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                                    FORM 10-Q/A


                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D. C. 20549
                            -----------------------


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

                 For the quarterly period ended: December 31, 1995

                                       OR

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


                         Commission file number 33-76368

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

     Nevada                                                 88-0303849
     ------                                                 ----------
(State or other jurisdiction of                        (I.R.S. Employer
incorporation or organization)                         Identification No.)

740 S. Decatur
Las Vegas, Nevada                                           89107
-----------------                                           -----
(Address of principal                                    (Zip Code)
 executive offices)

                                 (702) 258-5200

              (Registrant's telephone number, including area code)

                                 Not Applicable
                                 --------------
             (Former name, former address and former fiscal year if


                           changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months,  and (2) has been subject to such filing  requirements
for the past 90 days.

     YES [X]                                        NO [ ]


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

                                                  Outstanding at
Class of common stock                            January 31, 1996
---------------------                             --------------
  $.01 par value                                10,000,000 shares

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                      BECKER GAMING, INC. AND SUBSIDIARIES
                                   FORM 10-Q/A
                                      INDEX


PART I. FINANCIAL INFORMATION
Item 1.  Financial Statements (Unaudited)

                                                                         Page

BECKER GAMING, INC. AND SUBSIDIARIES
    Consolidated Balance Sheets as of June 30, 1995 and
        December 31, 1995 ..............................................  1
    Consolidated Statements of Operations and Retained Earnings
        (Deficit) for the Three-Month Periods Ended
        December 31, 1995 and 1994and for the Six-Month Periods
        Ended December 31, 1995 and 1994 ...............................  2
    Consolidated Statements of Cash Flows for the Six-Month
        Periods Ended December 31, 1995 and 1994 .......................  3
    Notes to Consolidated Financial Statements .........................  4

ARIZONA CHARLIE'S, INC
    Balance Sheets as of June 30, 1995 and December 31, 1995............ 10
    Statements of Operations and Retained Earnings (Deficit) for the
        Three-Month Periods Ended December 31, 1995
        and 1994 and for the Six-Month Periods Ended
        December 31, 1995 and 1994.......................................11
    Statements of  Cash Flows for the Six-Month Periods
        Ended December 31, 1995 and 1994.................................12
    Notes to Financial Statements........................................13

SUNSET COIN, INC
    Balance Sheets as of June 30, 1995 and December 31, 1995.............19
    Statements of Income and Retained Earnings for the Three-Month
        Periods Ended December 31, 1995 and 1994 and for the
        Six-Month Periods Ended December 31, 1995 and 1994...............20
    Statements of Cash Flows for the Six-Month Periods Ended
        December 31, 1995 and 1994.......................................21
    Notes to Financial Statements........................................22

CAPITOL QUEEN & CASINO, INC 
    Balance Sheets as of June 30, 1995 and December 31, 1995.............27
    Statements of Loss Incurred During the Development Stage 
        for the Three-Month Periods Ended  December 31, 1995 
        and 1994 and for the Six-Month Periods Ended  December  
        31, 1995 and 1994 and for the period  from  January 20,
        1993 (the date of inception) through December 31, 1995...........28
    Statements of Cash Flows for the for Six-Month Periods Ended
        December 31, 1995 and 1994  and for the period from January 20,
        1993 (the date of inception) through December 31, 1995...........29
    Notes to Financial Statements........................................30



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



    Becker Gaming, Inc....................................................35
    Arizona Charlie's, Inc................................................35
    Sunset Coin, Inc......................................................41
    Capitol Queen & Casino, Inc...........................................44

Part II.  Other Information
    Item 1  Legal Proceedings.............................................45
    Item 6  Exhibits and Reports on Form 8-K..............................47

Signatures................................................................48

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                      BECKER GAMING, INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS
                    (Dollars In Thousands, Except Share Data)



                                     ASSETS


                                                    December 31,        June 30,
                                                        1995              1995
                                                    ------------    ------------
                                                    (Unaudited)

Current assets:

 Cash and cash equivalents .......................      $  6,575       $  6,657
 Restricted cash, in escrow account ..............            40             40
 Trade and other accounts
   receivable ....................................           843          1,088
 Receivables from related parties ................            15             33
 Inventories .....................................           843            852
 Prepaid expenses ................................           873          1,318
 Current portion of notes
   receivable ....................................           199            233
                                                        --------       --------
     Total current  assets .......................         9,388         10,221
                                                        --------       --------
Property and equipment:
 Land improvements ...............................         1,628          1,628
 Building and improvements .......................        38,615         38,566
 Leasehold improvements ..........................         1,098          1,098
 Furniture and equipment .........................        27,834         27,927
                                                        --------       --------
                                                          69,175         69,219

 Less, accumulated depreciation ..................       (17,792)       (16,648)
                                                        --------       --------
                                                          51,383         52,571
 Land ............................................           208            208
                                                        --------       --------
     Net property and  equipment .................        51,591         52,779
                                                        --------       --------

Other assets:

 Assets held for sale ............................        15,597         15,987

 Notes receivable, less ..........................           535            502
   current portion, net
 Receivables from related parties, less ..........          --              165
   current portion
 Deposits and other ..............................         1,295          1,411
 Financing costs, net ............................         3,376          3,721
                                                        --------       --------
     Total other assets ..........................        20,803         21,786
                                                        --------       --------
     Total assets ................................      $ 81,782       $ 84,786
                                                        ========       ========



                 LIABILITIES AND STOCKHOLDERS' EQUITY(DEFICIT)


                                                   December  31,        June 30,
                                                         1995             1995
                                                   ------------     ------------
                                                     (Unaudited)

Current  liabilities:
 Trade accounts payable ..........................      $  2,073       $  2,028
 Accrued expenses ................................         5,147          3,674
 Notes payable ...................................          --              121
 Current portion of
   subordinated notes
   payable to stockholders .......................           800            800
 Current portion of
   long term debt ................................           405            356
 Long-term debt classified as
    current, net of unamortized
    original issue discount of
    $2,615 and $2,882,  respectively .............        17,385         17,118
 Current portion of obligations
    under capital leases .........................           850            865
                                                        --------       --------
     Total current liabilities ...................        26,660         24,962
Long-term debt, less
  current portion ................................        56,511         56,593
Subordinated notes payable
 to stockholders,
 less current portion ............................         8,000          8,000
Obligations under capital
 leases, less current portion ....................         1,501          2,001
                                                        --------       --------
     Total liabilities ...........................        92,672         91,556
                                                        --------       --------

Commitments and contingencies 
Stockholders' equity(deficit):

 Common stock, $.01 par value,
   20,000,000 shares authorized,
   10,000,000 shares issued and
   outstanding ...................................           100            100
 Preferred stock, $1 par
   value, 5,000,000
   shares authorized, none
   issued and  outstanding .......................          --             --
 Additional paid-in capital ......................         9,006          9,006
 Retained earnings (deficit) .....................       (19,996)       (15,876)
                                                        --------       --------
     Total stockholders' equity (deficit) ........       (10,890)        (6,770)
                                                        --------       --------
     Total liabilities and
     stockholders' equity(deficit) ...............      $ 81,782       $ 84,786
                                                        ========       ========


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

                      BECKER GAMING, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                         AND RETAINED EARNINGS (DEFICIT)
                  (Dollars In Thousands, Except Per Share Data)
                                   (Unaudited)



                                                 Three Months Ended December 31,
                                                         1995              1994
                                                 ------------      ------------
Revenues:
   Gaming ..................................     $     16,046      $     13,261
   Food and beverage .......................            4,601             3,452
   Hotel ...................................              771               708
   Gift shop ...............................              153               143
   Other ...................................              230               189
                                                 ------------      ------------
        Gross revenues .....................           21,801            17,753
Less, promotional allowances ...............           (2,379)           (1,462)
                                                 ------------      ------------
        Net revenues .......................           19,422            16,291

Operating expenses:
   Gaming ..................................            4,746             3,435
   Food and beverage .......................            5,547             4,354
   Hotel ...................................              417               413
   Gift shop ...............................              127               105
   Advertising and promotion ...............            1,184             1,149
   General and administrative ..............            5,331             5,072
   Rent expense paid to related party ......              109                94
   Depreciation and  amortization ..........            1,137             1,483
                                                 ------------      ------------
        Total operating expenses ...........           18,598            16,105
                                                 ------------      ------------
        Operating income ...................              824               186
                                                 ------------      ------------
Other income(expenses):
   Development costs .......................             (702)             (307)
   Interest income .........................               28               441
   Interest expense ........................           (2,668)           (3,262)
   Interest capitalized ....................             --                 168
   Other, net ..............................               (6)               (6)
                                                 ------------      ------------
        Total other income (expense) .......           (3,348)           (2,966)
                                                 ------------      ------------
        Loss before income taxes ...........           (2,524)           (2,780)
Provision for income taxes .................             --                --
                                                 ------------      ------------
        Net loss ...........................           (2,524)           (2,780)

        Retained earnings (deficit),
        beginning of period ................          (17,472)           (5,971)
                                                 ------------      ------------

        Retained earnings(deficit),
        end of period ......................     ($    19,996)     ($     8,751)
                                                 ============      ============

        Net loss per share of
        common stock .......................     $      (0.25)     $      (0.28)
                                                 ============      ============
        Weighted average common
        shares outstanding .................       10,000,000        10,000,000
                                                 ============      ============





                                                  Six Months Ended December 31,
                                                         1995              1994
                                                 ------------      ------------
Revenues:
   Gaming ..................................     $     31,371      $     25,200
   Food and beverage .......................            8,913             6,563
   Hotel ...................................            1,493             1,146
   Gift shop ...............................              307               264
   Other ...................................              549               293
                                                 ------------      ------------
        Gross revenues .....................           42,633            33,466
Less, promotional allowances ...............           (4,468)           (2,631)
                                                 ------------      ------------
        Net revenues .......................           38,165            30,835

Operating expenses:
   Gaming ..................................            8,896             6,490
   Food and beverage .......................           10,761             8,146
   Hotel ...................................              816               728
   Gift shop ...............................              234               211
   Advertising and promotion ...............            2,388             1,950
   General and administrative ..............           10,672             9,523
   Rent expense paid to related party ......              205               189
   Depreciation and amortization ...........            2,264             2,730
                                                 ------------      ------------
        Total operating expenses ...........           36,236            29,967
                                                 ------------      ------------
        Operating income ...................            1,929               868
                                                 ------------      ------------
Other income(expenses):
   Development costs .......................             (868)             (600)
   Interest income .........................               32               866
   Interest expense ........................           (5,249)           (6,416)
   Interest capitalized ....................             --                 676
   Other, net ..............................               36                 2
                                                 ------------      ------------
        Total other income (expense) .......           (6,049)           (5,472)
                                                 ------------      ------------
        Loss before  income taxes ..........           (4,120)           (4,604)
Provision for income taxes .................             --                --
                                                 ------------      ------------
        Net loss ...........................           (4,120)           (4,604)

        Retained earnings (deficit),
        beginning of period ................          (15,876)           (4,147)
                                                 ------------      ------------

        Retained earnings(deficit),
        end of period ......................     ($    19,996)     ($     8,751)
                                                 ============      ============

        Net loss per share of
        common stock .......................     $      (0.41)     $      (0.46)
                                                 ============      ============
        Weighted average common
        shares outstanding .................       10,000,000        10,000,000
                                                 ============      ============


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

                      BECKER GAMING, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                             (Dollars In Thousands)
                                   (Unaudited)

                                                   Six Months Ended December 31,
                                                             1995          1994
                                                         --------      --------
Cash flows from operating activities:
  Net loss .........................................     $ (4,120)     $ (4,604)
  Adjustments to reconcile net loss to net
     cash (used in) provided by operating
     activities:
     Depreciation and amortization .................        2,264         2,194
     Amortization of original issue discount .......          267           536
     Net loss on sale of assets ....................           17            10

(Increase) decrease in operating assets:
    Receivables ....................................          245          (198)
    Receivables from related parties ...............          183           (42)
    Inventories ....................................           10          (149)
    Prepaid expenses ...............................          444            32
    Deposits and other assets ......................          101           (46)

Increase (decrease) in operating liabilities:
    Accounts payable, net of amounts for
     capital expenditures ..........................           45          (125)
    Accrued expenses ...............................        1,473           716
                                                         --------      --------
            Total adjustments ......................        5,049         2,928
                                                         --------      --------
        Net cash provided by (used in)
        operating activities .......................          929        (1,676)
                                                         --------      --------

Cash flows from investing activities:
  Capital expenditures, net of
   construction accounts payable ...................         (463)      (21,445)
  Proceeds from sale of equipment ..................           33            14
  Net reductions in restricted cash equivalents ....         --          24,239
  Issuance of notes receivable .....................          (31)          124
  Payments of notes receivable .....................           30          --
  Increase in deposits and other assets ............         --              12
                                                         --------      --------
    Net cash provided by (used in)
     investing activities ..........................         (431)        2,944
                                                         --------      --------

Cash flows from financing activities:
  Proceeds from notes payable ......................          177           237
  Payments under notes payable .....................         (326)         (242)
  Payments under capital lease obligations .........         (430)         (773)
                                                         --------      --------
    Net cash used in financing activities
                                                             (579)         (778)
                                                         --------      --------
    Net increase in cash and cash equivalents ......          (81)          490
Cash and cash equivalents,
 beginning of period ...............................        6,656         6,455
                                                         --------      --------
Cash and cash equivalents,
 end of period .....................................     $  6,575      $  6,945
                                                         ========      ========

Supplemental cash flow disclosures:

   Interest paid, net of amount capitalized ........     $  3,868      $  6,389
                                                         ========      ========
   Income taxes paid ...............................           $-      $    346
                                                         ========      ========
   Capitalized lease obligations incurred ..........     $     70      $     66
                                                         ========      ========

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

                      BECKER GAMING, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   ----------


1)       Basis of Presentation:

         The accompanying  consolidated  financial  statements of Becker Gaming,
Inc. ("BGI" or the "Company") are unaudited and have been prepared in accordance
with generally accepted accounting  principles for interim financial information
and  with the  instructions  to Form  10-Q and  Article  10 of  Regulation  S-X.
Accordingly,  they do not include all of the information and footnotes  required
by generally accepted accounting  principles for complete financial  statements.
In the opinion of management,  all  adjustments  and normal  recurring  accruals
considered  necessary  for a fair  presentation  have been  included.  Operating
results for the three and  six-month  periods  ended  December  31, 1995 are not
necessarily  indicative  of the results  that may be expected for the year ended
June 30, 1996. The accompanying  unaudited consolidated financial statements and
footnotes should be read in conjunction with the financial  statements  included
in the Company's annual report on Form 10-K for the year ended June 30, 1995.

2)       Denial of Missouri Gaming License Application of Capitol Queen & 
          Casino, Inc.:

         Sunset  Coin,  Inc.  ("SC"),  a wholly  owned  subsidiary  of BGI,  has
guaranteed 12% First Mortgage Notes due November 15, 2000, of Arizona Charlie's,
Inc.  ("AC"),  another  wholly owned  subsidiary  of BGI,  until such time as AC
completes an expansion of its casino  facilities (which it has done) and obtains
a specified fixed charge  coverage ratio, as defined in the indenture  governing
the AC First Mortgage  Notes(the "AC Notes") AC, in turn, has guaranteed the 12%
First  Mortgage Notes (the "CQC Notes") due November 15, 2000 of Capitol Queen &
Casino, Inc. ("CQC"), another wholly owned subsidiary of BGI, until such time as
CQC is licensed to conduct gaming in Missouri.

         CQC  was  formed  to  develop,  own and  operate  the  "Capitol  Queen"
riverboat  casino in Jefferson  City,  Missouri.  On September 28, 1994, CQC was
notified that its  application for a gaming license was rejected by the Missouri
Gaming  Commission (the  "Commission").  Under the Commission's  order, CQC, its
principal owners and affiliated companies cannot reapply for a gaming license in
Missouri prior to September 28, 1996.

         The Commission's decision was based on an August 1994 recommendation of
its staff (the  "Staff")  that CQC's license  application  be denied  without an
investigative   review  because  CQC  knowingly  failed  to  disclose  material,
substantive information in the application. The Commission did not find that CQC
knowingly  failed to  disclose  information,  but did find that the  application
contained  omissions of a  substantive  and material  nature.  Management of CQC
believes that its application was complete and accurate. Moreover, CQC has fully
disclosed the information cited by the Staff in post-application  filings, other
public  documents and  communications  with the Staff,  all of which  management
considers to be part of the licensing and related investigative  process.  Based
on the advice of legal counsel,  CQC believes that the Commission  acted outside
its authority in rejecting the application without a formal investigation.

         On October 31, 1994,  CQC  petitioned  the Cole County Circuit Court in
Jefferson  City for a writ of mandamus.  In response to the petition,  the court
issued an order  declaring  that by  denying  CQC's  application  without  first
conducting  an  investigation  and by  deliberating  in a  closed  session,  the
Commission had violated  Missouri gaming and open meeting laws. The court issued
a  preliminary  writ of mandamus  declaring the  Commission's  decision void and
ordering  the  Commission  to  immediately  commence  a full  investigation  and
thereafter to act on CQC's application. The court ordered the Commission to show
cause within thirty days why the preliminary writ should not be made permanent.

         Initially,  the  Commission  did not  respond  directly  to the Circuit
Court's order to show cause, but instead filed two actions,  both  unsuccessful,
in the Missouri Court of Appeals for the Western District. On November 16, 1994,
the Commission petitioned the Court of Appeals for a writ of prohibition against
the Circuit Court, contending,  among other things, that CQC was not entitled to
judicial  relief  because it had not exhausted its  administrative  remedy of an
evidentiary hearing before the Commission. The Court of Appeals initially issued
a preliminary  writ in prohibition  staying  further  proceedings in the Circuit
Court.  However,  in an opinion  issued on April 18, 1995,  the Court of Appeals
concluded  that its  preliminary  writ of  prohibition  had  been  improvidently
granted, quashed the preliminary writ, and denied the Commission's request for a
permanent writ,  relegating the Commission to its remedies in the Circuit Court.
On December 13, 1994, the Commission also filed an appeal of the Circuit Court's
order.  On December  23, CQC moved to dismiss the appeal on the grounds that the
preliminary  writ of  mandamus  was  not a final  order  and  therefore  was not
appealable.  On January 5, 1995,  the Court of Appeals  granted CQC's motion and
dismissed the appeal.

         On June 26, 1995,  the Circuit  Court  issued a peremptory  (permanent)
writ of mandamus  similar to the preliminary  writ,  declaring the  Commission's
order void and ordering the Commission to proceed with an investigation of CQC's
application  "with all  deliberate  speed."  On July 21,  1995,  the  Commission
appealed the Circuit  Court's  decision to the Missouri Court of Appeals for the
Western District. That appeal is pending.

         On November  1, 1994,  concurrent  with its efforts to obtain  judicial
relief,  CQC  (with  BGI as a  co-party)  requested  an  administrative  hearing
pursuant to the Missouri  gaming  statutes,  under which a denied  applicant may
request an evidentiary  hearing before a Commission  appointed  hearing officer.
The hearing officer's  decision is subject to review by the Commission,  and the
Commission's  decision is in turn  subject to judicial  review.  The  Commission
filed an answer on November 29,  alleging,  among other things,  that CQC is not
entitled to an administrative hearing because CQC had not been investigated.  On
December  22,  because the  Commission  had not  appointed a hearing  officer or
otherwise responded to CQC's request for a hearing,  CQC moved the Commission to
appoint a hearing  officer and establish a procedural  schedule.  The Commission
did not  respond to this  motion.  However,  in March  1995,  CQC's  counsel was
notified  by a member  of the  Commission's  staff  that he had  been  appointed
hearing officer in the case. Because this person appears to have participated in
the staff's  recommendation  that CQC's license be denied, CQC moved on March 31
for  the  appointment  of  an  impartial,   independent  hearing  officer.   The
Commission's attorney filed a response in opposition to this motion on April 12,
but the  Commission  has not responded to it.  Instead,  on August 10, 1995, the
hearing officer issued an order  proclaiming his ability to proceed  impartially
and  purporting  to  deny  the  motion.  Hearing  dates  have  been  vacated  by
stipulation,  and,  after the Circuit  Court's  order  voiding the  Commission's
decision appeared to make the  administrative  proceeding  premature,  postponed
indefinitely.

         On March 24, 1995,  CQC filed an action  against the  Commission in the
Cole County, Missouri,  Circuit Court, alleging that the Commission had violated
Missouri's  open meeting law by  deliberating in a closed session before issuing
its decision denying CQC's license.  The petition requested an order voiding the
Commission's  decision.  On March 27, as a protective  measure against  possible
arguments  that Cole County is not the proper venue,  CQC filed a  substantively
identical action in the St. Louis County Circuit Court. In April, the Commission
filed answers to both  complaints  denying that it had violated the open meeting
law. On June 1, CQC moved for summary  judgment in the Cole County case.  In its
response,  the  Commission  stated  that  it "did  not  deliberately  intend  to
circumvent"  the open meeting law but had deliberated in closed session based on
erroneous advice of counsel. The Commission argued that the closed session could
nevertheless be justified under statutory  exceptions  allowing agencies to meet
privately with their lawyers to discuss confidential information and litigation.
The motion for summary  judgment was heard on December 19, 1995, and taken under
submission by the court.

         In January 1995, CQC engaged in settlement discussions initiated by the
Missouri  Attorney  General's  office,  legal counsel for the  Commission,  with
respect to the civil matters  involving the Commission.  The discussions,  which
terminated  in March  1995,  were  resumed in August  1995 and were  expanded to
include the misdemeanor  charges filed by the Missouri Attorney  General.  While
CQC and its lawyers  continue to seek a  negotiated  settlement  to the disputes
with the Commission and the Attorney  General,  the discussions  have again been
terminated by the Attorney General's office.

         At the time CQC was notified of the Staff's  position,  construction of
the riverboat  contemplated  under the project being developed by CQC was almost
completed.  CQC had also  obtained  the  necessary  permits  for the  land-based
development  portion of the project and had performed certain dredging and other
site  preparation  work.  In August 1994,  CQC  suspended  all further land site
development   activity   pending   resolution  of  the  review  of  its  license
application.  Management of CQC believes that the Commission's subsequent ruling
in September 1994 makes further  development of the project not feasible because
of  significant  delays in the ability to operate the riverboat  casino,  either
through appeal of the decision or expiration of the two-year  probation  period.
Accordingly,  on  September  29,  1994,  management  decided to suspend  further
development  of the Capitol Queen project.  As a result of that decision,  costs
associated  with the  development of the project which had been deferred  during
the development  stage were written-off in the fourth quarter of the fiscal year
ended June 30, 1994,  and the land site and riverboat were written down to their
estimated net realizable value.

         Prior to its  suspension,  CQC had financed the Capitol  Queen  project
through  the  issuance  of $40  million  in  principal  amount  of the 12% First
Mortgage  Notes due November 15, 2000. As of January 1, 1995,  the CQC Indenture
was amended to (i) eliminate CQC's  obligation to construct and open the Capitol
Queen and (ii) permit a two-step  purchase of the CQC Notes at 101% of principal
plus  accrued  and unpaid  interest  from a sale of assets.  The  repurchase  of
$20,000,000  principal amount of the CQC Notes (plus accrued and unpaid interest
thereon) was  completed  on January 17, 1995 with funds from the project  escrow
account  and an  aggregate  of  $20,000,000  principal  amount  of the CQC Notes
remained outstanding. However, the dates by which CQC previously agreed with the
holders of the CQC Notes to effect the sale of its  assets  and  repurchase  the
remaining  CQC Notes  have  passed.  The CQC Notes  outstanding  require  annual
interest payments of $2,400,000,  payable in equal installments semi-annually on
May 15 and November 15. CQC was not able to make its scheduled  interest payment
of  $1,200,000  on November 15,  1995,  and AC did not have  available  funds to
advance  on behalf of CQC.  Management  of AC and CQC are  currently  undergoing
discussions with an informal committee  representing the holders of the AC Notes
and CQC Notes regarding a proposed restructuring plan, however, an agreement has
not yet been reached.

         CQC had entered into an Asset Purchase  Agreement  dated April 10, 1995
for the sale of its assets to Aerie  Riverboat  Casinos of  Missouri,  Inc. at a
purchase price of $18,000,000.  However,  the consummation of the Aerie purchase
agreement was subject to the satisfaction of several  conditions which could not
be satisfied timely, including, among others, that Jefferson City consent to the
assignment  of the  Development  Agreement,  that  Aerie  be  found  preliminary
suitable to hold a Missouri Gaming license and that riverboat  gaming is legally
permitted  in  Jefferson  City.  As a  result,  the  agreement  with  Aerie  was
terminated without penalty when the expiration date of December 31, 1995 passed.
CQC is  currently  pursuing  offers on its  riverboat  assets  from  prospective
buyers.

         On November 7, 1995,  voters in  Jefferson  City  rejected an ordinance
permitting  riverboat  gambling,  reversing  the vote of an earlier  election in
which  Jefferson  City  voters  approved  riverboat   gambling.   Because  CQC's
Development  Agreement  with  Jefferson  City was entered  into  pursuant to the
earlier ordinance permitting riverboat gambling,  the Company believes that as a
matter of law the 1995 election does not affect the validity of the  Development
Agreement.  However,  it has not yet been determined whether Jefferson City will
honor the Agreement in light of the election without  litigation to uphold CQC's
position.  CQC is  exploring  its  legal  options  in the event  Jefferson  City
declines to honor the Development Agreement, but has not reached any decision. A
final  judicial  determination  that the 1995  vote  abrogates  the  Development
Agreement  would have a material  adverse  effect on CQC and its ability to sell
its assets.

         CQC is not expected to generate  sufficient  funds  through the sale of
its assets to repurchase all of the outstanding  CQC Notes.  AC, pursuant to its
guarantee of the CQC Notes,  will be liable for the  principal  of, and interest
on, any remaining  outstanding  CQC Notes.  AC is restricted from selling assets
under the covenants  governing the AC Notes, and management believes that access
to  additional  capital  from  other  sources is  restricted  as a result of the
above-described circumstances.  As a result, management does not believe that AC
(nor SC, as  guarantor  of the AC Notes)  would  have  sufficient  resources  to
satisfy such obligation, should it be necessary.



3)       Assets Held For Sale:

         At  December  31,  1995,  BGI had  $15,597,000  of assets held for sale
consisting of riverboat assets of $11,834,000 and $3,763,000 of aviation assets.
The Company  intends to sell the aviation  asset,  the  proceeds  from which are
expected to be sufficient to extinguish the existing  capital lease  obligations
relating thereto.


================================================================================
                             ARIZONA CHARLIE'S, INC.

               (A Wholly Owned Subsidiary Of Becker Gaming, Inc. )
                                 BALANCE SHEETS
                             (Dollars In Thousands)



                                     ASSETS


                                              December 31,    June 30,
                                                     1995        1995
                                                 --------    --------
                                                 (unaudited)
Current assets:

   Cash and cash equivalents .................   $  4,952    $  5,404
   Restricted cash, in escrow account ........         10          10
   Trade and other accounts receivable .......        581         658
   Management fee receivable -
     Becker Gaming Inc. ......................        725        --
   Receivable from related  parties ..........      1,681         820
   Notes receivable from related party .......      4,416       4,416
   Inventories ...............................        669         661
   Prepaid expenses ..........................        756       1,162
                                                 --------    --------
     Total current assets ....................     13,790      13,131
                                                 --------    --------

Property and equipment:

   Building and improvements .................     37,485      37,485
   Furniture and equipment ...................     22,516      22,609
   Land improvements .........................      1,628       1,628
                                                 --------    --------
                                                   61,629      61,722
   Less, accumulated  depreciation ...........    (14,764)    (13,572)
                                                 --------    --------
                                                   46,865      48,150
   Land ......................................        208         208
                                                 --------    --------
       Net property and equipment ............     47,073      48,358
                                                 --------    --------

Other assets:

   Receivable from related party, noncurrent..       --           240
   Deposits and other ........................        432         551
   Financing costs, less accumulated
   amortization of $1,156 at December 31,
   1995 and  $329 June 30, 1995 ..............      2,717       2,993
                                                 --------    --------
       Total other  assets ...................      3,149       3,784
                                                 --------    --------
       Total assets ..........................   $ 64,012    $ 65,273
                                                 ========    ========


                 LIABILITIES AND STOCKHOLDER'S EQUITY (DEFICIT)



                                               December 31,   June 30,
                                                     1995        1995
                                                 --------    --------
                                               (unaudited)


Current liabilities:
   Trade accounts payable ....................   $  1,535    $  1,449
   Accounts payable to related parties .......          5           3
   Accrued expenses ..........................      3,343       3,097
   Management fees due Becker Gaming, Inc. ...      5,049       3,287
   Notes payable .............................          0         121
   Notes payable to related party ............      2,250       2,250
   Current portion of obligations
     under capital leases ....................          3           4
                                                 --------    --------
           Total current liabilities .........     12,185      10,211

Long-term debt, less current portion .........     55,000      55,000
Subordinated notes payable to prior
  stockholders ...............................      5,000       5,000
Obligations under capital leases,
  less current portion .......................          2           4
                                                 --------    --------
           Total liabilities .................     72,187      70,215
                                                 --------    --------

Commitments and contingencies

Stockholder's equity (deficit):
  Common stock, no par value,
   2,500 shares authorized, 1,000
   shares issued and outstanding .............        469         469

  Retained earnings (deficit) ................     (8,644)     (5,411)
                                                 --------    --------

           Total stockholder's equity
           (deficit) .........................     (8,175)     (4,942)
                                                 --------    --------

           Total liabilities  and
           stockholder's equity (deficit) ....   $ 64,012    $ 65,273
                                                 ========    ========


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

                             ARIZONA CHARLIE'S, INC.
               (A Wholly Owned Subsidiary Of Becker Gaming, Inc.)

            STATEMENTS OF OPERATIONS AND RETAINED EARNINGS (DEFICIT)
                             (Dollars In Thousands)
                                   (unaudited)



                                                 Three Months Ended December 31,
                                                           1995            1994
                                                       --------        --------
Revenues:
  Gaming .......................................       $ 13,642        $ 10,973
  Food and beverage ............................          3,390           2,519
  Hotel ........................................            771             708
  Gift shop ....................................            153             143
  Management fee from affiliates ...............            725            --
  Other ........................................            215             172
                                                       --------        --------
      Gross revenues ...........................         18,896          14,515
Less, promotional allowances ...................         (1,945)         (1,148)
                                                       --------        --------
      Net revenues .............................         16,951          13,367
                                                       --------        --------

Operating expenses:
  Gaming .......................................          4,100           2,955
  Food and beverage ............................          4,140           3,310
  Hotel ........................................            417             413
  Gift shop ....................................            127             105
  Advertising and promotion ....................          1,145           1,116
  General and administrative ...................          4,876           3,624
  Management fee - Becker Gaming, Inc. .........            906             723
  Rent expense paid to related party ...........             54              46
  Depreciation and amortization ................            893             938
                                                       --------        --------
      Total operating expenses .................         16,658          13,230
                                                       --------        --------
      Operating income .........................            293             137
                                                       --------        --------

Other income (expenses):
  Gain(Loss) on sale of assets .................            (14)           --
  Interest income ..............................             75             151
  Interest expense .............................         (1,762)         (1,821)
  Interest capitalized .........................           --               168
  Other, net ...................................             10            --
                                                       --------        --------
      Total other expenses .....................         (1,691)         (1,502)
                                                       --------        --------
      Income (loss) before taxes ...............         (1,398)         (1,365)
Provision for income tax .......................           --              --
                                                       --------        --------
      Net (loss)income .........................       ($ 1,398)       ($ 1,365)

Retained earnings (deficit),
beginning ofperiod .............................         (7,246)           (950)
                                                       --------        --------

Retained earnings (deficit),
end of period ..................................       ($ 8,644)       ($ 2,315)
                                                       ========        ========




                                                   Six Months Ended December 31,
                                                           1995            1994
                                                       --------        --------
Revenues:
  Gaming .......................................       $ 26,533        $ 20,610
  Food and beverage ............................          6,463           4,684
  Hotel ........................................          1,493           1,146
  Gift shop ....................................            307             264
  Management fee from affiliates ...............            725            --
  Other ........................................            515             262
                                                       --------        --------
       Gross revenues ..........................         36,036          26,966
 Less, promotional allowances ..................         (3,614)         (1,990)
                                                       --------        --------
      Net revenues .............................         32,422          24,976
                                                       --------        --------

Operating expenses:
  Gaming .......................................          7,638           5,568
  Food and beverage ............................          8,015           6,084
  Hotel ........................................            816             728
  Gift shop ....................................            234             211
  Advertising and promotion ....................          2,321           1,890
  General and administrative ...................          9,674           6,695
  Management fee - Becker Gaming, Inc. .........          1,763           1,343
  Rent expense paid to related party ...........            108              93
  Depreciation and amortization ................          1,779           1,637
                                                       --------        --------
      Total operating expenses .................         32,348          24,249
                                                       --------        --------
      Operating income .........................             74             727
                                                       --------        --------

Other income (expenses):
  Gain(Loss) on sale of assets .................            (11)           --
  Interest income ..............................            144             395
  Interest expense .............................         (3,475)         (3,638)
  Interest capitalized .........................           --               676
  Other, net ...................................             35            --
                                                       --------        --------
      Total other expenses .....................         (3,307)         (2,567)
                                                       --------        --------
      Income (loss) before taxes ...............         (3,233)         (1,840)
Provision for income tax .......................           --              --
                                                       --------        --------
      Net (loss)income .........................       ($ 3,233)       ($ 1,840)

Retained earnings (deficit),
beginning of period ............................         (5,411)           (475)
                                                       --------        --------

Retained earnings (deficit),
end of period ..................................       ($ 8,644)       ($ 2,315)
                                                       ========        ========


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

                             ARIZONA CHARLIE'S, INC.
               (A Wholly Owned Subsidiary Of Becker Gaming, Inc.)

                            STATEMENTS OF CASH FLOWS
                             (Dollars In Thousands)

                                   (Unaudited)


                                                   Six Months Ended December 31,
                                                               1995        1994
                                                           --------    --------
Cash flows from operating activities:
    Net income (loss) ..................................   ($ 3,233)   ($ 1,840)

    Adjustments to reconcile net income
    (loss) to net cash provided by
    operating activities:
    Depreciation and amortization ......................      1,779       1,637
    Provision for losses on related
     party receivables .................................      2,152        --
    (Gain) loss on sale of equipment ...................         11          (2)

(Increase) decrease in operating assets:
    Receivables ........................................     (2,728)        559
    Inventories ........................................         (8)       (133)
    Prepaid expenses ...................................        406          (7)
    Deposits and other .................................        (13)        (50)

Increase (decrease) in operating liabilities:
    Accounts payable, net of amounts for
     capital expenditures ..............................         88        (148)
    Accrued expenses ...................................        246         728
    Management fees due to Becker Gaming, Inc. .........      1,762       1,343
                                                           --------    --------
       Total adjustments ...............................      3,695       3,927
                                                           --------    --------
        Net cash provided by operating activities ......        462       2,087
                                                           --------    --------

Cash flows from investing activities:
    Capital expenditures, net of amounts in
     accounts payable ..................................        (77)    (19,448)
    Increase in receivable from Becker Gaming, Inc. ....       --        (3,000)
    Increase in  management fee receivable from Becker
    Gaming, Inc. .......................................       (725)       --
    Net (additions to) reductions in restricted cash
    equivalents ........................................       --        19,905
    Proceeds from assets sales .........................         12        --
                                                           --------    --------
       Net cash provided by (used in)
          investing activities .........................       (790)     (2,543)
                                                           --------    --------

Cash flows from financing activities:
    Proceeds from borrowing under notes payable ........       --         1,000
    Principal payments on notes payable ................       (121)       (120)
    Payments under capital lease obligations ...........         (3)        (14)
                                                           --------    --------
       Net cash provided by (used in)
          financing activities .........................       (124)        866
                                                           --------    --------
       Net increase in cash and cash equivalents .......       (452)        410
Cash and cash equivalents, beginning of the period .....      5,404       4,014
                                                           --------    --------
Cash and cash equivalents, end of the period ...........   $  4,952    $  4,424
                                                           ========    ========
Supplemental cash flow disclosures:
    Interst paid, net of amount capitalized ............   $  3,558    $  3,558
                                                           ========    ========
    Income taxes paid ..................................       --      $    136
                                                           ========    ========
    Capital lease obligations incurred .................       --      $      9
                                                           ========    ========


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


                            ARIZONA CHARLIE'S, INC.
               (A Wholly Owned Subsidiary of Becker Gaming, Inc.)

                       NOTES TO THE FINANCIAL STATEMENTS
                                   ----------


1)   Basis of Presentation:

      Arizona  Charlie's,  Inc.  ("AC") is a wholly owned  subsidiary  of Becker
Gaming,  Inc.  ("BGI").  The accompanying  financial  statements of AC have been
prepared in accordance with generally accepted accounting principles for interim
financial  information and with the  instructions to Form 10-Q and Article 10 of
Regulation  S-X.  Accordingly,  they do not include all of the  information  and
footnotes  required by generally  accepted  accounting  principles  for complete
financial statements.  In the opinion of management,  all adjustments and normal
recurring  accruals  considered  necessary  for a fair  presentation  have  been
included.  Operating  results for the three and six-month periods ended December
31, 1995 are not necessarily  indicative of the results that may be expected for
the year ended June 30, 1996. The unaudited financial  statements should be read
in  conjunction  with the financial  statements  and footnotes  included in AC's
annual report on Form 10-K for the year ended June 30, 1995.

2)    Denial  of  Missouri  Gaming  License  Application  of
Capitol Queen & Casino, Inc.:

      Sunset Coin, Inc. ("SC"), a wholly owned subsidiary of BGI, has guaranteed
12% First  Mortgage  Notes due November 15, 2000,  of Arizona  Charlie's,  Inc.,
another  wholly  owned  subsidiary  of BGI,  until such time as AC  completes an
expansion of its casino  facilities  (which it has done) and obtains a specified
fixed charge coverage ratio, as defined in the indenture  governing the AC First
Mortgage  Notes (the "AC  Notes").  AC, in turn,  has  guaranteed  the 12% First
Mortgage  Notes (the "CQC  Notes")  due  November  15,  2000 of Capitol  Queen &
Casino, Inc. ("CQC"), another wholly owned subsidiary of BGI, until such time as
CQC is licensed to conduct gaming in Missouri.

     CQC was formed to develop,  own and operate the "Capitol  Queen"  riverboat
casino in Jefferson City, Missouri. On September 28, 1994, CQC was notified that
its  application  for a gaming  license  was  rejected  by the  Missouri  Gaming
Commission (the "Commission").  Under the Commission's order, CQC, its principal
owners and affiliated  companies cannot reapply for a gaming license in Missouri
prior to September 28, 1996.

      The Commission's  decision was based on an August 1994  recommendation  of
its staff (the  "Staff")  that CQC's license  application  be denied  without an
investigative   review  because  CQC  knowingly  failed  to  disclose  material,
substantive information in the application. The Commission did not find that CQC
knowingly  failed to  disclose  information,  but did find that the  application
contained  omissions of a  substantive  and material  nature.  Management of CQC
believes that its application was complete and accurate. Moreover, CQC has fully
disclosed the information cited by the Staff in post-application  filings, other
public  documents and  communications  with the Staff,  all of which  management
considers to be part of the licensing and related investigative  process.  Based
on the advice of legal counsel,  CQC believes that the Commission  acted outside
its authority in rejecting the application without a formal investigation.

      On October 31,  1994,  CQC  petitioned  the Cole County  Circuit  Court in
Jefferson  City for a writ of mandamus.  In response to the petition,  the court
issued an order  declaring  that by  denying  CQC's  application  without  first
conducting  an  investigation  and by  deliberating  in a  closed  session,  the
Commission had violated  Missouri gaming and open meeting laws. The court issued
a  preliminary  writ of mandamus  declaring the  Commission's  decision void and
ordering  the  Commission  to  immediately  commence  a full  investigation  and
thereafter to act on CQC's application. The court ordered the Commission to show
cause within thirty days why the preliminary writ should not be made permanent.

      Initially,  the Commission did not respond directly to the Circuit Court's
order to show cause, but instead filed two actions,  both  unsuccessful,  in the
Missouri  Court of Appeals for the Western  District.  On November 16, 1994, the
Commission petitioned the Court of Appeals for a writ of prohibition against the
Circuit  Court,  contending,  among other  things,  that CQC was not entitled to
judicial  relief  because it had not exhausted its  administrative  remedy of an
evidentiary hearing before the Commission. The Court of Appeals initially issued
a preliminary  writ in prohibition  staying  further  proceedings in the Circuit
Court.  However,  in an opinion  issued on April 18, 1995,  the Court of Appeals
concluded  that its  preliminary  writ of  prohibition  had  been  improvidently
granted, quashed the preliminary writ, and denied the Commission's request for a
permanent writ,  relegating the Commission to its remedies in the Circuit Court.
On December 13, 1994, the Commission also filed an appeal of the Circuit Court's
order.  On December  23, CQC moved to dismiss the appeal on the grounds that the
preliminary  writ of  mandamus  was  not a final  order  and  therefore  was not
appealable.  On January 5, 1995,  the Court of Appeals  granted CQC's motion and
dismissed the appeal.

     On June 26, 1995, the Circuit Court issued a peremptory (permanent) writ of
mandamus similar to the preliminary writ,  declaring the Commission's order void
and  ordering  the  Commission  to  proceed  with  an   investigation  of  CQC's
application  "with all  deliberate  speed."  On July 21,  1995,  the  Commission
appealed the Circuit  Court's  decision to the Missouri Court of Appeals for the
Western District. That appeal is pending.

      On  November  1, 1994,  concurrent  with its  efforts  to obtain  judicial
relief,  CQC  (with  BGI as a  co-party)  requested  an  administrative  hearing
pursuant to the Missouri  gaming  statutes,  under which a denied  applicant may
request an evidentiary  hearing before a Commission  appointed  hearing officer.
The hearing officer's  decision is subject to review by the Commission,  and the
Commission's  decision is in turn  subject to judicial  review.  The  Commission
filed an answer on November 29,  alleging,  among other things,  that CQC is not
entitled to an administrative hearing because CQC had not been investigated.  On
December  22,  because the  Commission  had not  appointed a hearing  officer or
otherwise responded to CQC's request for a hearing,  CQC moved the Commission to
appoint a hearing  officer and establish a procedural  schedule.  The Commission
did not  respond to this  motion.  However,  in March  1995,  CQC's  counsel was
notified  by a member  of the  Commission's  staff  that he had  been  appointed
hearing officer in the case. Because this person appears to have participated in
the staff's  recommendation  that CQC's license be denied, CQC moved on March 31
for  the  appointment  of  an  impartial,   independent  hearing  officer.   The
Commission's attorney filed a response in opposition to this motion on April 12,
but the  Commission  has not responded to it.  Instead,  on August 10, 1995, the
hearing officer issued an order  proclaiming his ability to proceed  impartially
and  purporting  to  deny  the  motion.  Hearing  dates  have  been  vacated  by
stipulation,  and,  after the Circuit  Court's  order  voiding the  Commission's
decision appeared to make the  administrative  proceeding  premature,  postponed
indefinitely.

      On March 24, 1995,  CQC filed an action against the Commission in the Cole
County,  Missouri,  Circuit  Court,  alleging that the  Commission  had violated
Missouri's  open meeting law by  deliberating in a closed session before issuing
its decision denying CQC's license.  The petition requested an order voiding the
Commission's  decision.  On March 27, as a protective  measure against  possible
arguments  that Cole County is not the proper venue,  CQC filed a  substantively
identical action in the St. Louis County Circuit Court. In April, the Commission
filed answers to both  complaints  denying that it had violated the open meeting
law. On June 1, CQC moved for summary  judgment in the Cole County case.  In its
response,  the  Commission  stated  that  it "did  not  deliberately  intend  to
circumvent"  the open meeting law but had deliberated in closed session based on
erroneous advice of counsel. The Commission argued that the closed session could
nevertheless be justified under statutory  exceptions  allowing agencies to meet
privately with their lawyers to discuss confidential information and litigation.
The motion for summary  judgment was heard on December 19, 1995, and taken under
submission by the court.

      In January 1995,  CQC engaged in settlement  discussions  initiated by the
Missouri  Attorney  General's  office,  legal counsel for the  Commission,  with
respect to the civil matters  involving the Commission.  The discussions,  which
terminated  in March  1995,  were  resumed in August  1995 and were  expanded to
include the misdemeanor  charges filed by the Missouri Attorney  General.  While
CQC and its lawyers  continue to seek a  negotiated  settlement  to the disputes
with the Commission and the Attorney  General,  the discussions  have again been
terminated by the Attorney General's office.

      At the time CQC was notified of the Staff's position,  construction of the
riverboat  contemplated  under the  project  being  developed  by CQC was almost
completed.  CQC had also  obtained  the  necessary  permits  for the  land-based
development  portion of the project and had performed certain dredging and other
site  preparation  work.  In August 1994,  CQC  suspended  all further land site
development   activity   pending   resolution  of  the  review  of  its  license
application.  Management of CQC believes that the Commission's subsequent ruling
in September 1994 makes further  development of the project not feasible because
of  significant  delays in the ability to operate the riverboat  casino,  either
through appeal of the decision or expiration of the two-year  probation  period.
Accordingly,  on  September  29,  1994,  management  decided to suspend  further
development  of the Capitol Queen project.  As a result of that decision,  costs
associated  with the  development of the project which had been deferred  during
the development  stage were written-off in the fourth quarter of the fiscal year
ended June 30, 1994,  and the land site and riverboat were written down to their
estimated net realizable value.

      Prior to its  suspension,  CQC had  financed  the  Capitol  Queen  project
through  the  issuance  of $40  million  in  principal  amount  of the 12% First
Mortgage  Notes due November 15, 2000. As of January 1, 1995,  the CQC Indenture
was amended to (i) eliminate CQC's  obligation to construct and open the Capitol
Queen and (ii) permit a two-step  purchase of the CQC Notes at 101% of principal
plus  accrued  and unpaid  interest  from a sale of assets.  The  repurchase  of
$20,000,000  principal amount of the CQC Notes (plus accrued and unpaid interest
thereon) was  completed  on January 17, 1995 with funds from the project  escrow
account  and an  aggregate  of  $20,000,000  principal  amount  of the CQC Notes
remained outstanding. However, the dates by which CQC previously agreed with the
holders of the CQC Notes to effect the sale of its  assets  and  repurchase  the
remaining  CQC Notes  have  passed.  The CQC Notes  outstanding  require  annual
interest payments of $2,400,000,  payable in equal installments semi-annually on
May 15 and November 15. CQC was not able to make its scheduled  interest payment
of  $1,200,000  on November 15,  1995,  and AC did not have  available  funds to
advance  on behalf of CQC.  Management  of AC and CQC are  currently  undergoing
discussions with an informal committee  representing the holders of the AC Notes
and CQC Notes regarding a proposed restructuring plan, however, an agreement has
not yet been reached.

      CQC had entered into an Asset Purchase  Agreement dated April 10, 1995 for
the sale of its  assets  to Aerie  Riverboat  Casinos  of  Missouri,  Inc.  at a
purchase price of $18,000,000.  However,  the consummation of the Aerie purchase
agreement was subject to the satisfaction of several  conditions which could not
be satisfied timely, including, among others, that Jefferson City consent to the
assignment  of the  Development  Agreement,  that  Aerie  be  found  preliminary
suitable to hold a Missouri Gaming license and that riverboat  gaming is legally
permitted  in  Jefferson  City.  As a  result,  the  agreement  with  Aerie  was
terminated without penalty when the expiration date of December 31, 1995 passed.
CQC is  currently  pursuing  offers on its  riverboat  assets  from  prospective
buyers.

      On November  7, 1995,  voters in  Jefferson  City  rejected  an  ordinance
permitting  riverboat  gambling,  reversing  the vote of an earlier  election in
which  Jefferson  City  voters  approved  riverboat   gambling.   Because  CQC's
Development  Agreement  with  Jefferson  City was entered  into  pursuant to the
earlier ordinance permitting riverboat gambling,  the Company believes that as a
matter of law the 1995 election does not affect the validity of the  Development
Agreement.  However,  it has not yet been determined whether Jefferson City will
honor the Agreement in light of the election without  litigation to uphold CQC's
position.  CQC is  exploring  its  legal  options  in the event  Jefferson  City
declines to honor the Development Agreement, but has not reached any decision. A
final  judicial  determination  that the 1995  vote  abrogates  the  Development
Agreement  would have a material  adverse  effect on CQC and its ability to sell
its assets.

      CQC is not expected to generate  sufficient  funds through the sale of its
assets to  repurchase  all of the  outstanding  CQC Notes.  AC,  pursuant to its
guarantee of the CQC Notes,  will be liable for the  principal  of, and interest
on, any remaining  outstanding  CQC Notes.  AC is restricted from selling assets
under the covenants  governing the AC Notes, and management believes that access
to  additional  capital  from  other  sources is  restricted  as a result of the
above-described circumstances.  As a result, management does not believe that AC
(nor SC, as  guarantor  of the AC Notes)  would  have  sufficient  resources  to
satisfy such obligation, should it be necessary.


3)   Relationship To Becker Gaming, Inc.:

      Due to the  decision  to suspend  development  of CQC's  riverboat  casino
project and sell its assets, the majority of BGI's management and administrative
services are anticipated to benefit AC in the future. Accordingly, in late March
1995,  BGI  transferred  approximately  40 employees  involved in accounting and
administrative  functions  from  BGI  to AC.  These  employees  were  originally
employees  of  AC  and  were   transferred  to  BGI  in  June  1994,   when  the
Reorganization became effective.  The Company has reviewed the amount of the BGI
management  fee (currently 5% of gross  revenues) and determined  that effective
October 1, 1995 an amount equal to 4% of gross  revenues  will be returned to AC
from BGI for the services that AC provides for BGI's  subsidiaries  as mentioned
above.


================================================================================
                                SUNSET COIN, INC.
               (A Wholly Owned Subsidiary Of Becker Gaming, Inc.)

                                 BALANCE SHEETS
                             (Dollars In Thousands)


                                     ASSETS


                                                        December 31,   June 30,
                                                                1995       1995
                                                             -------    -------
                                                         (Unaudited)
Current assets:
  Cash ...................................................   $   842    $   506
  Current portion of notes receivable ....................       175        175
  Note receivable from related party .....................     2,250      2,250
  Other receivables ......................................       130        146
  Prepaid expenses .......................................        33         46
                                                             -------    -------
      Total current assets ...............................     3,430      3,123
                                                             -------    -------


Property and equipment:
  Building and leasehold improvements ....................       509        461
  Furniture, fixtures and equipment ......................     2,930      2,984
                                                             -------    -------
                                                                3,439      3,445
  Less, accumulated depreciation .........................    (1,586)    (1,710)
                                                             -------    -------
      Net property and equipment .........................     1,853      1,735
                                                             -------    -------

Notes receivable, less current
  portion ................................................       273        267

Advances to related parties ..............................       110         86

Other assets, less accumulated
  amortization of $20 at December 31, 1995,
  and $19 at June 30 , 1995 ..............................        87        138
                                                             -------    -------

      Total assets .......................................   $ 5,753    $ 5,349
                                                             =======    =======



                      LIABILITIES AND STOCKHOLDER'S EQUITY


                                                        December 31,  June 30,
                                                               1995     1995
                                                             ------   ------
                                                        (Unaudited)
Current liabilities:
  Trade accounts payable .................................   $   11   $   69
  Accrued expenses .......................................      506      284
  Current portion of long term debt ......................      304      255
                                                             ------   ------
       Total current liabilities .........................      821      608


Long-term liabilities:
   Long-term debt, less current portion ..................      632      664
   Subordinated notes payable to
     former stockholders .................................    3,000    3,000
                                                             ------   ------
      Total liabilities ..................................    4,453    4,272
                                                             ------   ------

Commitments and contingencies

Stockholder's equity:
  Common stock, no par value, 2,500
  shares authorized, 400 shares
  issued and outstanding .................................       27       27
Retained earnings ........................................    1,273    1,050
                                                             ------   ------
      Total stockholder's equity .........................    1,300    1,077
                                                             ------   ------

      Total liabilities and stockholder's
      equity .............................................   $5,753   $5,349
                                                             ======   ======

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

                                SUNSET COIN, INC.
               (A Wholly Owned Subsidiary of Becker Gaming, Inc.)


                   STATEMENTS OF INCOME AND RETAINED EARNINGS
                             (Dollars in Thousands)



                                       Three Months Ended December 31,
                                              1995       1994
                                           -------    -------
Revenues:
    Slot route:
       From locations controlled
          by related parties ...........   $   576    $   584
       Other ...........................        33         73

    Slot service fees:
       From related parties ............        24         18
       Other ...........................         8         16
                                           -------    -------
         Total revenues ................       641        691

Operating expenses:
    Slot route and service .............       307        271
    General and administrative .........         9         15
    Management fee - Becker Gaming, Inc.        38         33
    Depreciation and amortization ......        76         58
                                           -------    -------
       Total operating expenses ........       425        382
                                           -------    -------
Operating income .......................       216        309
                                           -------    -------
Other income (expense):
    Interest income ....................        42         34
    Interest expense ...................      (104)       (86)
    Other income .......................        13         15
                                           -------    -------
       Total other income (expense) ....       (49)       (37)
                                           -------    -------
Net income before income tax ...........       167        272
Provision for income tax ...............       (57)      (102)
                                           -------    -------
Net income .............................       110        191
Retained earnings,
beginning of period ....................     1,163        527
                                           -------    -------
Retained earnings, end of
period .................................   $ 1,273    $   718
                                           =======    =======



                                       Six Months Ended  December 31,
                                              1995       1994
                                           -------    -------
Revenues:
    Slot route:
       From locations controlled
          by related parties ...........   $ 1,143    $ 1,128
       Other ...........................        74        142

    Slot service fees:
       From related parties ............        48         36
       Other ...........................        16         33
                                           -------    -------
         Total revenues ................     1,281      1,339

Operating expenses:
    Slot route and service .............       614        508
    General and administrative .........        27         35
    Management fee - Becker Gaming, Inc.        67         74
    Depreciation and amortization ......       149        113
                                           -------    -------
       Total operating expenses ........       857        730
                                           -------    -------
Operating income .......................       424        609
                                           -------    -------
Other income (expense):
    Interest income ....................        82         59
    Interest expense ...................      (203)      (170)
    Other income .......................        35         41
                                           -------    -------
       Total other income (expense) ....       (86)       (70)
                                           -------    -------

 Net income before income tax ..........       338        539
Provision for income tax ...............      (115)      (183)
                                           -------    -------
Net income .............................       223        356
Retained earnings,
beginning of period ....................     1,050        362
                                           -------    -------
Retained earnings,
end of period ..........................   $ 1,273    $   718
                                           =======    =======


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

                                SUNSET COIN, INC.
               (A Wholly Owned Subsidiary of Becker Gaming, Inc.)


                            STATEMENTS OF CASH FLOWS
                             (Dollars In Thousands)

                                   (Unaudited)


                                       Six Months Ended December 31,
                                             1995       1994
                                          -------    -------
Cash flows from operating activities:
    Net income ........................   $   223    $   356

    Adjustments  to  reconcile  net  
     income to net cash  provided  by  
     operating activities:
     Depreciation and amortization ....       149        113
     Gain on sales of equipment .......        13         12

(Increase) decrease in operating assets:
    Other receivables .................        16         21
    Prepaid expenses ..................        13          8

Increase (decrease) in operating liabilities:
     Accounts payable .................       (58)       (58)
     Notes payable ....................      --           15
     Accrued expenses .................       222         (1)
                                          -------    -------
         Total adjustments ............       355        110
                                          -------    -------

         Net cash provided by
          operating activities ........       578        466
                                          -------    -------

Cash flows from investing activities:
   Capital expenditures ...............      (285)      (313)
   Proceeds from sales of equipment ...        12         14
   Decrease (increase) in related
     party notes receivable ...........      --       (1,000)
   Decrease (increase) in advances
     to related parties ...............       (24)       (23)
   Repayments of notes receivable .....        39        109
                                          -------    -------
        Net cash provided by
          investing activities ........      (258)    (1,213)
                                          -------    -------
Cash flows from financing activities:

    Proceeds from notes payable .......       177        237
    Principal payments on notes payable      (161)       (72)
                                          -------    -------
        Net cash provided by
          financing activities ........        16        165
                                          -------    -------

        Net increase in cash ..........       336       (582)

Cash, beginning of period .............       506      1,940
                                          -------    -------
Cash, end of period ...................   $   842    $ 1,358
                                          =======    =======

Supplemental cash flow disclosures:
    Interest paid .....................   $   204    $   170
                                          =======    =======
    Income taxes paid .................        $-    $   102
                                          =======    =======

The accompanying notes are an integral part of these financial statements.
================================================================================
                                SUNSET COIN, INC.
               (A Wholly Owned Subsidiary Of Becker Gaming, Inc.)

                       NOTES TO THE FINANCIAL STATEMENTS
                                   ----------

1)   Basis of Presentation:

      Sunset Coin, Inc. ("SC") is wholly owned subsidiary of Becker Gaming, Inc.
("BGI"). The accompanying financial statements of SC are unaudited and have been
prepared in accordance with generally accepted accounting principles for interim
financial  information and with the  instructions to Form 10-Q and Article 10 of
Regulation  S-X.  Accordingly,  they do not include all  adjustments  and normal
recurring  accruals  considered  necessary  for a fair  presentation  have  been
included.  Operating  results for the three and six-month periods ended December
31, 1995 are not necessarily  indicative of the results that may be expected for
the year ended June 30, 1996. The unaudited financial  statements should be read
in conjunction  with the financial  statements  and footnotes  including in SC's
annual report on Form 10-K for the year ended June 30, 1995.

2)    Denial  of  Missouri  Gaming  License  Application  of
Capitol Queen & Casino, Inc.:

      Sunset Coin,  Inc., a wholly owned  subsidiary of BGI, has  guaranteed 12%
First Mortgage Notes due November 15, 2000, of Arizona  Charlie's,  Inc. ("AC"),
another  wholly  owned  subsidiary  of BGI,  until such time as AC  completes an
expansion of its casino  facilities  (which it has done) and obtains a specified
fixed charge coverage ratio, as defined in the indenture  governing the AC First
Mortgage  Notes (the "AC  Notes").  AC, in turn,  has  guaranteed  the 12% First
Mortgage  Notes (the "CQC  Notes")  due  November  15,  2000 of Capitol  Queen &
Casino, Inc. ("CQC"), another wholly owned subsidiary of BGI, until such time as
CQC is licensed to conduct gaming in Missouri.

     CQC was formed to develop,  own and operate the "Capitol  Queen"  riverboat
casino in Jefferson City, Missouri. On September 28, 1994, CQC was notified that
its  application  for a gaming  license  was  rejected  by the  Missouri  Gaming
Commission (the "Commission").  Under the Commission's order, CQC, its principal
owners and affiliated  companies cannot reapply for a gaming license in Missouri
prior to September 28, 1996.

      The Commission's  decision was based on an August 1994  recommendation  of
its staff (the  "Staff")  that CQC's license  application  be denied  without an
investigative   review  because  CQC  knowingly  failed  to  disclose  material,
substantive information in the application. The Commission did not find that CQC
knowingly  failed to  disclose  information,  but did find that the  application
contained  omissions of a  substantive  and material  nature.  Management of CQC
believes that its application was complete and accurate. Moreover, CQC has fully
disclosed the information cited by the Staff in post-application  filings, other
public  documents and  communications  with the Staff,  all of which  management
considers to be part of the licensing and related investigative  process.  Based
on the advice of legal counsel,  CQC believes that the Commission  acted outside
its authority in rejecting the application without a formal investigation.

      On October 31,  1994,  CQC  petitioned  the Cole County  Circuit  Court in
Jefferson  City for a writ of mandamus.  In response to the petition,  the court
issued an order  declaring  that by  denying  CQC's  application  without  first
conducting  an  investigation  and by  deliberating  in a  closed  session,  the
Commission had violated  Missouri gaming and open meeting laws. The court issued
a  preliminary  writ of mandamus  declaring the  Commission's  decision void and
ordering  the  Commission  to  immediately  commence  a full  investigation  and
thereafter to act on CQC's application. The court ordered the Commission to show
cause within thirty days why the preliminary writ should not be made permanent.

      Initially,  the Commission did not respond directly to the Circuit Court's
order to show cause, but instead filed two actions,  both  unsuccessful,  in the
Missouri  Court of Appeals for the Western  District.  On November 16, 1994, the
Commission petitioned the Court of Appeals for a writ of prohibition against the
Circuit  Court,  contending,  among other  things,  that CQC was not entitled to
judicial  relief  because it had not exhausted its  administrative  remedy of an
evidentiary hearing before the Commission. The Court of Appeals initially issued
a preliminary  writ in prohibition  staying  further  proceedings in the Circuit
Court.  However,  in an opinion  issued on April 18, 1995,  the Court of Appeals
concluded  that its  preliminary  writ of  prohibition  had  been  improvidently
granted, quashed the preliminary writ, and denied the Commission's request for a
permanent writ,  relegating the Commission to its remedies in the Circuit Court.
On December 13, 1994, the Commission also filed an appeal of the Circuit Court's
order.  On December  23, CQC moved to dismiss the appeal on the grounds that the
preliminary  writ of  mandamus  was  not a final  order  and  therefore  was not
appealable.  On January 5, 1995,  the Court of Appeals  granted CQC's motion and
dismissed the appeal.

     On June 26, 1995, the Circuit Court issued a peremptory (permanent) writ of
mandamus similar to the preliminary writ,  declaring the Commission's order void
and  ordering  the  Commission  to  proceed  with  an   investigation  of  CQC's
application  "with all  deliberate  speed."  On July 21,  1995,  the  Commission
appealed the Circuit  Court's  decision to the Missouri Court of Appeals for the
Western District. That appeal is pending.

      On  November  1, 1994,  concurrent  with its  efforts  to obtain  judicial
relief,  CQC  (with  BGI as a  co-party)  requested  an  administrative  hearing
pursuant to the Missouri  gaming  statutes,  under which a denied  applicant may
request an evidentiary  hearing before a Commission  appointed  hearing officer.
The hearing officer's  decision is subject to review by the Commission,  and the
Commission's  decision is in turn  subject to judicial  review.  The  Commission
filed an answer on November 29,  alleging,  among other things,  that CQC is not
entitled to an administrative hearing because CQC had not been investigated.  On
December  22,  because the  Commission  had not  appointed a hearing  officer or
otherwise responded to CQC's request for a hearing,  CQC moved the Commission to
appoint a hearing  officer and establish a procedural  schedule.  The Commission
did not  respond to this  motion.  However,  in March  1995,  CQC's  counsel was
notified  by a member  of the  Commission's  staff  that he had  been  appointed
hearing officer in the case. Because this person appears to have participated in
the staff's  recommendation  that CQC's license be denied, CQC moved on March 31
for  the  appointment  of  an  impartial,   independent  hearing  officer.   The
Commission's attorney filed a response in opposition to this motion on April 12,
but the  Commission  has not responded to it.  Instead,  on August 10, 1995, the
hearing officer issued an order  proclaiming his ability to proceed  impartially
and  purporting  to  deny  the  motion.  Hearing  dates  have  been  vacated  by
stipulation,  and,  after the Circuit  Court's  order  voiding the  Commission's
decision appeared to make the  administrative  proceeding  premature,  postponed
indefinitely.

      On March 24, 1995,  CQC filed an action against the Commission in the Cole
County,  Missouri,  Circuit  Court,  alleging that the  Commission  had violated
Missouri's  open meeting law by  deliberating in a closed session before issuing
its decision denying CQC's license.  The petition requested an order voiding the
Commission's  decision.  On March 27, as a protective  measure against  possible
arguments  that Cole County is not the proper venue,  CQC filed a  substantively
identical action in the St. Louis County Circuit Court. In April, the Commission
filed answers to both  complaints  denying that it had violated the open meeting
law. On June 1, CQC moved for summary  judgment in the Cole County case.  In its
response,  the  Commission  stated  that  it "did  not  deliberately  intend  to
circumvent"  the open meeting law but had deliberated in closed session based on
erroneous advice of counsel. The Commission argued that the closed session could
nevertheless be justified under statutory  exceptions  allowing agencies to meet
privately with their lawyers to discuss confidential information and litigation.
The motion for summary  judgment was heard on December 19, 1995, and taken under
submission by the court.

      In January 1995,  CQC engaged in settlement  discussions  initiated by the
Missouri  Attorney  General's  office,  legal counsel for the  Commission,  with
respect to the civil matters  involving the Commission.  The discussions,  which
terminated  in March  1995,  were  resumed in August  1995 and were  expanded to
include the misdemeanor  charges filed by the Missouri Attorney  General.  While
CQC and its lawyers  continue to seek a  negotiated  settlement  to the disputes
with the Commission and the Attorney  General,  the discussions  have again been
terminated by the Attorney General's office.

      At the time CQC was notified of the Staff's position,  construction of the
riverboat  contemplated  under the  project  being  developed  by CQC was almost
completed.  CQC had also  obtained  the  necessary  permits  for the  land-based
development  portion of the project and had performed certain dredging and other
site  preparation  work.  In August 1994,  CQC  suspended  all further land site
development   activity   pending   resolution  of  the  review  of  its  license
application.  Management of CQC believes that the Commission's subsequent ruling
in September 1994 makes further  development of the project not feasible because
of  significant  delays in the ability to operate the riverboat  casino,  either
through appeal of the decision or expiration of the two-year  probation  period.
Accordingly,  on  September  29,  1994,  management  decided to suspend  further
development  of the Capitol Queen project.  As a result of that decision,  costs
associated  with the  development of the project which had been deferred  during
the development  stage were written-off in the fourth quarter of the fiscal year
ended June 30, 1994,  and the land site and riverboat were written down to their
estimated net realizable value.

      Prior to its  suspension,  CQC had  financed  the  Capitol  Queen  project
through  the  issuance  of $40  million  in  principal  amount  of the 12% First
Mortgage  Notes due November 15, 2000. As of January 1, 1995,  the CQC Indenture
was amended to (i) eliminate CQC's  obligation to construct and open the Capitol
Queen and (ii) permit a two-step  purchase of the CQC Notes at 101% of principal
plus  accrued  and unpaid  interest  from a sale of assets.  The  repurchase  of
$20,000,000  principal amount of the CQC Notes (plus accrued and unpaid interest
thereon) was  completed  on January 17, 1995 with funds from the project  escrow
account  and an  aggregate  of  $20,000,000  principal  amount  of the CQC Notes
remained outstanding. However, the dates by which CQC previously agreed with the
holders of the CQC Notes to effect the sale of its  assets  and  repurchase  the
remaining  CQC Notes  have  passed.  The CQC Notes  outstanding  require  annual
interest payments of $2,400,000,  payable in equal installments semi-annually on
May 15 and November 15. CQC was not able to make its scheduled  interest payment
of  $1,200,000  on November 15,  1995,  and AC did not have  available  funds to
advance  on behalf of CQC.  Management  of AC and CQC are  currently  undergoing
discussions with an informal committee  representing the holders of the AC Notes
and CQC Notes regarding a proposed restructuring plan, however, an agreement has
not yet been reached.

      CQC had entered into an Asset Purchase  Agreement dated April 10, 1995 for
the sale of its  assets  to Aerie  Riverboat  Casinos  of  Missouri,  Inc.  at a
purchase price of $18,000,000.  However,  the consummation of the Aerie purchase
agreement was subject to the satisfaction of several  conditions which could not
be satisfied timely, including, among others, that Jefferson City consent to the
assignment  of the  Development  Agreement,  that  Aerie  be  found  preliminary
suitable to hold a Missouri Gaming license and that riverboat  gaming is legally
permitted  in  Jefferson  City.  As a  result,  the  agreement  with  Aerie  was
terminated without penalty when the expiration date of December 31, 1995 passed.
CQC is  currently  pursuing  offers on its  riverboat  assets  from  prospective
buyers.

      On November  7, 1995,  voters in  Jefferson  City  rejected  an  ordinance
permitting  riverboat  gambling,  reversing  the vote of an earlier  election in
which  Jefferson  City  voters  approved  riverboat   gambling.   Because  CQC's
Development  Agreement  with  Jefferson  City was entered  into  pursuant to the
earlier ordinance permitting riverboat gambling,  the Company believes that as a
matter of law the 1995 election does not affect the validity of the  Development
Agreement.  However,  it has not yet been determined whether Jefferson City will
honor the Agreement in light of the election without  litigation to uphold CQC's
position.  CQC is  exploring  its  legal  options  in the event  Jefferson  City
declines to honor the Development Agreement, but has not reached any decision. A
final  judicial  determination  that the 1995  vote  abrogates  the  Development
Agreement  would have a material  adverse  effect on CQC and its ability to sell
its assets.

      CQC is not expected to generate  sufficient  funds through the sale of its
assets to  repurchase  all of the  outstanding  CQC Notes.  AC,  pursuant to its
guarantee of the CQC Notes,  will be liable for the  principal  of, and interest
on, any remaining  outstanding  CQC Notes.  AC is restricted from selling assets
under the covenants  governing the AC Notes, and management believes that access
to  additional  capital  from  other  sources is  restricted  as a result of the
above-described circumstances.  As a result, management does not believe that AC
(nor SC, as  guarantor  of the AC Notes)  would  have  sufficient  resources  to
satisfy such obligation, should it be necessary.

================================================================================

                          CAPITOL QUEEN & CASINO, INC.
                 (A Development Stage Company And A Wholly Owned
                       Subsidiary of Becker Gaming, Inc.)

                                 BALANCE SHEETS
                    (Dollars In Thousands, Except Share Data)


                                     ASSETS



                                                        December 31,    June 30,
                                                                1995      1995
                                                             -------   -------
                                                         (Unaudited)
Current assets:


  Cash and cash equivalents ..............................   $  --     $    45
   Restricted cash, in escrow account ....................        30        30
                                                             -------   -------

      Total current assets ...............................        30        75
                                                             -------   -------

Other assets:


  Assets held for sale ...................................    11,834    12,146

  Financing costs, net of accumulated
    amortization of $278 at December 31,
    1995 and $212 at June 30, 1995 .......................       639       705
  Deposits and other assets ..............................        60        60
                                                             -------   -------

      Total other assets .................................    12,533    12,911
                                                             -------   -------

      Total assets .......................................   $12,563   $12,986
                                                             -------   -------
                                                             -------   -------



                  LIABILITIES & STOCKHOLDER'S EQUITY(DEFICIT)

                                                      December 31,    June 30,
                                                              1995        1995
                                                          --------    --------
                                                       (Unaudited)

Current liabilities:

  Accounts payable ....................................   $   --      $    142
  Advances from related parties .......................      1,057         404
  Accrued interest ....................................      1,542         395
  Notes payable to related parties ....................      1,200       1,200
  Long-term debt classified as current,
    net of unamortized original issue discount
    of $2,615 and $2,882, respectively ................     17,385      17,118
                                                          --------    --------
         Total liabilities ............................     21,184      19,259
                                                          --------    --------

Commitments and contingencies

Stockholder's equity(deficit):
  Common stock, $1.00 par value, 1,000 shares
   authorized, 100 shares issued and outstanding ......       --          --
  Additional paid-in capital ..........................     12,732      12,732
  Deficit accumulated during development stage ........    (21,353)    (19,005)
                                                          --------    --------
      Total stockholder's equity (deficit) ............     (8,621)     (6,273)
                                                          --------    --------

      Total liabilities and stockholder's
         equity(deficit) ..............................   $ 12,563    $ 12,986
                                                          --------    --------
                                                          --------    --------


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

                        CAPITOL QUEEN & CASINO, INC.
                 (A Development Stage Company And A Wholly Owned
                       Subsidiary of Becker Gaming, Inc.)

            STATEMENTS OF LOSS INCURRED DURING THE DEVELOPMENT STAGE
                             (Dollars In Thousands)
                                   (Unaudited)





                                Three Months Ended December 31,
                                        1995       1994
                                     -------    -------
Revenues .........................        $-         $-

Operating expenses:
  Amortization of financing and
    other costs ..................        33        333
  Abandonment loss ...............      --         --
  Development costs ..............       702        307
                                     -------    -------

      Total operating expenses ...       735        640
                                     -------    -------

Operating loss ...................      (735)      (640)

Other income (expenses):
  Interest income ................      --          283
  Interest expense ...............      (729)    (1,227)
  Interest capitalized ...........      --         --
                                     -------    -------

Total other income (expense) .....      (729)      (944)
                                     -------    -------

Net loss before extraordinary item
                                      (1,464)    (1,584)
                                     -------    -------

Extraordinary item:
  Loss on early retirement of
    debt (no income tax benefit
    available) ...................      --         --
                                     -------    -------
   Net loss ......................   $(1,464)   $(1,584)
                                     =======    =======





                                                                  For The Period
                                                                January 20, 1993
                                                                    (The Date Of
                                                                      Inception)
                                            Six Months              Through
                                         Ended December 31,      December 31,
                                         1995        1994            1995
                                     --------    --------    ------------------
Revenues ...........................       $-          $-                    $-


Operating expenses:
  Amortization of financing and ....       66         670                 1,307
    other costs ....................     --          --                   6,034
  Abandonment loss .................      868         600                 2,074
  Development costs ................     --          --                    --

                                          934       1,270                 9,415
      Total operating expenses .....     --          --                    --

                                         (934)     (1,270)               (9,415)
Operating loss

Other income (expenses): ...........     --           555                 1,265
  Interest income ..................   (1,415)     (2,453)               (9,797)
  Interest expense .................     --          --                     683
  Interest capitalized .............     --          --                    --

                                       (1,415)     (1,898)               (7,849)
Total other income (expense) .......     --          --                    --


Net loss before extraordinary item .   (2,349)     (3,168)              (17,264)
                                     --------    --------    ------------------


Extraordinary item:
  Loss on early retirement of
     debt (no income tax benefit ...
     available) ....................     --          --                  (4,089)
                                     --------    --------    ------------------

   Net loss ........................ $ (2,349)   $ (3,168)   $          (21,353)
                                     ========    ========    ==================


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

                          CAPITOL QUEEN & CASINO, INC.

  ( A Development Stage Company And A Wholly Owned Subsidiary of Becker Gaming,
                                      Inc.)

                            STATEMENTS OF CASH FLOWS
                             (Dollars In Thousands)
                                   (Unaudited)





                                                      Six Months Ended
                                                         December 31,
                                                    1995       1994
                                                 -------    -------

Cash flows from development stage activities:
 Net loss ....................................   $(2,349)   $(3,168)
 Adjustments to reconcile net loss
    to net cash provided by (used in)
    development stage activities:
 Amortization of financing and other costs ...        66        134
 Amortization of original issue discount .....       267        536
 Abandonment loss ............................      --         --
 Extraordinary loss on retirement of debt ....      --         --
 Increase in accounts payable
  and accruals, net of amounts
  for capital expenditures ...................     1,005          5
 Increase in advances from related parties ...       653         40
                                                 -------    -------
       Total adjustments .....................     1,991        715
                                                 -------    -------
       Net cash used in development
         stage activities ....................      (358)    (2,453)
                                                 -------    -------

Cash flows from investing activities:
 Capital expenditures, net of
  construction accounts payable ..............      --       (1,639)
 Decrease in deposits and other assets .......       313         12
 Capitalization of preopening costs ..........      --         --
 Development costs ...........................      --         --
 Net (additions to) reductions
    in restricted cash equivalents ...........      --        4,334
                                                 -------    -------
     Net cash provided by
       (used in) investing activities ........       313      2,707
                                                 -------    -------

Cash flows from financing activities:
 Principal payments on First
    Mortgage Notes ...........................      --         --
 Proceeds from issuance of First
    Mortgage Notes, net of financing costs ...      --         --
 Proceeds from borrowings under
    notes payable to  related parties ........      --         --
 Equity contribution from Becker Gaming, Inc.       --
      relating to sale of warrants ...........      --         --
                                                 -------    -------
     Net cash provided by financing activities      --         --
                                                 -------    -------

     Net (decrease) increase in
         cash and cash  equivalents ..........       (45)       254

Cash and cash equivalents,
    beginning of period ......................        45         33
                                                 -------    -------

Cash and cash equivalents,
    end of period ............................      --      $   287
                                                 -------    -------
                                                 -------    -------

Supplemental cash flow disclosures:
 Interest paid, net of amounts capitalized ...        $-    $ 2,400
                                                 -------    -------
                                                 -------    -------
 Original issue discount that
    did not affect cash ......................        $-         $-
                                                 -------    -------
                                                 -------    -------
 Equity contribution by Becker Gaming
    that did not affect cash .................        $-         $-
                                                 -------    -------
                                                 -------    -------


                                                       For The Period
                                                      January 20, 1993
                                                        (The Date Of
                                                         Inception)
                                                           Through
                                                         December 31,
                                                              1995
                                                           --------

Cash flows from development stage activities:
 Net loss ...................................              $(21,353)
 Adjustments to reconcile net loss
    to net cash provided by (used in)
    development stage activities:
 Amortization of financing and other costs ..                 1,307
 Amortization of original issue discount ....                 1,766
 Abandonment loss ...........................                 6,034
 Extraordinary loss on retirement of debt ...                 4,089
 Increase in accounts payable
  and accruals, net of amounts
  for capital expenditures ..................                 1,553
 Increase in advances from related parties ..                 1,045
                                                           --------
       Total adjustments ....................                15,794
                                                           --------
       Net cash used in development
         stage activities ...................                (5,559)
                                                           --------

Cash flows from investing activities:
 Capital expenditures, net of
  construction accounts payable .............               (12,936)
 Decrease in deposits and other assets ......                   253
 Capitalization of preopening costs .........                  (340)
 Development costs ..........................                  (553)
 Net (additions to) reductions
    in restricted cash equivalents ..........                   (31)
                                                           --------
     Net cash provided by
       (used in) investing activities .......               (13,607)
                                                           --------

Cash flows from financing activities:
 Principal payments on First
    Mortgage Notes ..........................               (20,200)
 Proceeds from issuance of First
    Mortgage Notes, net of financing costs ..                30,666
 Proceeds from borrowings under
    notes payable to  related parties .......                 1,200
 Equity contribution from Becker Gaming, Inc.
      relating to sale of warrants ..........                 7,500
                                                           --------
     Net cash provided by financing activities               19,166
                                                           --------

     Net (decrease) increase in
         cash and cash  equivalents .........                  --

Cash and cash equivalents,
    beginning of period .....................                  --
                                                           --------

Cash and cash equivalents,
    end of period ...........................                  --
                                                           --------
                                                           --------

Supplemental cash flow disclosures:
 Interest paid, net of amounts capitalized ..              $  5,807
                                                           --------
                                                           --------
 Original issue discount that
    did not affect cash .....................              $  7,500
                                                           --------
                                                           --------
 Equity contribution by Becker Gaming
    that did not affect cash ................              $  5,232
                                                           --------
                                                           --------


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

                          CAPITOL QUEEN & CASINO, INC.
  ( A Development Stage Company And A Wholly Owned Subsidiary of Becker Gaming,
                                      Inc.)

                       NOTES TO THE FINANCIAL STATEMENTS
                                   ----------


1)   Basis of Presentation:

      Capitol Queen & Casino,  Inc. ("CQC") is wholly owned subsidiary of Becker
Gaming,  Inc. ("BGI").  The accompanying  financial  statements of CQC have been
prepared in accordance with generally accepted accounting principles for interim
financial  information  and with the  instruction to Form 10-Q and Article 10 of
Regulation  S-X.  Accordingly,  they do not include all of the  information  and
footnotes  required by generally  accepted  accounting  principles  for complete
financial statements.  In the opinion of management,  all adjustments and normal
recurring  accruals  considered  necessary  for a fair  presentation  have  been
included.  Operating  results for the three and six-month periods ended December
31, 1995 are not necessarily  indicative of the results that may be expected for
the year ended June 30, 1996. The unaudited financial  statements should be read
in conjunction  with the financial  statements  and footnotes  included in CQC's
annual report on Form 10-K for the year ended June 30, 1995.

2)    Denial  of  Missouri  Gaming  License  Application  of
Capitol Queen & Casino, Inc.:

      Sunset Coin, Inc. ("SC"), a wholly owned subsidiary of BGI, has guaranteed
12% First  Mortgage  Notes due  November 15, 2000,  of Arizona  Charlie's,  Inc.
("AC"),  another wholly owned subsidiary of BGI, until such time as AC completes
an  expansion  of its  casino  facilities  (which  it has  done)  and  obtains a
specified fixed charge coverage ratio, as defined in the indenture governing the
AC First  Mortgage  Notes (the "AC Notes").  AC, in turn, has guaranteed the 12%
First  Mortgage Notes (the "CQC Notes") due November 15, 2000 of Capitol Queen &
Casino,  Inc., another wholly owned subsidiary of BGI, until such time as CQC is
licensed to conduct gaming in Missouri.

     CQC was formed to develop,  own and operate the "Capitol  Queen"  riverboat
casino in Jefferson City, Missouri. On September 28, 1994, CQC was notified that
its  application  for a gaming  license  was  rejected  by the  Missouri  Gaming
Commission (the "Commission").  Under the Commission's order, CQC, its principal
owners and affiliated  companies cannot reapply for a gaming license in Missouri
prior to September 28, 1996.

      The Commission's  decision was based on an August 1994  recommendation  of
its staff (the  "Staff")  that CQC's license  application  be denied  without an
investigative   review  because  CQC  knowingly  failed  to  disclose  material,
substantive information in the application. The Commission did not find that CQC
knowingly  failed to  disclose  information,  but did find that the  application
contained  omissions of a  substantive  and material  nature.  Management of CQC
believes that its application was complete and accurate. Moreover, CQC has fully
disclosed the information cited by the Staff in post-application  filings, other
public  documents and  communications  with the Staff,  all of which  management
considers to be part of the licensing and related investigative  process.  Based
on the advice of legal counsel,  CQC believes that the Commission  acted outside
its authority in rejecting the application without a formal investigation.

      On October 31,  1994,  CQC  petitioned  the Cole County  Circuit  Court in
Jefferson  City for a writ of mandamus.  In response to the petition,  the court
issued an order  declaring  that by  denying  CQC's  application  without  first
conducting  an  investigation  and by  deliberating  in a  closed  session,  the
Commission had violated  Missouri gaming and open meeting laws. The court issued
a  preliminary  writ of mandamus  declaring the  Commission's  decision void and
ordering  the  Commission  to  immediately  commence  a full  investigation  and
thereafter to act on CQC's application. The court ordered the Commission to show
cause within thirty days why the preliminary writ should not be made permanent.

      Initially,  the Commission did not respond directly to the Circuit Court's
order to show cause, but instead filed two actions,  both  unsuccessful,  in the
Missouri  Court of Appeals for the Western  District.  On November 16, 1994, the
Commission petitioned the Court of Appeals for a writ of prohibition against the
Circuit  Court,  contending,  among other  things,  that CQC was not entitled to
judicial  relief  because it had not exhausted its  administrative  remedy of an
evidentiary hearing before the Commission. The Court of Appeals initially issued
a preliminary  writ in prohibition  staying  further  proceedings in the Circuit
Court.  However,  in an opinion  issued on April 18, 1995,  the Court of Appeals
concluded  that its  preliminary  writ of  prohibition  had  been  improvidently
granted, quashed the preliminary writ, and denied the Commission's request for a
permanent writ,  relegating the Commission to its remedies in the Circuit Court.
On December 13, 1994, the Commission also filed an appeal of the Circuit Court's
order.  On December  23, CQC moved to dismiss the appeal on the grounds that the
preliminary  writ of  mandamus  was  not a final  order  and  therefore  was not
appealable.  On January 5, 1995,  the Court of Appeals  granted CQC's motion and
dismissed the appeal.

     On June 26, 1995, the Circuit Court issued a peremptory (permanent) writ of
mandamus similar to the preliminary writ,  declaring the Commission's order void
and  ordering  the  Commission  to  proceed  with  an   investigation  of  CQC's
application  "with all  deliberate  speed."  On July 21,  1995,  the  Commission
appealed the Circuit  Court's  decision to the Missouri Court of Appeals for the
Western District. That appeal is pending.

      On  November  1, 1994,  concurrent  with its  efforts  to obtain  judicial
relief,  CQC  (with  BGI as a  co-party)  requested  an  administrative  hearing
pursuant to the Missouri  gaming  statutes,  under which a denied  applicant may
request an evidentiary  hearing before a Commission  appointed  hearing officer.
The hearing officer's  decision is subject to review by the Commission,  and the
Commission's  decision is in turn  subject to judicial  review.  The  Commission
filed an answer on November 29,  alleging,  among other things,  that CQC is not
entitled to an administrative hearing because CQC had not been investigated.  On
December  22,  because the  Commission  had not  appointed a hearing  officer or
otherwise responded to CQC's request for a hearing,  CQC moved the Commission to
appoint a hearing  officer and establish a procedural  schedule.  The Commission
did not  respond to this  motion.  However,  in March  1995,  CQC's  counsel was
notified  by a member  of the  Commission's  staff  that he had  been  appointed
hearing officer in the case. Because this person appears to have participated in
the staff's  recommendation  that CQC's license be denied, CQC moved on March 31
for  the  appointment  of  an  impartial,   independent  hearing  officer.   The
Commission's attorney filed a response in opposition to this motion on April 12,
but the  Commission  has not responded to it.  Instead,  on August 10, 1995, the
hearing officer issued an order  proclaiming his ability to proceed  impartially
and  purporting  to  deny  the  motion.  Hearing  dates  have  been  vacated  by
stipulation,  and,  after the Circuit  Court's  order  voiding the  Commission's
decision appeared to make the  administrative  proceeding  premature,  postponed
indefinitely.

      On March 24, 1995,  CQC filed an action against the Commission in the Cole
County,  Missouri,  Circuit  Court,  alleging that the  Commission  had violated
Missouri's  open meeting law by  deliberating in a closed session before issuing
its decision denying CQC's license.  The petition requested an order voiding the
Commission's  decision.  On March 27, as a protective  measure against  possible
arguments  that Cole County is not the proper venue,  CQC filed a  substantively
identical action in the St. Louis County Circuit Court. In April, the Commission
filed answers to both  complaints  denying that it had violated the open meeting
law. On June 1, CQC moved for summary  judgment in the Cole County case.  In its
response,  the  Commission  stated  that  it "did  not  deliberately  intend  to
circumvent"  the open meeting law but had deliberated in closed session based on
erroneous advice of counsel. The Commission argued that the closed session could
nevertheless be justified under statutory  exceptions  allowing agencies to meet
privately with their lawyers to discuss confidential information and litigation.
The motion for summary  judgment was heard on December 19, 1995, and taken under
submission by the court.

      In January 1995,  CQC engaged in settlement  discussions  initiated by the
Missouri  Attorney  General's  office,  legal counsel for the  Commission,  with
respect to the civil matters  involving the Commission.  The discussions,  which
terminated  in March  1995,  were  resumed in August  1995 and were  expanded to
include the misdemeanor  charges filed by the Missouri Attorney  General.  While
CQC and its lawyers  continue to seek a  negotiated  settlement  to the disputes
with the Commission and the Attorney  General,  the discussions  have again been
terminated by the Attorney General's office.

      At the time CQC was notified of the Staff's position,  construction of the
riverboat  contemplated  under the  project  being  developed  by CQC was almost
completed.  CQC had also  obtained  the  necessary  permits  for the  land-based
development  portion of the project and had performed certain dredging and other
site  preparation  work.  In August 1994,  CQC  suspended  all further land site
development   activity   pending   resolution  of  the  review  of  its  license
application.  Management of CQC believes that the Commission's subsequent ruling
in September 1994 makes further  development of the project not feasible because
of  significant  delays in the ability to operate the riverboat  casino,  either
through appeal of the decision or expiration of the two-year  probation  period.
Accordingly,  on  September  29,  1994,  management  decided to suspend  further
development  of the Capitol Queen project.  As a result of that decision,  costs
associated  with the  development of the project which had been deferred  during
the development  stage were written-off in the fourth quarter of the fiscal year
ended June 30, 1994,  and the land site and riverboat were written down to their
estimated net realizable value.

      Prior to its  suspension,  CQC had  financed  the  Capitol  Queen  project
through  the  issuance  of $40  million  in  principal  amount  of the 12% First
Mortgage  Notes due November 15, 2000. As of January 1, 1995,  the CQC Indenture
was amended to (i) eliminate CQC's  obligation to construct and open the Capitol
Queen and (ii) permit a two-step  purchase of the CQC Notes at 101% of principal
plus  accrued  and unpaid  interest  from a sale of assets.  The  repurchase  of
$20,000,000  principal amount of the CQC Notes (plus accrued and unpaid interest
thereon) was  completed  on January 17, 1995 with funds from the project  escrow
account  and an  aggregate  of  $20,000,000  principal  amount  of the CQC Notes
remained outstanding. However, the dates by which CQC previously agreed with the
holders of the CQC Notes to effect the sale of its  assets  and  repurchase  the
remaining  CQC Notes  have  passed.  The CQC Notes  outstanding  require  annual
interest payments of $2,400,000,  payable in equal installments semi-annually on
May 15 and November 15. CQC was not able to make its scheduled  interest payment
of  $1,200,000  on November 15,  1995,  and AC did not have  available  funds to
advance  on behalf of CQC.  Management  of AC and CQC are  currently  undergoing
discussions with an informal committee  representing the holders of the AC Notes
and CQC Notes regarding a proposed restructuring plan, however, an agreement has
not yet been reached.

      CQC had entered into an Asset Purchase  Agreement dated April 10, 1995 for
the sale of its  assets  to Aerie  Riverboat  Casinos  of  Missouri,  Inc.  at a
purchase price of $18,000,000.  However,  the consummation of the Aerie purchase
agreement was subject to the satisfaction of several  conditions which could not
be satisfied timely, including, among others, that Jefferson City consent to the
assignment  of the  Development  Agreement,  that  Aerie  be  found  preliminary
suitable to hold a Missouri Gaming license and that riverboat  gaming is legally
permitted  in  Jefferson  City.  As a  result,  the  agreement  with  Aerie  was
terminated without penalty when the expiration date of December 31, 1995 passed.
CQC is  currently  pursuing  offers on its  riverboat  assets  from  prospective
buyers.

      On November  7, 1995,  voters in  Jefferson  City  rejected  an  ordinance
permitting  riverboat  gambling,  reversing  the vote of an earlier  election in
which  Jefferson  City  voters  approved  riverboat   gambling.   Because  CQC's
Development  Agreement  with  Jefferson  City was entered  into  pursuant to the
earlier ordinance permitting riverboat gambling,  the Company believes that as a
matter of law the 1995 election does not affect the validity of the  Development
Agreement.  However,  it has not yet been determined whether Jefferson City will
honor the Agreement in light of the election without  litigation to uphold CQC's
position.  CQC is  exploring  its  legal  options  in the event  Jefferson  City
declines to honor the Development Agreement, but has not reached any decision. A
final  judicial  determination  that the 1995  vote  abrogates  the  Development
Agreement  would have a material  adverse  effect on CQC and its ability to sell
its assets.

      CQC is not expected to generate  sufficient  funds through the sale of its
assets to  repurchase  all of the  outstanding  CQC Notes.  AC,  pursuant to its
guarantee of the CQC Notes,  will be liable for the  principal  of, and interest
on, any remaining  outstanding  CQC Notes.  AC is restricted from selling assets
under the covenants  governing the AC Notes, and management believes that access
to  additional  capital  from  other  sources is  restricted  as a result of the
above-described circumstances.  As a result, management does not believe that AC
(nor SC, as  guarantor  of the AC Notes)  would  have  sufficient  resources  to
satisfy such obligation, should it be necessary.


                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                 OF FINANCIAL CONDITION AND RESULTS OF OPERATION



Becker Gaming, Inc.

     The Company  serves as a holding  company for, and provides  management and
administrative  services  to,  the Becker  family  gaming  interests,  including
Arizona Charlie's,  Inc. ("AC"),  Sunset Coin, Inc. ("SC"),  Becker Gaming Group
("BGG"),  and Capitol Queen & Casino, Inc. ("CQC").  The Company has not engaged
in any business other than providing such management and administrative services
to its subsidiaries.

      The Company's  prospects for the receipt of management fee income from CQC
have been adversely  impacted by recent events in Missouri  adversely  affecting
CQC's efforts to become licensed to conduct riverboat gaming in that State. As a
result of such events,  CQC proposes to sell its riverboat  casino project.  See
"Capitol Queen & Casino, Inc.
- General."


Arizona Charlie's, Inc.

General
-------

       AC's revenues are derived  largely from gaming  activities at its Arizona
Charlie's  casino-hotel,  and,  to a lessor  extent,  from  food  and  beverage,
lodging,  entertainment  and retail  sales.  AC generally  views its non- casino
operations  as  complementary  to its core casino  operations.  Accordingly,  it
utilizes  entertainment  primarily  as a  casino  marketing  tool.  Further,  AC
maintains  food and  beverage  pricing  structures  designed  to benefit  casino
volumes,  often resulting in department  operating  losses. AC seeks to maximize
profits from its hotel operations,  however,  while maintaining  attractive room
rental rates. Gaming revenues represent the net win from gaming wins and losses.
The retail  value of  accommodations,  food and  beverage  provided to customers
without  charge is  included  in gross  revenues  and  deducted  as  promotional
allowance.


            Results of Operations for the three and six months ended
                           December 31, 1995 and 1994
                                   ----------

      Results from  operations  at AC  decreased  for both the  three-month  and
six-month  periods ended  December 31, 1995 compared to the same periods in 1994
despite increased  revenues as a result of increased  operating  expenses in the
more recent periods.  The increased revenues and expenses reflected the openings
of new and expanded  facilities at Arizona Charlie's from September 1994 through
January  1995.  In  addition,  the  increase  in expenses  for the 1995  periods
reflects increased slot promotional activity, costs accrued and payments made on
behalf of CQC,  and the  addition  of staff  personnel,  equipment  and  related
operating expenses transferred to AC from BGI.

      Net revenues at AC increased by $3,584,000,  or 26.8%, from $13,367,000 to
$16,951,000 for the  three-month  period ended December 31, 1995 compared to the
three-month  period  ended  December  31,  1994.  In the  same  period-to-period
comparison,   operating  expenses,   including  depreciation  and  amortization,
increased by 30.5% to $17,258,000 from $13,230,000.  This resulted in a $444,000
decrease in operating  income from $137,000 to an operating loss of $307,000 for
the more recent period.

      Net revenues at AC increased by $7,446,000,  or 29.8%, from $24,422,000 to
$32,422,000 million for the six-month period ended December 31, 1995 compared to
the  six-month  period ended  December 31, 1994.  In the same period- to- period
comparison,   operating  expenses,   including  depreciation  and  amortization,
increased  by  39.6%  to  $33,848,000  from  $24,249,000.  This  resulted  in  a
$2,153,000  decrease in operating  income from $727,000 to an operating  loss of
$1,426,000 for the more recent period.

      The largest  portion of the revenue  increase for the  three-month  period
ended December 31, 1994 is attributable to gaming revenues, specifically, gaming
machine  revenues,   which  increased  26.6%  from  $8,976,000  to  $11,365,000,
reflecting  greater  revenue  generated  by an  average of 177  additional  slot
machines in the latter  period.  Revenues from table games also  increased  from
$1,147,000 to $1,267,000 during the three-month  period and can be attributed to
the raising of betting  limits,  establishing  higher credit limits to qualified
customers  and the operation of a three table poker room which was open for only
two months of the 1994 quarter.  Bingo  revenues also  increased by $102,000 for
the three-month  period ended December 31, 1995 when compared to the same period
of the prior year as a result of lower than normal payouts.

     The largest  portion of the increase in revenues for the  six-month  period
ended December 31, 1995 is attributable to gaming revenues which increased 28.7%
from $20,610,000 to $26,533,000. Specifically, gaming machine revenues increased
$4,941,000 or 28.5% from  $17,354,000 to $22,295,000.  Revenues from table games
increased  $351,000 or 16.9%,  from $2,084,000 to $2,435,000,  and revenues from
the  race & sports  book  increased  $285,000,  or  21.4%,  from  $1,328,000  to
$1,613,000. These increases are the result of an additional 399 slot machines, 5
table games and an expanded race & sports book facility that offers  pari-mutual
wagering.  Bingo revenues also increased by $111,000 during the six-month period
ended  December  31,  1995  compared  to the same  period of the prior year as a
result of lower than normal payouts.

       Food & Beverage  revenues  increased  34.6% from $2,519,000 to $3,390,000
during the  three-month  period  ended  December  31, 1995  compared to the same
period  in the  prior  year  reflecting  full  operation  of the  two  specialty
restaurants,  Chin's and the Yukon Grill which  opened in December of 1994.  For
the six-month period ended December 31, 1995, food & beverage revenues increased
$1,779,000 or 38.0% from $4,684,000 to $6,463,000 when compared to the six-month
period of the prior year, also  reflecting the additional  revenues from the two
specialty restaurants.

     Hotel revenues  increased  8.9% from $708,000 to $771,000  during the three
months ended December 31, 1995 compared to the same three-month  period in 1994.
The increased  revenue is due to a slight increase in room rates combined with a
small  increase in  occupancy.  During the six-month  period ended  December 31,
1995,  hotel  revenues  increased  by  $347,000  or  30.3%  from  $1,146,000  to
$1,493,000  compared to the same six-month period of 1994. The increased revenue
is largely due to the  addition of 158 rooms that were  opened in  September  of
1994.

      Gift shop revenues  increased  7.0% from  $143,000 to $153,000  during the
three-month  period ended December 31, 1995 compared to the same period in 1994.
During  the  six-month  period  ended  December  31,  1995,  gift shop  revenues
increased  $43,000,  or 16.3%,  from  $264,000 to $307,000  compared to the same
period  in  1994.  The  increases  are  primarily  due  to  the  relocation  and
enlargement of the gift shop in January 1995.

      Other revenues which principally include  entertainment cover charges, ATM
commissions,  and revenues from PBX and banquets,  increased 25.0% from $172,000
to $215,000 for the  three-month  period ended December 31, 1995 compared to the
same period in 1994.  During the six month period ended December 31, 1995, other
revenues  increased by $253,000 or 96.6% from  $262,000 to $515,000  compared to
the same six-month  period of 1994.  The increases for the 1995 periods  reflect
higher  entertainment  cover  charge and  banquet  revenues  resulting  from the
addition of the  showroom  and the banquet  facilities  which opened in December
1994.

     Gaming expenses increased by $1,145,000 and $2,070,000, or 38.8% and 37.2%,
from $2,955,000 and $5,568,000 to $4,100,000 and $7,638,000,  respectively,  for
the three-month and six-month periods ended December 31, 1995 as compared to the
same  periods in 1994.  The higher  levels of expense  for the 1995  three-month
period reflect  additional slot promotional  payouts  totaling  $727,000 made in
connection with two casino  promotions held in October and December 1995.  Other
increased  expense includes higher gaming tax and license fees totaling $124,000
which are associated  with the increased  gaming  revenues and the addition of a
casino  promotions  department in September  1995.  Such  departmental  expenses
include additional salaries and wages and certain costs associated with Company-
sponsored  promotional events for premium players totaling  $159,000.  In August
1995, the Company added a "Let it Ride the  Tournament"  table game.  Associated
fees  payable to the  manufacturer  of the game  totaled  $56,000 for the three-
month period ended December 31, 1995. For the 1995 six- month period,  increased
expenses include slot promotional  expense of $1,086,000,  higher gaming tax and
licenses fees of $401,000 along with the additional expense of the newly created
casino  marketing  department and costs  associated with the "Let it Ride" table
games.  As a  result,  gaming  expenses  represented  30.1%  and 28.8% of gaming
revenues for the  three-month  and  six-month  periods  ended  December 31, 1995
compared to 26.9% and 27.0% of the gaming revenues for the same periods in 1994.

      Food and Beverage expenses increased by $830,000 and $1,931,000,  or 25.8%
and 31.74%,  from  $3,310,000  and  $6,084,000  to  $4,140,000  and  $8,015,000,
respectively,  for the three-month and six-month periods ended December 31, 1995
when compared to the same periods in 1994,  as a result of increased  food costs
and the  additional  departmental  personnel  required for the two new specialty
restaurants  and the sports book deli that opened in December 1994. As a result,
food and  beverage  expenses  represented  22.1% and 24.0% of food and  beverage
revenues for the  three-month  and  six-month  periods  ended  December 31, 1995
compared  to 31.4%  and  29.9% of the food and  beverage  revenues  for the same
periods in 1994. Management  anticipates these costs will continue to decline as
a percentage of revenues as these  facilities  generate higher customer  volumes
and start-up costs are eliminated.

     Hotel  expenses  increased by $4,000 and $88,000,  or 1.0% and 12.1%,  from
$413,000  and  $728,000  to  $417,000  and  $816,000,   respectively,   for  the
three-month  and six-month  periods  ended  December 31, 1995 as compared to the
same periods in 1994, reflecting increased salaries and wages and the additional
expense  associated with the operation of the newly constructed rooms and suites
during the 1995  six-month  period.  Net  contribution  by the hotel  department
(hotel revenues less hotel operating expenses) was $354,000 and $677,000 for the
three-month  and  six-month  periods  ended  December  31,  1995 as  compared to
$295,000 and $418,000. for the same periods in 1994.

       General  and   Administrative   expenses   increased  by  $1,252,000  and
$2,979,000, or 34.5% and 44.5%, from $3,624,000 and $6,695,000 to $4,876,000 and
$9,674,000  respectively,  for  the  three-month  and  six-month  periods  ended
December  31,  1995 as  compared  to the same  periods  in 1994.  The  increases
resulted  from  an  addition  to  staff  (approximately  40  employees)  in  the
accounting,  payroll,  personnel  and  technical  services  departments  and the
transfer of certain  executive  personnel in March 1995 to the Company  together
with related  departmental  costs.  Other expenses  transferred  from BGI to the
Company include the maintenance and other operating expenses  associated with an
airplane and two boats. Other increases to General and  Administrative  expenses
included  accrued  expenses and payments made on behalf of CQC in the amounts of
$404,000 and $653,000 for the three-month and six-month ended December 31, 1995.
The Company  accrued  management  fees payable to BGI of $905,000 and $1,763,000
during the three-month and six-month periods ended December 31, 1995.

      Advertising and Promotional expenses increased by $29,000 and $431,000, or
2.6% and 22.8%,  from  $1,116,000  and  $1,890,000 to $1,145,000  and $2,321,000
during the three-month and six-month periods ended December 31, 1995 as compared
to the same period in 1994. The increase in the six-month period is attributable
to AC's effort to maintain  overall  customer  levels  during the slower  summer
months and to promote and attract customers to the newly constructed venues.

      Depreciation and Amortization decreased by $45,000 and increased $142,000,
or (4.8%) and 8.7%,  from  $938,000 and  $1,637,000  to $893,000 and  $1,779,000
during the  three-month  and  six-month  periods  ended  December  31, 1995 when
compared to the same periods in 1994,  primarily  due to the  disposition  of an
airplane in May 1995, offset by additional  depreciation expense associated with
new expansion assets placed in service during the six-month 1995 period.

      AC had other expenses of $1,691,000 and $3,307,000 for the three-month and
six-month   periods  ended  December  31,  1995  compared  with  $1,502,000  and
$2,567,000  for the same periods in 1994.  The increases were primarily due to a
decrease in capitalized  interest  (other income) in the amounts of $168,000 and
$676,000 for the three-month and six-month periods ended December 31, 1995.


Income Taxes
------------

      As a result of the  termination  of its  election  to be  treated  as an S
corporation,  AC is liable  for  income  taxes on income  earned  from and after
January 1, 1994. Prior to such termination, AC did not incur or pay income taxes
but  distributed  cash to its  stockholders  in amounts  sufficient to pay their
income  tax  liability  in  respect  to income of AC.  Since  terminating  its S
corporation status, AC generated a net operating loss for income tax purposes of
approximately  $6,000,000.  Management  anticipates that, upon full operation of
its expanded facilities,  AC will generate taxable income and that its effective
federal  income tax rate will  approximate  the statutory  rate of 35%, prior to
consideration  of the  benefit  from  the net  operating  losses,  which  may be
utilized to offset taxable income.

Liquidity and Capital Resources
-------------------------------

      At December 31, 1995,  AC had working  capital of  $1,605,000  compared to
working  capital of $2,920,000 at June 30, 1995. The decrease in working capital
was caused primarily by increased  accruals on the AC and CQC Notes,  management
fees  payable to BGI,  interest on the  $2,250,000  short-term  note  payable to
Sunset Coin,  Inc.,  and decrease in prepaid  expenses  offset by an increase in
receivable from related parties.

      For the  six-month  period  ended  December  31,  1995,  cash  provided by
operating activities decreased by 77.9% to $462,000 from $2,087,000 for the same
period  in  1994.  The  decrease  is  primarily  attributable  to a net  loss of
$3,233,000 for the six-month period in 1995 compared to a net loss of $1,840,000
for the same period last year,  an increase in  operating  assets of  $2,712,000
from a decrease of $369,000  for the same period last year offset by an increase
in operating  liabilities  to $2,096,000  for the six-month  period in 1995 from
$1,923,000 for the same period in 1994.

      For the  six-month  period  ended  December  30,  1995,  net cash  used in
investing activities decreased by 68.9% to $790,000 from $2,543,000 for the same
period in 1994. The decrease is the result of a $19,371,000 reduction in capitol
expenditures,  offset by a $19,905,000 net reduction to restricted cash. Capitol
expenditures   decreased  in  the  1995  period  because  the  majority  of  the
construction  of  the  expanded  facility  was  completed  in the  1994  period.
Restricted  cash was also  reduced  upon  payment  for the  construction  of the
expanded facility.  Other decreases in investing activities reflect a $2,275,000
net  reduction  in  receivables  from BGI to  attributable  a decrease in a cash
advances to BGI from AC.

      Cash flows used in financing  activities  for the  six-month  period ended
December 31, 1995 was $124,000  reflecting payments on notes payable and capital
leases.  For the same  period in 1994,  cash  flows  from  financing  activities
provided $866,000 derived mostly from borrowing under notes payable.

      AC's  long-term  obligations,  approximately  $60,000,000  at December 31,
1995,  consist  of the AC Notes,  stockholder  notes and  capitalized  equipment
leases. AC has annual interest expenses aggregating $6,600,000 and $500,000 with
respect to the AC Notes and the stockholder notes, in addition to current annual
payment of $1,200,000 associated with capitalized equipment financing.  Further,
AC is expected to have annual capital expenditure  requirements of approximately
$600,000.

      AC has a substantial contingent obligation resulting from its guarantee of
the CQC Notes,  $20,000,000 in principal amount of which are  outstanding,  as a
result of a September 28, 1994 ruling of the Missouri Gaming Commission  denying
CQC's gaming license  application.  Because CQC does not have significant funds,
AC is obligated to pay interest on the CQC Notes,  which  accrues at the rate of
$2,400,000  annually.  Such  interest  is  payable  semi-annually  on May 15 and
November 15 of each year.

      In addition,  unless the holders of the CQC Notes otherwise agree, AC will
be liable for any shortfall  between the proceeds from any sale of assets by CQC
and the  amount  required  to  retire  the CQC  Notes.  Because  there can be no
assurances  that CQC will be able to sell its  assets  for an amount  which will
allow it to fully or substantially repay the CQC Notes, AC's liability under its
guarantee  of the CQC Notes may exceed that amount  which it could  support.  In
addition, a default under the AC Notes and entitle the holders of 25% or more in
principal amount thereof to cause such AC Notes to become accelerated,  in which
event they would become immediately due and payable in full.

      On November 15, 1995,  AC made an interest  payment due on the AC Notes in
the amount of $1,650,000, an amount equal to 50% of the required amount due. The
remainder of the  interest  was paid on December  27, 1995.  CQC was not able to
make its scheduled  interest  payment of  $1,200,000,  and AC did not have funds
available to advance on behalf of CQC.  Management  of AC and CQC are  currently
undergoing  discussions with an informal  committee  representing the holders of
the AC Notes and CQC Notes regarding a proposed  restructuring plan, however, an
agreement has not yet been reached.

      AC's  management  believes  that,  if not  required to make any large cash
payments under its guarantee of the CQC Notes,  AC has sufficient  funds to meet
its projected  needs for financing of existing  operations  and service its debt
obligations. However, AC's performance will be influenced by prevailing economic
conditions and financial,  business and  competitive  factors,  may of which are
beyond its control.

Sunset Coin, Inc.

General
-------

      SC derives its revenues and profits  largely from its gaming machine route
pursuant to participation contracts and, to a lesser extent, space leases. Under
its  participation  contracts,  SC pays a  percentage  of the  net win  (amounts
wagered  less  winnings  paid) from its gaming  machines to the site owner.  The
balance is  retained  by SC.  Under its space  leases,  SC pays the site owner a
fixed space rental fee and retains all of the net win. SC gaming  revenues under
participation  contracts  represent  SC's share of the net win after payments to
the  location,  and under space  leases  represent  all  revenues  before  lease
payments,  which are treated as expenses. A majority of SC's gaming machines are
installed at locations  controlled by the Becker  family and the contracts  with
such locations are expected to be renewed as a matter of general course.

      In addition to the  operation  of its gaming  machine  route,  SC services
gaming machines owned by other operators for fixed service fees.  Included among
its service  agreements  are  contracts  with six Becker  Gaming  Group  ("BGG")
locations,  which  are  expected  to be  renewed  in  general  course,  and  one
additional location owned by an unrelated party.

Results  of  operations for the three and six  months  ended
December 31, 1995 and 1994

     SC's results of  operations  declined  for the  three-month  and  six-month
periods ended  December 31, 1995 compared to the same periods in the prior year.
Revenues decreased by 7.2% to $641,000 for the three-month period and by 4.3% to
$1,281,000 for the six-month period.  The decreases in revenues are attributable
to the expiration of one  participation and one service fee location in the more
recent period that were not renewed,  the effect of which was slightly offset by
the  addition  of one  participation  location  and the  conversion  of  another
location from a participation contract to a more favorable space lease contract.
Additional  service  revenues  were  recognized  in the 1995  periods due to the
recently added BGG bar, Charlie's Bar Down Under.

     The total number of gaming  machines  operated  during the  three-month and
six-month  periods ended December 31, 1995 were 388 compared to 371 in the prior
year periods.  The total number of gaming  machines from the BGG locations  that
are  serviced by SC is 135 for the  three-month  and  six-month  periods of 1995
compared to 95 gaming  machines for the same periods in 1994.  Slot service fees
from BGG for the three-month and six-month  periods ended December 31, 1995 were
$24,000 and  $48,000,  up from  $18,000 and $36,000 for the same  periods in the
prior year.

      Gaming machine route expenses for the  three-month  and six-month  periods
ended  December 31, 1995 increased by 13.3% to $307,000 and by 20.9% to $614,000
when  compared  to the same  periods  in the  prior  year  reflecting  increased
salaries and wages, due to additional staffing  requirements and the transfer of
management  personnel from BGI to SC. Other  increased  expense is due to higher
automotive  repair and  maintenance,  partially offset by a decrease in loss and
damage.

     General and  administrative  expenses  for the  three-month  and  six-month
periods  decreased  by 40.0% and 22.9% to $9,000 and  $27,000  from  $15,000 and
$35,000, reflecting lower professional fees, donations and bad debts.

      Management fees (based upon gross revenues) decreased by 13.2% and 9.5% to
$5,000 and $7,000 for the three-month  and six-month  periods ended December 31,
1995 when  compared  to the same  periods in the prior  year.  This  decrease is
attributable to lower gross revenues in the more recent periods.

      Depreciation and amortization  increased by 31.0% and 31.9% to $76,000 and
$149,000 for the  three-month  and  six-month  periods  ended  December 31, 1995
reflecting  depreciation and  amortization  costs connected with the new BGG bar
completed in April 1995. SC purchased certain furniture,  fixtures and equipment
contained in this bar.

      During the three-month  and six-month  periods ended December 31, 1995, SC
had other  expenses (net of other income) of  approximately  $49,000 and $86,000
compared to $37,000 and $70, 000 for the same periods in 1994. The increases are
attributable to increased interest expense relating to draws on a line of credit
to finance the furniture, fixtures and equipmentinstalled in the new BGG bar and
slot machines for the new andexisting locations.

Income Taxes
------------

      As a  result  of  the  termination  of its  election  to be  treated  as S
corporation,  SC became  liable for income taxes on income earned from and after
January 1, 1994. Prior to such termination, SC did not incur or pay their income
tax liability in respect to income of SC.  Estimated  income tax payable for the
three-month  and six-month  periods ended  December 31, 1995 amounted to $57,000
and  $115,000  from  $102,000 and $183,000 in the same period in the prior year.
These  were  based  on  an  anticipated   effective   federal  income  tax  rate
approximating the statutory rate of 34%.

Liquidity and Capital Resources
-------------------------------

     Cash  provided by  operating  activities  for the  six-month  period  ended
December 31, 1995  increased to $578,000 from $466,000 for the six-month  period
ended December 31, 1994,  mostly due to a net increase in operating  liabilities
of $208,000 and depreciation and amortization of $36,000 offset by a decrease in
revenues of $133,000.

      Cash flows used in investing  activities for the sixmonths  ended December
31, 1995  amounted to  $258,000,  including  repayment  of notes  receivable  of
$39,000, a decrease in advances to related parties of $24,000, purchases of slot
machines of $285,000, and proceeds from the sale of slot machines of $12,000.

      Cash flows used in financing  activities for the sixmonths  ended December
31, 1995 amounted to $16,000,  reflecting note proceeds of $177,000 and $161,000
in principal payments on notes payable.

      SC's indebtedness  includes  stockholder notes and notes collateralized by
its  gaming  equipment  and  other  assets.   The  stockholder  notes  aggregate
$3,000,000  in  principal  amount,  bear  interest  at an annual rate of 10% and
mature January 2001. The  collateralized  notes bear interest at annual rates of
approximately  10.89%,  in the case of fixed rate loans, or at prime plus 1.5% ,
in the  case of a  collateralized  line of  credit,  the  outstanding  aggregate
balance of which, $272,000, was converted to a note at July 1, 1994 with monthly
payments  through June 1998. The fixed rate notes mature at various date through
December 1995.

      In July 1994,  SC  entered  into an  agreement  with a bank for a new $1.2
million  non-revolving  line of  credit.  Each  advance  under the line shall be
evidenced by a separate  promissory  note with  maturity  date not  exceeding 66
months from the date of the respective  advance  giving rise to the note.  Under
the agreement,  SC originally  could request  advances  through October 28, 1995
only, at which time its rights to advances under the agreement were  terminated.
In December 1995, the agreement was amended making  available the unused portion
of $1,200,000 until October 20, 1996. Advances under the agreement bear interest
at the bank's  prime rate plus 1.5% up to 2.0%.  As of December  31,  1995,  the
amount  outstanding  under the non-revolving  line of credit was $878,000.  SC's
management  believes that it has sufficient funds through the non-revolving line
of credit and cash  generated  by  operations  to meet its  projected  needs for
existing  operations and limited expansion of its gaming machine route business.
Should SC  determine to expand on more than a limited  basis,  it is likely that
further  capital  would be necessary.  SC access to  additional  capital will be
significantly  restricted under the AC Indenture so long as SC is a guarantor of
the AC Notes. SC has guaranteed the payment of the AC Notes,  which guarantee is
subject to release upon  attainment  by AC of a fixed charge  coverage  ratio of
2.25 to 1. In connection with its guarantee,  the Indenture imposes restrictions
on the distribution of earnings because

      AC may have  liability  under its  guarantee  of the CQC Notes beyond that
which it could immediately support, AC may be in default of the AC Notes and SC,
as guarantor of the AC Notes,  would have liability  under its  guarantee.  Such
liability  would likely  exceed the amount which SC could  immediately  support,
including amounts available under its non-revolving line of credit.



Capitol Queen & Casino, Inc.

Analysis of  Development  Stage  Activities  for the period July 1, 1995 through
December 31, 1995

      CQC was  organized  on January  20,  1993 for the  purpose of  developing,
constructing,  owning and operating the Capitol Queen  riverboat  casino.  Since
inception,  CQC's  activities have been limited to, in addition to the financing
transaction  described  below, the acquisition of a land site in Jefferson City,
Missouri and the rights to develop the Capitol Queen  thereon,  the  preparation
and  prosecution  of  applications  to become  licensed  to own and  operate the
Capitol Queen in Missouri and for all other required permits and approvals,  the
preparation of preliminary  design plans,  drawings and budgets for the project,
construction of a riverboat vessel and other pre-opening development activities.
As of August 1994, CQC has suspended the development of the Capitol Queen, other
than completion of the riverboat.  As a result of a September 28, 1994 ruling by
the Missouri Gaming Commission denying CQC's license  application,  CQC proposes
to sell its assets. Such assets include its riverboat, Jefferson City land site,
the Riverfront Development Agreement with Jefferson City and certain permits.

     As of January 1, 1995, the CQC Indenture was amended to (i) eliminate CQC's
obligation  to construct  and open the Capitol  Queen and (ii) permit a two-step
purchase of the CQC Notes at 101% of principal plus accrued and unpaid  interest
from a sale of assets. The repurchase of $20,000,000 principal amount of the CQC
Notes (plus  accrued and unpaid  interest  thereon) was completed on January 17,
1995 with funds from the project  escrow account and an aggregate of $20,000,000
principal amount of the CQC Notes remained  outstanding.  However,  the dates by
which CQC previously agreed with the holders of the CQC Notes to effect the sale
of its assets and repurchase the remaining CQC Notes have passed.  The CQC Notes
outstanding  require annual  interest  payments of $2,400,000,  payable in equal
installments  semi-annually  on May 15 and November 15. CQC was not able to make
its scheduled  interest  payment of $1,200,000 on November 15, 1995,  and AC did
not have available  funds to advance on behalf of CQC.  Management of AC and CQC
are currently undergoing discussions with an informal committee representing the
holders of the AC Notes and CQC Notes regarding a proposed  restructuring  plan,
however, an agreement has not yet been reached.

      CQC had entered into an Asset Purchase  Agreement dated April 10, 1995 for
the sale of its  assets  to Aerie  Riverboat  Casinos  of  Missouri,  Inc.  at a
purchase price of $18,000,000.  However,  the consummation of the Aerie purchase
agreement was subject to the satisfaction of several  conditions which could not
be satisfied timely, including, among others, that Jefferson City consent to the
assignment  of the  Development  Agreement,  that  Aerie  be  found  preliminary
suitable to hold a Missouri Gaming license and that riverboat  gaming is legally
permitted  in  Jefferson  City.  As a  result,  the  agreement  with  Aerie  was
terminated without penalty when the expiration date of December 31, 1995 passed.
CQC is  currently  pursuing  offers on its  riverboat  assets  from  prospective
buyers.

      During the period from July 1, 1995 through  December  31,  1995,  CQC had
total  operating  expenses  of $934,000  consisting  primarily  of  amortization
expenses  of $66,000  associated  with debt issue  costs and  $868,000  of other
operating costs.  Other operating costs include a write-off of $312,000 of costs
for architectural  plans and dredging costs and approximately  $200,000 of costs
associated with the November 8, 1995 election campaign. For the same period, CQC
incurred  $1,415,000 of interest cost, of which none was  capitalized due to the
decision to suspend development of the riverboat project.

Liquidity and Capital Resources
-------------------------------

      For the period July 1, 1995 through  December  31, 1995,  net cash used by
development  stage  activities  was  $358,000.  At December  31,  1995,  CQC had
expended  a  total  of   approximately   $21,200,000  on  the   development  and
construction of the Capitol Queen.

      CQC's long-term obligations consist of the $20,000,000 in principal amount
of the  outstanding  CQC  Notes.  There  can be no  assurance  that  CQC will be
successful in its efforts to sell its assets or, that if a sale is effected, the
proceeds will be sufficient  to fully or  substantially  repay the CQC Notes and
accrued interest thereon. Moreover, CQC because it has not yet effected the sale
of its assets, is in default of the CQC Indenture.  As a result,  the holders of
25% or more in  principal  amount of the CQC Notes may cause the CQC Notes to be
accelerated,  in which event they would  become  immediately  due and payable in
full. If the CQC Notes were to be accelerated,  CQC would not be able to pay the
outstanding  CQC Notes without an infusion of capital,  which is not expected to
be available.  CQC is not expected to engage in any activities after the sale of
its assets,  although it may continue to pursue legal relief with respect to the
injury caused by the ruling of Missouri Gaming Commission and the recent vote in
Jefferson City. The cost of pursuing such relief is expected to be borne by BGI.


PART II. OTHER INFORMATION

Item 1.  Legal Proceedings
-------  -----------------

      BGI, CQC, and the Nevada Operating  Companies  (Arizona  Charlie's,  Inc.,
Becker  Gaming  Group,  and Sunset Coin,  Inc.) are parties to various  lawsuits
relating  to routine  matters  incidental  to their  respective  businesses,  in
addition  to the  litigation  discussed  below.  Based on the amounts and issues
believed to be in controversy and  management's  evaluation of the merits of the
claims after  consultation  with counsel,  management  does not believe that the
outcome of such  litigation,  in the  aggregate,  will have a  material  adverse
effect on the results of operations  or financial  condition of BGI, CQC, or the
Nevada Operating Companies.

      On October 31, 1994,  CQC and BGI petitioned the Cole County Circuit Court
in Jefferson City for a writ of mandamus. In response to the petition, the court
issued an order  declaring  that by denying  CQC's  application  for a riverboat
gaming license without first conducting an investigation  and by deliberating in
a closed session,  the Commission had violated  Missouri gaming and open meeting
laws. The court issued a preliminary writ of mandamus declaring the Commission's
decision  void and  ordering  the  Commission  to  immediately  commence  a full
investigation and thereafter to act on CQC's application.  The court ordered the
Commission to show cause within thirty days why the preliminary  writ should not
be made permanent.

     In response  to the Circuit  Court's  order to show cause,  the  Commission
filed two actions,  both unsuccessful,  in the Missouri Court of Appeals for the
Western District.  On November 16, 1994, the Commission  petitioned the Court of
Appeals for a writ of prohibition against the Circuit Court,  contending,  among
other things,  that CQC was not entitled to judicial  relief  because it had not
yet obtained and completed an  evidentiary  hearing  before the  Commission  and
therefore it had not exhausted its administrative remedies. The Court of Appeals
initially issued a preliminary writ of prohibition  staying further  proceedings
in the Circuit Court. However, in an opinion issued on April 18, 1995, the Court
of  Appeals  concluded  that  its  preliminary  writ  of  prohibition  had  been
improvidently granted, quashed the preliminary writ, and denied the Commission's
request for a permanent  writ,  relegating the Commission to its remedies in the
Circuit Court.  On December 13, 1994, the Commission also filed an appeal of the
Circuit  Court's  order to show cause.  On December 23, CQC moved to dismiss the
appeal on the ground that the preliminary writ of mandamus was not a final order
and  therefore  was not  appealable.  On January  5, 1995,  the Court of Appeals
granted CQC's motion and dismissed the appeal.

     On June 26, 1995, the Circuit Court issued a peremptory (permanent) writ of
mandamus similar to the preliminary writ,  declaring the Commission's order void
and  ordering  the  Commission  to  proceed  with  an   investigation  of  CQC's
application  "with all  deliberate  speed."  On July 21,  1995,  the  Commission
appealed the Circuit  Court's  decision to the Missouri Court of Appeals for the
Western District. That appeal is pending.

      On  November  1, 1994,  concurrent  with its  efforts  to obtain  judicial
relief,  CQC  (with  BGI as a  co-party)  requested  an  administrative  hearing
pursuant to the Missouri  gaming  statutes,  under which a denied  applicant may
request an evidentiary  hearing before a  Commission-appointed  hearing officer.
The hearing officer's  decision is subject to review by the Commission,  and the
Commission's  decision is in turn  subject to judicial  review.  The  Commission
answered on November 29, alleging,  among other things,  that an  administrative
hearing is  premature  because CQC had not been  investigated.  On December  22,
because  the  Commission  had not  appointed  a  hearing  officer  or  otherwise
responded to CQC's request for a hearing,  CQC moved the Commission to appoint a
hearing  officer and establish a procedural  schedule.  The  Commission  did not
respond to this motion.  However, in March 1995, CQC's counsel was notified by a
member of the Commission's  staff that he had been appointed  hearing officer in
the case.  Because  this  person  appears to have  participated  in the  staff's
recommendation  that  CQC's  license  be  denied,  CQC moved on March 31 for the
appointment  of an impartial,  independent  hearing  officer.  The  Commission's
attorney  filed a response  in  opposition  to this  motion on April 12, but the
Commission  has not responded to it.  However,  on August 10, 1995,  the hearing
officer  issued an order  proclaiming  his  ability to proceed  impartially  and
purporting to deny the motion.  Hearing dates have been vacated by  stipulation,
and, after the Circuit Court's order voiding the Commission's  decision appeared
to make the  administrative  proceeding  premature,  the hearing  was  postponed
indefinitely.

      On March 23, 1995, the Missouri Attorney General filed misdemeanor charges
against CQC and Bruce Becker  alleging they knowingly  made false  statements on
CQC's gaming license  application.  Each of the nine counts charged against each
defendant  carries a  potential  penalty  of $1,000 or one year in jail or both,
though CQC and Mr. Becker have been advised by counsel that in the circumstances
the possibility of jail time,  even if a conviction were obtained,  is remote at
best. CQC and Mr. Becker  vehemently  denied the charges and launched a vigorous
defense.  On July 25, 1995,  the Circuit Court for St. Louis  County,  Missouri,
dismissed  the  charges,  ruling  that they did not state an  offense,  that the
Attorney  General lacked authority to bring them, and that they were filed after
the statute of limitations had expired.  On July 28, 1995, the Attorney  General
filed an appeal in the Missouri Court of Appeals for the Western District. CQC's
and Bruce  Becker's  motions  to dismiss  the  appeals  as  untimely  filed were
summarily  denied on August 14, 1995.  These  charges are not expected to have a
material adverse effect on BGI or CQC.

      On March 24, 1995,  CQC filed an action against the Commission in the Cole
County,  Missouri,  Circuit  Court,  alleging that the  Commission  had violated
Missouri's  open meeting law by  deliberating in a closed session before issuing
its decision denying CQC's license.  The petition requested an order voiding the
Commission's  decision.  On March 27, as a protective  measure against  possible
arguments  that Cole County is not the proper venue,  CQC filed a  substantively
identical action in the St. Louis County Circuit Court. In April, the Commission
filed answers to both  complaints  denying that it had violated the open meeting
law. On June 1, CQC moved for summary  judgment in the Cole County case.  In its
response,  the  Commission  stated  that  it "did  not  deliberately  intend  to
circumvent"  the open meeting law but had deliberated in closed session based on
erroneous advice of counsel. The Commission argued that the closed session could
nevertheless be justified under statutory  exceptions  allowing agencies to meet
privately with their lawyers to discuss confidential information and litigation.
The motion for summary  judgment was heard on December 19, 1995, and taken under
submission by the court.

Item 6.  Exhibits and Reports on Form 8-K

     No exhibits are included herein:

     The  Company  did not file any reports on from 8-K during the Three and Six
Month periods ended December 31, 1995.







                                   SIGNATURES

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



                                                             Becker Gaming, Inc.
                                                             -------------------
                                                                 (Registrant)





Date:    November 1, 1996                   /S/ Bruce F. Becker
         ---------------------              -------------------

                                            Bruce F. Becker
                                            President, Chief Executive
                                            Officer(Principal Executive Officer)






Date:    November 1, 1996                   /S/ Jerry Griffis
         ----------------                   -----------------
                                            Jerry Griffis
                                            Chief Financial Officer
                                            (Principal Financial and
                                            Accounting Officer)