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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)
 
  /X/    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
         EXCHANGE ACT OF 1934
 
                    FOR THE FISCAL YEAR ENDED JUNE 30, 1998
                                       OR
 
  / /    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
         SECURITIES EXCHANGE ACT OF 1934
 
      FOR THE TRANSITION PERIOD FROM                  TO
 
                         COMMISSION FILE NUMBER 0-23124
                            ------------------------
                                 ANCHOR GAMING
 
             (Exact name of Registrant as specified in its charter)
 
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          NEVADA                  88-0304253
      (State or other          (I.R.S. Employer
      jurisdiction of         Identification No.)
     incorporation or
       organization)
</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:
 
     SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
 
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       TITLE OF EACH CLASS               NAME OF EACH EXCHANGE ON WHICH REGISTERED
----------------------------------  ---------------------------------------------------
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   COMMON STOCK, $.01 PAR VALUE          THE NASDAQ STOCK MARKET'S NATIONAL MARKET
</TABLE>
 
                            ------------------------
 
    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 22, 1998, based on the $63.50 per
share closing price for the Company's common stock on the Nasdaq National
Market, was approximately $538,733,238.
 
    The number of shares of the Registrant's Common Stock outstanding as of
September 22, 1998 was 12,423,532.
 
                      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 23, 1998 (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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PART I
 
          1  Business......................................................................................           1
          2  Properties....................................................................................          23
          3  Legal Proceedings.............................................................................          23
          4  Submission of Matters to a Vote of Securityholders............................................          23
 
PART II
 
          5  Market for Registrant's Common Equity and Related Stockholder Matters.........................          24
          6  Selected Financial Data.......................................................................          25
          7  Management's Discussion and Analysis of Financial Condition and Results of Operations.........          27
          8  Financial Statements and Supplementary Data...................................................          34
          9  Changes in and Disagreements with Accountants on Accounting and Financial Disclosure..........          50
 
PART III
 
         10  Directors and Executive Officers of the Registrant............................................          50
         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..............................          51
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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 a gaming machine route in Nevada. Anchor operates through
wholly owned subsidiaries, Anchor Coin, C.G. Investments, Inc, and D D Stud,
Inc. and one 80% subsidiary, Colorado Grande Enterprises, Inc. References in
this Annual Report on Form 10-K to Anchor or the Company include subsidiaries
unless the context requires otherwise.
 
SPECIAL NOTE ON FORWARD-LOOKING STATEMENTS
 
    This Annual Report on Form 10-K contains certain "forward-looking
statements" within the meaning of Section 21E of the Securities Exchange Act of
1934, as amended, and other applicable securities laws. All statements other
than statements of historical fact are "forward-looking statements" for purposes
of these provisions, including any projections of earnings, revenues, or other
financial items; any statements of the plans, strategies, and objectives of
management for future operation; any statements concerning proposed new
products, services, or developments; any statements regarding future economic
conditions or performance; statements of belief; and any statement of
assumptions underlying any of the foregoing. Such forward-looking statements may
be contained in the Company's business description and in Management's
Discussion and Analysis of Financial Condition and Results of Operations, among
other places. Although the Company believes that the expectations reflected in
any of its forward-looking statements will prove to be correct, actual results
could differ materially from those projected or assumed in the Company's
forward-looking statements. The Company's future financial condition and
results, as well as any forward-looking statements, are subject to the inherent
risks and uncertainties that are described from time to time in the Company's
reports filed with the Securities and Exchange Commission. See "Risk Factors" in
addition to the other information in this Annual Report. The Company undertakes
no obligation to update any forward-looking statement.
 
PROPRIETARY GAMES
 
    GENERAL.  Anchor develops proprietary games, which it 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 recurring revenues to the
Company from royalty, revenue participation, fixed daily rental fee, 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 to the two casinos it owns in
Colorado. 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 the Strategic
Alliance, the Company and IGT have formed a joint venture (the "Anchor IGT JV")
to develop, integrate, and distribute proprietary game concepts, primarily on
wide area progressive systems ("WAPs").
 
    The Company, seeking to capitalize on its established sales and marketing
infrastructure, its 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
 
                                       1
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more coins per play. The Company believes that an opportunity exists to further
expand and develop the market for proprietary games distributed on a royalty,
revenue participation, fixed daily rental fee, or other similar basis.
 
    DEDICATED PROPRIETARY GAMES.  The Company has successfully developed or
acquired the rights to ten proprietary games that are currently installed and
approved for use in unaffiliated casinos. Anchor's dedicated proprietary games
include Double Down Stud, Silver Strike, Clear Winner, Wheel of Gold, Totem
Pole, Rock'N'Reels, CashBall, Wheel Poker, Crazy Joker Poker, and SafeBuster.
All of the machines are placed in casinos free of any initial charge allowing
the casino to avoid up-front purchase costs and providing recurring revenues to
Anchor under royalty, revenue participation, fixed daily rental fee, 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.
 
    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 entered into the 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 game designs. The Company
and IGT share in the management of the Anchor IGT JV and share equally in its
profits and losses. The first WAP machine introduced by the Anchor IGT JV is the
Wheel of Fortune, a game that is very similar to the Company's Wheel of Gold.
Additionally, the Anchor IGT JV has introduced Wheel of Gold, Totem Pole, and
Pinball Mania on a WAP.
 
    CONVERSION OPPORTUNITY.  The Company's first proprietary game was the video
poker game Double Down Stud, a software conversion kit that the Company installs
in existing third party casino gaming machines. The enhancement created by the
installation provides the Company a daily royalty for each converted machine.
Management believes that as casinos experience pressure to increase "same store
sales" they will seek to enhance the performance of their installed base of
machines by adding new features by means of conversion kits. The Company is
currently developing technology to allow older generation slot machines to
utilize additional features such as the "game within a game" concept.
 
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    The following is a description of proprietary games that the Company is
currently distributing.
 
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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 that pays out
                               souvenir tokens for certain winning combinations. Anchor
                               furnishes Silver Strike machines free of any initial charge
                               to its casino customers, who agree to purchase the souvenir
                               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. This provides the
                               player with significantly higher potential winnings and
                               additional excitement 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
                               additional coins. Each successive game played provides the
                               possibility of greater payback to the player.
- Rock'N'Reels...............  Introduced in 1996, Rock'N'Reels is a specially packaged
                               standard slot machine designed to evoke the image of a
                               vintage jukebox. The game is enhanced with state of the art
                               sound and signage.
- CashBall...................  Introduced in 1998, CashBall is a standard slot machine that
                               has the added dimension of giving players the opportunity to
                               activate, on the same machine, an actual working pinball
                               game. This provides the player with significantly higher
                               potential winnings and excitement through the Company's
                               "game within a game" concept.
- Wheel Poker................  Wheel Poker is a standard video poker game introduced in
                               1998 that, in the tradition of our Wheel of Gold game, has
                               given the player the added opportunity to activate the
                               three-dimensional "roulette type" wheel. Again, this
                               provides the player with significantly higher potential
                               jackpots and excitement through the Company's "game within a
                               game" concept.
- Crazy Joker Poker..........  Introduced in 1998, Crazy Joker Poker is a standard video
                               poker machine with an added bonus. The Crazy Joker is a
                               randomly appearing wild symbol, which the player can choose
                               when to use.
- SafeBuster.................  SafeBuster is a standard reel slot machine introduced in
                               1998 which, as an added bonus, turns a combination dial
                               after each non-winning reel spin, offering a positive player
                               experience with each handle pull. Crack the combination and
                               receive free spins until a winner is hit and multiplied by
                               up to 10 times.
</TABLE>
 
    The Company derives recurring revenues on these machines in various forms,
including daily or similar royalties, revenue participation, fixed daily rental
fees, or other similar agreements with casinos, and, in the case of Silver
Strike, by selling the souvenir tokens to casinos.
 
                                       3
<PAGE>
    DEVELOPMENT.  Anchor is continually engaged 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. During the year
ended June 30, 1998, Anchor added a Research and Development Department and
acquired an Engineering Group to enhance its ability to develop new proprietary
game concepts.
 
    DISTRIBUTION.  Anchor has an established sales organization with offices in
Nevada, Missouri, Mississippi, Louisiana, Indiana and New Jersey servicing an
established customer base of over 250 casinos at June 30, 1998. 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.  In September 1996, the Company entered into
the Strategic Alliance. The Company believes that the Strategic Alliance will
facilitate both the expansion of their proprietary games business and the
Company's ability to develop and distribute additional proprietary games on a
WAP.
 
    As part of the Strategic Alliance, Anchor and IGT have formed the Anchor IGT
JV. The Company and IGT share in the management and share equally in its profits
and losses. IGT's WAP system is being used within the Anchor IGT JV for a
variety of the Company's dedicated proprietary game concepts including Wheel of
Gold, Totem Pole, and CashBall. IGT's Wheel of Fortune game is also covered
under the Strategic Alliance. Property, including intellectual property,
developed through the joint venture is owned by the Anchor IGT JV. The 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 joint venture upon at least one year's prior notice. The
Anchor IGT JV does not acquire any rights to the intellectual property rights of
each of Anchor and IGT that are developed outside of the joint venture. 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, alternative arrangements are made to satisfy regulatory
requirements.
 
    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 several patents to Anchor,
including (1) four patents which expire on March 31, 2009 covering the Double
Down Stud games in the United States; (2) one patent which expires on March 14,
2012 covering innovations of the Silver Strike game (but there is no independent
protection of the game itself); (3) one patent which was issued in 1993,
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; (4) one patent which expires July 11, 2112 covering the Crazy
Joker "traveling wild card" concept; and (5) one patent which expires on October
18, 2011 related to the game Player's Choice 21. 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
 
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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.
 
    Clear Winner-Registered Trademark-, Colorado Central Station
Casino-Registered Trademark-, Colorado Grande-Registered Trademark-, Double Down
Stud-Registered Trademark-, Fast Track Express-Registered Trademark-, Silver
Strike-Registered Trademark-, and Spin for Cash-Registered Trademark- are
registered trademarks, and Anchor Coin-TM-, Anchor Games-TM-, Anchor Gaming-TM-,
Bang For A Buck-TM-, Big Bucks Bingo-TM-, Big Slot-TM-, CashBall-TM-, Casino
Bowling-TM-, Crazy Joker-TM-, Fast Cash Giveaway-TM-, Keno Bucks-TM-, Maggie's
Slot Club-TM-, Players Choice 21-TM-, Push Your Luck-TM-, Race to Riches-TM-,
Rock'N'Reels-TM-, Spin, Rattle and Roll-TM-, Spin The Wheel-TM-,
Tic-Tac-Disco-TM-, Totem Pole-TM-, Wheel & Deal-TM-, Wheel Poker-TM-, Wheel of
Gold-TM- and Wheel Winner-TM- are trademarks of Anchor Gaming. IGT-TM-, Wheel of
Fortune-TM- and SafeBuster-TM- are trademarks of their respective owners. There
can be no assurance that any 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.
 
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 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 an initial cost of
approximately $25.0 million. The Colorado Central Station Casino is one of the
highest revenue producing and one of the most profitable casinos 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 700 gaming machines, ten blackjack tables, nine poker tables,
and a food court restaurant area. The casino benefits from a favorable location,
as it 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 600 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. The Colorado Central
Station Casino was constructed specifically for gaming activities, and as a
result offers an 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,
 
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1998, the Colorado Central Station Casino employed approximately 425 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, 1998, the Colorado Grande Casino employed approximately 98 people
and by law is allowed to be open seven days a week from 8:00 a.m. to 2:00 a.m.
 
ROUTE OPERATIONS
 
    Anchor is one of the largest gaming machine route operators in Nevada with
842 gaming machines in 60 locations at June 30, 1998, up from 801 gaming
machines in 58 locations at June 30, 1997. 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. Management believes that the
Company's route operation contracts provide the Company with a long-term, stable
revenue source and that its route has the highest revenue and profit per machine
of any route operation in the state of Nevada. In 1996, the Company extended its
exclusive space lease agreement with Smith's Food and Drug Centers, Inc.
("Smiths"), it's largest route customer, for an additional five years at current
rates through 2010. At June 30, 1998, 753 of the Company's 842 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.
 
    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."
 
    Anchor's space lease agreement with its largest gaming machine route
customer, Smiths, runs through the year 2010 at current rates. 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
 
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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.
 
    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 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 and bills 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 manufactured by either IGT or Sigma Game,
Inc. The primary components of Wheel of Gold, Wheel Poker and CashBall are
manufactured by Bally Gaming International, Inc. 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. Crazy Joker Poker machines are
currently manufactured by Williams Gaming and SafeBuster machines are currently
manufactured by Casino Data Systems. 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. See "Risk Factors--Risks of Dependence on Suppliers."
 
COMPETITION
 
    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 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
 
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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, fixed
daily rental fee, or similar agreements involves a departure from the
traditional practice of casinos purchasing gaming devices. To the extent that
casinos are reluctant to, or decide not to, enter into arrangements that
generate recurring revenues for suppliers of casino games, the market for
Anchor's proprietary games could be limited, or discontinued if casino operators
decide to reject Anchor's revenue sharing model. 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.
 
    In June 1998, a joint venture between Black Hawk Gaming & Development
Company, Inc. and Jacobs Entertainment Ltd. commenced casino operations, "The
Lodge," which includes 800 slot machines, 20 table games, and 500 parking
spaces. 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 late 1998 or early 1999, which is expected to include 1,100 slot
machines, 24 table games, and a 1,000 car parking garage. Riviera Holdings
Corporation has also commenced construction of a casino scheduled to open in
late 1999, which is expected to include 1,000 slot machines, 14 table games, and
a 500 space covered parking garage. Black Hawk Brewery has commenced
construction of a casino, located next to Colorado Central Station, scheduled to
open in late 1999 which is expected to include 600 slot machines, 10-20 table
games and 500 parking spaces. Fitzgeralds has also announced an expected
expansion of approximately 50% of their current gaming area as well as a 70-80
room hotel. Potential projects include the Hyatt, which would include 800-1,000
slot machines and the Dakota Works project, which would include approximately
1,000 slot machines. Competition from these entrants to the market could have a
material adverse effect on the Company.
 
    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 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
 
                                       8
<PAGE>
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, 1998, Anchor employed approximately 920 persons, the substantial
majority of whom are non-management personnel. Of this total, approximately 520
people worked at the Colorado Central Station Casino and the Colorado Grande
Casino. The balance of the Company's non-management employees are involved in
route and proprietary games operations. None of Anchor's employees are covered
by collective bargaining agreements, and Anchor believes that it has
satisfactory employee relations.
 
SEASONALITY
 
    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. Proprietary games operations within the
Anchor IGT JV, as well as within Anchor's proprietary games operations outside
of the Anchor IGT JV, during the winter months could be significantly affected
by inclement weather, road conditions and casino patron traffic patterns
throughout the gaming jurisdictions in which proprietary games are operated. 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. In general,
the highest levels of business activity in its Nevada Route operation occurs
during the summer periods, specifically April through September.
 
                                       9
<PAGE>
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 "non-
restricted" gaming location. The non-restricted 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
non-restricted locations are subject to various fixed fees and per-machine taxes
levied on a quarterly and annual basis by the Nevada Gaming Authorities.
Non-restricted 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 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
 
                                       10
<PAGE>
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 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
 
                                       11
<PAGE>
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. Such approval, if given, does not constitute a finding, recommendation
or approval by the Nevada Commission or the Nevada Board as to the accuracy or
adequacy of the prospectus or the investment merits of the securities. Any
representation to the contrary is unlawful.
 
    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
 
                                       12
<PAGE>
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."
 
    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
 
                                       13
<PAGE>
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 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 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
 
                                       14
<PAGE>
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,
increase in limitations on the $5 wager, or the addition of games other than
blackjack, poker and slot machines. If a statewide vote is successful, the law
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 beverage 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 $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
 
                                       15
<PAGE>
20% of amounts in excess of $10.0 million of AGP. During September 1997, the
Commission decided to adjust the gaming tax year for several reasons including
that it should coincide with Colorado's fiscal year, July 1 through June 30.
Consequently, during the abbreviated seventh year of gaming, October 1, 1997
through June 30, 1998, 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 of
AGP. Pursuant to the timing adjustment from October 1 to July 1, gaming taxes
for the eighth year of gaming, July 1, 1998 through June 30, 1999, have been
established at 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. Effective July 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).
Cripple Creek currently imposes a two-tiered quarterly device fee of $225 per
device on the first 50 devices and $300 per device on devices of 51 or more.
Black Hawk's annual fee per device is $750.00. 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 and/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
 
    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.
 
    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
 
                                       16
<PAGE>
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 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.
 
RISK FACTORS
 
    This Annual Report on Form 10-K contains certain "forward-looking
statements" within the meaning of Section 21E of the Securities Exchange Act of
1934, as amended, and other applicable securities laws. All statements other
than statements of historical fact are "forward-looking statements" for purposes
of these provisions, including any projections of earnings, revenues or other
financial items, any statements of the plans, strategies and objectives of
management for future operation, any statements concerning proposed new
products, services or developments, any statements regarding future economic
conditions or performance; statements of belief; and any statement of
assumptions underlying any of the foregoing. Such forward-looking statements may
be contained in the Company's business description and in Management's
Discussion and Analysis of Financial Condition and Results of Operations, among
other places. Although the company believes that the expectations reflected in
any of its forward-looking statements will prove to be correct, actual results
could differ materially from those projected or assumed in the Company's
forward-looking statements. The Company's future financial condition and
results, as well as any forward-looking statements, are subject to the inherent
risks and uncertainties that are summarized in this section and that are
described from time to time in the Company's reports filed with the Securities
and Exchange Commission. The Company undertakes no obligation to update any
forward-looking statement.
 
RISKS OF PROPRIETARY GAMES.
 
    The Company places its proprietary games in casinos at no initial cost 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
variations in the Company's ability to place games with casinos, the economic
terms on which casinos will accept the machines, the popularity of the games
with gaming patrons, and the ability of its games to be successful and popular
over the long-term. If the Company is not successful in introducing new games,
the effects on Anchor could be material and adverse.
 
    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, 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
game concepts, including Silver Strike, Totem Pole, and Clear Winner, among
others, do not have independent protection of the game itself, and it is
possible that competitors could produce a similar game without violating any
legal rights of the Company. 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
 
                                       17
<PAGE>
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.
 
    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
 
    Proprietary Games.  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 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, fixed
daily rental fee, or similar agreements involves a departure from the
traditional practice of casinos purchasing gaming devices. To the extent that
casinos are reluctant to, or decide not to, enter into arrangements that
generate recurring revenues for suppliers of casino games, the market for
Anchor's proprietary games could be limited, or discontinued if casino operators
decide to reject Anchor's revenue sharing model. 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.
 
    Colorado 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.
 
    In June 1998, a joint venture between Black Hawk Gaming & Development
Company, Inc. and Jacobs Entertainment Ltd. commenced casino operations, "The
Lodge," which includes 800 slot machines, 20 table games, and 500 parking
spaces. 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 is expected to include 1,100 slot machines, 24 table
games, and a 1,000 car parking garage. Riviera Holdings Corporation has also
commenced construction of a casino scheduled to open in late 1999, which is
expected to include 1,000 slot machines, 14 table games, and a 500 space covered
parking garage. Black Hawk Brewery has commenced construction of a casino,
located next to Colorado Central Station, scheduled to open in late 1999 which
is expected to include 600 slot machines, 10-20 table games and 500 parking
spaces. Fitzgeralds has also announced an expected expansion of approximately
50% of their current gaming area as well as a 70-80 room hotel. Potential
projects include the Hyatt, which would include approximately 800-1,000 slot
machines and the Dakota Works project, which would include approximately 1,000
slot machines. Competition from these entrants to the market could have a
material adverse effect on the Company.
 
                                       18
<PAGE>
    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 which
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.
 
    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.
 
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 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 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. Additionally, vendors may refuse to support or
modify existing equipment to comply with licensing and regulatory requirements
of various gaming jurisdictions. An inability to comply with licensing and
regulatory requirements could result in the Company being prohibited from
expanding into new gaming jurisdictions and possibly being required to remove
installed games from existing jurisdictions, both of which could have a material
adverse effect on the Company.
 
                                       19
<PAGE>
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. 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."
 
    Gaming licenses and related approvals are deemed to be privileges under the
laws of Nevada, Colorado, and the other jurisdictions in which the Company
operates. The gaming laws and regulations of the states in which the Company
operates grant substantial discretion to gaming regulatory authorities to
monitor and control the activities and operations of all lines of business in
which the Company operates. Accordingly, the gaming authorities have power to
require that the Company comply with new and discretionary directives of these
gaming authorities with respect to the operation and performance of its
proprietary games and the operations of its routes and casinos. In such highly
regulated environments, there is a constant risk that consumer pressures,
political considerations, or changes in regulatory personnel or approach could
have a material adverse effect on the Company and its operations.
 
    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
 
                                       20
<PAGE>
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."
 
    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.
 
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.
 
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.
 
                                       21
<PAGE>
RISKS OF NEVADA ROUTE OPERATIONS
 
    In 1998, the Mayor of Las Vegas formed a committee to study the effect of
gaming in grocery and convenience stores in Las Vegas. In connection with the
study, certain proposals to prohibit, limit, or change gaming devices in
convenience, grocery and similar retail facilities may be made. Other government
officials, as well as other individuals, may from time to time suggest proposals
to prohibit, limit, or change gaming devices in convenience, grocery and similar
retail facilities throughout Nevada, The broad adoption of any such proposal
could have a material adverse effect on the Company's Nevada route operations.
 
DEPENDENCE ON 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. Competition for employees in the Black
Hawk market could intensify as additional operators open or plan to open new
facilities. This competition could cause increases in the cost of retaining
employees or could cause employees to become scarce, both of which could have a
material adverse effect on the Company.
 
CONTROL OF THE COMPANY
 
    In October 1997, Anchor Gaming completed an offering (the "Offering") of
1,800,000 shares of common stock, of Anchor (the "Common Stock") 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). Upon completion of the Offering, the
officers and directors of the Company and members of their respective families
own beneficially approximately 40.5% of the outstanding Common Stock. 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 more than 40% of the Common Stock outstanding. Such
voting power, together with certain anti-takeover provisions included in the
Company's Articles of Incorporation and Bylaws and a Shareholder Rights Plan
could have the effect of delaying or discouraging an unsolicited takeover of the
Company.
 
INVENTORY SUBJECT TO GAMING APPROVAL
 
    At any point, the Company may be in the process of developing proprietary
games that have not yet received regulatory approvals. Anticipating demand for
its games after receipt of regulatory approval, the Company may begin to
manufacture games pending regulatory approval, and may develop a substantial
inventory of games that are not approved for use under the gaming laws and
regulations to which the Company is subject. To the extent that the Company does
not receive approval of games in its inventory, or if games in its inventory
require modification before they can be placed in service, the Company could be
materially and adversely affected.
 
                                       22
<PAGE>
CONTINUING DIRECTOR PROVISION IN THE COMPANY'S RIGHTS PLAN
 
    The Delaware Chancery Court has recently ruled that a rights agreement
provision similar to the Continuing Director requirement included the Company's
Rights Plan is unenforceable under Delaware law. The Company is not a Delaware
corporation and Delaware law does not govern the Company's Rights Plan. Nevada
courts have not ruled on the enforceability of a similar provision under Nevada
law; there can be no assurance that a Nevada court would enforce the Company's
Continuing Director provisions.
 
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) the 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 700 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 600 parking
spaces and is the first shuttle stop from Black Hawk's 3,000-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 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.
 
    Several securities class action lawsuits have been filed against the Company
and certain of its current and former officers and directors. The lawsuits were
filed in various jurisdictions following the Company's announcement in early
December 1997 that the Company's results for the December quarter might not meet
analysts' expectations. The lawsuits have been brought on behalf of certain
purchasers of the stock of the Company and allege violations of state and/or
federal securities laws arising out of alleged misstatements and omissions to
state material facts about the Company over various periods of time covered by
the lawsuits. The lawsuits have all been consolidated in Nevada, both in federal
and state court. The consolidated federal action is captioned In re Anchor
Gaming Securities Litigation, Civil Action No.
CV-S-97-01751-PMP (RJJ), and the consolidated state action is captioned Ryan, et
al. v. Anchor Gaming, et al., Civil No. A383456. Certain other actions have been
transferred and/or dismissed. The Company believes that the claims are without
merit, and the Company intends to vigorously contest the lawsuits.
 
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITYHOLDERS.
 
    Not applicable.
 
                                       23
<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
                                                                                                 --------------------
                                                                                                   HIGH        LOW
                                                                                                 ---------  ---------
<S>                                                                                              <C>        <C>
FISCAL 1998
  First quarter................................................................................  $90 1/2    $47 1/4
  Second quarter...............................................................................  $95 1/8    $43
  Third quarter................................................................................  $74 1/4    $55 3/16
  Fourth quarter...............................................................................  $93 11/16  $76
</TABLE>
 
<TABLE>
<CAPTION>
                                                                                                     PRICE RANGE
                                                                                                 --------------------
                                                                                                   HIGH        LOW
                                                                                                 ---------  ---------
<S>                                                                                              <C>        <C>
FISCAL 1997
  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 11, 1998, there were approximately 10,000 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.
 
                                       24
<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 Annual Report on
Form 10-K. The income statement and balance sheet data for each of the five
fiscal years ended June 30, 1998 are derived from the audited consolidated
financial statements of the Company.
 
<TABLE>
<CAPTION>
                                                                        FISCAL YEAR ENDED JUNE 30,
                                                         --------------------------------------------------------
                                                            1998        1997        1996       1995      1994(1)
                                                         ----------  ----------  ----------  ---------  ---------
                                                             (DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S>                                                      <C>         <C>         <C>         <C>        <C>
INCOME STATEMENT DATA:
  Revenues:
    Proprietary games..................................  $  113,677  $   49,716  $   21,457  $  14,159  $   4,147
    Casino operations..................................      82,139      69,223      65,125     56,184     23,713
    Route operations...................................      34,314      33,510      28,651     25,818     26,123
    Other..............................................       1,802       1,300       1,233      1,250        786
                                                         ----------  ----------  ----------  ---------  ---------
      Total revenues...................................     231,932     153,749     116,466     97,411     54,769
                                                         ----------  ----------  ----------  ---------  ---------
  Costs and expenses:
    Proprietary games..................................      13,475      11,039      12,113      9,851      3,047
    Casino operations..................................      35,065      29,100      26,830     21,500      8,199
    Route operations...................................      21,442      19,905      17,158     15,659     15,416
    Other..............................................       1,840       1,432       1,300      1,387        768
    Selling, general, and administrative...............      41,218      28,164      21,074     20,949     10,375
    Preopening costs...................................      --          --          --         --            731
    Project cost write-downs...........................      --           2,117      --         --         --
    Depreciation and amortization......................      12,661       8,798       4,110      3,215      2,121
                                                         ----------  ----------  ----------  ---------  ---------
      Total costs and expenses.........................     125,701     100,555      82,585     72,561     40,657
                                                         ----------  ----------  ----------  ---------  ---------
  Income from operations...............................     106,231      53,194      33,881     24,850     14,112
  Interest income......................................       2,989       3,793       2,028      1,105        379
  Interest expense.....................................        (226)       (288)       (429)      (732)    (1,314)
  Other income (expense)(2)............................         446         (22)         43        244        244
                                                         ----------  ----------  ----------  ---------  ---------
  Income before provision for income taxes.............     109,440      56,677      35,523     25,467     13,421
  Historical and pro forma provision for income
    taxes(3)...........................................      41,040      21,001      13,188      9,486      4,702
                                                         ----------  ----------  ----------  ---------  ---------
  Net income and pro forma net income(3)...............  $   68,400  $   35,676  $   22,335  $  15,981  $   8,719
                                                         ----------  ----------  ----------  ---------  ---------
  Weighted average shares outstanding(4)...............      12,751      13,321      11,820     11,252      8,481
  Basic earnings per share(3)..........................  $     5.36  $     2.68  $     1.89  $    1.42  $    1.03
  Weighted average common and common equivalent shares
    outstanding(4).....................................      13,161      13,542      12,038     11,447      8,481
  Diluted earnings and pro forma diluted earnings per
    share(3)...........................................  $     5.20  $     2.63  $     1.86  $    1.40  $    1.03
 
OTHER DATA:
  Capital expenditures.................................  $   22,499  $   38,108  $   27,916  $   7,834  $  17,921
  Distributions to stockholders(5).....................      --          --          --                     6,760
</TABLE>
 
                                       25
<PAGE>
 
<TABLE>
<CAPTION>
                                                                              AS OF JUNE 30,
                                                         --------------------------------------------------------
                                                            1998        1997        1996       1995      1994(1)
                                                         ----------  ----------  ----------  ---------  ---------
                                                                              (IN THOUSANDS)
<S>                                                      <C>         <C>         <C>         <C>        <C>
BALANCE SHEET DATA:
  Cash and cash equivalents............................  $   73,187  $   66,427  $   78,113  $  26,132  $  10,472
  Total assets.........................................     245,134     188,876     162,312     79,266     58,903
  Long term notes payable..............................      --           2,800       3,650      5,989      6,927
  Stockholders' equity(5)..............................     210,482     171,331     146,307     64,832     47,001
</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 initial public offering in February 1994 (the "IPO").
 
(2) Other income (expense) consists of minority interest in earnings of
    consolidated subsidiary, and other income (expense).
 
(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 and weighted average common and common
    equivalent shares outstanding are presented as if the reorganization
    completed in conjunction with the Company's IPO took place July 1, 1993.
 
(5) 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 the Company's IPO, earnings have been retained to support
    operations and to finance expansion.
 
                                       26
<PAGE>
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. On October 17, 1997, the Company
completed an offering of 1.8 million shares of Common Stock at a price of $91
per share. All of these shares were sold by selling stockholders. The Company
did not receive any proceeds from the offering.
 
    The following table sets forth the percentage of Anchor's total revenues
attributable to proprietary games operations, casino operations, route
operations, and other during the fiscal years ended June 30, 1998, 1997, and
1996. The growth in proprietary games revenue as a percentage of total revenues
is attributable primarily to the commencement of the Strategic Alliance with IGT
during the second half of fiscal 1997, and to a lesser extent, the Company's
introduction of the new proprietary game Wheel of Gold, which began generating
revenue in the third quarter of fiscal 1996.
 
<TABLE>
<CAPTION>
                                                                                             FISCAL YEARS ENDED JUNE 30,
                                                                                           -------------------------------
                                                                                             1998       1997       1996
                                                                                           ---------  ---------  ---------
<S>                                                                                        <C>        <C>        <C>
SOURCES OF REVENUES:
  Proprietary games operations...........................................................       49.0%      32.4%      18.4%
  Casino operations......................................................................       35.4       45.0       55.9
  Route operations.......................................................................       14.8       21.8       24.6
  Other..................................................................................         .8         .8        1.1
                                                                                           ---------  ---------  ---------
    Total revenues.......................................................................      100.0%     100.0%     100.0%
                                                                                           ---------  ---------  ---------
                                                                                           ---------  ---------  ---------
</TABLE>
 
FISCAL YEAR 1998 COMPARED TO FISCAL YEAR 1997
 
    REVENUES.  Total revenues were $231.9 million for the fiscal year ended June
30, 1998, an increase of $78.2 million or 50.9% from $153.7 million for the
fiscal year ended June 30, 1997.
 
    Revenues from proprietary games operations were $113.7 million for the
fiscal year ended June 30, 1998, an increase of $64.0 million or 128.7% from
$49.7 million for the fiscal year ended June 30, 1997. The increase is primarily
due to increased equity earnings in the Company's joint venture alliance with
IGT, which, for accounting purposes, is recorded net of expense. At June 30,
1998 there were more than 5,600 games, primarily Wheel of Fortune, operating
within the joint venture, compared to more than 2,000 games at June 30, 1997.
This increase is also due to increased revenues from the Company's proprietary
games Wheel of Gold and Totem Pole, and to a lesser extent increased revenues
from the proprietary games Rock'N'Reels and SafeBuster. These increases were
offset to some extent by decreased revenues
 
                                       27
<PAGE>
generated from the sale of tokens for the proprietary game Silver Strike and
decreased revenues generated from the proprietary game Clear Winner. The Company
expects the trend of reduced year-to-year Silver Strike and Clear Winner revenue
comparisons to continue due to the market maturity of these proprietary games.
After completing a full year of operations within the joint venture alliance
with IGT, we now recognize that these operations are influenced by seasonal
fluctuations as a result of weather and casino patron traffic patterns. We
expect that these seasonal trends will continue in both our joint venture
operations and our proprietary games operations outside of the joint venture.
 
    Revenues from casino operations were $82.1 million for the fiscal year ended
June 30, 1998, an increase of $12.9 million or 18.7% from $69.2 million for the
fiscal year ended June 30, 1997. This increase is primarily due to increased
slot revenues at the Colorado Central Station Casino and, to a lesser extent,
increased slot revenues at the Colorado Grande Casino. The Company's Colorado
casino operations were the beneficiary of mild weather during the six months
ended June 30, 1998. The competitive landscape has begun to change recently in
the Black Hawk market. On June 24, 1998 a competitor opened a new casino, as
expected, near the Colorado Central Station Casino. The Company expects the
opening of another new casino by a competitor, also near the Colorado Central
Station Casino, during December 1998. The Company is aware of other casino
projects in various stages of planning in the Black Hawk market. The Company
cannot predict the effect, if any, that the new or proposed casino openings will
have on the Company's Colorado casino operations. Historically, revenues and
casino patronage in the Colorado casino operations are highest in the summer
months and those months unaffected by inclement weather. We expect this trend to
continue.
 
    Revenues from route operations were $34.3 million for the fiscal year ended
June 30, 1998, an increase of $804,000 or 2.4% from $33.5 million for the fiscal
year ended June 30, 1997. Machines on route increased 41 machines or 5.1% to 842
machines at June 30, 1998 from 801 machines at June 30, 1997. Average machines
on route during fiscal 1998 increased 57 average machines or 7.4% to 827 average
machines from 770 average machines during fiscal 1997. The increase in route
revenue was due to the increased number of machines on route offset somewhat by
increased competition due to expansion of grocery store chains and local casino
operations. As a result of the increased competition, the trend of generally
flat year over year route revenue comparisons is expected to continue. The Mayor
of Las Vegas recently formed a committee to study the local effect of gaming in
grocery and convenience stores. The Company cannot predict the effect, if any,
that the study's results will have on its route operation's revenues and
profits.
 
    COSTS AND EXPENSES.  Total costs and expenses were $125.7 million for the
fiscal year ended June 30, 1998, an increase of $25.1 million or 25.0% from
$100.6 million for the fiscal year ended June 30, 1997. Total costs and expenses
as a percentage of total revenues decreased to 54.2% during fiscal 1998 from
65.4% during fiscal 1997.
 
    Costs and expenses of proprietary games operations were $13.5 million for
the fiscal year ended June 30, 1998, an increase of $2.4 million or 22.1% from
$11.0 million for the fiscal year ended June 30, 1997. Proprietary games costs
and expenses as a percentage of proprietary games revenues decreased to 11.9%
during fiscal year 1998 from 22.2% during fiscal year 1997. The increase in
proprietary games costs and expenses was due to increased machine parts,
production and service payroll, shipping and handling, and production supplies,
resulting primarily from increased machine conversions and maintenance. These
increases were offset to some extent by decreased costs and expenses relating to
the sale of tokens for the proprietary game Silver Strike. The decrease in
proprietary games costs as a percentage of revenue is primarily due to equity in
the income of the joint venture with IGT, which, for accounting purposes, is
recorded net of expenses. Additionally, revenues from the Company's proprietary
games, such as Wheel of Gold and Totem Pole, incur less costs and expenses as a
percentage of revenue than the Company's Silver Strike game, which previously
accounted for a larger percentage of the Company's proprietary games revenue.
Developments in world silver markets during the past year have resulted in
increased volatility in silver prices, which, if it persists, could affect the
profitability of the Silver Strike game.
 
                                       28
<PAGE>
    Costs and expenses of casino operations were $35.1 million for the fiscal
year ended June 30, 1998, an increase of $6.0 million or 20.5% from $29.1
million for the fiscal year ended June 30, 1997. Casino costs and expenses as a
percentage of casino revenue increased slightly to 42.7% during fiscal year 1998
from 42.0% during fiscal year 1997. The increase in casino costs and expenses
was primarily due to increased gaming taxes and promotions, and to a lesser
extent direct payroll, at both of the Company's Colorado casinos. Although the
Company can not predict the effect of the new and proposed casino openings in
Black Hawk on the Colorado Central Station Casino's operations, management
believes it is likely to increase both promotion and payroll cost in future
periods.
 
    Costs and expenses of route operations were $21.4 million for the fiscal
year ended June 30, 1998, an increase of $1.5 million or 7.7% from $19.9 million
for the fiscal year ended June 30, 1997. Costs and expenses of route operations
as a percentage of route revenue increased to 62.5% during fiscal year 1998
compared to 59.4% during fiscal year 1997. 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.
 
    SG&A expenses were $41.2 million for the fiscal year ended June 30, 1998, an
increase of $13.1 million or 46.4% from $28.2 million for the fiscal year ended
June 30, 1997. SG&A expenses as a percentage of total revenue decreased to 17.8%
during fiscal year 1998 compared to 18.3% during fiscal year 1997. The increase
in SG&A expenses is primarily due to increased expenses in the Company's
proprietary games operations of approximately $9.4 million, including increased
payroll and compensation costs, valuation allowances, and tax and licensing
costs, as well as increased legal costs and development costs incurred at the
holding Company level. The Company incurred approximately $1.0 million of
development costs related to the Canadian charity based casino initiative that
was cancelled by the Ontario provincial government on June 26, 1998.
 
    Depreciation and amortization expense was $12.7 million for the fiscal year
ended June 30, 1998, an increase of $3.9 million or 43.9% from $8.8 million for
the fiscal year ended June 30, 1997. This increase is primarily due to increased
depreciation and amortization expense incurred in the Company's proprietary
games operations and, to a lesser extent, increased depreciation and
amortization expense incurred at the Company's Colorado Central Station Casino.
 
    INCOME FROM OPERATIONS.  As a result of the factors discussed above, income
from operations was $106.2 million for the fiscal year ended June 30, 1998, an
increase of $53.0 million or 99.7% from $53.2 million for the fiscal year ended
June 30, 1997. As a percentage of total revenues, income from operations
increased to 45.8% during fiscal year 1998 from 34.6% during fiscal year 1997.
 
    INTEREST INCOME.  Interest income was $3.0 million for the fiscal year ended
June 30, 1998, a decrease of $804,000 or 21.2% from $3.8 million for the fiscal
year ended June 30, 1997. The decrease is due to decreased short-term
investments resulting from decreased cash balances during the year.
 
    INTEREST EXPENSE.  Interest expense was $226,000 for the fiscal year ended
June 30, 1998, a decrease of $62,000 or 21.5% from $288,000 for the fiscal year
ended June 30, 1997. The decrease is due to reduced average notes payable during
fiscal year 1998 as compared to fiscal year 1997. At June 30, 1998, the Company
had no long or short-term notes payable.
 
    NET INCOME.  As a result of the factors discussed above, net income was
$68.4 million for the fiscal year ended June 30, 1998, an increase of $32.7
million or 91.7% from $35.7 million for the fiscal year ended June 30, 1997.
 
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.
 
                                       29
<PAGE>
    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 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 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 65.4% during fiscal 1997 from
70.9% during fiscal 1996.
 
    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. 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. Prior to
the introduction of Wheel of Gold, most of the proprietary games operations'
costs were associated with the production of Silver Strike tokens. 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 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 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.
 
    SG&A expenses were $28.2 million for the fiscal year ended June 30, 1997, an
increase of $7.1 million or 33.6% 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 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.
 
                                       30
<PAGE>
    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.
 
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. In October
1997, certain shareholders of the Company completed a secondary public offering.
The Company did not receive any proceeds from the October 1997 offering. Net
cash provided by operating activities was $68.2 million during fiscal year 1998
and $43.4 million during fiscal year 1997. At June 30, 1998, the Company had
cash and cash equivalents of $73.2 million, working capital of $54.4 million,
and a $10.0 million unsecured revolving bank line of credit (the "Bank
Revolver").
 
    In fiscal year 1998, the Company spent $22.5 million on capital
expenditures, primarily related to the purchase of gaming devices and equipment
for use in its proprietary games operations. The Company anticipates that
capital expenditures for the fiscal year ending June 30, 1999 will be at least
$19.0 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. In December 1997, the board of directors
authorized a repurchase of up to 513,975 additional shares of Common Stock. As
of June 30, 1998, the Company had repurchased 974,375 shares of Common Stock at
a cost of $49.6 million, 638,375 shares were repurchased during fiscal 1998 at a
cost of $36.1 million and 336,000 shares were repurchased during fiscal 1997 at
a cost of $13.5 million. At June 30, 1998 there was a balance of 539,600
authorized shares remaining under the repurchase program.
 
    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.
 
                                       31
<PAGE>
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 1998 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 and the development and purchase of proprietary
gaming machines in formats that have not yet been introduced. 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.
 
RECENTLY ADOPTED ACCOUNTING STANDARDS
 
    The American Institute of Certified Public Accountants' Accounting Standards
Executive Committee issued Statement of Position No. 98-5, Reporting on the
Costs of Start-Up Activities. This standard provides guidance on the financial
reporting for start-up costs and organization costs. This standard requires
costs of start-up activities and organization costs to be expensed as incurred
and is effective for fiscal years beginning after December 15, 1998, although
earlier application is encouraged. Management believes that this standard could
have a material effect on the Company's consolidated financial statements
depending on the status of the Company's current and future expansion projects
at the time this standard is adopted.
 
    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.
 
YEAR 2000
 
    In the past, many computer software programs were written using two digits
rather than four to define the applicable year. As a result, date-sensitive
computer software may recognize a date using "00" as the year 1900 rather than
the year 2000. This is generally referred to as the "Year 2000 Problem." If this
situation occurs, the potential exists for computer system failures or
miscalculations by computer programs, which could disrupt operations.
 
    The Company has conducted a comprehensive review of its computer and other
systems deemed to be date sensitive (as well as those of its unconsolidated
affiliates) to assess its exposure to the Year 2000 Problem. The Company is
already in the process of modifying or replacing those systems that are not Year
2000 compliant. Based upon the comprehensive review, management believes that
the Company's systems
 
                                       32
<PAGE>
are compliant or will be compliant by mid-1999. However, if modifications are
not made or not completed within an adequate time frame, the Year 2000 Problem
could have a material adverse effect on the operations of the Company.
 
    In addition, the Company has communicated with its major vendors and
suppliers to determine their state of readiness relative to the Year 2000
Problem and the Company's exposure to third party Year 2000 issues. However,
there can be no guarantee that the systems of other companies on which the
Company's systems rely will be timely converted, or that representations made to
the Company by third parties are in fact accurate. As a result, the failure of a
major vendor or supplier to adequately address their Year 2000 Problem could
have a material adverse effect on the operations of the Company.
 
    All costs related to the Company's Year 2000 Problem are being expensed as
incurred, while the cost of new hardware or software, is being capitalized and
amortized over its expected useful life. The costs associated with Year 2000
compliance have not been and are not anticipated to be material to the Company's
financial position or results of operations. Specifically, as of June 30, 1998,
the Company has spent less than $100,000 and anticipates spending less than
$500,000 thereafter. These costs and estimated completion dates are based upon
management's best estimates, as well as third party modification plans and other
factors. However, there can be no guarantee that these estimates will be
achieved and actual results could differ from these plans. The Company does not
have a contingency plan relative to the Year 2000 Problem, although it intends
to develop one before June 30, 1999.
 
                                       33
<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
 
                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
 
<TABLE>
<CAPTION>
                                                                                                            PAGE NO.
                                                                                                          -------------
<S>                                                                                                       <C>
Independent Auditors' Report............................................................................           35
Consolidated Balance Sheets as of June 30, 1998 and 1997................................................           36
Consolidated Statements of Income for Fiscal Years Ended June 30, 1998, 1997, and 1996..................           37
Consolidated Statements of Stockholders' Equity for Fiscal Years Ended June 30, 1998, 1997, and 1996....           38
Consolidated Statements of Cash Flows for the Fiscal Years Ended June 30, 1998, 1997, and 1996..........           39
Notes to Consolidated Financial Statements..............................................................           40
</TABLE>
 
                                       34
<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, 1998 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, 1998. Our audits also
included the financial statement schedule listed in the index at Item 14. These
financial statements and financial statement schedule 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
misstatement. 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, 1998 and 1997, and the results of their operations and their cash
flows for each of the three years in the period ended June 30, 1998 in
conformity with generally accepted accounting principles. Also, in our opinion,
the financial statement schedule, when considered in relation to the basic
consolidated financial statements taken as a whole, present fairly, in all
material respects, the information set forth therein.
 
                                          DELOITTE & TOUCHE LLP
 
Las Vegas, Nevada
July 31, 1998
 
                                       35
<PAGE>
                                 ANCHOR GAMING
 
                          CONSOLIDATED BALANCE SHEETS
 
<TABLE>
<CAPTION>
                                                                                              JUNE 30,
                                                                                   ------------------------------
                                                                                        1998            1997
                                                                                   --------------  --------------
<S>                                                                                <C>             <C>
                                                     ASSETS
 
Current assets:
  Cash and cash equivalents......................................................  $   73,187,295  $   66,427,369
  Accounts receivable, net.......................................................       8,977,254       6,358,052
  Inventory......................................................................       3,869,496       3,196,918
  Prepaid expenses...............................................................       1,951,947       1,835,913
  Other current assets...........................................................          53,688         445,799
                                                                                   --------------  --------------
    Total current assets.........................................................      88,039,680      78,264,051
  Property and equipment, net....................................................      94,791,189      85,033,436
  Long-term notes receivable, net................................................       2,234,856       1,543,159
  Intangible assets, net.........................................................       3,534,048       2,128,306
  Investments in unconsolidated affiliates.......................................      32,638,738       7,570,712
  Deposits and other.............................................................      23,895,032      14,336,705
                                                                                   --------------  --------------
    Total assets.................................................................  $  245,133,543  $  188,876,369
                                                                                   --------------  --------------
                                                                                   --------------  --------------
 
                                      LIABILITIES AND STOCKHOLDERS' EQUITY
 
Current liabilities:
  Accounts payable...............................................................  $    5,994,029  $    2,663,156
  Accrued salaries, wages and vacation pay.......................................       3,905,951       2,712,764
  Income tax payable.............................................................      12,469,108       2,138,934
  Other current liabilities......................................................      11,221,310       6,103,394
                                                                                   --------------  --------------
    Total current liabilities....................................................      33,590,398      13,618,248
  Long-term notes payable, principal stockholder.................................        --             2,800,000
  Other long-term liabilities....................................................        --               143,691
  Minority interest in consolidated subsidiary...................................       1,061,470         983,562
                                                                                   --------------  --------------
    Total liabilities and minority interest in consolidated subsidiary...........      34,651,868      17,545,501
                                                                                   --------------  --------------
  Commitments and contingencies..................................................        --              --
 
Stockholders' equity:
  Preferred stock, $.01 par value, 1,000,000 shares authorized, 0 shares issued
    and outstanding at June 30, 1998 and 1997....................................        --              --
  Common stock, $.01 par value, 50,000,000 shares authorized, 13,758,375 issued
    and 12,593,232 outstanding at June 30, 1998, 13,579,575 issued and 13,052,807
    outstanding at June 30, 1997.................................................         137,584         135,796
  Additional paid-in capital.....................................................     114,179,417     107,267,684
  Treasury stock at cost, 1,165,143 shares at June 30, 1998, 526,768 shares at
    June 30, 1997................................................................     (52,731,940)    (16,569,329)
  Retained earnings..............................................................     148,896,614      80,496,717
                                                                                   --------------  --------------
    Total stockholders' equity...................................................     210,481,675     171,330,868
                                                                                   --------------  --------------
    Total liabilities and stockholders' equity...................................  $  245,133,543  $  188,876,369
                                                                                   --------------  --------------
                                                                                   --------------  --------------
</TABLE>
 
                 See notes to consolidated financial statements
 
                                       36
<PAGE>
                                 ANCHOR GAMING
 
                       CONSOLIDATED STATEMENTS OF INCOME
 
<TABLE>
<CAPTION>
                                                                               YEARS ENDED JUNE 30,
                                                                  ----------------------------------------------
                                                                       1998            1997            1996
                                                                  --------------  --------------  --------------
<S>                                                               <C>             <C>             <C>
Revenues:
  Proprietary games operations..................................  $  113,677,299  $   49,715,779  $   21,457,135
  Casino operations.............................................      82,138,781      69,223,321      65,125,194
  Route operations..............................................      34,313,802      33,509,497      28,650,989
  Other.........................................................       1,801,899       1,300,002       1,233,003
                                                                  --------------  --------------  --------------
    Total revenues..............................................     231,931,781     153,748,599     116,466,321
                                                                  --------------  --------------  --------------
Costs and expenses:
  Proprietary games operations..................................      13,475,096      11,039,227      12,113,595
  Casino operations.............................................      35,064,884      29,100,285      26,830,475
  Route operations..............................................      21,441,590      19,904,608      17,158,172
  Other.........................................................       1,840,507       1,431,734       1,300,012
  Selling, general and administrative...........................      41,217,693      28,163,608      21,073,631
  Project cost write-downs......................................        --             2,116,968        --
  Depreciation and amortization.................................      12,660,680       8,798,163       4,109,835
                                                                  --------------  --------------  --------------
    Total costs and expenses....................................     125,700,450     100,554,593      82,585,720
                                                                  --------------  --------------  --------------
Income from operations..........................................     106,231,331      53,194,006      33,880,601
                                                                  --------------  --------------  --------------
Other income (expense):
  Interest income...............................................       2,988,422       3,792,739       2,028,347
  Interest expense..............................................        (225,811)       (287,711)       (428,991)
  Other income..................................................       1,157,217         288,703         260,439
  Minority interest in earnings of consolidated subsidiary......        (711,324)       (310,607)       (217,793)
                                                                  --------------  --------------  --------------
    Total other income (expense)................................       3,208,504       3,483,124       1,642,002
                                                                  --------------  --------------  --------------
Income before provision for income taxes........................     109,439,835      56,677,130      35,522,603
Income tax provision............................................      41,039,938      21,000,702      13,187,559
                                                                  --------------  --------------  --------------
Net income......................................................  $   68,399,897  $   35,676,428  $   22,335,044
                                                                  --------------  --------------  --------------
                                                                  --------------  --------------  --------------
Basic earnings per share........................................  $         5.36  $         2.68  $         1.89
                                                                  --------------  --------------  --------------
                                                                  --------------  --------------  --------------
Weighted average shares outstanding.............................      12,750,622      13,321,282      11,819,593
                                                                  --------------  --------------  --------------
                                                                  --------------  --------------  --------------
Diluted earnings per share......................................  $         5.20  $         2.63  $         1.86
                                                                  --------------  --------------  --------------
                                                                  --------------  --------------  --------------
Weighted average common and common equivalent shares
  outstanding...................................................      13,160,524      13,541,515      12,038,344
                                                                  --------------  --------------  --------------
                                                                  --------------  --------------  --------------
</TABLE>
 
                 See notes to consolidated financial statements
 
                                       37
<PAGE>
                                 ANCHOR GAMING
 
                CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
 
<TABLE>
<CAPTION>
                                       COMMON STOCK            TREASURY STOCK        ADDITIONAL
                                   ---------------------  ------------------------     PAID-IN       RETAINED
                                     SHARES     AMOUNT      SHARES       AMOUNT        CAPITAL       EARNINGS       TOTAL
                                   ----------  ---------  ----------  ------------  -------------  ------------  ------------
<S>                                <C>         <C>        <C>         <C>           <C>            <C>           <C>
Balance--July 1, 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
    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
    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
  Stock issued for exercise of
    options......................     178,800      1,788                               2,557,637                    2,559,425
  Treasury shares purchased......                           (638,375)  (36,162,611)                               (36,162,611)
  Tax effects of stock option
    transactions.................                                                      4,354,096                    4,354,096
  Net income.....................                                                                    68,399,897    68,399,897
                                   ----------  ---------  ----------  ------------  -------------  ------------  ------------
 
Balance--June 30, 1998...........  13,758,375  $ 137,584  (1,165,143) $(52,731,940)  $114,179,417  $148,896,614  $210,481,675
                                   ----------  ---------  ----------  ------------  -------------  ------------  ------------
                                   ----------  ---------  ----------  ------------  -------------  ------------  ------------
</TABLE>
 
                 See notes to consolidated financial statements
 
                                       38
<PAGE>
                                 ANCHOR GAMING
 
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
 
<TABLE>
<CAPTION>
                                                                                  YEARS ENDED JUNE 30,
                                                                       -------------------------------------------
                                                                           1998           1997           1996
                                                                       -------------  -------------  -------------
<S>                                                                    <C>            <C>            <C>
Cash flows from operating activities:
  Net income.........................................................  $  68,399,897  $  35,676,428  $  22,335,044
                                                                       -------------  -------------  -------------
  Adjustments to reconcile net income to net cash provided by
    operating activities:
    Loss on disposal of assets, including project cost write-downs...        423,009      2,208,878       --
    Depreciation and amortization....................................     12,832,757      8,955,446      4,085,573
    Provision for doubtful accounts and notes........................        685,621        364,000        105,000
    Minority interest in earnings of consolidated subsidiary in
      excess of cash distributed.....................................         77,908        310,607        217,793
    Unconsolidated affiliates' earnings in excess of distributions...    (25,068,026)    (7,570,712)      --
  (Increase) decrease in assets:
    Accounts receivable..............................................     (3,304,823)    (2,001,363)    (1,802,054)
    Inventory........................................................       (672,578)         1,037       (842,765)
    Other current assets.............................................        353,322        (83,898)        34,772
    Prepaid expenses.................................................       (116,034)       (96,650)      (105,769)
    Deposits and other assets........................................     (9,610,009)     1,964,543         58,925
  Increase (decrease) in liabilities:
    Accounts payable.................................................      3,330,873     (1,911,057)     2,763,320
    Accrued salaries, wages and vacation pay.........................      1,193,187        224,750        380,048
    Income tax payable...............................................     14,684,270      2,955,801        776,683
    Other liabilities................................................      4,974,225      2,394,423        762,794
                                                                       -------------  -------------  -------------
      Total adjustments..............................................       (216,298)     7,715,805      6,434,320
                                                                       -------------  -------------  -------------
Net cash provided by operating activities............................     68,183,599     43,392,233     28,769,364
                                                                       -------------  -------------  -------------
Cash flows from investing activities:
  Acquisition and construction of property and equipment.............    (22,498,825)   (38,108,284)   (27,916,341)
  Expenditures for intangible assets.................................     (1,922,338)      (488,715)      (274,013)
  Proceeds from sale of equipment....................................         53,584        117,254        530,377
  Issuance of notes receivable.......................................     (2,039,921)    (1,405,157)      (114,614)
  Principal reductions on notes receivable...........................      1,387,013      1,009,408        947,678
  Payments to extend operating leases................................       --             --           (5,000,000)
  Advances to joint venture..........................................       --           (3,100,000)      --
                                                                       -------------  -------------  -------------
    Net cash used in investing activities............................    (25,020,487)   (41,975,494)   (31,826,913)
                                                                       -------------  -------------  -------------
Cash flows from financing activities:
  Net proceeds from sale of stock and warrants.......................      2,559,425      1,321,600     58,277,115
  Treasury stock purchases...........................................    (36,162,611)   (13,473,500)      --
  Principal payments on loans from related parties...................     (2,800,000)      --           (3,189,447)
  Principal payments on other loans..................................       --             (950,000)       (50,000)
                                                                       -------------  -------------  -------------
    Net cash provided by (used in) financing activities..............    (36,403,186)   (13,101,900)    55,037,668
                                                                       -------------  -------------  -------------
Net increase (decrease) in cash and cash equivalents.................      6,759,926    (11,685,161)    51,980,119
Cash and cash equivalents, beginning of year.........................     66,427,369     78,112,530     26,132,411
                                                                       -------------  -------------  -------------
Cash and cash equivalents, end of year...............................  $  73,187,295  $  66,427,369  $  78,112,530
                                                                       -------------  -------------  -------------
                                                                       -------------  -------------  -------------
Supplemental disclosure of cash flow information:
  Cash paid for interest.............................................  $     225,811  $     257,994  $     392,643
                                                                       -------------  -------------  -------------
                                                                       -------------  -------------  -------------
  Cash paid for income taxes.........................................  $  36,741,793  $  18,044,900  $  12,404,763
                                                                       -------------  -------------  -------------
                                                                       -------------  -------------  -------------
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
 
                                       39
<PAGE>
                                 ANCHOR GAMING
 
                   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 were 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 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.
 
    On October 17, 1997, Anchor completed an offering of 1.8 million shares of
common stock at a price of $91 per share, in which all of the shares were sold
by selling stockholders. The Company did not receive any proceeds from the
offering.
 
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 at the date of acquisition.
 
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 of 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, 1998 and 1997.
 
INVESTMENTS IN DEBT SECURITIES
 
    The Company's investment securities, along with certain cash and cash
equivalents that are not deemed securities under Statement of Financial
Accounting Standards ("SFAS") No. 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, 1998 and 1997 as held-to-maturity. Held-to-
 
                                       40
<PAGE>
                                 ANCHOR GAMING
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
maturity securities are required to be carried at amortized cost. The securities
classified as held-to-maturity consist of the following amortized costs at June
30:
 
<TABLE>
<CAPTION>
                                                                     1998           1997
                                                                 -------------  -------------
<S>                                                              <C>            <C>
Debt securities issued by the U.S. Treasury and other U.S.
  government agencies..........................................  $  55,604,000  $  52,734,000
</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, 1998 and 1997 approximates amortized cost
due to 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, 1998 and 1997
were $1,332,404 and $665,605, respectively.
 
INVENTORY
 
    Inventory consists of silver and silver tokens, parts for gaming machines,
and food and beverage items. Silver inventory of $1,067,381 and $594,615 at June
30, 1998 and 1997, 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
their lease terms using either straight-line or accelerated methods. Estimated
useful lives for furniture and equipment are 3 to 7 years, for leasehold
improvements are 4 1/2 years to 31 1/2 years and for buildings and improvements
are 30 years. Property and equipment is evaluated for recoverability under the
requirements of SFAS No. 121 "Accounting for Impairment of Long-Lived Assets and
for Long-Lived Assets to be Disposed of" whenever impairment indicators are
present.
 
INTANGIBLE ASSETS
 
    Intangible assets include goodwill associated with the Acquisition, which is
amortized on a straight-line basis over 10 years, and goodwill associated with
the purchase of assets of an engineering company which is amortized on a
straight-line basis over 3 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 1 to 15 years. Intangible assets are evaluated for
recoverability under the requirements of SFAS No. 121 "Accounting for Impairment
of Long-Lived Assets and for Long-Lived Assets to be Disposed of" whenever
impairment indicators are present.
 
                                       41
<PAGE>
OTHER CURRENT LIABILITIES
 
    Included in other current liabilities are $3,519,000 and $333,000 in
employee royalties payable at June 30, 1998 and 1997, respectively.
 
REVENUE RECOGNITION
 
    In accordance with industry practice, the Company recognizes 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 $1,712,219,
$1,365,897, and $1,162,495 for the fiscal years ended June 30, 1998, 1997, and
1996, respectively.
 
RESEARCH AND DEVELOPMENT COSTS
 
    Research and development costs are expensed as incurred and are included in
selling, general, and administrative costs. Research and development costs of
$1,922,000, $2,023,000 and $608,000 were expensed for the fiscal years ended
June 30, 1998, 1997, and 1996, respectively.
 
RECLASSIFICATIONS
 
    Certain amounts in the June 30, 1997 balance sheet have been reclassified to
be consistent with the balance sheet presentation used at June 30, 1998.
 
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 ISSUED ACCOUNTING STANDARDS
 
    The American Institute of Certified Public Accountants' Accounting Standards
Executive Committee issued Statement of Position No. 98-5, "Reporting on the
Costs of Start-Up Activities". This standard provides guidance on the financial
reporting for start-up costs and organization costs. This standard requires
costs of start-up activities and organization costs to be expensed as incurred
and is effective for fiscal years beginning after December 15, 1998, although
earlier application is encouraged. Management believes that this standard could
have a material effect on the Company's consolidated financial statements
depending on the status of the Company's current and future expansion projects
at the time this standard is adopted.
 
    SFAS No. 130, "Reporting Comprehensive Income" was issued in June 1997. 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
No. 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 consolidated financial statements.
 
                                       42
<PAGE>
    SFAS No. 131, "Disclosure About Segments of an Enterprise and Related
Information" was issued in June 1997. 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 No. 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
No. 131.
 
3. NOTES RECEIVABLE
 
    Notes receivable include notes due from various slot route location owners
with interest rates ranging from 8% to 12% to be paid over periods ranging from
3 months to 20 years. At June 30, 1997, notes receivable also include notes due
from an unaffiliated gaming company and its stockholders for business
development, which accrue interest at the prime rate. These notes were
extinguished during the year ended June 30, 1998. Notes receivable consist of
the following at June 30:
 
<TABLE>
<CAPTION>
                                                                        1998          1997
                                                                    ------------  ------------
<S>                                                                 <C>           <C>
Loans to unaffiliated gaming companies............................  $    --       $    610,905
Location loans for operating rights...............................     2,570,848       700,435
Loans to employees................................................       --          1,200,000
                                                                    ------------  ------------
                                                                       2,570,848     2,511,340
Less allowance for doubtful accounts..............................       329,163       922,562
                                                                    ------------  ------------
                                                                       2,241,685     1,588,778
Less current portion:
Location loans for operating rights...............................         6,829        45,619
                                                                    ------------  ------------
Long-term notes receivable, net...................................  $  2,234,856  $  1,543,159
                                                                    ------------  ------------
                                                                    ------------  ------------
</TABLE>
 
    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%. These
loans were paid in full during the year ended June 30, 1998.
 
4. PROPERTY AND EQUIPMENT
 
    Property and equipment consist of the following at June 30:
 
<TABLE>
<CAPTION>
                                                                    1998            1997
                                                               --------------  --------------
<S>                                                            <C>             <C>
Land and improvements........................................  $   17,576,170  $   15,316,178
Buildings and improvements...................................      13,326,479      13,023,440
Gaming equipment.............................................      80,362,267      61,641,351
Furniture, fixtures and equipment............................       6,905,138       5,144,212
Leasehold improvements.......................................       6,282,043       6,143,415
Construction in progress.....................................        --             1,496,089
                                                               --------------  --------------
                                                                  124,452,097     102,764,685
Less accumulated depreciation................................      29,660,908      17,731,249
                                                               --------------  --------------
    Total....................................................  $   94,791,189  $   85,033,436
                                                               --------------  --------------
                                                               --------------  --------------
</TABLE>
 
    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
 
                                       43
<PAGE>
specifically related to architectural fees, building design costs, and deferred
rent that were determined to have no future benefit.
 
5. INTANGIBLE ASSETS
 
    Intangible assets consist of the following at June 30:
 
<TABLE>
<CAPTION>
                                                                        1998          1997
                                                                    ------------  ------------
<S>                                                                 <C>           <C>
Lease acquisition costs...........................................  $  2,408,951  $  2,312,951
Goodwill..........................................................     2,911,253     1,134,865
Patents...........................................................        98,595        98,595
Organization costs and other......................................       221,310       221,310
                                                                    ------------  ------------
                                                                       5,640,109     3,767,721
Less accumulated amortization.....................................     2,106,061     1,639,415
                                                                    ------------  ------------
    Total.........................................................  $  3,534,048  $  2,128,306
                                                                    ------------  ------------
                                                                    ------------  ------------
</TABLE>
 
    During the year ended June 30, 1998, the Company purchased the assets of an
engineering company, owned by an employee of the Company, that had previously
been developing products for the exclusive use of the Company in its proprietary
games operations. The total purchase price of $2,041,000 exceeded the fair value
of the identifiable assets by $1,776,000. The excess purchase price is recorded
as goodwill and is being amortized over three years on a straight-line basis.
 
6. INVESTMENTS IN UNCONSOLIDATED AFFILIATES
 
    The Company has investments in unconsolidated affiliates that are accounted
for under the equity method. Under the equity method, original investments are
recorded at cost and adjusted by the Company's share of earnings, losses and
distributions of these affiliates. Investments in unconsolidated affiliates
consist primarily of a 50% interest in a joint venture (the "Joint Venture")
with International Game Technology ("IGT"). The primary business of the Joint
Venture is to distribute gaming machines on wide-area progressive systems. The
Company's share of net earnings from the Joint Venture are included in revenue
from proprietary games operations.
 
    The Joint Venture operates on a September 30 year-end and began operations
during the quarter ended March 31, 1997. Summarized results of operations of the
Joint Venture for the year ended June 30, 1998 and the period from inception
through June 30, 1997 are as follows:
 
<TABLE>
<CAPTION>
                                                                     1998           1997
                                                                --------------  -------------
<S>                                                             <C>             <C>
Revenues......................................................  $  212,237,000  $  21,532,000
Expenses......................................................      99,572,000     12,465,000
Operating income..............................................     112,665,000      9,067,000
Net income....................................................     113,323,000      9,109,000
</TABLE>
 
    Summarized balance sheet information of the Joint Venture as of June 30 is
as follows:
 
<TABLE>
<CAPTION>
                                                                     1998           1997
                                                                 -------------  -------------
<S>                                                              <C>            <C>
Current assets.................................................  $  66,665,000  $  22,115,000
Property and other long-term assets, net.......................     84,282,000     16,001,000
Current liabilities............................................     16,640,000     15,097,000
Long-term debt and other liabilities...........................     67,519,000      7,967,000
Equity.........................................................     66,788,000     15,052,000
</TABLE>
 
                                       44
<PAGE>
    The Joint Venture is subject to various risks and uncertainties including,
but not limited to, gaming regulatory requirements. The Company's Annual Report
on Form 10-K includes a comprehensive set of the Company's risk factors,
including those related to the Joint Venture. The Joint Venture's operations are
subject to the licensing and regulatory requirements of multiple jurisdictions
throughout the United States and Canada. The Company's, IGT's and the Joint
Venture'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.
 
7. NOTES PAYABLE PRINCIPAL STOCKHOLDER
 
    Notes payable to the principal stockholder of $2,800,000 at June 30, 1997
consist of unsecured notes payable bearing interest at 8% that were due July 1,
1998. The notes were paid in full during the year ended June 30, 1998. Notes
payable to the principal stockholder resulted in interest expense of $223,693,
$223,693, and $289,373 for the years ended June 30, 1998, 1997, and 1996,
respectively, and accrued interest payable of $18,400 at June 30, 1997.
 
8. 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,
1998, the Company had not borrowed under the Bank Revolver.
 
9. EARNINGS PER SHARE
 
    During the year ended June 30, 1998, the Company adopted SFAS No. 128
"Earnings per Share." This statement established standards for computing and
presenting earnings per share and required restatement of all prior-period
earnings per share data presented. A reconciliation of income and shares for
basic and diluted earnings per share (EPS) for the years ended June 30 is as
follows:
<TABLE>
<CAPTION>
                                           1998                                  1997                          1996
                           ------------------------------------  ------------------------------------  ---------------------
                                                    PER-SHARE                             PER-SHARE
                             INCOME     SHARES       AMOUNT        INCOME     SHARES       AMOUNT        INCOME     SHARES
                           ----------  ---------  -------------  ----------  ---------  -------------  ----------  ---------
<S>                        <C>         <C>        <C>            <C>         <C>        <C>            <C>         <C>
Basic EPS:
  Net income.............  $68,399,897 12,750,622   $    5.36    $35,676,428 13,321,282   $    2.68    $22,335,044 11,819,593
Effect of Dilutive
  Securities:
  Options................      --        409,902        ( .16)       --        220,233        ( .05)       --        218,751
                           ----------  ---------        -----    ----------  ---------        -----    ----------  ---------
Diluted EPS:
  Net Income.............  $68,399,897 13,160,524   $    5.20    $35,676,428 13,541,515   $    2.63    $22,335,044 12,038,344
                           ----------  ---------        -----    ----------  ---------        -----    ----------  ---------
                           ----------  ---------        -----    ----------  ---------        -----    ----------  ---------
 
<CAPTION>
 
                             PER-SHARE
                              AMOUNT
                           -------------
<S>                        <C>
Basic EPS:
  Net income.............    $    1.89
Effect of Dilutive
  Securities:
  Options................        ( .03)
                                 -----
Diluted EPS:
  Net Income.............    $    1.86
                                 -----
                                 -----
</TABLE>
 
10. OPTIONS AND WARRANTS
 
    As of June 30, 1998, 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 1,054,500 shares at
the fair market values at the grant dates have been granted as of June 30, 1998.
As of June 30, 1998, options to purchase 541,275 shares had been exercised. Of
the 1,054,500 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
 
                                       45
<PAGE>
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, 25,000 vest in
equal annual installments over ten years, 99,000 vest in three equal
installments over five 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, 1998), 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,
1998.
 
    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.
 
    Summarized information for all options is as follows for the years ended
June 30:
 
<TABLE>
<CAPTION>
                                                 1998                        1997                        1996
                                      --------------------------  --------------------------  --------------------------
                                                    WEIGHTED                    WEIGHTED                    WEIGHTED
                                                     AVERAGE                     AVERAGE                     AVERAGE
                                       OPTIONS   EXERCISE PRICE    OPTIONS   EXERCISE PRICE    OPTIONS   EXERCISE PRICE
                                      ---------  ---------------  ---------  ---------------  ---------  ---------------
<S>                                   <C>        <C>              <C>        <C>              <C>        <C>
Outstanding, beginning of the
  year..............................  1,133,025     $   24.98       670,700     $   17.79       820,300     $   12.95
  Granted...........................    124,000         56.03       600,000         31.88       288,000         25.07
  Exercised.........................   (178,800)        14.31      (105,425)        12.54      (418,600)        13.57
  Canceled..........................    (17,300)        31.57       (32,250)        44.44       (19,000)        12.00
                                      ---------        ------     ---------        ------     ---------        ------
Outstanding, end of the year........  1,060,925     $   30.30     1,133,025     $   24.98       670,700     $   17.79
                                      ---------        ------     ---------        ------     ---------        ------
                                      ---------        ------     ---------        ------     ---------        ------
Exercisable at end of the year......    271,675     $   21.51       245,475     $   16.11       148,050     $   12.31
                                      ---------        ------     ---------        ------     ---------        ------
                                      ---------        ------     ---------        ------     ---------        ------
Options available for grant.........     82,800                     189,500                     107,250
                                      ---------                   ---------                   ---------
                                      ---------                   ---------                   ---------
</TABLE>
 
    The following table summarizes information about the options outstanding at
June 30, 1998:
 
<TABLE>
<CAPTION>
                                      OPTIONS OUTSTANDING                    OPTIONS EXERCISABLE
                        -----------------------------------------------  ----------------------------
                          NUMBER                            WEIGHTED        NUMBER        WEIGHTED
                        OUTSTANDING   WEIGHTED AVERAGE       AVERAGE      EXERCISABLE      AVERAGE
   RANGE OF EXERCISE    AT JUNE 30,       REMAINING         EXERCISE      AT JUNE 30,     EXERCISE
              PRICES       1998       CONTRACTUAL LIFE        PRICE          1998           PRICE
----------------------  -----------  -------------------  -------------  -------------  -------------
<S>                     <C>          <C>                  <C>            <C>            <C>
  $   12.00 - $13.50       124,625              5.6         $   12.21          85,875     $   12.22
      14.75 -  21.75       211,800              7.0             21.69         110,800         21.70
      31.88 -  46.88       608,000              8.7             32.07          75,000         31.88
      55.75 -  72.88       116,500              9.5             56.04         --             --
                                                 --
                        -----------                            ------    -------------       ------
                         1,060,925              8.1         $   30.30         271,675     $   21.51
                                                 --
                                                 --
                        -----------                            ------    -------------       ------
                        -----------                            ------    -------------       ------
</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.
 
    During the fiscal year ended June 30, 1998, 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"). 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 with a par value of $20.00 per share. Each Right under the Rights Plan
will entitle the registered holder to purchase from the Company a unit (a
"Unit") consisting of one
 
                                       46
<PAGE>
one-thousandth of a share of Series A Junior Participating Preferred stock at a
purchase price of $400 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 Rights Plan is filed as Exhibit 4.2 to the Company's
Annual Report on Form 10-K.
 
    The Company has adopted the disclosures-only provision of SFAS No. 123,
"Accounting for Stock-Based Compensation". The Company applies APB Opinion No.
25 and related interpretations in accounting for its stock options. Under APB
No. 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 No. 123, the Company's net income per common and
common equivalent share would have decreased to the pro forma amounts indicated
below for the years ended June 30:
 
<TABLE>
<CAPTION>
                                                      1998           1997           1996
                                                  -------------  -------------  -------------
<S>                                               <C>            <C>            <C>
Net income--as reported.........................  $  68,399,897  $  35,676,428  $  22,335,044
Net income--pro forma...........................     66,946,613     34,940,303     21,758,657
Basic earnings per share--as reported...........  $        5.36  $        2.68  $        1.89
Basic earnings per share--pro forma.............           5.25           2.62           1.84
Diluted earnings per share--as reported.........           5.20           2.63           1.86
Diluted earnings per share--pro forma...........           5.09           2.58           1.81
</TABLE>
 
    The fair value of each option granted in fiscal years 1998, 1997 and 1996
was estimated using the following assumptions for the Black-Scholes option
pricing model: (i) no dividends; (ii) expected volatility of 60% for 1998 and
50% for 1997 and 1996; (iii) risk free interest rates averaging 6% for all
years; and (iv) an expected average life of 4.6 years for 1998, 3.6 years for
1997 and 3.2 years for 1996. The weighted average fair value of the options
granted in 1998, 1997 and 1996 were $30.00, $9.82 and $9.03, respectively.
Because the SFAS No. 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.
 
11. 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 of gaming revenue
and $145,684 of route costs during the year ended June 30, 1996.
 
    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>
12. INCOME TAXES
 
    The provision for income taxes for the years ended June 30, 1998, 1997 and
1996 are as follows:
 
<TABLE>
<CAPTION>
                                                      1998           1997           1996
                                                  -------------  -------------  -------------
<S>                                               <C>            <C>            <C>
Currently payable per tax return:
  Federal.......................................  $  47,257,634  $  20,066,284  $  11,750,029
  State.........................................      4,168,430      1,369,887        846,278
                                                  -------------  -------------  -------------
                                                     51,426,064     21,436,171     12,596,307
                                                  -------------  -------------  -------------
Deferred:
  Federal.......................................     (9,510,554)      (399,219)       579,569
  State.........................................       (875,572)       (36,250)        11,683
                                                  -------------  -------------  -------------
                                                    (10,386,126)      (435,469)       591,252
                                                  -------------  -------------  -------------
    Total.......................................  $  41,039,938  $  21,000,702  $  13,187,559
                                                  -------------  -------------  -------------
                                                  -------------  -------------  -------------
</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>
                                                           1998                      1997                      1996
                                                 ------------------------  ------------------------  ------------------------
<S>                                              <C>            <C>        <C>            <C>        <C>            <C>
Statutory U.S. tax rate........................  $  38,303,942       35.0% $  19,836,995       35.0% $  12,432,911       35.0%
Increase in tax resulting from:
  State income taxes, net of federal tax
    effect.....................................      2,140,358        2.0        866,864        1.5        557,674        1.6
  Other, net...................................        595,638         .5        296,843         .6        196,974         .5
                                                 -------------        ---  -------------        ---  -------------        ---
Actual provision for income taxes..............  $  41,039,938       37.5% $  21,000,702       37.1% $  13,187,559       37.1%
                                                 -------------        ---  -------------        ---  -------------        ---
                                                 -------------        ---  -------------        ---  -------------        ---
</TABLE>
 
    SFAS 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 purposes and the
amounts used for income tax purposes. The tax items comprising the Company's net
deferred tax asset as of June 30, 1998 and 1997 are as follows:
 
<TABLE>
<CAPTION>
                                                                       1998           1997
                                                                   -------------  ------------
<S>                                                                <C>            <C>
Deferred tax assets:
  Receivable reserve.............................................  $   1,048,000  $    617,000
  Pre-opening expenditures.......................................         33,000        86,000
  Expenses not currently deductible..............................     10,832,000       417,000
                                                                   -------------  ------------
                                                                      11,913,000     1,120,000
Deferred tax liabilities:
  Difference between book and tax basis of property..............     (1,283,000)     (876,000)
                                                                   -------------  ------------
Net deferred tax asset...........................................  $  10,630,000  $    244,000
                                                                   -------------  ------------
                                                                   -------------  ------------
</TABLE>
 
                                       48
<PAGE>
13. 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 $256,000, $254,472 and $184,312 for the years ended June 30, 1998,
1997, and 1996, respectively.
 
    Future minimum rentals under non-cancelable operating leases at June 30,
1998 are:
 
<TABLE>
<S>                                                             <C>
Year ending June 30,
  1999........................................................  $11,732,000
  2000........................................................    9,125,000
  2001........................................................    8,973,000
  2002........................................................    8,923,000
  2003........................................................    8,923,000
  Thereafter..................................................   55,184,000
                                                                -----------
                                                                $102,860,000
                                                                -----------
                                                                -----------
</TABLE>
 
    Operating lease rental expense was $11,878,000, $10,940,000, and $9,539,000
for the fiscal years ended June 30, 1998, 1997, and 1996, respectively.
 
    Included in deposits at June 30, 1998 and 1997 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 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 and 1996.
 
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.
 
                                       49
<PAGE>
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. The Company applied the guidance in Statement of Position 96-1
"Environmental Remediation Liabilities" and determined that a liability has not
been incurred as the criteria of this standard have not been met.
 
EMPLOYMENT AGREEMENTS
 
    The Company has entered into employment agreements with six 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 $1,315,000 are terminable at the Company's option with 90 days to
one year severance pay.
 
LITIGATION
 
    Several securities class action lawsuits have been filed against the Company
and certain of its current and former officers and directors. The lawsuits were
filed in various jurisdictions following the Company's announcement in early
December 1997 that the Company's results for the December quarter might not meet
analysts' expectations. The lawsuits have been brought on behalf of certain
purchasers of the stock of the Company and allege violations of state and/or
federal securities laws arising out of alleged misstatements and omissions to
state material facts about the Company over various periods of time covered by
the lawsuits. The lawsuits have all been consolidated in Nevada, both in federal
and state court. The consolidated federal action is captioned IN RE ANCHOR
GAMING SECURITIES LITIGATION, Civil Action No. CV-S-97-01751-PMP (RJJ), and the
consolidated state action is captioned RYAN, ET AL. V. ANCHOR GAMING, ET AL.,
Civil No. A383456. Certain other actions have been transferred and/or dismissed.
The Company believes that the claims are without merit, and the Company intends
to vigorously contest the lawsuits. The consolidated state court action has been
stayed by order of the court.
 
PURCHASE COMMITMENTS
 
    At June 30, 1998, the Company had entered into various purchase agreements
to purchase gaming equipment for approximately $2,734,000.
 
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 23, 1998 Annual Meeting of Stockholders under the caption
"Management-Directors and Executive Officers."
 
                                       50
<PAGE>
ITEM 11. EXECUTIVE COMPENSATION.
 
    Incorporated herein by reference to the Company's proxy statement for the
November 23, 1998 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 23, 1998 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 23, 1998 Annual Meeting of Stockholders under the caption "Executive
Compensation and Other Information-Compensation Committee Interlocks and Insider
Participation."
 
                                    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:
 
      Consolidated Balance Sheets as of June 30, 1998 and 1997
 
      Consolidated Statements of Income for the fiscal years ended June 30,
      1998, 1997, and 1996
 
      Consolidated Statements of Stockholders' Equity for the fiscal years ended
      June 30, 1998, 1997, and 1996
 
      Consolidated Statements of Cash Flows for the fiscal years ended June 30,
      1998, 1997, and 1996
 
      Notes to Consolidated Financial Statements
 
      Independent Auditors' Report
 
(a)(2)The following accountants' reports and financial schedules for fiscal
      years ending June 30, 1998, 1997, and 1996 are submitted herewith:
 
      Schedule II-Valuation and Qualifying Accounts
 
      All other schedules are omitted as the required information is
      inapplicable
 
(a)(3)Management Contract or Compensatory Plan
 
      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, 10.32 through 10.36 and 10.38 through 10.40.
 
(b)  Reports on Form 8-K
 
     No reports on Form 8-K have been filed during the fourth quarter of the
     fiscal year ended June 30, 1998
 
(c)  Exhibits
 
     See Index to Exhibits.
 
(d)  Financial Statement Schedule filed in Part IV of this report is as follows:
 
     SCHEDULES:
 
     II--Valuation and Qualifying Accounts--Years Ended June 30, 1998, 1997, and
     1996.
 
                                       51
<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
</TABLE>
 
Date: September 22, 1998
 
    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.
 
<TABLE>
<CAPTION>
             NAME                         TITLE                    DATE
------------------------------  --------------------------  -------------------
 
<C>                             <S>                         <C>
    /s/ STANLEY E. FULTON
------------------------------  Director                    September 22, 1998
      Stanley E. Fulton
 
     /s/ STUART D. BEATH
------------------------------  Director                    September 22, 1998
       Stuart D. Beath
 
    /s/ ELIZABETH F. JONES
------------------------------  Director                    September 22, 1998
      Elizabeth F. Jones
 
    /s/ GLEN J. HETTINGER
------------------------------  Director                    September 22, 1998
      Glen J. Hettinger
 
    /s/ MICHAEL B. FULTON
------------------------------  Director                    September 22, 1998
      Michael B. Fulton
 
    /s/ MICHAEL D. RUMBOLZ
------------------------------  Director                    September 22, 1998
      Michael D. Rumbolz
</TABLE>
 
                                       52
<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*   Rights Agreement between the Company and the Rights Agent.
      4.3*   Certificate of Designation, Preferences, and Rights of Series A Junior Participating Preferred Stock.
      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)).
      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)).
</TABLE>
 
                                       53
<PAGE>
<TABLE>
<C>          <S>
      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)).
     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)).
</TABLE>
 
                                       54
<PAGE>
<TABLE>
<C>          <S>
     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 (Incorporated by reference to
               Exhibit 10.28 to the Company's June 30, 1996 Annual Report on Form 10-K (File No. 0-23124)).
     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*  Indemnification Agreement between the Company and Glen J. 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)).
</TABLE>
 
                                       55
<PAGE>
<TABLE>
<C>          <S>
     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. (Incorporated by reference to
               Exhibit 10.28 to the Company's June 30, 1996 Annual Report on Form 10-K (File No. 0-23124)).
     10.38   Stock Option Agreement of William Adams dated April 2, 1997 (Incorporated by reference to Exhibit 4.1 to
               the Company's Registration Statement on Form S-8 (File No. 333-53257)).
     10.39   Stock Option Agreement of Thomas J. Matthews dated April 2, 1997 (Incorporated by reference to Exhibit
               4.2 to the Company's Registration Statement on Form S-8 (File No. 333-53257)).
     10.40   Stock Option Agreement of Joseph Murphy dated April 2, 1997 (Incorporated by reference to Exhibit 4.3 to
               the Company's Registration Statement on Form S-8 (File No. 333-53257)).
     21.1*   List of Subsidiary Corporations.
     27.1*   Financial Data Schedule
</TABLE>
 
------------------------
 
*   Filed herewith
 
                                       56
<PAGE>
                                 ANCHOR GAMING
 
                                  SCHEDULE II
 
                       VALUATION AND QUALIFYING ACCOUNTS
 
<TABLE>
<CAPTION>
                                                                        ADDITIONS
                                                           BALANCE AT   CHARGED TO
                                                          BEGINNING OF   COST AND      OTHER      BALANCE AT
DESCRIPTION                                                   YEAR       EXPENSES   ADJUSTMENTS  END OF YEAR
--------------------------------------------------------  ------------  ----------  -----------  ------------
<S>                                                       <C>           <C>         <C>          <C>
Year ended June 30, 1996:
Allowance for doubtful accounts (deducted from accounts
  receivable)...........................................  $     80,821  $  198,000   $  --       $    278,821
Allowance for doubtful accounts (deducted from notes
  receivable)...........................................       842,147      99,022(3)    (20,000)(1)      915,369
                                                                                        (5,800)(2)
                                                          ------------  ----------  -----------  ------------
                                                          $    922,968  $  297,022   $ (25,800)  $  1,194,190
                                                          ------------  ----------  -----------  ------------
                                                          ------------  ----------  -----------  ------------
Year ended June 30, 1997:
Allowance for doubtful accounts (deducted from accounts
  receivable)...........................................  $    278,821  $  437,784   $ (51,000)(2) $    665,605
Allowance for doubtful accounts (deducted from notes
  receivable)...........................................       915,369      21,883(3)    (14,690)(2)      922,562
                                                          ------------  ----------  -----------  ------------
                                                          $  1,194,190  $  459,667   $ (65,690)  $  1,588,167
                                                          ------------  ----------  -----------  ------------
                                                          ------------  ----------  -----------  ------------
Year Ended June 30, 1998:
Allowance for doubtful accounts (deducted from accounts
  receivable)...........................................  $    665,605  $  812,544   $(145,745)(2) $  1,332,404
Allowance for doubtful accounts (deducted from notes
  receivable)...........................................       922,562      32,798     (15,292)(2)      329,163
                                                                                      (610,905)(1)
                                                          ------------  ----------  -----------  ------------
                                                          $  1,588,167  $  845,342   $(771,942)  $  1,661,567
                                                          ------------  ----------  -----------  ------------
                                                          ------------  ----------  -----------  ------------
</TABLE>
 
------------------------
 
(1) Amounts deemed to be uncollectible
 
(2) Amounts recovered
 
(3) Primarily charged to development costs included in selling, general, and
    administrative expenses
 
                                       57