 WEIGHTED                 WEIGHTED                 WEIGHTED
                                                  AVERAGE                  AVERAGE                  AVERAGE
                                                 EXERCISE                 EXERCISE                 EXERCISE
                                     OPTIONS       PRICE      OPTIONS       PRICE      OPTIONS       PRICE
                                    ----------  -----------  ----------  -----------  ----------  -----------
<S>                                 <C>         <C>          <C>         <C>          <C>         <C>
Outstanding, beginning of the
 year.............................     670,700   $   17.79      820,300   $   12.95      954,500   $   12.80
  Granted.........................     600,000       31.88      288,000       25.07        8,000       16.81
  Exercised.......................    (105,425)      12.54     (418,600)      13.57     (128,450)      12.18
  Canceled........................     (32,250)      44.44      (19,000)      12.00      (13,750)      12.00
                                    ----------               ----------               ----------
Outstanding, end of the year......   1,133,025       24.98      670,700       17.79      820,300       12.95
                                    ----------               ----------               ----------
                                    ----------               ----------               ----------
Exercisable at end of the year....     245,475       16.11      148,050       12.31      453,950       13.44
                                    ----------               ----------               ----------
                                    ----------               ----------               ----------
Options available for grant.......     189,500                  107,250                   26,250
                                    ----------               ----------               ----------
                                    ----------               ----------               ----------
</TABLE>
 
    The following table summarizes information about the options outstanding at
June 30, 1997:
 
<TABLE>
<CAPTION>
                                                   OPTIONS OUTSTANDING                   OPTIONS EXERCISABLE
                                     -----------------------------------------------  --------------------------
                                        NUMBER                            WEIGHTED       NUMBER       WEIGHTED
                                      OUTSTANDING    WEIGHTED AVERAGE      AVERAGE     EXERCISABLE     AVERAGE
                                      AT JUNE 30,        REMAINING        EXERCISE     AT JUNE 30,    EXERCISE
RANGE OF EXERCISE PRICES                 1997        CONTRACTUAL LIFE       PRICE         1997          PRICE
-----------------------------------  -------------  -------------------  -----------  -------------  -----------
<S>                                  <C>            <C>                  <C>          <C>            <C>
$12.00 - $13.50                           268,125              6.6        $   12.13        142,375    $   12.14
 14.75 -  21.75                           256,900              8.0            21.61        103,100        21.60
 31.88 -  46.88                           608,000              9.7            32.07        --            --
                                     -------------                                    -------------
                                        1,133,025              8.6            24.98        245,475        16.11
                                     -------------                                    -------------
                                     -------------                                    -------------
</TABLE>
 
    The Company is authorized to issue 1,000,000 shares of preferred stock, $.01
par value per share (the "Preferred Stock"), in one or more series, and to
designate the rights, preferences, limitations, and restrictions of and upon
shares of each series, including voting, redemption, and conversion rights. The
board of directors of the Company also may designate dividend rights and
preferences in liquidation. The board of directors of Anchor has authorized the
Company to designate a series of Series A Junior Participating Preferred Stock
in connection with the Rights Plan discussed in Note 12. In connection with the
authorization of the Rights Plan, the board of directors of the Company has
authorized the designation of 50,000 shares of Preferred Stock as Series A
Junior Participating Preferred Stock.
 
    The Company has adopted the disclosures-only provision of Statement No. 123,
"Accounting for Stock-Based Compensation" ("SFAS 123"). The Company applies APB
Opinion No. 25 and related interpretations in accounting for its stock options.
Under APB 25, no compensation cost has been recognized in the financial
statements for the Stock Option Plan or other stock options granted. The fair
value of each option grant is estimated on the date of grant using the
Black-Scholes option-pricing model. Had compensation cost for the stock option
grants been determined based on the fair value at the date of grant for awards
consistent with the provision of SFAS 123, the Company's net income per common
and
 
                                       46
<PAGE>
                         ANCHOR GAMING AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
8.  OPTIONS AND WARRANTS (CONTINUED)
common equivalent share would have been decreased to the pro forma amounts
indicated below for the years ended June 30:
 
<TABLE>
<CAPTION>
                                                                     1997           1996
                                                                 -------------  -------------
<S>                                                              <C>            <C>
Net income--as reported........................................  $  35,676,428  $  22,335,044
Net income--pro forma..........................................     34,940,303     21,758,657
 
Earnings per common and common
  equivalent shares--as reported...............................  $        2.61  $        1.84
Earnings per common and common
  equivalent shares--pro forma.................................           2.55           1.79
</TABLE>
 
    The fair value of each option granted in fiscal year 1997 and 1996 was
estimated using the following assumptions for the Black-Scholes option pricing
model: (i) no dividends; (ii) expected volatility for both years of 50%; (iii)
risk free interest rates averaging 6% for both years; and (iv) the expected
average life of 3.6 years for 1997 and 3.2 years for 1996. The weighted average
fair value of the options granted in 1997 and 1996 were $9.82 and $9.03,
respectively. Because the SFAS 123 method of accounting has not been applied to
options granted prior to July 1, 1995, the resulting pro forma net income may
not be representative of that to be expected in future years.
 
9.  OTHER RELATED PARTY TRANSACTIONS
 
    The principal stockholder of the Company owned 100% of the common stock of
an Anchor Gaming slot route location. On January 31, 1996, the principal
stockholder sold the location to an unaffiliated third party. For providing the
gaming machines and slot route services, the Company received a percentage of
the net win of the location similar to other route locations. The Company held a
note receivable from the slot route operation in the amount of $284,704 at
January 31, 1996 of which $257,562 was assumed by the new owner. The remaining
balance of the loan due from the principal stockholder at June 30, 1996 of
$27,142 was paid in full on July 11, 1996. The slot route operation, under the
ownership of the principal stockholder, accounted for $180,822 and $295,502 of
gaming revenue during the years ended June 30, 1996 and 1995, respectively and
$145,684 and $279,059 of route costs during the years ended June 30, 1996 and
1995, respectively.
 
    In August 1996, the Company made certain payments to an entity controlled by
an employee of the Company. These funds were used to repay a debt of $500,000
owed by the employee and his affiliate to the principal stockholder of the
Company.
 
                                       47
<PAGE>
                         ANCHOR GAMING AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
10.  INCOME TAXES
 
    The provision (benefit) for income taxes for the years ended June 30, 1997,
1996 and 1995 are as follows:
 
<TABLE>
<CAPTION>
                                                       1997           1996           1995
                                                   -------------  -------------  ------------
<S>                                                <C>            <C>            <C>
Currently payable per tax return:
  Federal........................................  $  20,066,284  $  11,750,029  $  8,976,859
  State..........................................      1,369,887        846,278       474,051
                                                   -------------  -------------  ------------
                                                      21,436,171     12,596,307     9,450,910
                                                   -------------  -------------  ------------
Deferred:
  Federal........................................       (399,219)       579,569      (381,402)
  State..........................................        (36,250)        11,683       416,943
                                                   -------------  -------------  ------------
                                                        (435,469)       591,252        35,541
                                                   -------------  -------------  ------------
    Total........................................  $  21,000,702  $  13,187,559  $  9,486,451
                                                   -------------  -------------  ------------
                                                   -------------  -------------  ------------
</TABLE>
 
    The historical provision for income taxes differs from the amount of income
tax determined by applying the applicable U.S. statutory federal income tax rate
to pre-tax income from continuing operations as a result of the following
differences:
 
<TABLE>
<CAPTION>
                                                          1997                        1996                        1995
                                                 ---------------------       ---------------------       ---------------------
<S>                                            <C>            <C>          <C>            <C>          <C>            <C>
Statutory U.S. tax rate......................  $  19,836,995       35.0%   $  12,432,911       35.0%   $   8,913,449       35.0%
Increase (decrease) in tax resulting from:
  State income taxes, net of federal tax
    effect...................................        866,864        1.5          557,674        1.6          579,147        2.3
Other, net...................................        296,843         .6          196,974         .5           (6,145)       (.1)
                                               -------------      -----    -------------      -----    -------------      -----
Actual provision for income taxes............  $  21,000,702       37.1%   $  13,187,559       37.1%   $   9,486,451       37.2%
                                               -------------      -----    -------------      -----    -------------      -----
                                               -------------      -----    -------------      -----    -------------      -----
</TABLE>
 
    Statement No. 109 "Accounting for Income Taxes" requires the recognition of
deferred tax assets and liabilities for the expected future tax consequences of
events that have been included in the financial statements or income tax
returns. Deferred income taxes included in other current assets, deposits and
other, and other long-term liabilities on the consolidated balance sheets
reflect the net tax effects of temporary differences between the carrying
amounts of assets and liabilities for financial reporting
 
                                       48
<PAGE>
                         ANCHOR GAMING AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
10.  INCOME TAXES (CONTINUED)
purposes and the amounts used for income tax purposes. The tax items comprising
the Company's net deferred tax asset as of June 30, 1997 and 1996 are as
follows:
 
<TABLE>
<CAPTION>
                                                                       1997          1996
                                                                   ------------  -------------
<S>                                                                <C>           <C>
Deferred tax assets:
  Receivable reserve.............................................  $    617,000  $     478,000
  Pre-opening expenditures.......................................        86,000        140,000
  Reserves not currently deductible..............................       417,000        229,000
                                                                   ------------  -------------
                                                                      1,120,000        847,000
 
Deferred tax liabilities:
  Difference between book and tax basis of property..............      (876,000)    (1,038,000)
                                                                   ------------  -------------
Net deferred tax asset (liability)...............................  $    244,000  $    (191,000)
                                                                   ------------  -------------
                                                                   ------------  -------------
</TABLE>
 
11.  COMMITMENTS AND CONTINGENCIES
 
    NON-CANCELABLE OPERATING LEASES:
 
    The Company leases parking lot space, office space, casino space, and slot
route locations under non-cancelable operating leases. The original terms of the
leases range from 3 to 15 years with various renewal options from 1 to 15 years.
 
    The casino space lease has contingent rentals based on gaming revenues of
the casino occupying the space. The lease provides for a monthly payment of the
greater of a base amount of $12,000 or 5% of adjusted gross gaming revenue, with
a payment ceiling of $400,000 per year. Contingent rentals paid above base
amounts were $254,472, $184,312, and $100,898 for the years ended June 30, 1997,
1996, and 1995, respectively.
 
    Future minimum rentals under non-cancelable operating leases at June 30,
1997 are:
 
<TABLE>
<S>                                                 <C>
Year ending June 30,
  1998............................................  $ 10,656,000
  1999............................................    10,571,000
  2000............................................     7,990,000
  2001............................................     7,875,000
  2002............................................     7,864,000
  Thereafter......................................    57,230,000
                                                    ------------
                                                    $102,186,000
                                                    ------------
                                                    ------------
</TABLE>
 
    Operating lease rental expense was $10,940,000, $9,539,000, and $7,706,000
for the fiscal years ended June 30, 1997, 1996, and 1995, respectively.
 
    Included in deposits at June 30, 1997 and 1996 is a space lease deposit of
$3,300,000, which is held by the lessor of several slot route locations pursuant
to an agreement that provides that the deposit, or any portion thereof, may, at
the option of the Company, be applied against rents owing during the last two
years of the lease agreement. Also included in deposits are payments totaling
$10,750,000 to this lessor to extend the lease term for these locations through
the year 2010. The lease extension payments are
 
                                       49
<PAGE>
                         ANCHOR GAMING AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
11.  COMMITMENTS AND CONTINGENCIES (CONTINUED)
amortized to rent expense on a straight-line basis over the remaining term of
the lease. The Company's slot route operations at locations leased from this
lessor accounted for more than 10% of the Company's total revenues for the years
ended June 30, 1997, 1996, and 1995.
 
    GAMING REGULATIONS
 
    The Company's route operations are subject to the licensing and regulatory
requirements of the Nevada State Gaming Control Board and the Nevada Gaming
Commission. The Company's casino operations are subject to the licensing and
regulatory requirements of the Colorado Limited Gaming Control Commission. The
Company's proprietary games operations are subject to the licensing and
regulatory requirements of multiple jurisdictions throughout the United States
and Canada including the Nevada and Colorado requirements. The Company's gaming
licenses are subject to certain conditions and periodic renewal. Management
believes that the conditions will continue to be satisfied and that subsequent
license renewals will be granted.
 
    ENVIRONMENTAL MATTERS
 
    The Colorado Central Station Casino is located in an area that has been
designated by the Environmental Protection Agency ("EPA") as a superfund site on
the National Priorities List, known as the Central City-Clear Creek Superfund
Site (the "Site") as a result of contamination from historic mining activity in
the area. The EPA is entitled to proceed against owners and operators of
properties located within the Site for remediation and response costs associated
with their properties and with the entire Site. The Colorado Central Station
Casino is located within the drainage basin of North Clear Creek and is
therefore subjected to potentially contaminated surface and ground water from
upstream mining-related sources. Soil and ground water samples on the Site
indicate that several contaminants exist in concentrations exceeding drinking
water standards. Records relating to historical uses of the Site are uncertain
as to whether mining actually occurred below the Company's property. Records do
indicate that an ore loading dock for a railroad depot was once located on an
adjacent property, and railroad tracks were present on the Company's property.
Management is not aware of any environmental issues associated with these
activities.
 
    EMPLOYMENT AGREEMENTS
 
    The Company has entered into employment agreements with seven executives and
top management personnel. The agreements vary in starting date and are for
periods ranging from two to five years. Agreements with aggregate annual
salaries of $1,435,000 are terminable at the Company's option with 90 days to
one year severance pay.
 
    LITIGATION
 
    The Company is party to several routine lawsuits arising from normal
operations. Management does not believe that the outcome of such litigation in
the aggregate will have a material adverse effect on the consolidated financial
statements of the Company.
 
    PURCHASE COMMITMENTS
 
    At June 30, 1997, the Company had entered into various purchase agreements
to purchase gaming equipment for approximately $5,594,000.
 
                                       50
<PAGE>
                         ANCHOR GAMING AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
12.  SUBSEQUENT EVENT
 
    In August 1997, the board of directors of Anchor authorized the Company to
enter into a Stockholder Rights Plan (the "Rights Plan") providing that one
right (a "Right") will be attached to each share of Common Stock as of a record
date to be determined by the board of directors of Anchor (the "Record Date").
Each Right will entitle the registered holder to purchase from the Company a
unit (a "Unit") consisting of one one-thousandth of a share of Series A Junior
Participating Preferred Stock, par value $20.00 per share, to be authorized by
the Company at a Purchase Price of $400.00 per Unit, subject to adjustment. The
Rights convert in certain circumstances into a right to purchase Common Stock or
securities of a successor entity. The description and terms of the Rights are to
be set forth in the Rights Agreement, between the Company and a bank or
financial institution to be selected by the Company as Rights Agent.
 
ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
  FINANCIAL DISCLOSURE.
 
    None.
 
                                    PART III
 
ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
 
    Incorporated herein by reference to the Company's proxy statement for the
November 24, 1997 Annual Meeting of Stockholders under the caption
"Management--Directors and Executive Officers."
 
ITEM 11.  EXECUTIVE COMPENSATION.
 
    Incorporated herein by reference to the Company's proxy statement for the
November 24, 1997 Annual Meeting of Stockholders under the caption "Executive
Compensation and Other Information", provided that the Performance Graph and the
Compensation Committee Report on Executive Compensation are expressly not
incorporated herein.
 
ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
 
    Incorporated herein by reference to the Company's proxy statement for the
November 24, 1997 Annual Meeting of Stockholders under the caption "Security
Ownership of Certain Beneficial Owners and Management."
 
ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
 
    Incorporated herein by reference to the Company's proxy statement for the
November 24, 1997 Annual Meeting of Stockholders under the caption "Executive
Compensation and Other Information-- Compensation Committee Interlocks and
Insider Participation."
 
                                       51
<PAGE>
                         ANCHOR GAMING AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
                                    PART IV
 
ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
 
(a)(1)  The following documents are filed as part of this Report:
 
<TABLE>
<S>                                                                      <C>
Consolidated Balance Sheets as of June 30, 1997 and 1996
 
Consolidated Statements of Income for the fiscal years ended June 30,
  1997, 1996, and 1995
 
Consolidated Statements of Stockholders' Equity for the fiscal years
  ended June 30, 1997, 1996, and 1995
 
Consolidated Statements of Cash Flows for the fiscal years ended June
  30, 1997, 1996, and 1995
 
Notes to Consolidated Financial Statements
 
Independent Auditors' Report of Deloitte & Touche LLP
</TABLE>
 
(a)(2)  The following accountants' reports and financial schedules for fiscal
        years ending June 30, 1997, 1996, and 1995 are submitted herewith:
 
<TABLE>
<S>                                                                      <C>
Independent Auditors' Report of Deloitte & Touche LLP on Schedule II
 
Schedule II--Valuation and Qualifying Accounts
 
All other schedules are omitted as the required information is
  inapplicable
</TABLE>
 
(a)(3)  Management Contract or Compensatory Plan
 
<TABLE>
<S>                                                                      <C>
See Index to Exhibits. Each of the following Exhibits described on the
Index to Exhibits is a management contract or compensatory plan:
Exhibits 10.10 through 10.28 and 10.32 through 10.36...................
</TABLE>
 
(b)  Reports on Form 8-K
 
<TABLE>
<S>                                                                      <C>
No reports on Form 8-K have been filed during the fourth quarter of the
fiscal year ended June 30, 1997
</TABLE>
 
(c)  Exhibits
 
<TABLE>
<S>                                                                      <C>
See Index to Exhibits.
</TABLE>
 
(d)  Financial Statement Schedule filed in Part IV of this report is as follows:
 
<TABLE>
<S>                                                                      <C>
SCHEDULES:
 
II--Valuation and Qualifying Account--Years Ended June 30, 1997, 1996,
  and 1995.
</TABLE>
 
                                       52
<PAGE>
                                   SIGNATURES
 
    Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, Anchor Gaming has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
 
<TABLE>
<S>                             <C>  <C>
                                ANCHOR GAMING
 
                                By:            /s/ STANLEY E. FULTON
                                     -----------------------------------------
                                                 Stanley E. Fulton
                                               CHAIRMAN OF THE BOARD
                                          AND CHIEF EXECUTIVE OFFICER AND
                                           ACTING CHIEF FINANCIAL OFFICER
 
                                By:             /s/ GEOFFREY A. SAGE
                                     -----------------------------------------
                                                  Geoffrey A. Sage
                                              CORPORATE CONTROLLER AND
                                            PRINCIPAL ACCOUNTING OFFICER
Date: September 29, 1996
</TABLE>
 
    Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed by the following persons on behalf of the Registrant and
in the capacities indicated.
 
             NAME                         TITLE                    DATE
------------------------------  --------------------------  -------------------
 
    /s/ STANLEY E. FULTON
------------------------------           Director           September 29, 1997
      Stanley E. Fulton
 
     /s/ STUART D. BEATH
------------------------------           Director           September 29, 1997
       Stuart D. Beath
 
    /s/ ELIZABETH F. JONES
------------------------------           Director           September 29, 1997
      Elizabeth F. Jones
 
     /s/ GARRET A. SCHOLZ
------------------------------           Director           September 29, 1997
       Garret A. Scholz
 
    /s/ GLEN J. HETTINGER
------------------------------           Director           September 29, 1997
      Glen J. Hettinger
 
    /s/ MICHAEL B. FULTON
------------------------------           Director           September 29, 1997
      Michael B. Fulton
 
    /s/ MICHAEL D. RUMBOLZ
------------------------------           Director           September 29, 1997
      Michael D. Rumbolz
 
                                       53
<PAGE>
                               INDEX TO EXHIBITS
 
<TABLE>
<CAPTION>
 EXHIBITS
-----------
<C>          <S>
       2.1   Reorganization Agreement (the "Reorganization Agreement") among Anchor Gaming, Anchor Coin, D D Stud,
               Inc., C. G. Investments, Inc., Colorado Grande Enterprises, Inc., New AC, New DD, New CG, and certain
               stockholders of such corporations. (Incorporated by reference to Exhibit 2.1 to the Company's
               Registration Statement on Form S-1 (Registration No. 33-71870)).
 
       2.2   Amendment No. 1 to the Reorganization Agreement, dated as of January 25, 1993. (Incorporated by
               reference to Exhibit 2.2 to the Company's Registration Statement on Form S-1 (Registration No.
               33-71870)).
 
       2.3   Purchase Agreement (Global Gaming Products, L.L.C.) between Stanley E. Fulton, William Randall Adams,
               Global Products, Inc., Michael S. Stone, Thomas J. Matthews, James R. Purdy, and Anchor Gaming, dated
               as of December 22, 1993. (Incorporated by reference to Exhibit 2.3 to the Company's Registration
               Statement on Form S-1 (Registration No. 33-71870)).
 
       2.4   Purchase Agreement (Global Gaming Distributors, Inc.) between Global Gaming Distributors, Michael S.
               Stone, Thomas J. Matthews, James R. Purdy, and Anchor Gaming, dated as of December 22, 1993.
               (Incorporated by reference to Exhibit 2.4 to the Company's Registration Statement on Form S-1
               (Registration No. 33-71870)).
 
       3.1   Restated Articles of Incorporation of Anchor Gaming. (Incorporated by reference to Exhibit 3.1 to the
               Company's Registration Statement on Form S-1 (Registration No. 33-71870)).
 
       3.2   Restated Bylaws of Anchor Gaming. (Incorporated by reference to Exhibit 3.2 to the Company's
               Registration Statement on Form S-1 (Registration No. 33-71870)).
 
       4.1   Specimen of Common Stock Certificate. (Incorporated by reference to Exhibit 4.1 to the Company's
               Registration Statement on Form S-1 (Registration No. 33-71870)).
 
       4.2   Form of Rights Agreement between the Company and the Rights Agent (Incorporated by reference to Exhibit
               4.1 to the Company's Registration Statement on Form S-3 (File No. 333-34755)).
 
       9.1   Irrevocable Proxy of Elizabeth F. Jones in favor of Stanley E. Fulton. (Incorporated by reference to
               Exhibit 9.1 to the Company's June 30, 1994 Annual Report on Form 10-K (File No. 0-23124)).
 
       9.2   Irrevocable Proxy of Lucinda F. Tischer in favor of Stanley E. Fulton. (Incorporated by reference to
               Exhibit 9.2 to the Company's June 30, 1994 Annual Report on Form 10-K (File No. 0-23124)).
 
       9.3   Irrevocable Proxy of Stanley M. Fulton in favor of Stanley E. Fulton. (Incorporated by reference to
               Exhibit 9.3 to the Company's June 30, 1994 Annual Report on Form 10-K (File No. 0-23124)).
 
       9.4   Irrevocable Proxy of Deborah J. Fulton in favor of Stanley E. Fulton (Incorporated by reference to
               Exhibit 9.4 to the Company's June 30, 1996 Annual Report on Form 10-K (File No. 0-23124))
 
       9.5   Irrevocable Proxy of Elizabeth F. Jones in favor of Stanley E. Fulton (Incorporated by reference to
               Exhibit 9.5 to the Company's June 30, 1996 Annual Report on Form 10-K (File No. 0-23124)).
 
       9.6   Irrevocable Proxy of Stanley M. Fulton in favor of Stanley E. Fulton (Incorporated by reference to
               Exhibit 9.6 to the Company's June 30, 1996 Annual Report on Form 10-K (File No. 0-23124)).
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
 EXHIBITS
-----------
<C>          <S>
       9.7   Irrevocable Proxy of Michael B. Fulton in favor of Stanley E. Fulton (Incorporated by reference to
               Exhibit 9.7 to the Company's June 30, 1996 Annual Report on Form 10-K (File No. 0-23124)).
 
       9.8   Irrevocable Proxy of Lucinda F. Tischer in favor of Stanley E. Fulton (Incorporated by reference to
               Exhibit 9.8 to the Company's June 30, 1996 Annual Report on Form 10-K (File No. 0-23124)).
 
       9.9   Irrevocable Proxy of Virginia L. Fulton in favor of Stanley E. Fulton (Incorporated by reference to
               Exhibit 9.9 to the Company's June 30, 1996 Annual Report on Form 10-K (File No. 0-23124)).
 
      10.1   Settlement Agreement between Anchor Gaming, Stanley E. Fulton, and Michael B. Fulton, dated as of
               December 22, 1993. (Incorporated by reference to Exhibit 10.2 to the Company's Registration Statement
               on Form S-1 (Registration No. 33-71870)).
 
      10.2   Commercial Note of Pelican Gaming, Inc. to Anchor Coin dated March 15, 1995. (Incorporated by reference
               to Exhibit 10.1 to the Company's March 31, 1994 Quarterly Report on Form 10-Q (File No. 0-23124)).
 
      10.3   Promissory Notes of Anchor Coin, D D Stud, Inc., and C. G. Investments, Inc. to Stanley E. Fulton.
               (Incorporated by reference to Exhibit 10.4 to the Company's Registration Statement on Form S-1
               (Registration No. 33-71870)).
 
      10.4   Loan Agreement of Pelican Gaming, Inc. to Anchor Coin dated as of March 15, 1994. (Incorporated by
               reference to Exhibit 10.2 to the Company's March 31, 1994 Quarterly Report on Form 10-Q (File No.
               0-23124)).
 
      10.5   Promissory Note of Colorado Grande Enterprises, Inc. to C.G. Investments, Inc. (Incorporated by
               reference to Exhibit 10.5 to the Company's Registration Statement on Form S-1 (Registration No.
               33-71870)).
 
      10.6   Promissory Notes of Anchor Coin to Michael B. Fulton, Stanley M. Fulton, Elizabeth Fulton Jones, Lucinda
               Fulton Tischer, Virginia L. Fulton, and Deborah J. Fulton. (Incorporated by reference to Exhibit 10.6
               to the Company's Registration Statement on Form S-1 (Registration No. 33-71870)).
 
      10.7   Promissory Note of Anchor Coin to Elizabeth Fulton and related Stock Option Agreement. (Incorporated by
               reference to Exhibit 10.7 to the Company's Registration Statement on Form S-1 (Registration No.
               33-71870)).
 
      10.8   Loan Agreement between Bank of America Nevada and Anchor Coin, dated as of June 13, 1994. (Incorporated
               by reference to Exhibit 10.6 to the Company's June 30, 1994 Annual Report on Form 10-K (File No.
               0-23124)).
 
      10.9   Lease and Sublease Agreement between Smith's Food & Drug Centers, Inc. and Anchor Coin, dated July 28,
               1993. (Confidential Treatment for a portion of this document was requested and granted pursuant to
               Rule 406 under the Securities Act). (Incorporated by reference to Exhibit 10.10 to the Company's
               Registration Statement on Form S-1 (Registration No. 33-71870)).
 
      10.10  Employment Agreement between Anchor Gaming and Stanley E. Fulton. (Incorporated by reference to Exhibit
               10.10 to the Company's June 30, 1994 Annual Report on Form 10-K (File No. 0-23124)).
 
      10.11  Employment Agreement between Anchor Gaming and Michael S. Stone. (Incorporated by reference to Exhibit
               10.11 to the Company's June 30, 1994 Annual Report on Form 10-K (File No. 0-23124)).
 
      10.12  Employment Agreement between Anchor Gaming and Thomas J. Matthews. (Incorporated by reference to Exhibit
               10.12 to the Company's June 30, 1994 Annual Report on Form 10-K (File No. 0-23124)).
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
 EXHIBITS
-----------
<C>          <S>
      10.13  Employment Agreement between Anchor Gaming and Joseph Murphy. (Incorporated by reference to Exhibit
               10.13 to the Company's June 30, 1994 Annual Report on Form 10-K (File No. 0-23124)).
 
      10.14  Employment Agreement between Anchor Gaming and James R. Purdy. (Incorporated by reference to Exhibit
               10.14 to the Company's June 30, 1994 Annual Report on Form 10-K (File No. 0-23124)).
 
      10.15  Employment Agreement between Anchor Gaming and Nick E. Greenwood. (Incorporated by reference to Exhibit
               10.15 to the Company's June 30, 1994 Annual Report on Form 10-K (File No. 0-23124)).
 
      10.16  Employment Agreement between Anchor Gaming and William Randall Adams. (Incorporated by reference to
               Exhibit 10.16 to the Company's June 30, 1994 Annual Report on Form 10-K (File No. 0-23124)).
 
      10.17  Employment Agreement between Anchor Gaming and Salvatore T. DiMascio. (Incorporated by reference to
               Exhibit 10.17 to the Company's June 30, 1994 Annual Report on Form 10-K (File No. 0-23124)).
 
      10.18  Option Agreement between Michael S. Stone and Anchor Gaming. (Incorporated by reference to Exhibit 10.18
               to the Company's June 30, 1994 Annual Report on Form 10-K (File No. 0-23124)).
 
      10.19  Option Agreement between Thomas J. Matthews and Anchor Gaming. (Incorporated by reference to Exhibit
               10.19 to the Company's June 30, 1994 Annual Report on Form 10-K (File No. 0-23124)).
 
      10.20  Option Agreement between Joseph Murphy and Anchor Gaming. (Incorporated by reference to Exhibit 10.20 to
               the Company's June 30, 1994 Annual Report on Form 10-K (File No. 0-23124)).
 
      10.21  Option Agreement between William Randall Adams and Anchor Gaming. (Incorporated by reference to Exhibit
               10.21 to the Company's June 30, 1994 Annual Report on Form 10-K (File No. 0-23124)).
 
      10.22  Option Agreement between Nick E. Greenwood and Anchor Gaming. (Incorporated by reference to Exhibit
               10.22 to the Company's June 30, 1994 Annual Report on Form 10-K (File No. 0-23124)).
 
      10.23  Option Agreement between James R. Purdy and Anchor Gaming. (Incorporated by reference to Exhibit 10.23
               to the Company's June 30, 1994 Annual Report on Form 10-K (File No. 0-23124)).
 
      10.24  Option Agreement between Salvatore T. DiMascio and Anchor Gaming. (Incorporated by reference to Exhibit
               10.24 to the Company's June 30, 1994 Annual Report on Form 10-K (File No. 0-23124)).
 
      10.25  Option Agreement between Anchor Gaming and Geoffrey A. Sage. (Incorporated by reference to Exhibit 10.25
               to the Company's June 30, 1994 Annual Report on Form 10-K (File No. 0-23124)).
 
      10.26  Option Agreement between the Company and Stuart D. Beath. (Incorporated by reference to Exhibit 10.26 to
               the Company's June 30, 1994 Annual Report on Form 10-K (File No. 0-23124)).
 
      10.27  Option Agreement between the Company and Garret A. Scholz. (Incorporated by reference to Exhibit 10.27
               to the Company's June 30, 1994 Annual Report on Form 10-K (File No. 0-23124)).
 
      10.28* Form of Stock Option Agreement between the Company and Glen J. Hettinger
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
 EXHIBITS
-----------
<C>          <S>
      10.29  Form of Indemnification Agreement between the Company and Officers and Directors. (Incorporated by
               reference to Exhibit 10.28 to the Company's June 30, 1994 Annual Report on Form 10-K (File No.
               0-23124)).
 
      10.30* Form of Indemnification Agreement between the Company and Glen H. Hettinger
 
      10.31  Tax Indemnification Agreement between Stanley E. Fulton, Anchor Gaming and its subsidiaries.
               (Incorporated by reference to Exhibit 10.29 to the Company's June 30, 1994 Annual Report on Form 10-K
               (File No. 0-23124)).
 
      10.32  Option Agreement between the Company and Elizabeth Fulton. (Incorporated by reference to Exhibit 10.30
               to the Company's June 30, 1994 Annual Report on Form 10-K (File No. 0-23124)).
 
      10.33  Option Agreement between the Company and Michael D. Rumbolz. (Incorporated by reference to Exhibit 10.31
               to the Company's June 30, 1995 Annual Report on Form 10-K (File No. 0-23124)).
 
      10.34  Employment Agreement between the Company and Michael D. Rumbolz. (Incorporated by reference to Exhibit
               10.31 to the Company's June 30, 1995 Annual Report on Form 10-K (File No. 0-23124)).
 
      10.35  Anchor Gaming 1995 Employee Stock Option Plan. (Incorporated by reference to Exhibit 10.31 to the
               Company's June 30, 1995 Annual Report on Form 10-K (File No. 0-23124)).
 
      10.36  Addendum Agreement to amend the Employment and Stock Option Agreements between the Company and Salvatore
               T. DiMascio (Incorporated by reference to Exhibit 10.34 to the Company's June 30, 1996 Annual Report
               on Form 10-K (File No. 0-23124)).
 
      10.37* Joint Venture Agreement, dated as of December 3, 1996 by and between Anchor Games, a d.b.a. of Anchor
               Coin, a Nevada corporation and Subsidiary of the Company, and IGT.
 
      21.1*  List of Subsidiary Corporations.
 
      27.1*  Financial Data Schedule
</TABLE>
 
------------------------
 
*   Filed herewith