===============================================================================
<PAGE>                                  

                                    FORM 10-Q


                       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: March 31, 1998

                                       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                            April 30, 1998
---------------------                             --------------
  $.01 par value                                10,000,000 shares

===============================================================================
<PAGE>

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


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

                                                                        Page

BECKER GAMING, INC. AND SUBSIDIARIES
    Consolidated Balance Sheets as of March 31, 1998 and
        June 30, 1997 ..................................................  1
    Consolidated Statements of Operations and Retained Earnings
        (Deficit) for the Three-Month Periods Ended
        March 31, 1998 and 1997 and for the Nine-Month Periods
        Ended March 31, 1998 and 1997 ..................................  2
    Consolidated Statements of Cash Flows for the Nine-Month
        Periods Ended March 31, 1998 and 1997 ..........................  3
    Notes to Consolidated Financial Statements .........................  4

ARIZONA CHARLIE'S, INC
    Balance Sheets as of March 31, 1998 and June 30, 1997............... 10
    Statements of Operations and Retained Earnings (Deficit) for the
        Three-Month Periods Ended March 31, 1998
        and 1997 and for the Nine-Month Periods Ended
        March 31, 1998 and 1997..........................................11
    Statements of  Cash Flows for the Nine-Month Periods
        Ended March 31, 1998 and 1997....................................12
    Notes to Financial Statements........................................13

SUNSET COIN, INC
    Balance Sheets as of March 31, 1998 and June 30, 1997................19
    Statements of Income and Retained Earnings for the Three-Month
        Periods Ended March 31, 1998 and 1997 and for the
        Nine-Month Periods Ended March 31, 1998 and 1997.................20
    Statements of Cash Flows for the Nine-Month Periods Ended
        March 31, 1998 and 1997..........................................21
    Notes to Financial Statements........................................22

CAPITOL QUEEN & CASINO, INC
    Balance Sheets as of March 31, 1998 and June 30, 1997................27
    Statements of Loss Incurred During the Development Stage
        for the Three-Month Periods Ended  March 31, 1998
        and 1997 and for the Nine-Month Periods Ended March
        31, 1998 and 1997 and for the period  from  January 20,
        1993 (the date of inception) through March 31, 1998..............28
    Statements of Cash Flows for the for Nine-Month Periods Ended
        March 31, 1998 and 1997  and for the period from January 20,
        1993 (the date of inception) through March 31, 1998..............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 5  Other Information ............................................47    
    Item 6  Exhibits and Reports on Form 8-K..............................47

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

================================================================================
<PAGE>

                      BECKER GAMING, INC. AND SUBSIDIARIES

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


                                     ASSETS


                                                      March 31,        June 30,
                                                        1998              1997
                                                    ------------    ------------
                                                    (Unaudited)

Current assets:

 Cash and cash equivalents .......................      $ 10,015       $  7,394
 Restricted cash, in escrow account ..............            42             41
 Trade and other accounts receivable .............           974            374
 Current portion of receivables from
   related parties ...............................            24             22
 Inventories .....................................           697            665
 Prepaid expenses ................................         1,003          1,119
 Current portion of notes receivable .............           214            256
 Assets held for sale ............................            --            382
                                                        --------       --------
     Total current  assets .......................        12,969         10,253
                                                        --------       --------
Property and equipment:
 Land improvements ...............................         1,628          1,628
 Building and improvements .......................        38,284         38,284
 Leasehold improvements ..........................         1,411            663
 Furniture and equipment .........................        30,302         29,013
                                                        --------       --------
                                                          71,625         69,588

 Less, accumulated depreciation ..................       (22,402)       (21,266)
                                                        --------       --------
                                                          49,223         48,322
 Land ............................................           208            208
 Construction in progress ........................            --            443
                                                        --------       --------
     Net property and  equipment .................        49,431         48,973
                                                        --------       --------

Other assets:

 Assets held for sale ............................         6,454          7,754
 Notes receivable, less current portion, net .....           455            268
 Receivables from related parties, less
   current portion ...............................           165            165
 Deposits and other ..............................         1,750          1,187
 Financing costs, net ............................         1,901          2,409
                                                        --------       --------
     Total other assets ..........................        10,725         11,783
                                                        --------       --------
     Total assets ................................      $ 73,125       $ 71,009
                                                        ========       ========
================================================================================
<PAGE>
                      BECKER GAMING, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                    (Dollars In Thousands, Except Share Data)

                 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)



                                                     March  31,        June 30,
                                                         1998             1997
                                                   ------------     ------------
                                                     (Unaudited)

Current  liabilities:
 Trade accounts payable ..........................      $  1,267       $  1,355
 Construction accounts payable ...................            --            443
 Accrued interest ................................            --          9,998
 Accrued expenses ................................         4,579          3,125
 Notes payable ...................................           120            106
 Current portion of subordinated notes
   payable to stockholders .......................           800            800
 Current portion of long term debt ...............           281            887
 Long-term debt classified as current due to
   default under covenants, net unamortized
   original issue discount of $2,092 .............            --         72,908
 Current portion of obligations
   under capital leases ..........................           197            138
                                                        --------       --------
     Total current liabilities ...................         7,244         89,760

Prepetition liabilities not subject to compromise:
 Current portion of capital lease obligations ....            26           --
 Current portion of long-term debt ...............         1,156           --
 Capital lease obligations, less current portion .            67           --
 Long-term debt, less current portion ............           957           --
                                                         --------       --------
     Total prepetition liabilities of wholly owned
       subsidiaries not subject to compromise ....         2,206           --

Prepetition liabilities subject to compromise:
 Trade accounts payable ..........................         2,273           --
 Accrued interest ................................        14,923           --
 Long-term debt classified as current due to
   default under covenants, net of unamortized
   original discount of $1,725 ...................        73,275           --
 Subordinated notes payable to stockholders,
   less current portion ..........................         5,000           --
                                                         --------       --------
     Total prepetition liabilities of wholly
       owned subsidiaries subject to compromise ..        95,471           --

Long-term debt, less current portion .............         1,711          2,314
Subordinated notes payable to stockholders, less
  current portion ................................         3,000          8,000
Obligations under capital leases, less current
  portion .......................................             28             98
                                                        --------       --------
     Total liabilities ...........................       109,660        100,172
                                                        --------       --------

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) .....................       (45,641)       (38,269)
                                                        --------       --------
     Total stockholder's equity (deficit) ........       (36,535)       (29,163)
                                                        --------       --------
     Total liabilities and
     stockholder's equity (deficit) ..............      $ 73,125       $ 71,009
                                                        ========       ========



The  accompanying  notes are an integral  part of these  consolidated  financial
statements.
================================================================================
<PAGE>

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



                                                   Three Months Ended March 31,
                                                       1998              1997
                                                 ------------      ------------
Revenues:
   Gaming ..................................     $     15,051      $     13,929
   Food and beverage .......................            4,323             4,344
   Hotel ...................................              777               854
   Gift shop ...............................              206               135
   Other ...................................              302               191
                                                 ------------      ------------
        Gross revenues .....................           20,659            19,453
Less, promotional allowances ...............           (1,919)           (2,355)
                                                 ------------      ------------
        Net revenues .......................           18,740            17,098

Operating expenses:
   Gaming ..................................            5,175             4,614
   Food and beverage .......................            4,718             4,073
   Hotel ...................................              372               329
   Gift shop ...............................              184               137
   Advertising and promotion ...............            1,240             1,124
   General and administrative ..............            4,535             4,910
   Rent expense paid to related party ......              101               105
   Depreciation and  amortization ..........            1,110             1,031
                                                 ------------      ------------
        Total operating expenses ...........           17,435            16,323
                                                 ------------      ------------
        Operating income ...................            1,305               775
                                                 ------------      ------------
Other income (expenses):
   Development costs and abandonment losses.           (1,349)             ( 41)
   Interest income .........................               --                41
   Interest expense (contractual interest for 
     wholly owned subsidiaries for the three 
     and nine-month periods ended March 31, 
     1998 of $3,093 and $9,228, respectively)            (943)           (2,925)
     
   Other, net ..............................                5                75
                                                 ------------      ------------
        Total other income (expense) .......           (2,287)           (2,850)
                                                 ------------      ------------

        Loss before income taxes and 
          reorganization items .............             (982)           (2,075)
Reorganization items of wholly owned 
  subsidiaries .............................             (192)               --
        Loss before income taxes ...........     ------------      ------------
Provision for income taxes .................           (1,174)           (2,075)
                                                 ------------      ------------
        Net loss ...........................           (1,174)           (2,075)

        Retained earnings (deficit),
        beginning of period ................          (44,467)          (32,242)
                                                 ------------      ------------

        Retained earnings (deficit),
        end of period ......................     $    (45,641)     $    (34,317)
                                                 ============      ============

Basic and siluted earnings per common share:

        Net loss per share of
        common stock .......................     $      (0.12)     $      (0.21)
                                                 ============      ============
        Weighted average common
        shares outstanding .................       10,000,000        10,000,000
                                                 ============      ============
================================================================================
<PAGE>
                      BECKER GAMING, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                         AND RETAINED EARNINGS (DEFICIT)
                  (Dollars In Thousands, Except Per Share Data)
                                   (Unaudited)


                                                    Nine Months Ended March 31,
                                                         1998              1997
                                                 ------------      ------------
Revenues:
   Gaming ..................................     $     42,117      $     42,828
   Food and beverage .......................           12,647            13,665
   Hotel ...................................            2,265             2,540
   Gift shop ...............................              573               404
   Other ...................................              931               756
                                                 ------------      ------------
        Gross revenues .....................           58,533            60,193
Less, promotional allowances ...............           (5,793)           (7,641)
                                                 ------------      ------------
        Net revenues .......................           52,740            52,552

Operating expenses:
   Gaming ..................................           14,307            11,078
   Food and beverage .......................           13,738            16,027
   Hotel ...................................            1,114             1,325
   Gift shop ...............................              501               387
   Advertising and promotion ...............            3,640             3,846
   General and administrative ..............           15,355            15,413
   Rent expense paid to related party ......              360               316
   Depreciation and amortization ...........            3,287             3,082
                                                 ------------      ------------
        Total operating expenses ...........           52,302            51,474
                                                 ------------      ------------
        Operating income ...................              438            (1,078)
                                                 ------------      ------------
Other income (expenses):
   Development costs and abandonment losses.           (1,567)             (175)
   Interest income .........................               46               109
   Interest expense (contractual interest for 
     wholly owned subsidiaries for the three 
     and nine-month periods ended March 31, 
     1998 of $3,093 and $9,228, respectively)          (6,039)             (943)
     
   Other, net ..............................               45               116
                                                 ------------      ------------
        Total other income (expense) .......           (7,515)           (8,292)
                                                 ------------      ------------
        Loss before income taxes and 
          reorganization items .............           (7,077)           (7,214)
Reorganization items of wholly owned 
  subsidiaries .............................             (295)               --
                                                 ------------      ------------
        Loss before income taxes ...........           (7,372)           (7,214)
Provision for income taxes .................               --                --
                                                 ------------      ------------
        Net loss ...........................           (7,372)           (7,214)

        Retained earnings (deficit),
        beginning of period ................          (38,269)          (27,103)
                                                 ------------      ------------

        Retained earnings (deficit),
        end of period ......................     $    (45,641)     $    (34,317)
                                                 ============      ============

Basic and siluted earnings per common share:

        Net loss per share of
        common stock .......................     $      (0.74)     $      (0.72)
                                                 ============      ============
        Weighted average common
        shares outstanding .................       10,000,000        10,000,000
                                                 ============      ============


The  accompanying  notes are an integral  part of these  consolidated  financial
statements.
================================================================================
<PAGE>

                      BECKER GAMING, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (Dollars In Thousands)
                                   (Unaudited)

                                                     Nine Months Ended March 31,
                                                             1998          1997
                                                         --------      --------
Cash flows from operating activities:
  Net loss .........................................     $ (7,372)     $ (7,214)
  Adjustments to reconcile net loss to net
     cash provided by operating activities:
     Depreciation and amortization .................        3,287         3,082
     Amortization of original issue discount .......          367           406
     Provisions for losses on receivables...........          135            72
     (Gain) loss on sale of assets .................           (1)            1

(Increase) decrease in operating assets:
    Receivables ....................................         (594)         (123)
    Receivables from related parties ...............           (2)           (4)
    Inventories ....................................          (32)           25
    Prepaid expenses ...............................          116           210
    Deposits and other assets ......................          611          (142)

Increase (decrease) in operating liabilities:
    Accounts payable, net of amounts for capital 
      expenditures .................................        1,438          (363)
    Accrued expenses ...............................        1,454         4,478
    Accrued interest ...............................        4,925            --
                                                         --------      --------
            Total adjustments ......................       11,704         7,642
                                                         --------      --------
        Net cash provided by (used in)
        operating activities .......................        4,332           428
                                                         --------      --------

Cash flows from investing activities:
  Capital expenditures, net of amounts in 
    accounts payable ...............................         (953)         (577)
  Proceeds from sale of equipment ..................          247         3,240
  Issuance of notes receivable .....................         (384)           (4)
  Increase in investment in prospective ventures....           --          (751)
  Payments of notes receivable .....................          239            76
                                                         --------      --------
    Net cash provided by (used in)
     investing activities ..........................       (1,155)        1,984
                                                         --------      --------

Cash flows from financing activities:
  Proceeds from notes payable ......................          158           349
  Payments under notes payable .....................         (849)         (467)
  Payments under capital lease obligations .........         (169)       (1,814)
                                                         --------      --------
    Net cash used in financing activities                    (860)       (1,932)
                                                         --------      --------
    Net increase in cash and cash equivalents ......        2,621           480
Cash and cash equivalents, beginning of period .....        7,394         6,745
                                                         --------      --------
Cash and cash equivalents, end of period ...........     $ 10,015      $  7,225
                                                         ========      ========

Supplemental cash flow disclosures:

   Interest paid, net of amount capitalized ........     $    558      $  5,934
                                                         ========      ========
Assets acquired through issuance of long-term debt 
  capital leases and accounts payable ..............     $  2,164     $    114
                                                         ========      ========

The  accompanying  notes are an integral  part of these  consolidated  financial
statements.
================================================================================
<PAGE>
                      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-month and nine-month  periods ended March 31, 1998 are not
necessarily  indicative  of the results  that may be expected for the year ended
June 30, 1998. 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, 1997.

Certain  amounts in the 1997  financial  statements  have been  reclassified  to
conform with the 1998 presentation.


2)   Arizona Charlie's, Inc. Bankruptcy Filing:

Arizona  Charlie's,  Inc.,  ("AC"),  is a wholly owned subsidiary of BGI and the
source of the majority of BGI's  operating  revenues and cash flows. On November
14, 1997, AC filed a voluntary petition under Chapter 11 of the U.S.  Bankruptcy
Code with the United  States  Bankruptcy  Court for the  District of Nevada (the
"Bankruptcy  Court") in Las Vegas, Nevada in order to provide it protection from
creditors  while it  attempts  to  negotiate  a  settlement  with the holders of
certain debt.

During  the  course  of the  bankruptcy  proceeding  AC  has  been  involved  in
litigation with certain of its creditors.  Specifically,  the holders of the CQC
Notes (as  defined  in Note 3)  asserted a claim  against  AC under its  limited
guaranty  of the CQC Notes  for the full  deficiency  which  might  arise  after
proceeds from the sale of CQC's assets are applied to the CQC Notes. On November
14,  1997,  AC filed a complaint  to declare its  obligations  under the limited
guaranty discharged or alternatively to avoid the limited guaranty.  The trustee
under the indenture  with respect to the CQC Notes  answered this  complaint and
denies that the limited  guaranty has been satisfied and denies that the limited
guaranty is avoidable.  The  litigation  presently is in the discovery  phase. A
trial to  determine  the  amount  (if any) of  liability  under  the AC  Limited
Guaranty is scheduled to begin before the Bankruptcy Court on August 17, 1998.

In  addition,  holders of the AC Notes (as  defined in Note 3) claim a valid and
enforceable lien in all of AC's assets, including all real property and personal
property which comprise Arizona Charlie's Hotel and Casino. On February 2, 1998,
AC filed a motion disputing  certain aspects of the liens claimed by the holders
of the AC Notes and seeking for the  Bankruptcy  Court to determine the value of
the  collateral  securing the AC Note  holders'  claims.  The  Bankruptcy  Court
conducted  an initial  hearing on April 3, 1998,  and  indicated an intention to
value the liens of the holders of the AC Notes at the hearing of confirmation of
the Competing Plans (as defined below).

Currently  pending  before the  Bankruptcy  Court in the AC Bankruptcy  Case are
three competing plans of reorganization:  (i) a plan of reorganization  filed by
AC on February  17,  1998 (as  amended,  "the  Debtor's  Plan");  (ii) a plan of
reorganization  filed by Fertitta Enterprises and Station Casinos on May 8, 1998
(as amended,  the "Station Plan");  and (iii) a plan of reorganization  filed on
May 8, 1998 by High River Limited Partnership, an entity owned and controlled by
Carl  Icahn  (as  amended,  the  "High  River  Plan").   Disclosure   statements
accompanying  the  Debtor's  Plan,  the  Station  Plan,  and the High River Plan
(collectively,  the  "Competing  Plans") were approved by the  Bankruptcy  Court
following a hearing held on May 15, 1998. As a  consequence,  creditors  will be
asked to vote on the  Competing  Plans in the near  future,  and the  Bankruptcy
Court has set a confirmation  hearing on the Competing  Plans scheduled to begin
on  June  18,  1998.  Set  forth  in the  table  below  is a  comparison  of the
significant terms of the Competing Plans.


<TABLE>
<CAPTION>

================================================================================
                     COMPARATIVE SUMMARY OF COMPETING PLANS
================================================================================
                                                 Debtor's Plan
--------------------------------------------------------------------------------
   Conditions to                                 Entry of
   Confirmation of Plan                          Confirmation Order
--------------------------------------------------------------------------------
   <S>                     <C>                   <C>

   Additional Conditions
   to the Effective Date   (NOTE: PROPONENTS     Gaming Approval
   of the Plan             MAY WAIVE ONE OR      New Value
                           MORE CONDITIONS)      Contribution Made
                           (NOTE:  PAYMENT OF    (due 30 days after
                           UNSECURED CREDITORS   entry of the
                           ARE NOT CONDITIONED   Confirmation Order)
                           UPON OR TIED TO       Confirmation Order
                           EFFECTIVE DATE)       entered and in
                           (NOTE:  IF ITS PLAN   effect
                           IS CONFIRMED, HIGH
                           RIVER MAY CLOSE THE
                           CASINO FOR A PERIOD
                           OF TIME IF UNABLE TO
                           RENEGOTIATE OR
                           OBTAIN  CERTAIN  LEASES) 
                           (NOTE:  DEBTOR'S  ABILITY 
                           TO MAKE  PAYMENTS  
                           REQUIRED  BY ITS PLAN IS  
                           SUBJECT  TO RECEIPT  OF  
                           FUNDS  UNDER  ITS LOAN  
                           COMMITMENT  FROM UNITED 
                           HEALTHCARE FINANCIAL SERVICES, 
                           INC.)
--------------------------------------------------------------------------------
 <S>                     <C>                   <C>
 Administrative Claims     $1,000,000-           Unless otherwise
                           $1,500,000            agreed in writing by
                                                 the Creditor, or
                                                 unless otherwise
                                                 ordered by the
                                                 Court:  100% on the
                                                 later of (a) the
                                                 Effective Date; or
                                                 (b) the date allowed
                                                 by final order
                                                 (Class 1-unimpaired)
--------------------------------------------------------------------------------
 <S>                     <C>                   <C>
   Priority Unsecured      0                     Same as Class 1
   Claims                                        (Class 2-unimpaired)
--------------------------------------------------------------------------------
 <S>                     <C>                   <C>
   Secured Tax Claims      0                     100% plus interest
                                                 at 8% per annum,
                                                 semi-annual payments
                                                 commencing six
                                                 months after the
                                                 Effective Date
                                                 (Class 3-impaired)
--------------------------------------------------------------------------------
 <S>                     <C>                   <C>
   Priority Tax Claims     $511,000              100%, to be paid (at
                                                 Debtor's  option)  in cash upon
                                                 later of Effective Date or date
                                                 claim is allowed;  or quarterly
                                                 payments  with  interest  at 8%
                                                 (or   rate   allowed   by   the
                                                 Bankruptcy   Court)   over  six
                                                 years from date of  assessment,
                                                 with payments commencing at the
                                                 end  of  the   first   calendar
                                                 quarter   after  the  Effective
                                                 Date. (Class 4-unimpaired)
--------------------------------------------------------------------------------
 <S>                     <C>                   <C>
   AC Noteholder Claims    $55,000,000           Each holder shall
                           (principal)           have the option of
                                                 receiving  either:  (1) payment
                                                 on the  Effective  Date  of pro
                                                 rata  share of the value of the
                                                 Noteholders'  Secured Claim, as
                                                 determined  by  the  Bankruptcy
                                                 Court  (estimated by the Debtor
                                                 at $43,000,000) plus payment of
                                                 either    (i)    10%   of   the
                                                 deficiency  balance  in cash on
                                                 the Effective date; or (ii) the
                                                 full  amount of the  deficiency
                                                 balance  five  years  after the
                                                 Effective  Date  (estimated  by
                                                 the  Debtor  at   $19,000,000),
                                                 with  interest only payments at
                                                 the  rate of  5.75%  per  annum
                                                 commencing  18 months after the
                                                 Effective  Date; or (2) payment
                                                 of   pro    rata    share    of
                                                 $55,000,000 in  satisfaction of
                                                 all  claims.  (Class  5 and 10-
                                                 impaired)
--------------------------------------------------------------------------------
 <S>                     <C>                   <C>
   Gaming Equipment        $2,374,000            Post-petition
   Secured Claims                                payments brought
                                                 current on the  Effective  Date
                                                 and maintained thereafter; pre-
                                                 petition   arrears  along  with
                                                 recoverable  costs and expenses
                                                 (including reasonable attorneys
                                                 fees) paid in six equal monthly
                                                 installments,  with interest at
                                                 8%, commencing on the first day
                                                 of  the  month   following  the
                                                 Effective      Date      (Class
                                                 6-impaired)
--------------------------------------------------------------------------------
 <S>                     <C>                   <C>
   Other Secured Claims    0                     Same as Class 6
                                                 (Class 7-impaired)
--------------------------------------------------------------------------------
 <S>                     <C>                   <C>
   General (Trade)         $2,000,000            100% 11 days after
   Unsecured Claims                              entry of
                                                 Confirmation Order
                                                 (Class 9-impaired)
--------------------------------------------------------------------------------
 <S>                     <C>                   <C>
   Other Unsecured Claims  $270,000-$320,000     100% 11 days after
                                                 entry of
                                                 Confirmation Order
                                                 with limitations
                                                 ($2,500-vehicular
                                                 injury; $25,000-non-
                                                 vehicular injury)
                                                 plus right to
                                                 recover balance of
                                                 claim from available
                                                 insurance proceeds
                                                 (Class 11-impaired)
--------------------------------------------------------------------------------
 <S>                     <C>                   <C>
   AC Affiliates           $7,000,000            No distribution-
   Unsecured Claims                              claims contributed
                                                 as part of new value
                                                 contribution
                                                 (Class 12-impaired)
--------------------------------------------------------------------------------
 <S>                     <C>                   <C>
   CQC Noteholders         $27,000,000           If Claim Allowed,
   Guaranty Claim                                Holder may elect to
                                                 receive 10% on  Effective  Date
                                                 (equivalent     of     up    to
                                                 $2,700,000)  or 100% five years
                                                 after the Effective  Date, with
                                                 interest   from  the  Effective
                                                 Date  at   5.57%   (semi-annual
                                                 interest      only     payments
                                                 commencing  18 months after the
                                                 Effective     Date)     (Debtor
                                                 estimates  claims at $0) (Class
                                                 13-impaired)
--------------------------------------------------------------------------------
 <S>                     <C>                   <C>
   Equity Interests        N/A                   Retained in exchange
                                                 for release of Class
                                                 12 claims plus
                                                 $1,500,000 new value
                                                 contribution (which
                                                 includes $385,000
                                                 loan commitment fee
                                                 advanced)
--------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>

================================================================================
                     COMPARATIVE SUMMARY OF COMPETING PLANS
================================================================================

                                            High River's Plan
--------------------------------------------------------------------------------
Conditions to                               Confirmation Order
Confirmation of Plan                        final and non-
                                            appealable
                                            Regulatory Approval
                                            (including gaming)
                                            Appointment of
                                            Interim Operating Trustee
--------------------------------------------------------------------------------
<S>                   <C>                   <C>

Additional
Conditions to the     (NOTE: PROPONENTS     Gaming Approval
Effective Date of     MAY WAIVE ONE OR      Execution of lease
the Plan              MORE CONDITIONS)      with a qualified
                      (NOTE:  PAYMENT OF    gaming operator
                      UNSECURED CREDITORS   Confirmation Order
                      ARE NOT CONDITIONED   Effective
                      UPON OR TIED TO  
                      EFFECTIVE  DATE)  
                      (NOTE:  IF ITS  PLAN 
                      IS CONFIRMED, HIGH 
                      RIVER MAY CLOSE THE 
                      CASINO FOR A PERIOD OF
                      TIME IF UNABLE TO 
                      RENEGOTIATE  OR OBTAIN 
                      CERTAIN LEASES)
                      (NOTE:  DEBTOR'S 
                      ABILITY TO MAKE PAYMENTS
                      REQUIRED BY ITS PLAN IS  
                      SUBJECT TO RECEIPT OF 
                      FUNDS UNDER ITS LOAN
                      COMMITMENT FROM UNITED
                      HEALTHCARE FINANCIAL
                      SERVICES, INC.)
--------------------------------------------------------------------------------
<S>                   <C>                   <C>
Administrative        $1,000,000-           Unless otherwise
Claims                $1,500,000            agreed in writing
                                            between Reorganized
                                            Debtor and Claimant:
                                            100% on the later of
                                            (a) the Effective
                                            Date; or (b) the
                                            date allowed by
                                            final order (Certain
                                            Administrative
                                            Claimants must file
                                            claim or request for
                                            payment within 30
                                            days after the
                                            Effective Date)
                                            (Class 1-unimpaired)
--------------------------------------------------------------------------------
<S>                   <C>                   <C>
Priority Unsecured    0                     Unless otherwise
Claims                                      ordered by the Court-
                                            Same as Class 1
                                            (Class 2-unimpaired)
--------------------------------------------------------------------------------
<S>                   <C>                   <C>
Secured Tax Claims    0                     100%, to be paid (at
                                            option of Reorganization  Debtor) in
                                            cash  on  the  Effective   Date;  in
                                            semi-annual  payments  over 5  years
                                            commencing  on the  Effective  Date,
                                            with   interest   at   8%;   or   as
                                            determined   by  the  Court   (Class
                                            3-unimpaired)
--------------------------------------------------------------------------------
<S>                   <C>                   <C>
Priority Tax Claims   $511,000              100%, to be paid (at
                                            option  of  Reorganized  Debtor)  in
                                            cash on Effective Date; in quarterly
                                            payments over six years from date of
                                            assessment  commencing  on Effective
                                            Date;  or as determined by the Court
                                            (Class 4-unimpaired)
--------------------------------------------------------------------------------
<S>                   <C>                   <C>
AC Noteholder Claims  $55,000,000           96% of face value of
                      (principal)           notes in cash
                                            (equivalent of
                                            $52,800,000, to be
                                            paid on Effective
                                            Date or as soon
                                            thereafter as
                                            practicable, with no
                                            payment of any
                                            deficiency balance
                                            (Class 5-impaired)
--------------------------------------------------------------------------------
<S>                   <C>                   <C>
Gaming Equipment      $2,374,000            No claims in Class
Secured Claims                              6; reorganized
                                            Debtor  will  assume  all  contracts
                                            relating to Gaming Equipment Vendors
                                            Claims as executory contracts on the
                                            Effective   Date;   all   pre-   and
                                            post-petition  arrears  paid  eleven
                                            days  after  Confirmation  Date,  or
                                            plan proponent will acquire pre- and
                                            post-petition claims at 100% of face
                                            amount and pay the net present value
                                            of the  balance  of  the  underlying
                                            contract. (Class 6- impaired)
--------------------------------------------------------------------------------
<S>                   <C>                   <C>
Other Secured Claims  0                     Included in Class 6
General (Trade)       $2,000,000            100% 11 days after
Unsecured Claims                            entry of
                                            Confirmation Order
                                            (Class 7-impaired)
--------------------------------------------------------------------------------
<S>                   <C>                   <C>
Other Unsecured       $270,000-$320,000     100% 11 days after
Claims                                      entry of
                                            Confirmation  Order with limitations
                                            ($2,500-vehicular            injury;
                                            $25,000-non-  vehicular injury) plus
                                            right to  recover  balance  of claim
                                            from  available  insurance  proceeds
                                            (Class 8-impaired)
--------------------------------------------------------------------------------
<S>                   <C>                   <C>
AC Affiliates         $7,000,000            No distribution
Unsecured Claims                            (Class 10-impaired)
                                            (Deemed to have
                                            rejected the Plan-
                                            class  does not
                                            vote)
--------------------------------------------------------------------------------
<S>                   <C>                   <C>
CQC Noteholders       $27,000,000           Pro rata share of
Guaranty Claim                              $1,500,000 and
                                            waiver of Debtor's
                                            Claims against CQC
                                            (Class 9-impaired)
--------------------------------------------------------------------------------
<S>                   <C>                   <C>
Equity Interests      N/A                   No distribution
                                            (Class 11-impaired)
                                            (Deemed to have
                                            rejected the Plan-
                                            class does not vote)
--------------------------------------------------------------------------------
</TABLE>


<TABLE>
<CAPTION>

================================================================================
                     COMPARATIVE SUMMARY OF COMPETING PLANS
================================================================================

                                                 Station's Plan
--------------------------------------------------------------------------------
Conditions to                                    Entry of
Confirmation of Plan                             Confirmation Order
--------------------------------------------------------------------------------



<S>                             <C>              <C>
Effective Date of the Plan      PROPONENTS MAY   Confirmation
                                WAIVE ONE OR     Order final
                                MORE             No stay of
                                CONDITIONS)      Confirmation
                                (NOTE:  PAYMENT  Order
                                OF UNSECURED     Debtor, Debtor
                                CREDITORS ARE    in Possession,
                                NOT CONDITIONED  Reorganized
                                UPON OR TIED TO  Debtor, and
                                EFFECTIVE DATE)  Proponents have
                                (NOTE:  IF ITS   executed and
                                PLAN IS          delivered all
                                CONFIRMED, HIGH  documents
                                RIVER MAY CLOSE  necessary  to
                                THE  CASINO FOR  effectuate Plan
                                A PERIOD OF      (manner and
                                TIME IF UNABLE   form in sole
                                TO RENEGOTIATE   discretion of
                                OR OBTAIN        Proponents)
                                CERTAIN LEASES)  Proponent's
                                (NOTE:           contribution of
                                DEBTOR'S         cash necessary
                                ABILITY TO MAKE  to satisfy all
                                PAYMENTS         cash payments
                                REQUIRED BY      under the Plan
                                ITS PLAN IS      Debtor's
                                SUBJECT TO       satisfaction of
                                RECEIPT OF       Minimum Gaming
                                FUNDS UNDER ITS  Reserve
                                LOAN COMMITMENT  Requirement
                                FROM UNITED      Leases with
                                HEALTHCARE       various Becker
                                FINANCIAL        entities to
                                SERVICES, INC.)  have been
                                                 renegotiated      or      other
                                                 satisfactory   arrangements  to
                                                 have  been  made   (subject  to
                                                 approval in sole  discretion of
                                                 Proponents)  Proponents to have
                                                 obtained     all      requisite
                                                 corporate  authority,  consents
                                                 and   approvals   No   material
                                                 adverse   changes  in  Debtor's
                                                 business,  assets,  liabilities
                                                 or operations
--------------------------------------------------------------------------------
<S>                             <C>              <C>
Administrative Claims           $1,000,000-      100% up to an
                                $1,500,000       aggregate of
                                                 $1,000,000  (which  cap  may be
                                                 increased by Proponents) on the
                                                 later  of  (a)  the   Effective
                                                 Date;  (b) the  date of a final
                                                 order  allowing  the claim;  or
                                                 (c) the  date  due  outside  of
                                                 bankruptcy       (Class      1-
                                                 unimpaired)
--------------------------------------------------------------------------------
<S>                             <C>              <C>
Priority Unsecured Claims       0                Same as Class 1
                                                 or as ordered
                                                 by the court
                                                 (Class 2-unimpaired)
--------------------------------------------------------------------------------
<S>                             <C>              <C>
Secured Tax Claims              0                Paid in full or
                                                 brought current
                                                 by the
                                                 Effective Date
                                                 (Class 3- unimpaired)
--------------------------------------------------------------------------------
<S>                             <C>              <C>
Priority Tax Claims             $511,000         Unless
                                                 otherwise
                                                 agreed, 100%
                                                 either on the
                                                 Effective Date
                                                 or quarterly
                                                 payments with
                                                 interest at 8%
                                                 commencing at
                                                 the end of the
                                                 first quarter
                                                 after the
                                                 Effective Date
                                                 and concluding
                                                 six years after
                                                 date of
                                                 assessment
                                                 (Class 4-
                                                 unimpaired)
--------------------------------------------------------------------------------
<S>                             <C>              <C>
AC Noteholder Claims            $55,000,000      Pro rata share
                                (principal)      of $52,000,000,
                                                 with no payment
                                                 of any deficiency
                                                 balance (Class 5-impaired)
--------------------------------------------------------------------------------
<S>                             <C>              <C>
Gaming Equipment                $2,374,000       100%-subject to
Secured Claims                                   cap of
                                                 $2,400,000    (which   may   be
                                                 increased by Proponents) either
                                                 by   cure   of   arrears    and
                                                 resumption  of payments or cash
                                                 in full on the Effective  Date,
                                                 at  Proponents'  option;  or to
                                                 the  extent  gaming  equipment,
                                                 capital  lease  or  installment
                                                 sales contracts,  are executory
                                                 contracts,  the  same  will  be
                                                 assumed as of  Effective  Date.
                                                 (Class 6- impaired)
--------------------------------------------------------------------------------
<S>                             <C>              <C>
Other Secured Claims            0                100%-subject to
                                                 cap of $100,000
                                                 (which may be
                                                 increased by
                                                 Proponents)
                                                 paid same as
                                                 Class 6 (Class
                                                 7-unimpaired)
--------------------------------------------------------------------------------
<S>                             <C>              <C>
General (Trade) Unsecured       $2,000,000       100%-subject to
Claims                                           cap of
                                                 $2,600,000
                                                 (which may be
                                                 increased by
                                                 Proponents) 11
                                                 days after
                                                 entry of
                                                 confirmation
                                                 order
                                                 (Class 9-
                                                 impaired)
--------------------------------------------------------------------------------
<S>                             <C>              <C>
Other Unsecured Claims          $270,000-        100% on the
                                $320,000         Effective Date
                                                 with    limitations    ($2,500-
                                                 vehicular   injury,    $25,000-
                                                 non-vehicular injury)plus right
                                                 to  recover  balance  of  claim
                                                 from    available     insurance
                                                 proceeds (Class 11- impaired)
--------------------------------------------------------------------------------
<S>                             <C>              <C>
AC Affiliates Unsecured Claims  $7,000,000       100% to be paid
                                                 (at Proponents'  option) either
                                                 on the Effective  Date; or five
                                                 years after the Effective Date,
                                                 with    interest    from    the
                                                 Effective    Date   at    5.57%
                                                 (semi-annual    interest   only
                                                 payments  commencing  18 months
                                                 after   the   Effective   Date)
                                                 (Class 12- impaired)
--------------------------------------------------------------------------------
<S>                             <C>              <C>
CQC                                              Noteholders    Guaranty   Claim
                                                 $27,000,000  Pro rate  share of
                                                 $1,000,000    and   waiver   of
                                                 Debtor's   Claims  against  CQC
                                                 (Class 13- impaired)
--------------------------------------------------------------------------------
<S>                             <C>              <C>
Equity Interests                N/A              No distribution
                                                 (Class 14-
                                                 impaired)
                                                 (Deemed to have
                                                 rejected the
                                                 Plan-class does
                                                 not vote)
--------------------------------------------------------------------------------

</TABLE>


Interest expense on the AC Notes and the subordinated  notes payable to prior AC
stockholders  has not been  recognized  since AC's November 14, 1997  bankruptcy
petition  date as it not probable that  post-petition  interest for the AC Notes
will be an allowed claim in these proceedings.

Reorganization items presented in the consolidated  statements of operations and
retained earnings (deficit) are comprised of expenses incurred by AC as a result
of AC's  reorganization  under  Chapter 11 of  Bankruptcy  Code.  Such  expenses
consisted  entirely of  professional  fees for the  three-month  and  nine-month
periods ended March 31, 1998.

3)   Missouri Gaming License,  Default Under  Indebtedness,  Management's Plans,
     and Going Concern:

Capitol Queen and Casino,  Inc.  ("CQC"),  a wholly owned subsidiary of BGI, was
formed to develop,  own and operate the  "Capitol  Queen"  riverboat  casino and
related  land-based  facilities 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").  At the time CQC was notified
of the Commission's decision,  construction of the riverboat under contract with
a shipbuilder was substantially  completed.  CQC had also obtained the necessary
permits for the  land-based  development  portion of the  project and  performed
certain  dredging and other site  preparation  work.  Immediately  following the
Commission's  decision,  management temporarily suspended further development of
the Capitol Queen project,  pending an appeal of the decision and legal remedies
potentially  available to the Company.  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.

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.  Management  ultimately  determined to
abandon the  project,  and is  currently  looking for  alternative  uses for the
riverboat, including opportunities to sell or lease it to another operator.

CQC financed the Capitol Queen project  through the issuance of  $40,000,000  in
principal  amount of 12% First  Mortgage  Notes due  November 15, 2000 (the "CQC
Notes").  As of January  1,  1995,  the  indenture  governing  the CQC Notes 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  first  step
repurchase of $20,000,000 principal amount of the CQC

Notes (plus accrued and unpaid interest) was completed on January 17, 1995, with
unexpended  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,  and
CQC is thus in default of the amended covenants.

The remaining CQC Notes 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 payments of $1,200,000 on November 15, 1995, May
15, 1996,  November 15, 1996,  May 15, 1997,  November 15, 1997 and May 15, 1998
and AC (which has  guaranteed the CQC Notes as more fully  described  below) did
not have available funds to advance on behalf of CQC.

Concurrent with the issuance of the CQC Notes, AC completed a private  placement
debt financing of  $55,000,000  in principal  amount of 12% First Mortgage Notes
due November 15, 2000 (the "AC Notes").  The AC Notes  require  annual  interest
payments of $6,600,000,  payable in equal  installments  semi-annually on May 15
and  November  15. AC was not able to make its  scheduled  interest  payments of
$3,300,000 on May 15, 1997,  November 15, 1997 and May 15, 1998 and Sunset Coin,
Inc. ("SC"), another wholly owned subsidiary of BGI (which has guaranteed the AC
Notes as more fully described  below) did not have available funds to advance on
behalf of AC. 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. AC
does not have  sufficient  financial  resources  (including a guaranty of the AC
Notes by SC, as more fully  described  below) to repay the AC Notes on a current
basis and satisfy its guaranty  obligation (as more fully described  below) with
respect to the CQC Notes.

As of March 31,  1998,  AC was in default of certain  debt  covenants  under the
Indenture  governing  the AC Notes.  These  covenant  violations  include  (i) a
failure  to meet a minimum  Fixed  Charge  Coverage  ratio,  as  defined  in the
Indenture;  (ii)  advances by AC to Becker  Gaming,  Inc.  which exceed  amounts
allowed for under the Indenture (which advances remain  outstanding at March 31,
1998);  (iii)  beginning  in the fourth  quarter of fiscal 1997,  exceeding  the
amount of new indebtedness allowed for under the Indenture;  (iv) beginning with
the quarter  ending  December 31, 1995, AC has not met the Minimum  Tangible Net
Worth Ratio of 1.5 to 1.0, as defined in the Indenture;  and (v) AC did not make
its  required  semi-annual  interest  payments of  $3,300,000  on May 15,  1997,
November 15, 1997 and May 15,  1998.  In  addition,  beginning  with the quarter
ending  December  31,  1995,  AC has not  met the  Minimum  Tangible  Net  Worth
requirement defined in the Indenture.  Under the terms of the Indenture,  AC was
technically  required to offer to buy back  $49,500,000  of the  outstanding  AC
Notes at March 31, 1998 due to the failure to meet this covenant,  increasing by
$5,500,000 each fiscal quarter. AC has not made such offer. As a result of these
defaults  under  covenants  and demand for payment made by the  Trustee,  the AC
Notes have been classified as currently  payable in the  accompanying  financial
statements.

AC provided a limited  guaranty of the CQC Notes. The AC Notes are guaranteed by
SC (which guaranty is subject to release upon the attainment of a fixed-coverage
ratio by AC of 2.25 to 1, which has not been  satisfied).  The amount and extent
of AC's  guaranty  of the CQC Notes is in  dispute.  Legal  counsel  has advised
management  that,  under the  terms of the CQC  indenture  regarding  fraudulent
conveyance and limitation of guarantor's liability, the guaranty liability of AC
is not expected to be material.

On July 3, 1997, CQC received a notice of  acceleration  (the "Notice") from the
trustee and collateral agent for the CQC Notes.  Pursuant to section 6.02 of the
indenture  governing the CQC Notes, due to certain  violations of the indenture,
all of the outstanding  CQC Notes are immediately due and payable  together with
all accrued and unpaid interest thereon.

On September 5, 1997, AC received a notice of acceleration  from the trustee and
collateral  agent for the AC Notes.  Pursuant to section  6.02 of the  indenture
governing  the AC Notes,  due to certain  violations of the indenture all of the
outstanding AC Notes are immediately  due and payable  together with all accrued
and unpaid interest thereon.

The CQC Indenture contains covenants that, among other things, limit the ability
of CQC and, in certain cases,  AC, to pay dividends or management fees, or incur
additional  indebtedness.   At  March  31,  1998,  CQC  had  a  net  deficit  of
approximately $22,100,000.

The AC Indenture contains covenants that, among other things,  limit the ability
of AC and, in certain cases,  SC, to pay dividends or management  fees, or incur
additional indebtedness.  At March 31, 1998 approximately $2,200,000 of SC's net
assets were restricted by such Indenture  covenants;  while AC had a net deficit
of approximately $20,300,000.

In connection with the decision to abandon the project,  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,
which  price  exceeded  the  carrying  value  of the CQC  assets.  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 its Development  Agreement with
CQC,  that  Aerie be found  preliminarily  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
December 31, 1995 expiration  date passed.  As more fully described in Note 4, a
further  write-down in the carrying value of the riverboat was recognized in the
third  quarter  of fiscal  1996,  after the  election  in  Jefferson  City,  the
expiration of the Aerie contract,  and due to deteriorating  market  conditions.
Additionally,  the cost of the riverboat  was further  written down at March 31,
1998 to $6,200,000  based on recent  offers  received for the  riverboat,  which
resulted in an additional abandonment loss of $1,300,000.

CQC continues to market its riverboat  assets to  prospective  buyers.  Based on
current  market  conditions,  management  does not expect that CQC will generate
sufficient  funds  through  the  sale of its  assets  to  repurchase  all of the
outstanding CQC Notes.  These matters raise  substantial doubt about the ability
of the Company's principal subsidiaries (and, thus the Company) to continue as a
going concern. The final outcome of these matters is not presently  determinable
and the March 31, 1998  financial  statements  of the Company do not include any
adjustment that might result from the outcome of this uncertainty.

4)   Capitol Queen & Casino, Inc. Bankruptcy Filing:

On March 17, 1998,  CQC filed for  bankruptcy  protection  in the United  States
Bankruptcy  Court  for  the  District  of  Nevada  in  Las  Vegas,  Nevada  (the
"Bankruptcy  Court") under Chapter 11 of the United States Bankruptcy Code (Case
NO. 98- 22172 LBR) to purse financial  reorganization of CQC and to facilitate a
sale of the gaming vessel, the principal asset of CQC, to a third party. A third
party  bid for the  purchase  of the  vessel  was  filed  with a Motion of Order
Authorizing  Sale of  Personal  Property  and  hearing on the motion was set for
April 16, 1998. On April 16, 1998, the parties requested the hearing be deferred
to April 29, 1998. On April 29, 1998, the third party buyer withdrew its bid and
there being no other willing  buyers present to make a bid, the sale of the boat
was  continued  to June 5,  1998 to allow  CQC to  solicit  additional  bids and
offers. Subsequently,  CQC received a conditional offer from a third party and a
new hearing date of May 15, 1998 was scheduled (in lieu of the June 5, 1998 date
which  was  vacated)  to  consider  this  bid  and  any  others  that  might  be
forthcoming. The third party, however, then requested a continuance to allow for
additional  time to complete its diligence  investigation  regarding the vessel,
and there being no other bidders  prepared to offer a 4) Capitol Queen & Casino,
Inc. Bankruptcy Filing, Continued:

competitive  bid to that of the third party, a further  continuance  was request
and granted to June 15, 1998,  at which time the third party bid and that of any
competing buyers will be considered.  Since CQC does not presently engage in any
business operations,  the Company did not experience any material changes in its
operations as a result of the bankruptcy filing.



5)   Assets Held For Sale:

At March 31, 1998,  BGI had  $6,454,000  of assets held for sale,  consisting of
land and riverboat  assets which were written down to a carrying  value based on
management's best estimate of the riverboat's  current net realizable value in a
cash sale, based on information obtained from shipbuilders,  marine brokers, and
purchase offers made to the Company from third parties.


6)   Becker Gaming Group Property Transactions:

Becker Gaming Group ("BGG") another wholly owned subsidiary of BGI, entered into
an  agreement to sell one of it's bars  "Cantina  Charlie's"  to a  prospective,
unrelated buyer. The sale, which was consummated on November 21, 1997,  resulted
in a gain on sale of assets of approximately  $16,000. A new BGG bar, "Charlie's
Saloon" opened on December 19, 1997.

================================================================================
<PAGE>
                             ARIZONA CHARLIE'S, INC.
               (A Wholly Owned Subsidiary Of Becker Gaming, Inc.)
                                 BALANCE SHEETS
                             (Dollars In Thousands)


                                     ASSETS


                                                 March 31,    June 30,
                                                     1998        1997
                                                 --------    --------
                                                 (unaudited)
Current assets:

   Cash and cash equivalents .................   $  8,290    $  5,481
   Restricted cash, in escrow account ........         10          10
   Trade and other accounts receivable .......        361         240
   Receivable from related  parties ..........      2,874       2,665
   Inventories ...............................        554         529
   Prepaid expenses ..........................        874         985
                                                 --------    --------
     Total current assets ....................     12,963       9,910
                                                 --------    --------

Property and equipment:

   Building and improvements .................     37,493      37,490
   Furniture and equipment ...................     24,767      23,916
   Land improvements .........................      1,629       1,629
                                                 --------    --------
                                                   63,889      63,035
   Less, accumulated  depreciation ...........    (19,462)    (18,303)
                                                 --------    --------
                                                   44,427      44,732
   Land ......................................        208         208
                                                 --------    --------
       Net property and equipment ............     44,635      44,940
                                                 --------    --------

Other assets:

   Receivable from related party, noncurrent..        210         210
   Deposits and other ........................        698         544
   Note receivable from related party.........      4,416       4,416
   Financing costs, less accumulated
   amortization of $2,343 at March 31,
   1998 and $1,923 June 30, 1997 .............      1,517       1,937
                                                 --------    --------
       Total other  assets ...................      6,841       7,107
                                                 --------    --------
       Total assets ..........................   $ 64,439    $ 61,957
                                                 ========    ========
================================================================================
<PAGE>
                             ARIZONA CHARLIE'S, INC.
               (A Wholly Owned Subsidiary Of Becker Gaming, Inc.)
                                 BALANCE SHEETS
                             (Dollars In Thousands)

                 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)



                                                 March 31,   June 30,
                                                     1998        1997
                                                 --------    --------
                                               (unaudited)


Current liabilities:
   Trade accounts payable ....................   $    717    $  1,047
   Accrued expenses ..........................      2,951       2,642
   Accrued interest ..........................         --       4,522
   Management fees due Becker Gaming, Inc. ...        258       5,347
   Notes payable, current portion ............        120         106
   Notes payable to related party ............         --       3,150
   Current portion of obligations
     under capital leases ....................         --          12
   Current portion of long-term debt .........         --         464
   Long-term debt classified as current due
     to default under covenants ..............         --      55,000
                                                 --------    --------
           Total current liabilities .........      4,046      72,290
                                                 --------    --------

Prepetition liabilities not subject to
   compromise:
   Current portion of capital lease
     obligations .............................         26         --
   Current portion of long-term debt .........        957         --
   Capital lease obligations, less current
     portion .................................         67         --
   Long-term debt, less current portion ......      1,156         --
                                                 --------    --------
     Total prepetition liabilities not
       subject to compromise .................      2,206         --
                                                 --------    --------
Prepetition liabilities subject to compromise:
   Trade accounts payable ....................      2,273         --
   Management fees due Becker Gaming, Inc. ...      5,583         --
   Accrued interest ..........................      7,445         --
   Notes payable to related party ............      3,150         --
   Long-term debt classified as current due
     to default under covenants ..............     55,000         --
   Subordinated notes payable to prior
     stockholders ............................      5,000         --
                                                 --------    --------
     Total prepetition liabilities subject to
     compromise ..............................     78,451         --
                                                 --------    --------
   Long-term debt, less current portion ......         --      1,284
   Subordinated notes payable to prior
     stockholders ............................         --      5,000
   Capital lease obligations, less current
     portion .................................         --         29
                                                 --------    --------
     Total liabilities                             84,703     78,603
                                                 --------    --------
Commitments and contingencies

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

  Retained earnings (deficit) ................   (20,733)    (17,115)
                                                 --------    --------

           Total stockholders' equity
           (deficit) .........................   (20,264)    (16,646)
                                                 --------    --------

           Total liabilities  and
           stockholders' equity (deficit) ....  $ 64,439    $ 61,957
                                                 ========    ========




The accompanying notes are an integral part of these financial statements.
================================================================================
<PAGE>
                             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 March 31,
                                                           1998            1997
                                                       --------        --------
Revenues:
  Gaming .......................................       $ 12,984        $ 11,837
  Food and beverage ............................          3,284           3,297
  Hotel ........................................            777             854
  Gift shop ....................................            206             135
  Other ........................................            262             175
                                                       --------        --------
      Gross revenues ...........................         17,513          16,298
Less, promotional allowances ...................         (1,592)         (1,985)
                                                       --------        --------
      Net revenues .............................         15,921          14,313
                                                       --------        --------

Operating expenses:
  Gaming .......................................          4,736           4,276
  Food and beverage ............................          3,623           2,956
  Hotel ........................................            372             329
  Gift shop ....................................            184             137
  Advertising and promotion ....................          1,219           1,100
  Provisions for losses on related party 
    receivables ................................             --              41
  General and administrative ...................          3,742           3,955
  Management fee - Becker Gaming, Inc. .........            175             164
  Rent expense paid to related party ...........             56              55
  Depreciation and amortization ................            938             864
                                                       --------        --------
      Total operating expenses .................         15,045          13,877
                                                       --------        --------
      Operating income (loss)...................            876             436
                                                       --------        --------

Other income (expenses):
  Gain (loss) on sale of assets .................            26             (1)
  Interest income ...............................            67              67
  Interest expense (contractual interest for the 
    three and nine-months ended March 31, 1998
    of $2,030 and $6,139, respectively)..........            --          (1,814)
    
  Other, net ....................................            50              22
                                                       --------        --------
      Total other income (expenses) .............           143          (1,726)
                                                       --------        --------
      Income (loss) before reorganization items..         1,019          (1,290)
Reorganization items ............................          (712)             --
                                                       --------        --------
      Net income (loss) before taxes ............           814          (1,290)
Provision for income taxes ......................            --              --
                                                       --------        --------
      Net income (loss) .........................        ($ 847)       ($ 1,290)

Retained earnings (deficit),
  beginning of period ...........................       (21,580)        (13,681)
                                                       --------        --------

Retained earnings (deficit),
   end of period ................................      ($20,733)       ($14,971)
                                                       ========        ========
<PAGE>

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

                             ARIZONA CHARLIE'S, INC.
               (A Wholly Owned Subsidiary Of Becker Gaming, Inc.)
            STATEMENTS OF OPERATIONS AND RETAINED EARNINGS (DEFICIT)
                             (Dollars In Thousands)
                                   (Unaudited)

                                                     Nine Months Ended March 31,
                                                           1998            1997
                                                       --------        --------
Revenues:
  Gaming .......................................       $ 36,080        $ 36,362
  Food and beverage ............................          9,644          10,445
  Hotel ........................................          2,265           2,540
  Gift shop ....................................            573             404
  Other ........................................            776             711
                                                       --------        --------
       Gross revenues ..........................         49,338          50,462
 Less, promotional allowances ..................         (4,804)         (6,479)
                                                       --------        --------
      Net revenues .............................         44,534          43,983
                                                       --------        --------

Operating expenses:
  Gaming .......................................         13,025          13,136
  Food and beverage ............................         10,592           9,287
  Hotel ........................................          1,114           1,065
  Gift shop ....................................            501             387
  Advertising and promotion ....................          3,547           3,708
  Payment under Guarantee Obligation ...........             94             175
  General and administrative ...................         12,804          12,800
  Management fee - Becker Gaming, Inc. .........            493             505
  Rent expense paid to related party ...........            169             167
  Depreciation and amortization ................          2,768           2,583
                                                       --------        --------
      Total operating expenses .................         45,107          43,813
                                                       --------        --------
      Operating income (loss)...................           (573)            170
                                                       --------        --------

Other income (expenses):
  Gain (loss) on sale of assets ................             71             (1)
  Interest income (reflecting contractual interest
    for the three and nine-months ended March
    31, 1998 of $2,030 and $6,139,
    respectively) ...............................           203             204
  Interest expense ..............................        (3,070)         (5,435)
  Other, net ....................................            25              61
                                                       --------        --------
      Total other income (expenses) .............        (2,771)         (5,171)
                                                       --------        --------
Income (loss) before reorganization cost...              (3,344)         (5,001)
Reorganization items ............................          (275)             --
                                                       --------        --------
      Net (loss) income before taxes ............        (3,619)         (5,001)
Provision for income tax ........................            --              --
                                                       --------        --------
      Net (loss) income .........................        (3,619)         (5,001)

Retained earnings (deficit),
  beginning of period ...........................       (17,114)         (9,970)
                                                       --------        --------

Retained earnings (deficit),
   end of period ................................      ($20,733)       ($14,971)
                                                       ========        ========


The accompanying notes are an integral part of these financial statements.
================================================================================
<PAGE>
                             ARIZONA CHARLIE'S, INC.
               (A Wholly Owned Subsidiary Of Becker Gaming, Inc.)
                            STATEMENTS OF CASH FLOWS
                             (Dollars In Thousands)

                                   (Unaudited)


                                                     Nine Months Ended March 31,
                                                               1998        1997
                                                           --------    --------
Cash flows from operating activities:
    Net loss ...........................................   ($ 3,619)   ($ 5,001)

    Adjustments to reconcile net income
     loss to net cash provided by operating activities:
    
    Provision for losses on related party receivables ..         94         175
    Depreciation and amortization ......................      2,768       2,583
    (Gain) loss on sale of equipment ...................        (71)          1

(Increase) decrease in operating assets:
    Trade and other accounts receivables ...............       (121)         29
    Inventories ........................................        (25)         17
    Prepaid expenses ...................................        111         169
    Deposits and other .................................       (154)       (102)

Increase (decrease) in operating liabilities:
    Accounts payable, net of amounts for capital 
      expenditures .....................................     (1,639)       (462)
    Management fees due to Becker Gaming, Inc. .........        494         505
    Accrued expenses ...................................      3,232       2,520
                                                           --------    --------
       Total adjustments ...............................      7,967       5,435
                                                           --------    --------
        Net cash provided by operating activities ......      4,348         434
                                                           --------    --------

Cash flows from investing activities:
    Capital expenditures, net of amounts in 
      accounts payable .................................     (1,009)       (305)
    Increase in receivables from related party 
      notes receivable .................................       (209)       (342)
    Proceeds from assets sold ..........................        133           7
                                                           --------    --------
       Net cash provided by
          investing activities .........................     (1,085)       (640)
                                                           --------    --------

Cash flows from financing activities:
    Proceeds from borrowing under payables .............        140         190
    Proceeds from related party notes payable...........         --         900
    Principal payments on notes payable ................       (576)       (110)
    Payments under capital lease obligations ...........        (18)        (10)
                                                           --------    --------
       Net cash provided by (used) in
          financing activities .........................       (454)        970
                                                           --------    --------
       Net increase (decrease) in cash and
         cash equivalents ..............................      2,809         764
Cash and cash equivalents, beginning of the period .....      5,481       4,591
                                                           --------    --------
Cash and cash equivalents, end of the period ...........   $  8,290    $  5,355
                                                           ========    ========
Supplemental cash flow disclosures:
    Interest paid, net of amount capitalized ...........   $    164    $  5,435
                                                           ========    ========
Assets acquired through issuance of long-term debt
  and capital leases and accounts payable ..............   $  1,189          $-
                                                           ========    ========


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

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

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

1)   Basis of Presentation:

Arizona Charlie's,  Inc. ("AC" or the "Company") 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-month  and nine-month  periods ended
March  31,  1998  are not  necessarily  indicative  of the  results  that may be
expected for the year ended June 30, 1998.  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, 1997.

Certain  amounts in the 1997  financial  statements  have been  reclassified  to
conform with the 1998 presentation.


2)   Arizona Charlie's, Inc. Bankruptcy Filing:

On November 14, 1997, AC filed a voluntary petition under Chapter 11 of the U.S.
Bankruptcy  Code with the United  States  Bankruptcy  Court for the  District of
Nevada  (the  "Bankruptcy  Court") in Las  Vegas,  Nevada in order to provide it
protection  from creditors  while it attempts to negotiate a settlement with the
holders of certain debt.

During the course of the bankruptcy  proceeding the Company has been involved in
litigation with certain of its creditors.  Specifically,  the holders of the CQC
Notes (as  defined in Note 3) asserted a claim  against  the  Company  under its
limited  guaranty  of the CQC Notes for the full  deficiency  which  might arise
after  proceeds  from the sale of CQC's assets are applied to the CQC Notes.  On
November 14,  1997,  the Company  filed a complaint  to declare its  obligations
under the limited  guaranty  discharged  or  alternatively  to avoid the limited
guaranty. The trustee under the indenture with respect to the CQC Notes answered
this  complaint  and denies that the limited  guaranty  has been  satisfied  and
denies that the limited  guaranty is avoidable.  The litigation  presently is in
the discovery phase. A trial to determine the amount (if any) of liability under
the AC Limited  Guaranty is scheduled to begin  before the  Bankruptcy  Court on
August 17, 1998.

In  addition,  holders of the AC Notes (as  defined in Note 3) claim a valid and
enforceable lien in all of the Company's assets, including all real property and
personal property which comprise Arizona Charlie's Hotel and Casino. On February
2, 1998,  the  Company  filed a motion  disputing  certain  aspects of the liens
claimed by the holders of the AC Notes and seeking for the  Bankruptcy  Court to
determine the value of the collateral  securing the AC Note holders' claims. The
Bankruptcy Court conducted an initial hearing on April 3, 1998, and indicated an
intention  to value the liens of the  holders of the AC Notes at the  hearing of
confirmation of the Competing Plans (as defined below).

Currently  pending  before the  Bankruptcy  Court in the AC Bankruptcy  Case are
three competing plans of reorganization:  (i) a plan of reorganization  filed by
AC on February  17,  1998 (as  amended,  "the  Debtor's  Plan");  (ii) a plan of
reorganization  filed by Fertitta Enterprises and Station Casinos on May 8, 1998
(as amended,  the "Station Plan");  and (iii) a plan of reorganization  filed on
May 8, 1998 by High River Limited Partnership, an entity owned and controlled by
Carl  Icahn  (as  amended,  the  "High  River  Plan").   Disclosure   statements
accompanying  the  Debtor's  Plan,  the  Station  Plan,  and the High River Plan
(collectively,  the  "Competing  Plans") were approved by the  Bankruptcy  Court
following a hearing held on May 15, 1998. As a  consequence,  creditors  will be
asked to vote on the  Competing  Plans in the near  future,  and the  Bankruptcy
Court has set a confirmation  hearing on the Competing  Plans scheduled to begin
on  June  18,  1998.  Set  forth  in the  table  below  is a  comparison  of the
significant terms of the Competing Plans.

<TABLE>
<CAPTION>

================================================================================
                     COMPARATIVE SUMMARY OF COMPETING PLANS
================================================================================
                                                 Debtor's Plan
--------------------------------------------------------------------------------
   Conditions to                                 Entry of
   Confirmation of Plan                          Confirmation Order
--------------------------------------------------------------------------------
   <S>                     <C>                   <C>

   Additional Conditions
   to the Effective Date   (NOTE: PROPONENTS     Gaming Approval
   of the Plan             MAY WAIVE ONE OR      New Value
                           MORE CONDITIONS)      Contribution Made
                           (NOTE:  PAYMENT OF    (due 30 days after
                           UNSECURED CREDITORS   entry of the
                           ARE NOT CONDITIONED   Confirmation Order)
                           UPON OR TIED TO       Confirmation Order
                           EFFECTIVE DATE)       entered and in
                           (NOTE:  IF ITS PLAN   effect
                           IS CONFIRMED, HIGH
                           RIVER MAY CLOSE THE
                           CASINO FOR A PERIOD
                           OF TIME IF UNABLE TO
                           RENEGOTIATE OR
                           OBTAIN  CERTAIN  LEASES) 
                           (NOTE:  DEBTOR'S  ABILITY 
                           TO MAKE  PAYMENTS  
                           REQUIRED  BY ITS PLAN IS  
                           SUBJECT  TO RECEIPT  OF  
                           FUNDS  UNDER  ITS LOAN  
                           COMMITMENT  FROM UNITED 
                           HEALTHCARE FINANCIAL SERVICES, 
                           INC.)
--------------------------------------------------------------------------------
 <S>                     <C>                   <C>
 Administrative Claims     $1,000,000-           Unless otherwise
                           $1,500,000            agreed in writing by
                                                 the Creditor, or
                                                 unless otherwise
                                                 ordered by the
                                                 Court:  100% on the
                                                 later of (a) the
                                                 Effective Date; or
                                                 (b) the date allowed
                                                 by final order
                                                 (Class 1-unimpaired)
--------------------------------------------------------------------------------
 <S>                     <C>                   <C>
   Priority Unsecured      0                     Same as Class 1
   Claims                                        (Class 2-unimpaired)
--------------------------------------------------------------------------------
 <S>                     <C>                   <C>
   Secured Tax Claims      0                     100% plus interest
                                                 at 8% per annum,
                                                 semi-annual payments
                                                 commencing six
                                                 months after the
                                                 Effective Date
                                                 (Class 3-impaired)
--------------------------------------------------------------------------------
 <S>                     <C>                   <C>
   Priority Tax Claims     $511,000              100%, to be paid (at
                                                 Debtor's  option)  in cash upon
                                                 later of Effective Date or date
                                                 claim is allowed;  or quarterly
                                                 payments  with  interest  at 8%
                                                 (or   rate   allowed   by   the
                                                 Bankruptcy   Court)   over  six
                                                 years from date of  assessment,
                                                 with payments commencing at the
                                                 end  of  the   first   calendar
                                                 quarter   after  the  Effective
                                                 Date. (Class 4-unimpaired)
--------------------------------------------------------------------------------
 <S>                     <C>                   <C>
   AC Noteholder Claims    $55,000,000           Each holder shall
                           (principal)           have the option of
                                                 receiving  either:  (1) payment
                                                 on the  Effective  Date  of pro
                                                 rata  share of the value of the
                                                 Noteholders'  Secured Claim, as
                                                 determined  by  the  Bankruptcy
                                                 Court  (estimated by the Debtor
                                                 at $43,000,000) plus payment of
                                                 either    (i)    10%   of   the
                                                 deficiency  balance  in cash on
                                                 the Effective date; or (ii) the
                                                 full  amount of the  deficiency
                                                 balance  five  years  after the
                                                 Effective  Date  (estimated  by
                                                 the  Debtor  at   $19,000,000),
                                                 with  interest only payments at
                                                 the  rate of  5.75%  per  annum
                                                 commencing  18 months after the
                                                 Effective  Date; or (2) payment
                                                 of   pro    rata    share    of
                                                 $55,000,000 in  satisfaction of
                                                 all  claims.  (Class  5 and 10-
                                                 impaired)
--------------------------------------------------------------------------------
 <S>                     <C>                   <C>
   Gaming Equipment        $2,374,000            Post-petition
   Secured Claims                                payments brought
                                                 current on the  Effective  Date
                                                 and maintained thereafter; pre-
                                                 petition   arrears  along  with
                                                 recoverable  costs and expenses
                                                 (including reasonable attorneys
                                                 fees) paid in six equal monthly
                                                 installments,  with interest at
                                                 8%, commencing on the first day
                                                 of  the  month   following  the
                                                 Effective      Date      (Class
                                                 6-impaired)
--------------------------------------------------------------------------------
 <S>                     <C>                   <C>
   Other Secured Claims    0                     Same as Class 6
                                                 (Class 7-impaired)
--------------------------------------------------------------------------------
 <S>                     <C>                   <C>
   General (Trade)         $2,000,000            100% 11 days after
   Unsecured Claims                              entry of
                                                 Confirmation Order
                                                 (Class 9-impaired)
--------------------------------------------------------------------------------
 <S>                     <C>                   <C>
   Other Unsecured Claims  $270,000-$320,000     100% 11 days after
                                                 entry of
                                                 Confirmation Order
                                                 with limitations
                                                 ($2,500-vehicular
                                                 injury; $25,000-non-
                                                 vehicular injury)
                                                 plus right to
                                                 recover balance of
                                                 claim from available
                                                 insurance proceeds
                                                 (Class 11-impaired)
--------------------------------------------------------------------------------
 <S>                     <C>                   <C>
   AC Affiliates           $7,000,000            No distribution-
   Unsecured Claims                              claims contributed
                                                 as part of new value
                                                 contribution
                                                 (Class 12-impaired)
--------------------------------------------------------------------------------
 <S>                     <C>                   <C>
   CQC Noteholders         $27,000,000           If Claim Allowed,
   Guaranty Claim                                Holder may elect to
                                                 receive 10% on  Effective  Date
                                                 (equivalent     of     up    to
                                                 $2,700,000)  or 100% five years
                                                 after the Effective  Date, with
                                                 interest   from  the  Effective
                                                 Date  at   5.57%   (semi-annual
                                                 interest      only     payments
                                                 commencing  18 months after the
                                                 Effective     Date)     (Debtor
                                                 estimates  claims at $0) (Class
                                                 13-impaired)
--------------------------------------------------------------------------------
 <S>                     <C>                   <C>
   Equity Interests        N/A                   Retained in exchange
                                                 for release of Class
                                                 12 claims plus
                                                 $1,500,000 new value
                                                 contribution (which
                                                 includes $385,000
                                                 loan commitment fee
                                                 advanced)
--------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>

================================================================================
                     COMPARATIVE SUMMARY OF COMPETING PLANS
================================================================================

                                            High River's Plan
--------------------------------------------------------------------------------
Conditions to                               Confirmation Order
Confirmation of Plan                        final and non-
                                            appealable
                                            Regulatory Approval
                                            (including gaming)
                                            Appointment of
                                            Interim Operating Trustee
--------------------------------------------------------------------------------
<S>                   <C>                   <C>

Additional
Conditions to the     (NOTE: PROPONENTS     Gaming Approval
Effective Date of     MAY WAIVE ONE OR      Execution of lease
the Plan              MORE CONDITIONS)      with a qualified
                      (NOTE:  PAYMENT OF    gaming operator
                      UNSECURED CREDITORS   Confirmation Order
                      ARE NOT CONDITIONED   Effective
                      UPON OR TIED TO  
                      EFFECTIVE  DATE)  
                      (NOTE:  IF ITS  PLAN 
                      IS CONFIRMED, HIGH 
                      RIVER MAY CLOSE THE 
                      CASINO FOR A PERIOD OF
                      TIME IF UNABLE TO 
                      RENEGOTIATE  OR OBTAIN 
                      CERTAIN LEASES)
                      (NOTE:  DEBTOR'S 
                      ABILITY TO MAKE PAYMENTS
                      REQUIRED BY ITS PLAN IS  
                      SUBJECT TO RECEIPT OF 
                      FUNDS UNDER ITS LOAN
                      COMMITMENT FROM UNITED
                      HEALTHCARE FINANCIAL
                      SERVICES, INC.)
--------------------------------------------------------------------------------
<S>                   <C>                   <C>
Administrative        $1,000,000-           Unless otherwise
Claims                $1,500,000            agreed in writing
                                            between Reorganized
                                            Debtor and Claimant:
                                            100% on the later of
                                            (a) the Effective
                                            Date; or (b) the
                                            date allowed by
                                            final order (Certain
                                            Administrative
                                            Claimants must file
                                            claim or request for
                                            payment within 30
                                            days after the
                                            Effective Date)
                                            (Class 1-unimpaired)
--------------------------------------------------------------------------------
<S>                   <C>                   <C>
Priority Unsecured    0                     Unless otherwise
Claims                                      ordered by the Court-
                                            Same as Class 1
                                            (Class 2-unimpaired)
--------------------------------------------------------------------------------
<S>                   <C>                   <C>
Secured Tax Claims    0                     100%, to be paid (at
                                            option of Reorganization  Debtor) in
                                            cash  on  the  Effective   Date;  in
                                            semi-annual  payments  over 5  years
                                            commencing  on the  Effective  Date,
                                            with   interest   at   8%;   or   as
                                            determined   by  the  Court   (Class
                                            3-unimpaired)
--------------------------------------------------------------------------------
<S>                   <C>                   <C>
Priority Tax Claims   $511,000              100%, to be paid (at
                                            option  of  Reorganized  Debtor)  in
                                            cash on Effective Date; in quarterly
                                            payments over six years from date of
                                            assessment  commencing  on Effective
                                            Date;  or as determined by the Court
                                            (Class 4-unimpaired)
--------------------------------------------------------------------------------
<S>                   <C>                   <C>
AC Noteholder Claims  $55,000,000           96% of face value of
                      (principal)           notes in cash
                                            (equivalent of
                                            $52,800,000, to be
                                            paid on Effective
                                            Date or as soon
                                            thereafter as
                                            practicable, with no
                                            payment of any
                                            deficiency balance
                                            (Class 5-impaired)
--------------------------------------------------------------------------------
<S>                   <C>                   <C>
Gaming Equipment      $2,374,000            No claims in Class
Secured Claims                              6; reorganized
                                            Debtor  will  assume  all  contracts
                                            relating to Gaming Equipment Vendors
                                            Claims as executory contracts on the
                                            Effective   Date;   all   pre-   and
                                            post-petition  arrears  paid  eleven
                                            days  after  Confirmation  Date,  or
                                            plan proponent will acquire pre- and
                                            post-petition claims at 100% of face
                                            amount and pay the net present value
                                            of the  balance  of  the  underlying
                                            contract. (Class 6- impaired)
--------------------------------------------------------------------------------
<S>                   <C>                   <C>
Other Secured Claims  0                     Included in Class 6
General (Trade)       $2,000,000            100% 11 days after
Unsecured Claims                            entry of
                                            Confirmation Order
                                            (Class 7-impaired)
--------------------------------------------------------------------------------
<S>                   <C>                   <C>
Other Unsecured       $270,000-$320,000     100% 11 days after
Claims                                      entry of
                                            Confirmation  Order with limitations
                                            ($2,500-vehicular            injury;
                                            $25,000-non-  vehicular injury) plus
                                            right to  recover  balance  of claim
                                            from  available  insurance  proceeds
                                            (Class 8-impaired)
--------------------------------------------------------------------------------
<S>                   <C>                   <C>
AC Affiliates         $7,000,000            No distribution
Unsecured Claims                            (Class 10-impaired)
                                            (Deemed to have
                                            rejected the Plan-
                                            class  does not
                                            vote)
--------------------------------------------------------------------------------
<S>                   <C>                   <C>
CQC Noteholders       $27,000,000           Pro rata share of
Guaranty Claim                              $1,500,000 and
                                            waiver of Debtor's
                                            Claims against CQC
                                            (Class 9-impaired)
--------------------------------------------------------------------------------
<S>                   <C>                   <C>
Equity Interests      N/A                   No distribution
                                            (Class 11-impaired)
                                            (Deemed to have
                                            rejected the Plan-
                                            class does not vote)
--------------------------------------------------------------------------------
</TABLE>


<TABLE>
<CAPTION>

================================================================================
                     COMPARATIVE SUMMARY OF COMPETING PLANS
================================================================================

                                                 Station's Plan
--------------------------------------------------------------------------------
Conditions to                                    Entry of
Confirmation of Plan                             Confirmation Order
--------------------------------------------------------------------------------



<S>                             <C>              <C>
Effective Date of the Plan      PROPONENTS MAY   Confirmation
                                WAIVE ONE OR     Order final
                                MORE             No stay of
                                CONDITIONS)      Confirmation
                                (NOTE:  PAYMENT  Order
                                OF UNSECURED     Debtor, Debtor
                                CREDITORS ARE    in Possession,
                                NOT CONDITIONED  Reorganized
                                UPON OR TIED TO  Debtor, and
                                EFFECTIVE DATE)  Proponents have
                                (NOTE:  IF ITS   executed and
                                PLAN IS          delivered all
                                CONFIRMED, HIGH  documents
                                RIVER MAY CLOSE  necessary  to
                                THE  CASINO FOR  effectuate Plan
                                A PERIOD OF      (manner and
                                TIME IF UNABLE   form in sole
                                TO RENEGOTIATE   discretion of
                                OR OBTAIN        Proponents)
                                CERTAIN LEASES)  Proponent's
                                (NOTE:           contribution of
                                DEBTOR'S         cash necessary
                                ABILITY TO MAKE  to satisfy all
                                PAYMENTS         cash payments
                                REQUIRED BY      under the Plan
                                ITS PLAN IS      Debtor's
                                SUBJECT TO       satisfaction of
                                RECEIPT OF       Minimum Gaming
                                FUNDS UNDER ITS  Reserve
                                LOAN COMMITMENT  Requirement
                                FROM UNITED      Leases with
                                HEALTHCARE       various Becker
                                FINANCIAL        entities to
                                SERVICES, INC.)  have been
                                                 renegotiated      or      other
                                                 satisfactory   arrangements  to
                                                 have  been  made   (subject  to
                                                 approval in sole  discretion of
                                                 Proponents)  Proponents to have
                                                 obtained     all      requisite
                                                 corporate  authority,  consents
                                                 and   approvals   No   material
                                                 adverse   changes  in  Debtor's
                                                 business,  assets,  liabilities
                                                 or operations
--------------------------------------------------------------------------------
<S>                             <C>              <C>
Administrative Claims           $1,000,000-      100% up to an
                                $1,500,000       aggregate of
                                                 $1,000,000  (which  cap  may be
                                                 increased by Proponents) on the
                                                 later  of  (a)  the   Effective
                                                 Date;  (b) the  date of a final
                                                 order  allowing  the claim;  or
                                                 (c) the  date  due  outside  of
                                                 bankruptcy       (Class      1-
                                                 unimpaired)
--------------------------------------------------------------------------------
<S>                             <C>              <C>
Priority Unsecured Claims       0                Same as Class 1
                                                 or as ordered
                                                 by the court
                                                 (Class 2-unimpaired)
--------------------------------------------------------------------------------
<S>                             <C>              <C>
Secured Tax Claims              0                Paid in full or
                                                 brought current
                                                 by the
                                                 Effective Date
                                                 (Class 3- unimpaired)
--------------------------------------------------------------------------------
<S>                             <C>              <C>
Priority Tax Claims             $511,000         Unless
                                                 otherwise
                                                 agreed, 100%
                                                 either on the
                                                 Effective Date
                                                 or quarterly
                                                 payments with
                                                 interest at 8%
                                                 commencing at
                                                 the end of the
                                                 first quarter
                                                 after the
                                                 Effective Date
                                                 and concluding
                                                 six years after
                                                 date of
                                                 assessment
                                                 (Class 4-
                                                 unimpaired)
--------------------------------------------------------------------------------
<S>                             <C>              <C>
AC Noteholder Claims            $55,000,000      Pro rata share
                                (principal)      of $52,000,000,
                                                 with no payment
                                                 of any deficiency
                                                 balance (Class 5-impaired)
--------------------------------------------------------------------------------
<S>                             <C>              <C>
Gaming Equipment                $2,374,000       100%-subject to
Secured Claims                                   cap of
                                                 $2,400,000    (which   may   be
                                                 increased by Proponents) either
                                                 by   cure   of   arrears    and
                                                 resumption  of payments or cash
                                                 in full on the Effective  Date,
                                                 at  Proponents'  option;  or to
                                                 the  extent  gaming  equipment,
                                                 capital  lease  or  installment
                                                 sales contracts,  are executory
                                                 contracts,  the  same  will  be
                                                 assumed as of  Effective  Date.
                                                 (Class 6- impaired)
--------------------------------------------------------------------------------
<S>                             <C>              <C>
Other Secured Claims            0                100%-subject to
                                                 cap of $100,000
                                                 (which may be
                                                 increased by
                                                 Proponents)
                                                 paid same as
                                                 Class 6 (Class
                                                 7-unimpaired)
--------------------------------------------------------------------------------
<S>                             <C>              <C>
General (Trade) Unsecured       $2,000,000       100%-subject to
Claims                                           cap of
                                                 $2,600,000
                                                 (which may be
                                                 increased by
                                                 Proponents) 11
                                                 days after
                                                 entry of
                                                 confirmation
                                                 order
                                                 (Class 9-
                                                 impaired)
--------------------------------------------------------------------------------
<S>                             <C>              <C>
Other Unsecured Claims          $270,000-        100% on the
                                $320,000         Effective Date
                                                 with    limitations    ($2,500-
                                                 vehicular   injury,    $25,000-
                                                 non-vehicular injury)plus right
                                                 to  recover  balance  of  claim
                                                 from    available     insurance
                                                 proceeds (Class 11- impaired)
--------------------------------------------------------------------------------
<S>                             <C>              <C>
AC Affiliates Unsecured Claims  $7,000,000       100% to be paid
                                                 (at Proponents'  option) either
                                                 on the Effective  Date; or five
                                                 years after the Effective Date,
                                                 with    interest    from    the
                                                 Effective    Date   at    5.57%
                                                 (semi-annual    interest   only
                                                 payments  commencing  18 months
                                                 after   the   Effective   Date)
                                                 (Class 12- impaired)
--------------------------------------------------------------------------------
<S>                             <C>              <C>
CQC                                              Noteholders    Guaranty   Claim
                                                 $27,000,000  Pro rate  share of
                                                 $1,000,000    and   waiver   of
                                                 Debtor's   Claims  against  CQC
                                                 (Class 13- impaired)
--------------------------------------------------------------------------------
<S>                             <C>              <C>
Equity Interests                N/A              No distribution
                                                 (Class 14-
                                                 impaired)
                                                 (Deemed to have
                                                 rejected the
                                                 Plan-class does
                                                 not vote)
--------------------------------------------------------------------------------

</TABLE>


Interest expense on the AC Notes and the subordinated  notes payable to prior AC
stockholders  has not been  recognized  since AC's November 14, 1997  bankruptcy
petition  date as it not probable that  post-petition  interest for the AC Notes
will be an allowed claim in these proceedings.

Reorganization  items  presented in the  statements of  operations  and retained
earnings  (deficit) are comprised of expenses incurred by AC as a result of AC's
reorganization  under Chapter 11 of  Bankruptcy  Code.  Such expenses  consisted
entirely of professional  fees for the three-month and nine-month  periods ended
March 31, 1998.


3)   Missouri Gaming License,  Default Under  Indebtedness,  Management's Plans,
     and Going Concern:

Capitol Queen and Casino,  Inc.  ("CQC") was formed to develop,  own and operate
the  "Capitol  Queen"  riverboat  casino and related  land-based  facilities  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").  At the time CQC was notified of the Commission's  decision,
construction  of the riverboat  under  contract  with a  shipbuilder  was almost
completed.  CQC had also  obtained  the  necessary  permits  for the  land-based
development portion of the project and performed certain dredging and other site
preparation work.  Immediately following the Commission's  decision,  management
temporarily suspended further development of the Capitol Queen project,  pending
an appeal  of the  decision  and legal  remedies  potentially  available  to the
Company.

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.  Management  subsequently abandoned the
project  and is  currently  looking  for  alternative  uses  for the  riverboat,
including opportunities to sell or lease it to another operator.

CQC financed the Capitol Queen project  through the issuance of  $40,000,000  in
principal  amount of 12% First  Mortgage  Notes due  November 15, 2000 (the "CQC
Notes").  As of January  1,  1995,  the  indenture  governing  the CQC Notes 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  first  step
repurchase of $20,000,000 principal amount of the CQC

Notes (plus accrued and unpaid interest) was completed on January 17, 1995, with
unexpended  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,  and
CQC is thus in default of the amended covenants.

The remaining CQC Notes 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 payments of $1,200,000 on November 15, 1995, May
15, 1996,  November 15, 1996,  May 15, 1997,  November 15, 1997 and May 15, 1998
and AC (which has  guaranteed the CQC Notes as more fully  described  below) did
not have available funds to advance on behalf of CQC.

Concurrent with the issuance of the CQC Notes, AC completed a private  placement
debt financing of  $55,000,000  in principal  amount of 12% First Mortgage Notes
due November 15, 2000 (the "AC Notes").  The AC Notes  require  annual  interest
payments of $6,600,000,  payable in equal  installments  semi-annually on May 15
and  November  15. AC was not able to make its  scheduled  interest  payment  of
$3,300,000 on May 15, 1997,  November 15, 1997 and May 15, 1998 and Sunset Coin,
Inc. ("SC"), another wholly owned subsidiary of BGI (which has guaranteed the AC
Notes as more fully described  below) did not have available funds to advance on
behalf of AC. AC is also in default of certain  covenants under the AC 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 result  of the  above-described  circumstances.  AC does not have
sufficient  financial resources (including a guarantee of the AC Notes by SC, as
more fully described below) to repay the AC Notes on a current basis and satisfy
its guarantee obligation (as more fully described below) with respect to the CQC
Notes.

AC provided a limited  guaranty of the CQC Notes. The AC Notes are guaranteed by
SC  (which   guarantee  is  subject  to  release  upon  the   attainment   of  a
fixed-coverage  ratio by AC of 2.25 to 1,  which  has not been  satisfied).  The
amount and extent of AC's guaranty of the CQC Notes is in dispute. Legal counsel
has  advised  management  that,  under  the  terms  of CQC  indenture  regarding
fraudulent  conveyance,  the  guarantee  liability  of AC is not  expected to be
material.

On July 3, 1997 CQC received a notice of  acceleration  (the  "Notice") from the
trustee and collateral agent for the CQC Notes.  Pursuant to section 6.02 of the
indenture  governing the CQC Notes,  due to certain  violations of the indenture
(as  more  fully  described  above),  all  of  the  outstanding  CQC  Notes  are
immediately  due and  payable  together  with all  accrued  and unpaid  interest
thereon.

On September 5, 1997, AC received a notice of acceleration  from the trustee and
collateral  agent for the AC Notes.  Pursuant to section  6.02 of the  indenture
governing  the AC Notes  (the  "Indenture"),  due to certain  violations  of the
indenture,  all of the  outstanding  AC Notes are  immediately  due and  payable
together with all accrued and unpaid interest thereon.

As of March 31,  1998,  AC was in default of certain  debt  covenants  under the
indenture  governing  the AC Notes.  These  covenant  violations  include  (i) a
failure  to meet a minimum  Fixed  Charge  Coverage  ratio,  as  defined  in the
Indenture;  (ii)  advances by AC to Becker  Gaming,  Inc.  which exceed  amounts
allowed for under the Indenture (which advances remain  outstanding at March 31,
1998);  (iii)  beginning  in the fourth  quarter of fiscal 1997,  exceeding  the
amount of new indebtedness allowed for under the Indenture;  (iv) beginning with
the quarter  ending  December 31, 1995, AC has not met the Minimum  Tangible Net
Worth Ratio of 1.5 to 1.0, as defined in the Indenture;  and (v) AC did not make
its  required  semi-annual  interest  payments of  $3,300,000  on May 15,  1997,
November 15, 1997 and May 15,  1998.  In  addition,  beginning  with the quarter
ending  December  31,  1995,  AC has not  met the  Minimum  Tangible  Net  Worth
requirement defined in the Indenture.  Under the terms of the Indenture,  AC was
technically  required to offer to buy back  $49,500,000  of the  outstanding  AC
Notes at March 31, 1998 due to the failure to meet this covenant,  increasing by
$5,500,000  each fiscal  quarter.  As a result of these defaults under covenants
and demand for payment made by the Trustee, the AC Notes have been classified as
currently payable in the accompanying financial statements.

CQC continues to market its riverboat  assets to  prospective  buyers.  Based on
current  market  conditions,  management  does not expect that CQC will generate
sufficient  funds  through  the  sale of its  assets  to  repurchase  all of the
outstanding CQC Notes.  These matters raise  substantial doubt about the ability
of AC to continue as a going concern.  The final outcome of these matters is not
presently  determinable and the March 31, 1998 financial statements of AC do not
include any adjustment that might result from the outcome of this uncertainty.

4)     Related-Party Transactions:

AC has advanced to BGI an aggregate of  approximately  $6,441,000  to fund BGI's
operating  expenses  from June 1994 through  March 31, 1998 of which  $4,416,000
represented  notes receivable that are interest bearing and have been classified
as noncurrent  based on  management's  expectation  for the timing of repayments
from BGI. At March 31, 1998, accrued interest receivable on the interest bearing
portion of the advances to BGI totaled $821,000.  The matters described in Notes
2  and  3  raise   substantial  doubt  about  the  ability  of  BGI's  principal
subsidiaries  (and,  thus  BGI) to  continue  as a going  concern.  Accordingly,
management of the Company believes it is reasonably  possible that a portion, or
the entire  balance,  of the notes  receivable  from BGI will be  uncollectible.
However,  an  estimate  of  the  loss  cannot  presently  be  determined  and no
adjustment  has been made to the carrying value or  classification  of the notes
receivable at March 31, 1998.

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

<PAGE>

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


                                     ASSETS


                                                           March 31,   June 30,
                                                                1998      1997
                                                             -------    -------
                                                         (Unaudited)
Current assets:
  Cash ...................................................   $   723    $   707
  Current portion of notes receivable ....................        36        222
  Note receivable from related party .....................     3,150      3,150
  Advances to related parties ............................       630        312
  Other receivables ......................................        23         27
  Interest receivable from related party .................       375        313
  Prepaid expenses .......................................        46         45
                                                             -------    -------
      Total current assets ...............................     4,983      4,776
                                                             -------    -------
Property and equipment:
  Building and leasehold improvements ....................       174        174
  Furniture, fixtures and equipment ......................     3,135      3,068
                                                             -------    -------
                                                                3,309      3,242
  Less, accumulated depreciation .........................    (1,577)    (1,604)
                                                             -------    -------
      Net property and equipment .........................     1,732      1,638
                                                             -------    -------
Notes receivable, less current
    portion ..............................................         3         18

  Other assets, less accumulated
    amortization of $11 at March 31, 1998,
    and $37 at June 30, 1998 ............................         69         75
                                                             -------    -------

      Total other assets .................................        72         93
                                                             -------    -------
      Total assets .......................................   $ 6,787    $ 6,507
                                                             =======    =======

================================================================================
<PAGE>
                                SUNSET COIN, INC.
               (A Wholly Owned Subsidiary Of Becker Gaming, Inc.)
                                 BALANCE SHEETS
                             (Dollars In Thousands)


                      LIABILITIES AND STOCKHOLDERS' EQUITY


                                                          March 31,  June 30,
                                                               1998     1997
                                                             ------   ------
                                                        (Unaudited)
Current liabilities:
  Trade accounts payable .................................   $   83   $   13
  Accrued expenses .......................................       60       39
  Accrued taxes payable to related party .................      856      779
  Current portion of long term debt ......................      345      322
                                                             ------   ------
       Total current liabilities .........................    1,344    1,153


Long-term liabilities:
   Long-term debt, less current portion ..................      197      305
   Subordinated notes payable to former stockholders .....    3,000    3,000
                                                             ------   ------
      Total liabilities ..................................    4,541    4,458
                                                             ------   ------

Commitments and contingencies

Stockholders' equity:
  Common stock, no par value, 2,500 shares authorized,
    400 shares issued and outstanding ....................       27       27
Retained earnings ........................................    2,219    2,022
                                                             ------   ------
      Total stockholders' equity .........................    2,246    2,049
                                                             ------   ------

      Total liabilities and stockholders'
      equity .............................................   $6,787   $6,507
                                                             ======   ======

The accompanying notes are an integral part of these financial statements.
================================================================================
<PAGE>
                                SUNSET COIN, INC.
               (A Wholly Owned Subsidiary of Becker Gaming, Inc.)
                   STATEMENTS OF INCOME AND RETAINED EARNINGS
                             (Dollars in Thousands)



                                       Three Months Ended March 31,
                                              1998       1997
                                           -------    -------
Revenues:
  Slot route:
       From locations controlled
          by related parties ...........   $   599    $   614
       Other ...........................        24         30

  Slot service fees:
       From related parties ............        22         21
       Other ...........................         8          8
                                           -------    -------
         Total revenues ................       653        673

  Operating expenses:
    Slot route and service .............       363        313
    General and administrative .........        62          8
    Management fee - Becker Gaming, Inc.        33         34
    Depreciation and amortization ......        74         73
                                           -------    -------
       Total operating expenses ........       532        428
                                           -------    -------
       Operating income ................       121        245
                                           -------    -------
  Other income (expense):
    Interest income ....................         3         48
    Interest expense ...................       (88)       (89)
    Other income .......................       (46)        81
                                           -------    -------
       Total other income (expense) ....      (131)        40
                                           -------    -------
  Net income (loss) before income tax ..       (10)       285
  Provision for income tax .............         3        (73)
                                           -------    -------
  Net income (loss).....................        (7)       212
  Retained earnings, beginning of period     2,226      1,665
                                           -------    -------
  Retained earnings, end of period .....   $ 2,219    $ 1,877
                                           =======    =======

================================================================================
<PAGE>
                                SUNSET COIN, INC.
               (A Wholly Owned Subsidiary of Becker Gaming, Inc.)
                   STATEMENTS OF INCOME AND RETAINED EARNINGS
                             (Dollars in Thousands)




                                       Nine Months Ended March 31,
                                              1998       1997
                                           -------    -------
Revenues:
    Slot route:
       From locations controlled
          by related parties ...........   $ 1,817    $ 1,789
       Other ...........................        91         97

    Slot service fees:
       From related parties ............        64         63
       Other ...........................        24         25
                                           -------    -------
         Total revenues ................     1,996      1,974

Operating expenses:
    Slot route and service .............     1,062      1,000
    General and administrative .........       159         38
    Management fee - Becker Gaming, Inc.       101        104
    Depreciation and amortization ......       230        215
                                           -------    -------
       Total operating expenses ........     1,552      1,357
                                           -------    -------
       Operating income ................       444        617
                                           -------    -------
Other income (expense):
    Interest income ....................        97        143
    Interest expense ...................      (269)      (274)
    Other income .......................         2        129
                                           -------    -------
       Total other income (expense) ....      (170)        (2)
                                           -------    -------

Net income (loss) before income tax ....       274        615
Provision for income tax ...............       (77)      (169)
                                           -------    -------
Net income (loss).......................       197        446
Retained earnings, beginning of period .     2,022      1,431
                                           -------    -------
Retained earnings, end of period .......   $ 2,219    $ 1,877
                                           =======    =======


The accompanying notes are an integral part of these financial statements.
================================================================================
<PAGE>
                                SUNSET COIN, INC.
               (A Wholly Owned Subsidiary of Becker Gaming, Inc.)
                            STATEMENTS OF CASH FLOWS
                             (Dollars In Thousands)

                                   (Unaudited)


                                        Nine Months Ended March 31,
                                             1998       1997
                                          -------    -------
Cash flows from operating activities:
    Net income ........................   $   197    $   446

    Adjustments  to  reconcile  net
     income to net cash  provided
     by operating activities:
     Provision for losses on related 
       party receivables ..............        41         --
     Depreciation and amortization ....        49         --
     Loss on sales of equipment .......       230        215

(Increase) decrease in operating assets:
    Other receivables .................       (37)       (30)
    Prepaid expenses ..................        (1)        23

Increase (decrease) in operating liabilities:
     Accounts payable .................        70        (43)
     Accrued expenses .................        98        161
                                          -------    -------
         Total adjustments ............       450        326
                                          -------    -------

         Net cash provided by
          operating activities ........       647        772
                                          -------    -------

Cash flows from investing activities:
   Capital expenditures ...............      (200)      (150)
   Proceeds from sales of equipment ...        73         --
   Decrease (increase) in related
     party notes receivable ...........        --       (900)
   Decrease (increase) in advances
     to related parties ...............      (380)      (125)
   (Increase) in notes receivable .....        --        (25)
   Repayments of notes receivable .....       201         76
                                          -------    -------
        Net cash used in investing
           activities .................      (306)    (1,124)
                                          -------    -------
Cash flows from financing activities:

    Proceeds from notes payable .......       257        159
    Principal payments on notes payable      (582)      (281)
                                          -------    -------
        Net cash used in financing 
          activities ..................      (325)      (122)
                                          -------    -------
        Net increase in cash ..........        16       (474)

Cash, beginning of period .............       707      1,122
                                          -------    -------
Cash, end of period ...................   $   723    $   648
                                          =======    =======

Supplemental cash flow disclosures:
    Interest paid .....................   $   267    $   274
                                          =======    =======
Assets acquired through issuance of
     long-term debt ...................   $   240    $-
                                          =======    =======

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

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


1)   Basis of Presentation:

Sunset Coin, Inc. ("SC" or the "Company") is a 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 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-month  and
nine-month  periods ended March 31, 1998 are not  necessarily  indicative of the
results that may be expected for the year ended June 30, 1998. The  accompanying
unaudited 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, 1997.

Certain  amounts in the 1997  financial  statements  have been  reclassified  to
conform with the 1998 presentation.

2) Guarantee Obligation, Management's Plans, and Going Concern:

SC has guaranteed the payment of interest and  $55,000,000  principal  amount of
12% First  Mortgage  Notes due  November 15, 2000 issued by AC (the "AC Notes").
Arizona Charlie's,  Inc. ("AC") was in default of certain covenants under the AC
Notes as of March  31,  1998.  On  September  5,  1997 AC  received  a notice of
acceleration  from the trustee and collateral agent for the AC Notes, and all of
the  outstanding  AC Notes are  immediately  due and payable  together  with all
accrued and unpaid  interest  thereon.  In  addition,  AC has provided a limited
guaranty  of notes  payable  issued by CQC (the "CQC  Notes"),  (the  amount and
extent of which guaranty is in dispute) of which  $20,000,000  principal  amount
are outstanding at March 31, 1998.  Capitol Queen and Casino,  Inc. ("CQC") is a
development  stage company  which has abandoned its project to develop,  own and
operate a riverboat  casino,  and is currently  attempting to sell its assets to
prospective  buyers.  Based on current market  conditions,  management  does not
expect that CQC will generate sufficient funds through the sale of its assets to
repurchase all of the  outstanding  CQC Notes.  These matters raise  substantial
doubt about the ability of SC to continue as a going concern.  The final outcome
of these matters is not presently  determinable and the March 31, 1998 financial
statements  of SC do not  include  any  adjustment  that might  result  from the
outcome of this uncertainty.

On November 14, 1997, AC filed a voluntary petition under Chapter 11 of the U.S.
Bankruptcy  Code with the United  States  Bankruptcy  Court for the  District of
Nevada  (the  "Bankruptcy  Court") in Las  Vegas,  Nevada in order to provide it
protection  from creditors  while it attempts to negotiate a settlement with the
holders of certain debt.

During  the  course  of the  bankruptcy  proceeding  AC  has  been  involved  in
litigation  with certain of its creditors.  Specifically  the holders of the CQC
Notes  asserted a claim  against AC under its limited  guaranty of the CQC Notes
for the full deficiency  which might arise after proceeds from the sale of CQC's
assets are applied to the CQC Notes.  On November 14, 1997, AC filed a complaint
to  declare  its   obligations   under  the  limited   guaranty   discharged  or
alternatively  to avoid the limited  guaranty.  The trustee  under the indenture
with  respect to the CQC Notes  answered  this  complaint  and  denies  that the
limited  guaranty  has been  satisfied  and denies that the limited  guaranty is
avoidable  The  litigation  presently  is in the  discovery  phase.  A trial  to
determine  the amount (if any) of  liability  under the AC Limited  Guaranty  is
scheduled to begin before the Bankruptcy Court on August 17, 1998.

In addition,  holders of the AC Notes claim a valid and enforceable  lien in all
of AC's assets, including all real property and personal property which comprise
Arizona  Charlie's  Hotel and Casino.  On  February  2, 1998,  AC filed a motion
disputing  certain  aspects of the liens  claimed by the holders of the AC Notes
and seeking for the  Bankruptcy  Court to determine the value of the  collateral
securing the AC Note holders'  claims.  The Bankruptcy  Court has set an initial
hearing on April 3, 1998,  and  indicated an intention to value the liens of the
holders of the AC Notes at the hearing of  confirmation  of the Competing  Plans
(as defined below).

Currently  pending  before the  Bankruptcy  Court in the AC Bankruptcy  Case are
three competing plans of reorganization:  (i) a plan of reorganization  filed by
AC on February  17,  1998 (as  amended,  "the  Debtor's  Plan");  (ii) a plan of
reorganization  filed by Fertitta Enterprises and Station Casinos on May 8, 1998
(as amended,  the "Station Plan");  and (iii) a plan of reorganization  filed on
May 8, 1998 by High River Limited Partnership, an entity owned and controlled by
Carl  Icahn  (as  amended,  the  "High  River  Plan").   Disclosure   statements
accompanying  the  Debtor's  Plan,  the  Station  Plan,  and the High River Plan
(collectively,  the  "Competing  Plans") were approved by the  Bankruptcy  Court
following a hearing held on May 15, 1998. As a  consequence,  creditors  will be
asked to vote on the  Competing  Plans in the near  future,  and the  Bankruptcy
Court has set a confirmation  hearing on the Competing  Plans scheduled to begin
on  June  18,  1998.  Set  forth  in the  table  below  is a  comparison  of the
significant terms of the Competing Plans.

<TABLE>
<CAPTION>

================================================================================
                     COMPARATIVE SUMMARY OF COMPETING PLANS
================================================================================
                                                 Debtor's Plan
--------------------------------------------------------------------------------
   Conditions to                                 Entry of
   Confirmation of Plan                          Confirmation Order
--------------------------------------------------------------------------------
   <S>                     <C>                   <C>

   Additional Conditions
   to the Effective Date   (NOTE: PROPONENTS     Gaming Approval
   of the Plan             MAY WAIVE ONE OR      New Value
                           MORE CONDITIONS)      Contribution Made
                           (NOTE:  PAYMENT OF    (due 30 days after
                           UNSECURED CREDITORS   entry of the
                           ARE NOT CONDITIONED   Confirmation Order)
                           UPON OR TIED TO       Confirmation Order
                           EFFECTIVE DATE)       entered and in
                           (NOTE:  IF ITS PLAN   effect
                           IS CONFIRMED, HIGH
                           RIVER MAY CLOSE THE
                           CASINO FOR A PERIOD
                           OF TIME IF UNABLE TO
                           RENEGOTIATE OR
                           OBTAIN  CERTAIN  LEASES) 
                           (NOTE:  DEBTOR'S  ABILITY 
                           TO MAKE  PAYMENTS  
                           REQUIRED  BY ITS PLAN IS  
                           SUBJECT  TO RECEIPT  OF  
                           FUNDS  UNDER  ITS LOAN  
                           COMMITMENT  FROM UNITED 
                           HEALTHCARE FINANCIAL SERVICES, 
                           INC.)
--------------------------------------------------------------------------------
 <S>                     <C>                   <C>
 Administrative Claims     $1,000,000-           Unless otherwise
                           $1,500,000            agreed in writing by
                                                 the Creditor, or
                                                 unless otherwise
                                                 ordered by the
                                                 Court:  100% on the
                                                 later of (a) the
                                                 Effective Date; or
                                                 (b) the date allowed
                                                 by final order
                                                 (Class 1-unimpaired)
--------------------------------------------------------------------------------
 <S>                     <C>                   <C>
   Priority Unsecured      0                     Same as Class 1
   Claims                                        (Class 2-unimpaired)
--------------------------------------------------------------------------------
 <S>                     <C>                   <C>
   Secured Tax Claims      0                     100% plus interest
                                                 at 8% per annum,
                                                 semi-annual payments
                                                 commencing six
                                                 months after the
                                                 Effective Date
                                                 (Class 3-impaired)
--------------------------------------------------------------------------------
 <S>                     <C>                   <C>
   Priority Tax Claims     $511,000              100%, to be paid (at
                                                 Debtor's  option)  in cash upon
                                                 later of Effective Date or date
                                                 claim is allowed;  or quarterly
                                                 payments  with  interest  at 8%
                                                 (or   rate   allowed   by   the
                                                 Bankruptcy   Court)   over  six
                                                 years from date of  assessment,
                                                 with payments commencing at the
                                                 end  of  the   first   calendar
                                                 quarter   after  the  Effective
                                                 Date. (Class 4-unimpaired)
--------------------------------------------------------------------------------
 <S>                     <C>                   <C>
   AC Noteholder Claims    $55,000,000           Each holder shall
                           (principal)           have the option of
                                                 receiving  either:  (1) payment
                                                 on the  Effective  Date  of pro
                                                 rata  share of the value of the
                                                 Noteholders'  Secured Claim, as
                                                 determined  by  the  Bankruptcy
                                                 Court  (estimated by the Debtor
                                                 at $43,000,000) plus payment of
                                                 either    (i)    10%   of   the
                                                 deficiency  balance  in cash on
                                                 the Effective date; or (ii) the
                                                 full  amount of the  deficiency
                                                 balance  five  years  after the
                                                 Effective  Date  (estimated  by
                                                 the  Debtor  at   $19,000,000),
                                                 with  interest only payments at
                                                 the  rate of  5.75%  per  annum
                                                 commencing  18 months after the
                                                 Effective  Date; or (2) payment
                                                 of   pro    rata    share    of
                                                 $55,000,000 in  satisfaction of
                                                 all  claims.  (Class  5 and 10-
                                                 impaired)
--------------------------------------------------------------------------------
 <S>                     <C>                   <C>
   Gaming Equipment        $2,374,000            Post-petition
   Secured Claims                                payments brought
                                                 current on the  Effective  Date
                                                 and maintained thereafter; pre-
                                                 petition   arrears  along  with
                                                 recoverable  costs and expenses
                                                 (including reasonable attorneys
                                                 fees) paid in six equal monthly
                                                 installments,  with interest at
                                                 8%, commencing on the first day
                                                 of  the  month   following  the
                                                 Effective      Date      (Class
                                                 6-impaired)
--------------------------------------------------------------------------------
 <S>                     <C>                   <C>
   Other Secured Claims    0                     Same as Class 6
                                                 (Class 7-impaired)
--------------------------------------------------------------------------------
 <S>                     <C>                   <C>
   General (Trade)         $2,000,000            100% 11 days after
   Unsecured Claims                              entry of
                                                 Confirmation Order
                                                 (Class 9-impaired)
--------------------------------------------------------------------------------
 <S>                     <C>                   <C>
   Other Unsecured Claims  $270,000-$320,000     100% 11 days after
                                                 entry of
                                                 Confirmation Order
                                                 with limitations
                                                 ($2,500-vehicular
                                                 injury; $25,000-non-
                                                 vehicular injury)
                                                 plus right to
                                                 recover balance of
                                                 claim from available
                                                 insurance proceeds
                                                 (Class 11-impaired)
--------------------------------------------------------------------------------
 <S>                     <C>                   <C>
   AC Affiliates           $7,000,000            No distribution-
   Unsecured Claims                              claims contributed
                                                 as part of new value
                                                 contribution
                                                 (Class 12-impaired)
--------------------------------------------------------------------------------
 <S>                     <C>                   <C>
   CQC Noteholders         $27,000,000           If Claim Allowed,
   Guaranty Claim                                Holder may elect to
                                                 receive 10% on  Effective  Date
                                                 (equivalent     of     up    to
                                                 $2,700,000)  or 100% five years
                                                 after the Effective  Date, with
                                                 interest   from  the  Effective
                                                 Date  at   5.57%   (semi-annual
                                                 interest      only     payments
                                                 commencing  18 months after the
                                                 Effective     Date)     (Debtor
                                                 estimates  claims at $0) (Class
                                                 13-impaired)
--------------------------------------------------------------------------------
 <S>                     <C>                   <C>
   Equity Interests        N/A                   Retained in exchange
                                                 for release of Class
                                                 12 claims plus
                                                 $1,500,000 new value
                                                 contribution (which
                                                 includes $385,000
                                                 loan commitment fee
                                                 advanced)
--------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>

================================================================================
                     COMPARATIVE SUMMARY OF COMPETING PLANS
================================================================================

                                            High River's Plan
--------------------------------------------------------------------------------
Conditions to                               Confirmation Order
Confirmation of Plan                        final and non-
                                            appealable
                                            Regulatory Approval
                                            (including gaming)
                                            Appointment of
                                            Interim Operating Trustee
--------------------------------------------------------------------------------
<S>                   <C>                   <C>

Additional
Conditions to the     (NOTE: PROPONENTS     Gaming Approval
Effective Date of     MAY WAIVE ONE OR      Execution of lease
the Plan              MORE CONDITIONS)      with a qualified
                      (NOTE:  PAYMENT OF    gaming operator
                      UNSECURED CREDITORS   Confirmation Order
                      ARE NOT CONDITIONED   Effective
                      UPON OR TIED TO  
                      EFFECTIVE  DATE)  
                      (NOTE:  IF ITS  PLAN 
                      IS CONFIRMED, HIGH 
                      RIVER MAY CLOSE THE 
                      CASINO FOR A PERIOD OF
                      TIME IF UNABLE TO 
                      RENEGOTIATE  OR OBTAIN 
                      CERTAIN LEASES)
                      (NOTE:  DEBTOR'S 
                      ABILITY TO MAKE PAYMENTS
                      REQUIRED BY ITS PLAN IS  
                      SUBJECT TO RECEIPT OF 
                      FUNDS UNDER ITS LOAN
                      COMMITMENT FROM UNITED
                      HEALTHCARE FINANCIAL
                      SERVICES, INC.)
--------------------------------------------------------------------------------
<S>                   <C>                   <C>
Administrative        $1,000,000-           Unless otherwise
Claims                $1,500,000            agreed in writing
                                            between Reorganized
                                            Debtor and Claimant:
                                            100% on the later of
                                            (a) the Effective
                                            Date; or (b) the
                                            date allowed by
                                            final order (Certain
                                            Administrative
                                            Claimants must file
                                            claim or request for
                                            payment within 30
                                            days after the
                                            Effective Date)
                                            (Class 1-unimpaired)
--------------------------------------------------------------------------------
<S>                   <C>                   <C>
Priority Unsecured    0                     Unless otherwise
Claims                                      ordered by the Court-
                                            Same as Class 1
                                            (Class 2-unimpaired)
--------------------------------------------------------------------------------
<S>                   <C>                   <C>
Secured Tax Claims    0                     100%, to be paid (at
                                            option of Reorganization  Debtor) in
                                            cash  on  the  Effective   Date;  in
                                            semi-annual  payments  over 5  years
                                            commencing  on the  Effective  Date,
                                            with   interest   at   8%;   or   as
                                            determined   by  the  Court   (Class
                                            3-unimpaired)
--------------------------------------------------------------------------------
<S>                   <C>                   <C>
Priority Tax Claims   $511,000              100%, to be paid (at
                                            option  of  Reorganized  Debtor)  in
                                            cash on Effective Date; in quarterly
                                            payments over six years from date of
                                            assessment  commencing  on Effective
                                            Date;  or as determined by the Court
                                            (Class 4-unimpaired)
--------------------------------------------------------------------------------
<S>                   <C>                   <C>
AC Noteholder Claims  $55,000,000           96% of face value of
                      (principal)           notes in cash
                                            (equivalent of
                                            $52,800,000, to be
                                            paid on Effective
                                            Date or as soon
                                            thereafter as
                                            practicable, with no
                                            payment of any
                                            deficiency balance
                                            (Class 5-impaired)
--------------------------------------------------------------------------------
<S>                   <C>                   <C>
Gaming Equipment      $2,374,000            No claims in Class
Secured Claims                              6; reorganized
                                            Debtor  will  assume  all  contracts
                                            relating to Gaming Equipment Vendors
                                            Claims as executory contracts on the
                                            Effective   Date;   all   pre-   and
                                            post-petition  arrears  paid  eleven
                                            days  after  Confirmation  Date,  or
                                            plan proponent will acquire pre- and
                                            post-petition claims at 100% of face
                                            amount and pay the net present value
                                            of the  balance  of  the  underlying
                                            contract. (Class 6- impaired)
--------------------------------------------------------------------------------
<S>                   <C>                   <C>
Other Secured Claims  0                     Included in Class 6
General (Trade)       $2,000,000            100% 11 days after
Unsecured Claims                            entry of
                                            Confirmation Order
                                            (Class 7-impaired)
--------------------------------------------------------------------------------
<S>                   <C>                   <C>
Other Unsecured       $270,000-$320,000     100% 11 days after
Claims                                      entry of
                                            Confirmation  Order with limitations
                                            ($2,500-vehicular            injury;
                                            $25,000-non-  vehicular injury) plus
                                            right to  recover  balance  of claim
                                            from  available  insurance  proceeds
                                            (Class 8-impaired)
--------------------------------------------------------------------------------
<S>                   <C>                   <C>
AC Affiliates         $7,000,000            No distribution
Unsecured Claims                            (Class 10-impaired)
                                            (Deemed to have
                                            rejected the Plan-
                                            class  does not
                                            vote)
--------------------------------------------------------------------------------
<S>                   <C>                   <C>
CQC Noteholders       $27,000,000           Pro rata share of
Guaranty Claim                              $1,500,000 and
                                            waiver of Debtor's
                                            Claims against CQC
                                            (Class 9-impaired)
--------------------------------------------------------------------------------
<S>                   <C>                   <C>
Equity Interests      N/A                   No distribution
                                            (Class 11-impaired)
                                            (Deemed to have
                                            rejected the Plan-
                                            class does not vote)
--------------------------------------------------------------------------------
</TABLE>


<TABLE>
<CAPTION>

================================================================================
                     COMPARATIVE SUMMARY OF COMPETING PLANS
================================================================================

                                                 Station's Plan
--------------------------------------------------------------------------------
Conditions to                                    Entry of
Confirmation of Plan                             Confirmation Order
--------------------------------------------------------------------------------



<S>                             <C>              <C>
Effective Date of the Plan      PROPONENTS MAY   Confirmation
                                WAIVE ONE OR     Order final
                                MORE             No stay of
                                CONDITIONS)      Confirmation
                                (NOTE:  PAYMENT  Order
                                OF UNSECURED     Debtor, Debtor
                                CREDITORS ARE    in Possession,
                                NOT CONDITIONED  Reorganized
                                UPON OR TIED TO  Debtor, and
                                EFFECTIVE DATE)  Proponents have
                                (NOTE:  IF ITS   executed and
                                PLAN IS          delivered all
                                CONFIRMED, HIGH  documents
                                RIVER MAY CLOSE  necessary  to
                                THE  CASINO FOR  effectuate Plan
                                A PERIOD OF      (manner and
                                TIME IF UNABLE   form in sole
                                TO RENEGOTIATE   discretion of
                                OR OBTAIN        Proponents)
                                CERTAIN LEASES)  Proponent's
                                (NOTE:           contribution of
                                DEBTOR'S         cash necessary
                                ABILITY TO MAKE  to satisfy all
                                PAYMENTS         cash payments
                                REQUIRED BY      under the Plan
                                ITS PLAN IS      Debtor's
                                SUBJECT TO       satisfaction of
                                RECEIPT OF       Minimum Gaming
                                FUNDS UNDER ITS  Reserve
                                LOAN COMMITMENT  Requirement
                                FROM UNITED      Leases with
                                HEALTHCARE       various Becker
                                FINANCIAL        entities to
                                SERVICES, INC.)  have been
                                                 renegotiated      or      other
                                                 satisfactory   arrangements  to
                                                 have  been  made   (subject  to
                                                 approval in sole  discretion of
                                                 Proponents)  Proponents to have
                                                 obtained     all      requisite
                                                 corporate  authority,  consents
                                                 and   approvals   No   material
                                                 adverse   changes  in  Debtor's
                                                 business,  assets,  liabilities
                                                 or operations
--------------------------------------------------------------------------------
<S>                             <C>              <C>
Administrative Claims           $1,000,000-      100% up to an
                                $1,500,000       aggregate of
                                                 $1,000,000  (which  cap  may be
                                                 increased by Proponents) on the
                                                 later  of  (a)  the   Effective
                                                 Date;  (b) the  date of a final
                                                 order  allowing  the claim;  or
                                                 (c) the  date  due  outside  of
                                                 bankruptcy       (Class      1-
                                                 unimpaired)
--------------------------------------------------------------------------------
<S>                             <C>              <C>
Priority Unsecured Claims       0                Same as Class 1
                                                 or as ordered
                                                 by the court
                                                 (Class 2-unimpaired)
--------------------------------------------------------------------------------
<S>                             <C>              <C>
Secured Tax Claims              0                Paid in full or
                                                 brought current
                                                 by the
                                                 Effective Date
                                                 (Class 3- unimpaired)
--------------------------------------------------------------------------------
<S>                             <C>              <C>
Priority Tax Claims             $511,000         Unless
                                                 otherwise
                                                 agreed, 100%
                                                 either on the
                                                 Effective Date
                                                 or quarterly
                                                 payments with
                                                 interest at 8%
                                                 commencing at
                                                 the end of the
                                                 first quarter
                                                 after the
                                                 Effective Date
                                                 and concluding
                                                 six years after
                                                 date of
                                                 assessment
                                                 (Class 4-
                                                 unimpaired)
--------------------------------------------------------------------------------
<S>                             <C>              <C>
AC Noteholder Claims            $55,000,000      Pro rata share
                                (principal)      of $52,000,000,
                                                 with no payment
                                                 of any deficiency
                                                 balance (Class 5-impaired)
--------------------------------------------------------------------------------
<S>                             <C>              <C>
Gaming Equipment                $2,374,000       100%-subject to
Secured Claims                                   cap of
                                                 $2,400,000    (which   may   be
                                                 increased by Proponents) either
                                                 by   cure   of   arrears    and
                                                 resumption  of payments or cash
                                                 in full on the Effective  Date,
                                                 at  Proponents'  option;  or to
                                                 the  extent  gaming  equipment,
                                                 capital  lease  or  installment
                                                 sales contracts,  are executory
                                                 contracts,  the  same  will  be
                                                 assumed as of  Effective  Date.
                                                 (Class 6- impaired)
--------------------------------------------------------------------------------
<S>                             <C>              <C>
Other Secured Claims            0                100%-subject to
                                                 cap of $100,000
                                                 (which may be
                                                 increased by
                                                 Proponents)
                                                 paid same as
                                                 Class 6 (Class
                                                 7-unimpaired)
--------------------------------------------------------------------------------
<S>                             <C>              <C>
General (Trade) Unsecured       $2,000,000       100%-subject to
Claims                                           cap of
                                                 $2,600,000
                                                 (which may be
                                                 increased by
                                                 Proponents) 11
                                                 days after
                                                 entry of
                                                 confirmation
                                                 order
                                                 (Class 9-
                                                 impaired)
--------------------------------------------------------------------------------
<S>                             <C>              <C>
Other Unsecured Claims          $270,000-        100% on the
                                $320,000         Effective Date
                                                 with    limitations    ($2,500-
                                                 vehicular   injury,    $25,000-
                                                 non-vehicular injury)plus right
                                                 to  recover  balance  of  claim
                                                 from    available     insurance
                                                 proceeds (Class 11- impaired)
--------------------------------------------------------------------------------
<S>                             <C>              <C>
AC Affiliates Unsecured Claims  $7,000,000       100% to be paid
                                                 (at Proponents'  option) either
                                                 on the Effective  Date; or five
                                                 years after the Effective Date,
                                                 with    interest    from    the
                                                 Effective    Date   at    5.57%
                                                 (semi-annual    interest   only
                                                 payments  commencing  18 months
                                                 after   the   Effective   Date)
                                                 (Class 12- impaired)
--------------------------------------------------------------------------------
<S>                             <C>              <C>
CQC                                              Noteholders    Guaranty   Claim
                                                 $27,000,000  Pro rate  share of
                                                 $1,000,000    and   waiver   of
                                                 Debtor's   Claims  against  CQC
                                                 (Class 13- impaired)
--------------------------------------------------------------------------------
<S>                             <C>              <C>
Equity Interests                N/A              No distribution
                                                 (Class 14-
                                                 impaired)
                                                 (Deemed to have
                                                 rejected the
                                                 Plan-class does
                                                 not vote)
--------------------------------------------------------------------------------

</TABLE>


3) Related-Party Transactions:

Note  receivable  from related party consists of $3,150,000 of  uncollateralized
advances made by the Company to AC for general working capital purposes.  Due to
the present financial condition of AC, as described in Note 2, management of the
Company  believes  it is  reasonably  possible  that a  portion,  or the  entire
balance, of the notes receivable from AC will be uncollectible. In addition, the
Plan of  Reorganization  contemplates  SC's  forgiveness of the notes receivable
from AC. However,  there is no assurance that the Plan of Reorganization will be
confirmed by the Court,  an estimate of the loss cannot  presently be determined
and,  accordingly,  no  adjustment  has  been  made  to the  carrying  value  or
classification  of the note receivable at March 31, 1998.  Interest earned by SC
on the notes  receivable  from AC was $0 and  $62,000  for the  three-month  and
nine-month  periods  ended March 31, 1998 as compared to $31,000 and $63,000 for
the same periods in 1997. The interest receivable from AC and payables to AC are
included in other  receivables  and advances to related  parties,  respectively.
Contractual  interest,  though  not  accrued  since  the AC  November  14,  1997
bankruptcy  date,  would  be  $41,000  and  $124,000  for  the  three-month  and
nine-month periods ended March 31, 1998.

================================================================================
<PAGE>
                          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


                                                           March 31,   June 30,
                                                                1998      1997
                                                             -------   -------
                                                         (Unaudited)
Current assets:


  Restricted cash, in escrow account ....................      $  32    $   31
                                                             -------   -------

      Total current assets ...............................        32        31
                                                             -------   -------

Other assets:


  Assets held for sale ...................................     6,454     7,754

  Financing costs, net of accumulated
    amortization of $546 at March 31,
    1998 and $445 at June 30, 1997 .......................       371       472
                                                             -------   -------

      Total other assets .................................     6,825     8,226
                                                             -------   -------

      Total assets .......................................   $ 6,857   $ 8,257
                                                             =======   =======

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

<PAGE>

                          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)


                  LIABILITIES & STOCKHOLDERS' EQUITY (DEFICIT)


                                                         March 31,    June 30,
                                                              1998        1997
                                                          --------    --------
                                                       (Unaudited)

Current liabilities:

  Advances from related parties .......................   $     14     $ 1,226
  Accrued interest ....................................         --       5,788
  Notes payable to related parties ....................         --       1,200
  Long-term debt classified as current due to default
    under covenants, net of unamortized original issue
    discount of $2,092 ................................         --      17,908
                                                          --------    --------

         Total liabilities ............................         14      26,122
                                                          --------    --------

Prepetition liabilities subject to compromise:
  Advance from related parties                               1,398          --
  Accrued interest                                           8,043          --
  Notes payable to related parties                           1,200          --
  Long-term debt classified as current due to
    default under covenants, net if unamortized
    original issue discount of $1,725                       18,275          --
                                                          --------    --------
    Total prepetition liabilities subject to
      compromise                                            28,916          --
                                                          --------    --------
        Total liabilities ..............................     28,930      26,122
                                                          --------    --------

Commitments and contingencies

Stockholders' 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 ........    (34,805)    (30,597)
                                                          --------    --------
      Total stockholders' equity (deficit) ............    (22,073)    (17,865)
                                                          --------    --------

      Total liabilities and stockholders'
         equity (deficit) ..............................   $  6,857    $  8,257
                                                           ========    ========


The accompanying notes are an integral part of these financial statements.
================================================================================
<PAGE>
                          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 March 31,
                                        1998       1997
                                     -------    -------
Revenues .........................        $-         $-

Operating expenses:
  Amortization of financing and
    other costs ..................        34         33
  Abandonment loss and write-downs
    of assets held for sale ......     1,300         --
  Development costs ..............        40         41
                                     -------    -------

      Total operating expenses ...     1,374         74
                                     -------    -------

Operating loss ...................    (1,374)       (74)

Other income (expenses):
  Interest income ................        --         --
  Interest expense (contractual
    interest for the three-months
    ended March 31, 1998 in the
    amount of $937 ...............      (817)    (1,016)
  Interest capitalized ...........        --         --
                                     -------    -------

Total other income (expense) .....      (817)    (1,016)
                                     -------    -------

Net loss before extraordinary item    (2,191)    (1,090)
                                     -------    -------

Reorganization items                     (20)        --
                                     -------    -------
Net loss before extraordinary item    (2,211)    (1,090)

Extraordinary item:
  Loss on early retirement of
    debt (no income tax benefit
    available) ...................      --         --
                                     -------    -------
   Net loss ......................   $(2,211)   $(1,090)
                                     =======    =======

================================================================================
<PAGE>
                          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)


                                                                 For The Period
                                                                January 20, 1993
                                                                 (The Date Of
                                                                  Inception)
                                           Nine Months             Through
                                         Ended March 31,           March 31,
                                         1998        1997            1998
                                     --------    --------    ------------------
Revenues ...........................       $-          $-                  $-
                                                          
                                                          
Operating expenses:                                       
  Amortization of financing and                           
    other costs ....................      101          99                1,575
  Abandonment losses and write-downs                      
    of assets held for sale.........    1,300          --               11,726
  Development costs ................      166         175                2,157
                                     --------    --------   ------------------
                                                          
      Total operating expenses .....    1,567        274               15,458
                                     --------    --------   ------------------
Operating loss                         (1,567)      (274)             (15,458)
                                                          
Other income (expenses):                                  
  Interest income ..................        1         --                1,267
  Interest expense (contractual                           
    interest for the three-months                         
    ended March 31, 1998 in the                           
    amount of $937 .................   (2,622)     (2,519)             (17,188)
  Interest capitalized .............     --          --                    683
                                     
Total other income (expense) .......   (2,621)     (2,519)             (15,238)
                                     --------    --------   ------------------
                                                          
Net loss before extraordinary item .   (4,188)     (2,793)             (30,696)
                                     --------    --------   ------------------
                                                          
Reogranization items                      (20)      --                     (20)
                                     --------    --------   ------------------
Net loss before extraordinary item .   (4,208)     (2,793)             (30,716)
                                                          
Extraordinary item:                                       
  Loss on early retirement of                             
     debt (no income tax benefit ...                      
     available) ....................     --          --                 (4,089)
                                     --------    --------   ------------------
                                                          
   Net loss ........................ $ (4,208)   $ (2,793)  $          (34,805)
                                     ========    ========   ==================
                                                 

The accompanying notes are an integral part of these financial statements.
================================================================================
<PAGE>
                          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)


                                                   Nine Months Ended
                                                        March 31,
                                                    1998       1997
                                                 -------    -------

Cash flows from development stage activities:
 Net loss ....................................   $(4,208)   $(2,793)
 Adjustments to reconcile net loss                                  
    to net cash provided by (used in)                               
    development stage activities:                                   
 Amortization of financing and other costs ...       101         99 
 Amortization of original issue discount .....       367        406 
 Abandonment losses and write-downs of assets.
    held for sale ............................     1,300         -- 
 Extraordinary loss on retirement of debt ....        --         -- 
 Increase in accounts payable and accruals, 
    net of amounts for capital expenditures ..     2,255      2,114 
 Increase in advances from related parties ...       186        174 
                                                 -------    ------- 
       Total adjustments .....................     4,209      2,793 
                                                 -------    ------- 
       Net cash used in development                                 
         stage activities ....................         1         -- 
                                                 -------    ------- 
                                                                    
Cash flows from investing activities:                               
 Capital expenditures, net of                                       
  construction accounts payable ..............       --         --  
 Net (additions to) reductions                                
    in restricted cash equivalents ...........        (1)       --  
 Decrease in deposits and other assets .......       --         --  
 Capitalization of preopening costs ..........       --         --  
 Development costs ...........................       --         --  
                                                                    
                                                 -------    ------- 
     Net cash provided by                                           
       (used in) investing activities ........        (1)       --  
                                                 -------    ------- 
                                                                    
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 ..........       --         --  
                                                                    
Cash and cash equivalents,                                          
    beginning of period ......................       --         --  
                                                 -------    ------- 
                                                                    
Cash and cash equivalents,                                          
    end of period ............................       --         --  
                                                 ========   ========
                                                                    
Supplemental cash flow disclosures:                                 
 Interest paid, net of amounts capitalized ...        $-         $- 
                                                 ========   ========
 Original issue discount that                                       
    did not affect cash ......................        $-         $- 
                                                 ========   ========
 Equity contribution by Becker Gaming                               
    that did not affect cash .................        $-         $- 
                                                 ========   ========
                                                            
================================================================================
<PAGE>

                          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)

                                                       For The Period
                                                      January 20, 1993
                                                        (The Date Of
                                                         Inception)
                                                           Through
                                                           March 31,
                                                              1998
                                                           --------

Cash flows from development stage activities:
 Net loss ...................................              $(34,805)
 Adjustments to reconcile net loss
    to net cash provided by (used in)
    development stage activities:
 Amortization of financing and other costs ..                 1,575
 Amortization of original issue discount ....                 2,656
 Abandonment losses and write-downs of assets
     held for sale..........................                 11,786
 Extraordinary loss on retirement of debt ...                 4,089
 Increase in accounts payable and accruals, 
     net of amounts for capital expenditures.                 8,055
 Increase in advances from related parties ..                 1,400
                                                           --------
       Total adjustments ....................                29,561
                                                           --------
       Net cash used in development
         stage activities ...................                (5,244)
                                                           --------

Cash flows from investing activities:
 Capital expenditures, net of 
  construction accounts payable .............               (12,936)
 Net (additions to) reductions in restricted 
  cash equivalents ..........................                   (33)
 Decrease in deposits and other assets ......                   (60)
 Capitalization of preopening costs .........                  (340) 
 Development costs ..........................                  (553)
                                                           --------
     Net cash provided by
       (used in) investing activities .......               (13,922)
                                                           --------

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.
================================================================================

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

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

1)   Basis of Presentation:

Capitol  Queen &  Casino,  Inc.  ("CQC"  or the  "Company")  is a  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 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-month  and
nine-month  periods ended March 31, 1998 are not  necessarily  indicative of the
results  that may be expected for the year ended June 30,  1998.  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, 1997.

2)   Capitol Queen & Casino, Inc. Bankruptcy Filing:

On March 17, 1998,  CQC filed for  bankruptcy  protection  in the United  States
Bankruptcy  Court  for  the  District  of  Nevada  in  Las  Vegas,  Nevada  (the
"Bankruptcy  Court") under Chapter 11 of the United States Bankruptcy Code (Case
NO. 98-22172 LBR) to purse financial  reorganization  of CQC and to facilitate a
sale of the gaming vessel, the principal asset of CQC, to a third party. A third
party  bid for the  purchase  of the  vessel  was  filed  with a Motion of Order
Authorizing  Sale of  Personal  Property  and  hearing on the motion was set for
April 16, 1998. On April 16, 1998, the parties requested the hearing be deferred
to April 29, 1998. On April 29, 1998, the third party buyer withdrew its bid and
there being no other willing  buyers present to make a bid, the sale of the boat
was  continued  to June 5,  1998 to allow  CQC to  solicit  additional  bids and
offers. Subsequently,  CQC received a conditional offer from a third party and a
new hearing date of May 15, 1998 was scheduled (in lieu of the June 5, 1998 date
which  was  vacated)  to  consider  this  bid  and  any  others  that  might  be
forthcoming. The third party, however, then requested a continuance to allow for
additional  time to complete its diligence  investigation  regarding the vessel,
and there being no other bidders  prepared to offer a competitive bid to that of
the third party, a further continuance was request and granted to June 15, 1998,
at which  time the third  party  bid and that of any  competing  buyers  will be
considered.  Since CQC does not presently engage in any business operations, the
Company did not experience any material changes in its operations as a result of
the bankruptcy filing.


3)   Arizona Charlie's, Inc. Bankruptcy Filing:

Arizona  Charlie's,  Inc.,  ("AC"),  a wholly  owned  subsidiary  of BGI, is the
limited  guarantor  of certain  debt of CQC. On November  14,  1997,  AC filed a
voluntary petition under Chapter 11 of the U.S.  Bankruptcy Code with the United
States  Bankruptcy Court for the District of Nevada (the "Bankruptcy  Court") in
Las Vegas,  Nevada in order to provide it  protection  from  creditors  while it
attempts to negotiate a settlement with the holders of certain debt.

During  the  course  of the  bankruptcy  proceeding  AC  has  been  involved  in
litigation  with certain of its creditors.  Specifically  the holders of the CQC
Notes (as  defined  in Note 3)  asserted a claim  against  AC under its  limited
guaranty  of the CQC Notes  for the full  deficiency  which  might  arise  after
proceeds from the sale of CQC's assets are applied to the CQC Notes. On November
14,  1997,  AC filed a complaint  to declare its  obligations  under the limited
guaranty discharged or alternatively to avoid the limited guaranty.  The trustee
under the indenture  with respect to the CQC Notes  answered this  complaint and
denies that the limited  guaranty has been satisfied and denies that the limited
guaranty is avoidable.  The  litigation  presently is in the discovery  phase. A
trial to  determine  the  amount  (if any) of  liability  under  the AC  Limited
Guaranty is scheduled to begin before the Bankruptcy Court on August 17, 1998.

In  addition,  holders of the AC Notes (as  defined in Note 4) claim a valid and
enforceable lien in all of AC's assets, including all real property and personal
property which comprise Arizona Charlie's Hotel and Casino. On February 2, 1998,
AC filed a motion disputing  certain aspects of the liens claimed by the holders
of the AC Notes and seeking for the  Bankruptcy  Court to determine the value of
the  collateral  securing the AC Note  holders'  claims.  The  Bankruptcy  Court
conducted  an initial  hearing on April 3, 1998,  and  indicated an intention to
value the liens of the holders of the AC Notes at the hearing of confirmation of
the Competing Plans (as defined below).

Currently  pending  before the  Bankruptcy  Court in the AC Bankruptcy  Case are
three competing plans of reorganization:  (i) a plan of reorganization  filed by
AC on February  17,  1998 (as  amended,  "the  Debtor's  Plan");  (ii) a plan of
reorganization  filed by Fertitta Enterprises and Station Casinos on May 8, 1998
(as amended,  the "Station Plan");  and (iii) a plan of reorganization  filed on
May 8, 1998 by High River Limited Partnership, an entity owned and controlled by
Carl  Icahn  (as  amended,  the  "High  River  Plan").   Disclosure   statements
accompanying  the  Debtor's  Plan,  the  Station  Plan,  and the High River Plan
(collectively,  the  "Competing  Plans") were approved by the  Bankruptcy  Court
following a hearing held on May 15, 1998. As a  consequence,  creditors  will be
asked to vote on the  Competing  Plans in the near  future,  and the  Bankruptcy
Court has set a confirmation  hearing on the Competing  Plans scheduled to begin
on  June  18,  1998.  Set  forth  in the  table  below  is a  comparison  of the
significant terms of the Competing Plans.

<TABLE>
<CAPTION>

================================================================================
                     COMPARATIVE SUMMARY OF COMPETING PLANS
================================================================================
                                                 Debtor's Plan
--------------------------------------------------------------------------------
   Conditions to                                 Entry of
   Confirmation of Plan                          Confirmation Order
--------------------------------------------------------------------------------
   <S>                     <C>                   <C>

   Additional Conditions
   to the Effective Date   (NOTE: PROPONENTS     Gaming Approval
   of the Plan             MAY WAIVE ONE OR      New Value
                           MORE CONDITIONS)      Contribution Made
                           (NOTE:  PAYMENT OF    (due 30 days after
                           UNSECURED CREDITORS   entry of the
                           ARE NOT CONDITIONED   Confirmation Order)
                           UPON OR TIED TO       Confirmation Order
                           EFFECTIVE DATE)       entered and in
                           (NOTE:  IF ITS PLAN   effect
                           IS CONFIRMED, HIGH
                           RIVER MAY CLOSE THE
                           CASINO FOR A PERIOD
                           OF TIME IF UNABLE TO
                           RENEGOTIATE OR
                           OBTAIN  CERTAIN  LEASES) 
                           (NOTE:  DEBTOR'S  ABILITY 
                           TO MAKE  PAYMENTS  
                           REQUIRED  BY ITS PLAN IS  
                           SUBJECT  TO RECEIPT  OF  
                           FUNDS  UNDER  ITS LOAN  
                           COMMITMENT  FROM UNITED 
                           HEALTHCARE FINANCIAL SERVICES, 
                           INC.)
--------------------------------------------------------------------------------
 <S>                     <C>                   <C>
 Administrative Claims     $1,000,000-           Unless otherwise
                           $1,500,000            agreed in writing by
                                                 the Creditor, or
                                                 unless otherwise
                                                 ordered by the
                                                 Court:  100% on the
                                                 later of (a) the
                                                 Effective Date; or
                                                 (b) the date allowed
                                                 by final order
                                                 (Class 1-unimpaired)
--------------------------------------------------------------------------------
 <S>                     <C>                   <C>
   Priority Unsecured      0                     Same as Class 1
   Claims                                        (Class 2-unimpaired)
--------------------------------------------------------------------------------
 <S>                     <C>                   <C>
   Secured Tax Claims      0                     100% plus interest
                                                 at 8% per annum,
                                                 semi-annual payments
                                                 commencing six
                                                 months after the
                                                 Effective Date
                                                 (Class 3-impaired)
--------------------------------------------------------------------------------
 <S>                     <C>                   <C>
   Priority Tax Claims     $511,000              100%, to be paid (at
                                                 Debtor's  option)  in cash upon
                                                 later of Effective Date or date
                                                 claim is allowed;  or quarterly
                                                 payments  with  interest  at 8%
                                                 (or   rate   allowed   by   the
                                                 Bankruptcy   Court)   over  six
                                                 years from date of  assessment,
                                                 with payments commencing at the
                                                 end  of  the   first   calendar
                                                 quarter   after  the  Effective
                                                 Date. (Class 4-unimpaired)
--------------------------------------------------------------------------------
 <S>                     <C>                   <C>
   AC Noteholder Claims    $55,000,000           Each holder shall
                           (principal)           have the option of
                                                 receiving  either:  (1) payment
                                                 on the  Effective  Date  of pro
                                                 rata  share of the value of the
                                                 Noteholders'  Secured Claim, as
                                                 determined  by  the  Bankruptcy
                                                 Court  (estimated by the Debtor
                                                 at $43,000,000) plus payment of
                                                 either    (i)    10%   of   the
                                                 deficiency  balance  in cash on
                                                 the Effective date; or (ii) the
                                                 full  amount of the  deficiency
                                                 balance  five  years  after the
                                                 Effective  Date  (estimated  by
                                                 the  Debtor  at   $19,000,000),
                                                 with  interest only payments at
                                                 the  rate of  5.75%  per  annum
                                                 commencing  18 months after the
                                                 Effective  Date; or (2) payment
                                                 of   pro    rata    share    of
                                                 $55,000,000 in  satisfaction of
                                                 all  claims.  (Class  5 and 10-
                                                 impaired)
--------------------------------------------------------------------------------
 <S>                     <C>                   <C>
   Gaming Equipment        $2,374,000            Post-petition
   Secured Claims                                payments brought
                                                 current on the  Effective  Date
                                                 and maintained thereafter; pre-
                                                 petition   arrears  along  with
                                                 recoverable  costs and expenses
                                                 (including reasonable attorneys
                                                 fees) paid in six equal monthly
                                                 installments,  with interest at
                                                 8%, commencing on the first day
                                                 of  the  month   following  the
                                                 Effective      Date      (Class
                                                 6-impaired)
--------------------------------------------------------------------------------
 <S>                     <C>                   <C>
   Other Secured Claims    0                     Same as Class 6
                                                 (Class 7-impaired)
--------------------------------------------------------------------------------
 <S>                     <C>                   <C>
   General (Trade)         $2,000,000            100% 11 days after
   Unsecured Claims                              entry of
                                                 Confirmation Order
                                                 (Class 9-impaired)
--------------------------------------------------------------------------------
 <S>                     <C>                   <C>
   Other Unsecured Claims  $270,000-$320,000     100% 11 days after
                                                 entry of
                                                 Confirmation Order
                                                 with limitations
                                                 ($2,500-vehicular
                                                 injury; $25,000-non-
                                                 vehicular injury)
                                                 plus right to
                                                 recover balance of
                                                 claim from available
                                                 insurance proceeds
                                                 (Class 11-impaired)
--------------------------------------------------------------------------------
 <S>                     <C>                   <C>
   AC Affiliates           $7,000,000            No distribution-
   Unsecured Claims                              claims contributed
                                                 as part of new value
                                                 contribution
                                                 (Class 12-impaired)
--------------------------------------------------------------------------------
 <S>                     <C>                   <C>
   CQC Noteholders         $27,000,000           If Claim Allowed,
   Guaranty Claim                                Holder may elect to
                                                 receive 10% on  Effective  Date
                                                 (equivalent     of     up    to
                                                 $2,700,000)  or 100% five years
                                                 after the Effective  Date, with
                                                 interest   from  the  Effective
                                                 Date  at   5.57%   (semi-annual
                                                 interest      only     payments
                                                 commencing  18 months after the
                                                 Effective     Date)     (Debtor
                                                 estimates  claims at $0) (Class
                                                 13-impaired)
--------------------------------------------------------------------------------
 <S>                     <C>                   <C>
   Equity Interests        N/A                   Retained in exchange
                                                 for release of Class
                                                 12 claims plus
                                                 $1,500,000 new value
                                                 contribution (which
                                                 includes $385,000
                                                 loan commitment fee
                                                 advanced)
--------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>

================================================================================
                     COMPARATIVE SUMMARY OF COMPETING PLANS
================================================================================

                                            High River's Plan
--------------------------------------------------------------------------------
Conditions to                               Confirmation Order
Confirmation of Plan                        final and non-
                                            appealable
                                            Regulatory Approval
                                            (including gaming)
                                            Appointment of
                                            Interim Operating Trustee
--------------------------------------------------------------------------------
<S>                   <C>                   <C>

Additional
Conditions to the     (NOTE: PROPONENTS     Gaming Approval
Effective Date of     MAY WAIVE ONE OR      Execution of lease
the Plan              MORE CONDITIONS)      with a qualified
                      (NOTE:  PAYMENT OF    gaming operator
                      UNSECURED CREDITORS   Confirmation Order
                      ARE NOT CONDITIONED   Effective
                      UPON OR TIED TO  
                      EFFECTIVE  DATE)  
                      (NOTE:  IF ITS  PLAN 
                      IS CONFIRMED, HIGH 
                      RIVER MAY CLOSE THE 
                      CASINO FOR A PERIOD OF
                      TIME IF UNABLE TO 
                      RENEGOTIATE  OR OBTAIN 
                      CERTAIN LEASES)
                      (NOTE:  DEBTOR'S 
                      ABILITY TO MAKE PAYMENTS
                      REQUIRED BY ITS PLAN IS  
                      SUBJECT TO RECEIPT OF 
                      FUNDS UNDER ITS LOAN
                      COMMITMENT FROM UNITED
                      HEALTHCARE FINANCIAL
                      SERVICES, INC.)
--------------------------------------------------------------------------------
<S>                   <C>                   <C>
Administrative        $1,000,000-           Unless otherwise
Claims                $1,500,000            agreed in writing
                                            between Reorganized
                                            Debtor and Claimant:
                                            100% on the later of
                                            (a) the Effective
                                            Date; or (b) the
                                            date allowed by
                                            final order (Certain
                                            Administrative
                                            Claimants must file
                                            claim or request for
                                            payment within 30
                                            days after the
                                            Effective Date)
                                            (Class 1-unimpaired)
--------------------------------------------------------------------------------
<S>                   <C>                   <C>
Priority Unsecured    0                     Unless otherwise
Claims                                      ordered by the Court-
                                            Same as Class 1
                                            (Class 2-unimpaired)
--------------------------------------------------------------------------------
<S>                   <C>                   <C>
Secured Tax Claims    0                     100%, to be paid (at
                                            option of Reorganization  Debtor) in
                                            cash  on  the  Effective   Date;  in
                                            semi-annual  payments  over 5  years
                                            commencing  on the  Effective  Date,
                                            with   interest   at   8%;   or   as
                                            determined   by  the  Court   (Class
                                            3-unimpaired)
--------------------------------------------------------------------------------
<S>                   <C>                   <C>
Priority Tax Claims   $511,000              100%, to be paid (at
                                            option  of  Reorganized  Debtor)  in
                                            cash on Effective Date; in quarterly
                                            payments over six years from date of
                                            assessment  commencing  on Effective
                                            Date;  or as determined by the Court
                                            (Class 4-unimpaired)
--------------------------------------------------------------------------------
<S>                   <C>                   <C>
AC Noteholder Claims  $55,000,000           96% of face value of
                      (principal)           notes in cash
                                            (equivalent of
                                            $52,800,000, to be
                                            paid on Effective
                                            Date or as soon
                                            thereafter as
                                            practicable, with no
                                            payment of any
                                            deficiency balance
                                            (Class 5-impaired)
--------------------------------------------------------------------------------
<S>                   <C>                   <C>
Gaming Equipment      $2,374,000            No claims in Class
Secured Claims                              6; reorganized
                                            Debtor  will  assume  all  contracts
                                            relating to Gaming Equipment Vendors
                                            Claims as executory contracts on the
                                            Effective   Date;   all   pre-   and
                                            post-petition  arrears  paid  eleven
                                            days  after  Confirmation  Date,  or
                                            plan proponent will acquire pre- and
                                            post-petition claims at 100% of face
                                            amount and pay the net present value
                                            of the  balance  of  the  underlying
                                            contract. (Class 6- impaired)
--------------------------------------------------------------------------------
<S>                   <C>                   <C>
Other Secured Claims  0                     Included in Class 6
General (Trade)       $2,000,000            100% 11 days after
Unsecured Claims                            entry of
                                            Confirmation Order
                                            (Class 7-impaired)
--------------------------------------------------------------------------------
<S>                   <C>                   <C>
Other Unsecured       $270,000-$320,000     100% 11 days after
Claims                                      entry of
                                            Confirmation  Order with limitations
                                            ($2,500-vehicular            injury;
                                            $25,000-non-  vehicular injury) plus
                                            right to  recover  balance  of claim
                                            from  available  insurance  proceeds
                                            (Class 8-impaired)
--------------------------------------------------------------------------------
<S>                   <C>                   <C>
AC Affiliates         $7,000,000            No distribution
Unsecured Claims                            (Class 10-impaired)
                                            (Deemed to have
                                            rejected the Plan-
                                            class  does not
                                            vote)
--------------------------------------------------------------------------------
<S>                   <C>                   <C>
CQC Noteholders       $27,000,000           Pro rata share of
Guaranty Claim                              $1,500,000 and
                                            waiver of Debtor's
                                            Claims against CQC
                                            (Class 9-impaired)
--------------------------------------------------------------------------------
<S>                   <C>                   <C>
Equity Interests      N/A                   No distribution
                                            (Class 11-impaired)
                                            (Deemed to have
                                            rejected the Plan-
                                            class does not vote)
--------------------------------------------------------------------------------
</TABLE>


<TABLE>
<CAPTION>

================================================================================
                     COMPARATIVE SUMMARY OF COMPETING PLANS
================================================================================

                                                 Station's Plan
--------------------------------------------------------------------------------
Conditions to                                    Entry of
Confirmation of Plan                             Confirmation Order
--------------------------------------------------------------------------------



<S>                             <C>              <C>
Effective Date of the Plan      PROPONENTS MAY   Confirmation
                                WAIVE ONE OR     Order final
                                MORE             No stay of
                                CONDITIONS)      Confirmation
                                (NOTE:  PAYMENT  Order
                                OF UNSECURED     Debtor, Debtor
                                CREDITORS ARE    in Possession,
                                NOT CONDITIONED  Reorganized
                                UPON OR TIED TO  Debtor, and
                                EFFECTIVE DATE)  Proponents have
                                (NOTE:  IF ITS   executed and
                                PLAN IS          delivered all
                                CONFIRMED, HIGH  documents
                                RIVER MAY CLOSE  necessary  to
                                THE  CASINO FOR  effectuate Plan
                                A PERIOD OF      (manner and
                                TIME IF UNABLE   form in sole
                                TO RENEGOTIATE   discretion of
                                OR OBTAIN        Proponents)
                                CERTAIN LEASES)  Proponent's
                                (NOTE:           contribution of
                                DEBTOR'S         cash necessary
                                ABILITY TO MAKE  to satisfy all
                                PAYMENTS         cash payments
                                REQUIRED BY      under the Plan
                                ITS PLAN IS      Debtor's
                                SUBJECT TO       satisfaction of
                                RECEIPT OF       Minimum Gaming
                                FUNDS UNDER ITS  Reserve
                                LOAN COMMITMENT  Requirement
                                FROM UNITED      Leases with
                                HEALTHCARE       various Becker
                                FINANCIAL        entities to
                                SERVICES, INC.)  have been
                                                 renegotiated      or      other
                                                 satisfactory   arrangements  to
                                                 have  been  made   (subject  to
                                                 approval in sole  discretion of
                                                 Proponents)  Proponents to have
                                                 obtained     all      requisite
                                                 corporate  authority,  consents
                                                 and   approvals   No   material
                                                 adverse   changes  in  Debtor's
                                                 business,  assets,  liabilities
                                                 or operations
--------------------------------------------------------------------------------
<S>                             <C>              <C>
Administrative Claims           $1,000,000-      100% up to an
                                $1,500,000       aggregate of
                                                 $1,000,000  (which  cap  may be
                                                 increased by Proponents) on the
                                                 later  of  (a)  the   Effective
                                                 Date;  (b) the  date of a final
                                                 order  allowing  the claim;  or
                                                 (c) the  date  due  outside  of
                                                 bankruptcy       (Class      1-
                                                 unimpaired)
--------------------------------------------------------------------------------
<S>                             <C>              <C>
Priority Unsecured Claims       0                Same as Class 1
                                                 or as ordered
                                                 by the court
                                                 (Class 2-unimpaired)
--------------------------------------------------------------------------------
<S>                             <C>              <C>
Secured Tax Claims              0                Paid in full or
                                                 brought current
                                                 by the
                                                 Effective Date
                                                 (Class 3- unimpaired)
--------------------------------------------------------------------------------
<S>                             <C>              <C>
Priority Tax Claims             $511,000         Unless
                                                 otherwise
                                                 agreed, 100%
                                                 either on the
                                                 Effective Date
                                                 or quarterly
                                                 payments with
                                                 interest at 8%
                                                 commencing at
                                                 the end of the
                                                 first quarter
                                                 after the
                                                 Effective Date
                                                 and concluding
                                                 six years after
                                                 date of
                                                 assessment
                                                 (Class 4-
                                                 unimpaired)
--------------------------------------------------------------------------------
<S>                             <C>              <C>
AC Noteholder Claims            $55,000,000      Pro rata share
                                (principal)      of $52,000,000,
                                                 with no payment
                                                 of any deficiency
                                                 balance (Class 5-impaired)
--------------------------------------------------------------------------------
<S>                             <C>              <C>
Gaming Equipment                $2,374,000       100%-subject to
Secured Claims                                   cap of
                                                 $2,400,000    (which   may   be
                                                 increased by Proponents) either
                                                 by   cure   of   arrears    and
                                                 resumption  of payments or cash
                                                 in full on the Effective  Date,
                                                 at  Proponents'  option;  or to
                                                 the  extent  gaming  equipment,
                                                 capital  lease  or  installment
                                                 sales contracts,  are executory
                                                 contracts,  the  same  will  be
                                                 assumed as of  Effective  Date.
                                                 (Class 6- impaired)
--------------------------------------------------------------------------------
<S>                             <C>              <C>
Other Secured Claims            0                100%-subject to
                                                 cap of $100,000
                                                 (which may be
                                                 increased by
                                                 Proponents)
                                                 paid same as
                                                 Class 6 (Class
                                                 7-unimpaired)
--------------------------------------------------------------------------------
<S>                             <C>              <C>
General (Trade) Unsecured       $2,000,000       100%-subject to
Claims                                           cap of
                                                 $2,600,000
                                                 (which may be
                                                 increased by
                                                 Proponents) 11
                                                 days after
                                                 entry of
                                                 confirmation
                                                 order
                                                 (Class 9-
                                                 impaired)
--------------------------------------------------------------------------------
<S>                             <C>              <C>
Other Unsecured Claims          $270,000-        100% on the
                                $320,000         Effective Date
                                                 with    limitations    ($2,500-
                                                 vehicular   injury,    $25,000-
                                                 non-vehicular injury)plus right
                                                 to  recover  balance  of  claim
                                                 from    available     insurance
                                                 proceeds (Class 11- impaired)
--------------------------------------------------------------------------------
<S>                             <C>              <C>
AC Affiliates Unsecured Claims  $7,000,000       100% to be paid
                                                 (at Proponents'  option) either
                                                 on the Effective  Date; or five
                                                 years after the Effective Date,
                                                 with    interest    from    the
                                                 Effective    Date   at    5.57%
                                                 (semi-annual    interest   only
                                                 payments  commencing  18 months
                                                 after   the   Effective   Date)
                                                 (Class 12- impaired)
--------------------------------------------------------------------------------
<S>                             <C>              <C>
CQC                                              Noteholders    Guaranty   Claim
                                                 $27,000,000  Pro rate  share of
                                                 $1,000,000    and   waiver   of
                                                 Debtor's   Claims  against  CQC
                                                 (Class 13- impaired)
--------------------------------------------------------------------------------
<S>                             <C>              <C>
Equity Interests                N/A              No distribution
                                                 (Class 14-
                                                 impaired)
                                                 (Deemed to have
                                                 rejected the
                                                 Plan-class does
                                                 not vote)
--------------------------------------------------------------------------------

</TABLE>


4)     Missouri   Gaming  License,  Default  Under  Indebtedness,
Management's Plans, and  Going     Concern:

CQC was formed to develop,  own and operate the "Capitol Queen" riverboat casino
and related land-based  facilities 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").  At the time CQC was notified
of the Commission's decision,  construction of the riverboat under contract with
a shipbuilder was almost completed.  CQC had also obtained the necessary permits
for the  land-based  development  portion of the project and  performed  certain
dredging and other site preparation work. Immediately following the Commission's
decision,  management  temporarily  suspended further development of the Capitol
Queen project,  pending an appeal of the decision and legal remedies potentially
available to the Company.  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.

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.  Management has abandoned the project,
and is  currently  looking for  alternative  uses for the  riverboat,  including
opportunities to sell or lease it to another operator.

CQC financed the Capitol Queen project  through the issuance of  $40,000,000  in
principal  amount of 12% First  Mortgage  Notes due  November 15, 2000 (the "CQC
Notes").  As of January  1,  1995,  the  indenture  governing  the CQC Notes 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  first  step
repurchase of  $20,000,000  principal  amount of the CQC Notes (plus accrued and
unpaid  interest) was completed on January 17, 1995, with unexpended  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,  and CQC is thus in default of
the amended covenants.

The remaining CQC Notes 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 payments of $1,200,000 on November 15, 1995, May
15, 1996,  November 15, 1996,  May 15, 1997,  November 15, 1997 and May 15, 1998
and AC (which has guaranteed the CQC Notes as more fully described in below) did
not have available funds to advance on behalf of CQC.

Concurrent with the issuance of the CQC Notes, AC completed a private  placement
debt financing of  $55,000,000  in principal  amount of 12% First Mortgage Notes
due  November  15, 4)  Missouri  Gaming  License,  Default  Under  Indebtedness,
Management's Plans, and Going Concern, Continued:

2000  (the "AC  Notes").  The AC  Notes  require  annual  interest  payments  of
$6,600,000,  payable in equal installments  semi-annually on May 15 and November
15. AC was not able to make its scheduled interest payments of $3,300,000 on May
15,  1997,  November  15, 1997 and May 15, 1998 and Sunset  Coin,  Inc.  ("SC"),
another  wholly owned  subsidiary of BGI (which has  guaranteed  the AC Notes as
more fully described below) did not have available funds to advance on behalf of
AC. AC is also in  default  of  certain  covenants  under  the AC  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.  AC does not have
sufficient  financial resources including a guarantee of the AC Notes by SC, (as
more fully described below) to repay the AC Notes on a current basis and satisfy
its guarantee obligation (as more fully described below) with respect to the CQC
Notes.

AC has provided a limited guaranty of the CQC Notes. The AC Notes are guaranteed
by  SC  (which  guarantee  is  subject  to  release  upon  the  attainment  of a
fixed-coverage  ratio by AC of 2.25 to 1,  which  has not been  satisfied).  The
amount and extent of AC's guaranty of the CQC Notes is in dispute. Legal counsel
has  advised  management  that,  under  the  terms  of CQC  indenture  regarding
fraudulent  conveyance,  the  guarantee  liability  of AC is not  expected to be
material.

On July 3, 1997 the Company  received a notice of  acceleration  (the  "Notice")
from the trustee  and  collateral  agent for the CQC Notes.  Pursuant to section
6.02 of the Indenture, due to certain violations of the Indenture by the Company
(as more fully described above) all of the outstanding CQC Notes are immediately
due and  payable,  together  with  all  accrued  and  unpaid  interest  thereon.
Accordingly,  the CQC Notes have been  classified as currently  payable at March
31, 1998.

On September 5, 1997, AC received a notice of acceleration  from the trustee and
collateral  agent for the AC Notes.  Pursuant to section  6.02 of the  indenture
governing the AC Notes, due to certain  violations of the indenture,  all of the
outstanding AC Notes are immediately  due and payable  together with all accrued
and unpaid interest thereon.

In connection with the decision to abandon the project,  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,
which  price  exceeded  the  carrying  value  of the CQC  assets.  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 its Development  Agreement with
CQC,  that  Aerie be found  preliminarily  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 4) Missouri
Gaming  License,  Default  Under  Indebtedness,  Management's  Plans,  and Going
Concern, Continued:

when the December 31, 1995  expiration  date passed.  As more fully described in
Note  4, a  further  write-down  in the  carrying  value  of the  riverboat  was
recognized in the fourth quarter of fiscal 1996, after the election in Jefferson
City,  the expiration of the Aerie  contract,  and due to  deteriorating  market
conditions.  Additionally, the cost of the riverboat was further written down at
March 31, 1998 to $6,200,000  based on recent offers received for the riverboat,
which resulted in an additional abandonment loss of $1,300,000.

CQC continues to market its riverboat  assets to  prospective  buyers.  Based on
current  market  conditions,  management  does not expect that CQC will generate
sufficient  funds  through  the  sale of its  assets  to  repurchase  all of the
outstanding CQC Notes.  These matters raise  substantial doubt about the ability
of CQC to continue as a going concern. The final outcome of these matters is not
presently determinable and the March 31, 1998 financial statements of CQC do not
include any adjustment that might result from the outcome of this uncertainty.


5)   Assets Held For Sale:

At March 31, 1998,  CQC had  $6,454,000  of assets held for sale,  consisting of
land and riverboat  assets which were written down to a carrying  value based on
management's best estimate of the riverboat's  current net realizable value in a
cash sale, based on information obtained from shipbuilders,  marine brokers, and
purchase offers made to the Company from third parties.


                      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").

      On November 14, 1997,  AC filed a voluntary  petition  under Chapter 11 of
the U.S.  Bankruptcy  Code  with the  United  States  Bankruptcy  Court  for the
District of Nevada  (the  "Bankruptcy  Court") in Las Vegas,  Nevada in order to
provide it protection from creditors while it attempts to negotiate a settlement
with the holders of certain debt.

     On February 17, 1998, AC filed a Plan of Reorganization (the "Plan") and an
accompanying   Disclosure  Statement  (the  "Disclosure   Statement")  with  the
Bankruptcy  Court. The Plan provides for a restructure of the claims against AC,
which AC believes will allow its business to continue successfully.  See Further
discussion under Arizona Charlie's, Inc. _ Claims by Trustee.

      BGI is currently  receiving  payment for management  fees from SC and BGG,
and is accruing management fees from AC until such time as such fees may be paid
under the  Indenture  governing the AC Notes and other  uncertainties  regarding
AC's  ability  to pay  such  fees  are  resolved.  In  addition,  AC's  Plan  of
Reorganization  contemplates  BGI's  forgiveness of all such accrued  management
fees. BGI does not expect to receive  management fee income from CQC as a result
of the events in Missouri  adversely  affecting CQC's efforts to become licensed
to conduct  riverboat  gaming in that State. As a result of these  developments,
CQC has adopted a plan to sell its assets and  business.  See  "Capitol  Queen &
Casino,  Inc. - General"  and "Notes to Financial  Statements - Capitol  Queen &
Casino, Inc."

      On March 17, 1998,  Capitol Queen & Casino,  Inc. ("the  Company") filed a
voluntary  petition for  reorganization  under Chapter 11 of the Bankruptcy Code
with the United States  Bankruptcy  Court for the District of Nevada (Las Vegas,
Nevada).  The file  number in the case is 98-22172  LBR with Judge Linda  Riegle
presiding.

      As a result of the events  adversely  impacting  CQC's ability to complete
and open the Capitol Queen, significant doubt exists about the ability of CQC to
continue as a going concern. Similar doubt exists with respect to AC and SC as a
result of their guarantees of the CQC Notes and the AC Notes, respectively.  AC,
SC and CQC  represent  the  Company's  principal  subsidiaries,  from  which  it
anticipated receiving management fee income and, accordingly,  substantial doubt
also exists about BGI's  ability to continue as a going  concern.  See "Notes to
Financial  Statements - Becker Gaming,  Inc. - Missouri Gaming License,  Default
Under Indebtedness, Management's Plans, and Going Concern.


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 departmental 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 nine-months ended
March 31, 1998 and 1997

      Results from  operations at AC increased for both the three and nine-month
periods ended March 31, 1998 compared to the same periods in 1997 primarily as a
result of increased  gaming  revenues in the  three-month  period and  decreased
promotional  allowances in the nine-month  period.  Operating expenses increased
for both the three-month and nine-month periods ended March 31, 1998,  primarily
as a result of increased  depreciation  resulting  from the purchase of new slot
equipment  and  increased  food and  beverage  expenses.  Gaming  expenses  also
increased during the three-month period.

      Net revenues at AC increased by $1,608,000,  or 11.2%, from $14,313,000 to
$15,921,000  for the  three-month  period  ended March 31, 1998  compared to the
three-month   period  ended  March  31,  1997.  In  the  same   period-to-period
comparison,   operating  expenses,   including  depreciation  and  amortization,
increased by 8.4% to $15,045,000 from  $13,877,000.  This resulted in a $440,000
increase  in  operating  income from  $436,000  to $876,000  for the more recent
period.

     Net  revenues at AC increased by $551,000,  or 1.2%,  from  $43,983,000  to
$44,534,000  for the  nine-month  period  ended March 31,  1998  compared to the
nine-month period ended March 31, 1997. In the same period-to-period comparison,
operating expenses,  including depreciation and amortization,  increased by 2.9%
to  $45,107,000  from  $43,813,000.  This  resulted  in a $743,000  decrease  in
operating  income from  income of  $170,000  to a loss of $573,000  for the more
recent period.

      The largest  portion of the revenue  increase for the  three-month  period
ended March 31, 1998 is attributable to gaming  revenues,  specifically,  gaming
machine  revenues,   which  increased  9.8%  from  $10,269,000  to  $11,279,000,
reflecting  increased  levels of play from  patrons.  Revenues  from table games
increased 4.0% from $1,120,000 to $1,165,000 during the 1998 three-month  period
and race  and  sports  book  revenues  increased  $64,000  or  13.5%  reflecting
increased  twenty-one  play and  increased  race & sports  book and  pari-mutuel
wagering,  respectively.  The  increased  pari-  mutuel  wagering  is due to the
settlement  of a ten month old fee  dispute in August,  1997  between the Nevada
Pari-Mutuel  Association and both the Thoroughbred  Owners of California and the
California Horse Racing Board who provide and authorized televised  disseminator
services to race and sports books in Nevada.  Bingo  revenues also  increased by
$55,000 for the  three-month  period  ended March 31, 1998 when  compared to the
same period of the prior year.

     The largest  portion of the  increase in net  revenues  for the  nine-month
period ended March 31, 1998 is  attributable  to  promotional  allowances  which
decreased  25.8% from  $6,479,000 to  $4,804,000.  The reduction in  promotional
allowances is the result of Management's  recent efforts to better control these
costs and rewards patrons through stronger player evaluation methods such as the
Charlie  Card Slot  Club.  This is  partially  offset by  gaming  revenue  which
decreased by 0.8% or $282,000 from  $36,362,000  to  $36,080,000.  Revenues from
table games  decreased  $330,000 or 9.4%,  from  $3,525,000 to  $3,195,000,  and
revenues  from  the  race &  sports  book  increased  $187,000,  or  9.7%,  from
$1,934,000 to $2,121,000  Poker  revenues  decreased by $65,000 from $419,000 to
$354,000 during the nine-month  period ended March 31, 1998 compared to the same
period of the prior year.

      Food and beverage  revenues  decreased  $13,000 or 0.4% from $3,297,000 to
$3,284,000  during the  three-month  period ended March 31, 1998 compared to the
same period in the prior year.  The small  decrease in revenues is primarily due
to decreased  complimentary sales in the food and beverage department reflecting
management's  recent  efforts  to  better  control  the  costs  associated  with
complimentary  sales through  stronger  player  evaluation  methods offset by an
increase in the number of cash covers in the casino restaurants.  Such sales are
included  in  revenues at retail  value and are then  deducted as a  promotional
allowance.  For the  nine-month  period  ended March 31,  1998,  food & beverage
revenues decreased $801,000 or 7.7% from $10,445,000 to $9,644,000 when compared
to  the  nine-month  period  of  the  prior  year,  again  reflecting  decreased
complimentary sales in the food and beverage departments.

      Hotel revenues  decreased $77,000 or 9.0% from $854,000 to $777,000 during
the three months ended March 31, 1998 compared to the same three-month period in
1997.  The decrease is primarily due to a decrease in occupancy and average room
rates of 79.7% and  $41.96,  respectively,  compared  to 86.7% and $43.70 in the
1997 period.  During the nine-month  period ended March 31, 1998, hotel revenues
decreased by $275,000 or 10.8% from  $2,540,000  to  $2,265,000  compared to the
same  nine-month  period of 1997.  The  decreased  revenue is  largely  due to a
decrease in  occupancy  and to a lessor  extent  average room rates of 77.1% and
$42.81,  respectively,  compared  to 87.3%  and  $43.22  in the 1997  nine-month
period.

      Gift shop  revenues  increased  $71,000 or 52.6% from $135,000 to $206,000
during the  three-month  period ended March 31, 1998 compared to the same period
in 1997.  During the nine-month  period ended March 31, 1998, gift shop revenues
increased  $169,000,  or 41.8%,  from $404,000 to $573,000  compared to the same
period in 1997. The increases are primarily due to increased sales of hotel logo
items.

     Other revenues,  which principally include entertainment cover charges, ATM
commissions, and revenues from PBX and banquets, increased $87,000 or 49.7% from
$175,000 to $262,000 for the three-month period ended March 31, 1998 compared to
the same period in 1997.  During the nine month  period  ended  March 31,  1998,
other revenues  increased by $65,000 or 9.1% from $711,000 to $776,000  compared
to the same nine-month period of 1997. The increases are primarily the result of
higher  ATM  and  other  commissions  and  revenue  from  boxing  events  in the
three-month period of the more recent fiscal year.

      Gaming  expenses  increased  by  $460,000  or  10.8%  from  $4,276,000  to
$4,736,000  for the  three-month  period ended March 31, 1998 as compared to the
same  periods in 1997.  The  increased  levels of expense  reflect  additions to
staffing  levels  in the  slot  department  and  increased  race &  sports  book
promotion  expenses.  The  increase is also due to  increased  employee  medical
premium  expense  caused by a change in the way medical  insurance  payments are
recorded (see general and administrative below). For the nine-month period ended
March 31,  1998  gaming  expenses  decreased  slightly  by $111,000 or 0.9% from
$13,136,000 to $13,025,000.

      Food and beverage expenses increased by $667,000 and $1,305,000,  or 22.6%
and 14.0%,  from  $2,956,000  and  $9,287,000  to  $3,623,000  and  $10,592,000,
respectively,  for the three-month  and nine-month  periods ended March 31, 1998
when  compared  to the same  periods  in 1997,  as a result  of an  increase  in
beverage  costs plus  increased  employee  medical  premium  expense caused by a
change in the way medical  insurance  payments have been recorded (see general &
administrative  below)  during  the 1998  three-month  and  nine-month  periods.
Despite such increase,  food and beverage expenses  represented 88.9% and 109.8%
of food and beverage  revenues for the three-month and nine-month  periods ended
March 31, 1998  compared to 89.7% and 110.5% of the food and  beverage  revenues
for the same periods in 1997.

      Hotel expenses  increased by $43,000 and $49,000,  or 13.1% and 4.6%, from
$329,000  and  $1,065,000  to $372,000  and  $1,114,000,  respectively,  for the
three-month and nine-month  periods ended March 31, 1998 as compared to the same
periods in 1997,  reflecting the addition of in-room movie rental expense in the
1998  three-month and nine-month  periods.  Such in-room movie rental expense is
offset by movie rental revenue.  Net contribution by the hotel department (hotel
revenues  less hotel  operating  expenses) was $405,000 and  $1,151,000  for the
three-month and nine-month  periods ended March 31, 1998 as compared to $525,000
and $1,475,000 for the same periods in 1997.

       General and  administrative  expenses decreased by $213,000 and increased
by $4,000,  or 5.4% and 0.1%,  from $3,955,000 and $12,800,000 to $3,742,000 and
$12,804,000 respectively, for the three-month and nine-month periods ended March
31,  1998 as  compared  to the  same  periods  in  1997.  The  decrease  for the
three-month  period resulted from the changing of the medical  insurance  policy
from  self-insured  to  premium  only  with  such  premiums  being  recorded  to
individual  operating  departments  instead of the  general  and  administrative
department.  This  decrease  was  partially  offset  by annual  salary  and wage
increases.

      Advertising and promotional  expenses  increased by $119,000 and decreased
by $161,000, or 10.8% and 4.3%, from $1,100,000 and $3,708,000 to $1,219,000 and
$3,547,000 during the three-month and nine-month periods ended March 31, 1998 as
compared to the same period in 1997.  Management  believes that increased levels
of slot  promotional  expenditures  in both of the 1998 periods are necessary to
attract and maintain the desired customer levels, and support the other existing
facilities throughout the property.  Management believes that large and frequent
promotions  are  necessary  to  compete  with the newer  hotel/casinos  that are
located close in proximity to AC. These newer hotel/casinos appeal and market to
the same Arizona Charlie's "local" patron base.

      Depreciation and amortization  increased by $74,000 and $185,000,  or 8.6%
and 7.2%,  from $864,000 and  $2,583,000 to $938,000 and  $2,768,000  during the
three-month  and  nine-month  periods  ended March 31, 1998 when compared to the
same periods in 1997, as a result of increased  depreciation expenses associated
with the purchases of new slot machines and the computerized  slot reporting and
player tracking system acquired in the 1998 periods.

      Gift shop expenses increased by $47,000 and $114,000,  or 34.3% and 29.5%,
to $184,000 and $501,000 for the three-month and nine-month  periods ended March
31, 1998 compared to $137,000 and $387,000 for the same period of the prior year
reflecting  additional  payroll  expenses  associated with the expanded hours of
operation  and  increases  in  wholesale  item  costs and  higher  cost of sales
resulting from increased gift shop revenues.

      Management  fees to BGI increased by $11,000 and decreased by $12,000,  or
6.7% and 2.4%,  to $175,000  and  $493,000 for the  three-month  and  nine-month
periods  ended March 31, 1998 from $164,000 and $505,000 for the same periods in
the prior year.  Currently,  management fees are equal to 1.0% of gross revenues
of AC. As such,  decreased  gross  revenues bring about lower  management  fees.
Since inception of the management fees agreement, management fees payable to BGI
have  been and  continue  to be  accrued  by AC,  and may not be paid  under the
Indenture governing the AC Notes until such time that AC meets a specified fixed
charged coverage ratio. Rent expense paid to related parties increased  slightly
from  $55,000 to $56,000  and  $167,000  to $169,000  reflecting  normal  annual
adjustments to the base rents.

      Interest  expense  amounted to $0 and $3,070,000 for the  three-month  and
nine-month  periods ended March 31, 1998 compared to $1,814,000  and  $5,435,000
for the  same  periods  in the  prior  year.  The  decrease  of  $1,814,000  and
$2,365,000,  or 100.0% and 43.5%,  respectively,  is due to the  elimination  of
accrued interest and penalties on the AC Notes during the  post-petition  period
in regard to the Chapter 11 Bankruptcy  protection  filing on November 14, 1997.
The decrease of interest  expense was partially  offset by  additional  interest
costs in the pre-petition  period associated with the AC Notes due to additional
default interest expense and penalties associated with the May 15, 1997 interest
payment which was not made, and additional  interest costs  associated  with the
financing  of  the  computerized  slot  reporting  and  player  tracking  system
purchased in May,  1997. The $26,000 and $71,000 gains on sale of assets for the
three-month  and  nine-month  periods ending March 31, 1998 was primarily due to
the sale of older slot machines.


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  $21,300,000.  Due to low operating  margins and high depreciation
costs,  management does not anticipate that AC will generate  taxable income for
this fiscal year.


Liquidity and Capital Resources

      At March  31,  1998,  AC had a  working  capital  deficit  of  $70,517,000
compared to a working  capital  deficit of  $62,380,000  at June 30,  1997.  The
decrease in working capital in the amount of $8,137,000 was caused  primarily by
increased  accrued  interest  on the AC Notes  through  the  November  14,  1997
pre-petition  period and accrued management fees payable to BGI, plus additional
short term notes payable for slot machines.

      For the nine-month period ended March 31, 1998, cash provided by operating
activities increased $3,914,000 to $4,348,000, from $434,000 for the same period
in 1997.  The  increase  in the 1998  period is  primarily  attributable  to the
increased accounts payable of $2,101,000 and to a lower net loss for the current
period of  $1,382,000.  Increased  accrued  interest on the AC Notes through the
November 14, 1997 pre- petition period also  contributed to the increase in cash
provided by  operating  activities  partially  offset by an increase in accounts
receivable.

      For the nine-month period ended March 31, 1998, net cash used in investing
activities increased to $1,085,000 compared with $640,000 for the same period in
1997.  The increase of $445,000 was caused  primarily by a $704,000  increase in
capital  expenditures  for the  purchase  of slot  equipment  in the more recent
period partially offset by $126,000 increase in proceeds from sale of assets.

      Cash flows used in financing  activities for the  nine-month  period ended
March 31, 1998 increased to $454,000 from cash provided by financing  activities
of $970,000 for the  nine-month  period  ended March 31,  1997.  The increase of
$1,424,000  is primarily the result of higher  principal  payments on additional
notes payable and the decrease in related party notes payable.

      AC's long-term obligations of $6,223,000 at March 31, 1998, consist of the
stockholder  notes and  capitalized  equipment  leases.  AC has annual  interest
expense  aggregating  $6,600,000  and  $500,000  with  respect  to the AC  Notes
(classified  as current  due to default  under  covenants)  and the  stockholder
notes.  However,  AC has  ceased  accruing  interest  on the AC  Notes  and  the
Stockholder  Notes  as  of  November  14,  1997,  as  it is  not  probable  that
post-petition  interest  for  these  Notes  will  be an  allowed  claim  in AC's
Bankruptcy  proceedings.  Further,  AC has acquired capital  expenditures in the
amount of  $1,938,000  through  March 31, 1998  consisting  primarily  of gaming
equipment and a computerized accounting system.

Claims by Trustee

      AC currently has  outstanding  $55,000,000 of 12% First Mortgage Notes due
2000.  SC has issued a limited  guaranty  with  respect to the AC Notes (the "SC
Limited  Guaranty").  CQC currently  has  outstanding  $20,000,000  of 12% First
Mortgage  Notes due 2000.  AC has issued a limited  guaranty with respect to the
CQC Notes (the "AC Limited Guaranty"). The amount and extent of AC's guaranty of
the CQC Notes is in dispute due to certain  provisions  of the  Indenture  under
which the CQC Notes were issued,  as well as certain  provisions of State and/or
Federal  Law  that  may  be   applicable   in  or  with   respect  to  financial
restructuring. It is AC's position that, based on advice from legal counsel, its
limited  guaranty  does not  create  a  material  liability  on its part for the
payment of the obligations under the CQC Notes.

     IBJ Schroder Bank & Trust Company,  as Trustee under the  Indentures  under
which such Notes are outstanding, has declared the AC Notes and the CQC Notes to
be in default and has declared all such Notes to be immediately due and payable.
The Trustee has also notified AC that the purported  obligations of AC under its
guaranty have been accelerated and has declared the obligations of AC thereunder
to be due. On November 14, 1997 AC filed a voluntary  petition  under Chapter 11
and sought to  negotiate a  settlement  with the holders of the AC Notes and the
CQC Notes.
       AC is currently in default  under the  Indenture  governing  the AC Notes
because it has not made its required semi-annual interest payments in the amount
of  $3,300,000  due on May 15, 1997,  November 15, 1997 and May 15, 1998 and has
neither maintained the required minimum level of consolidated tangible net worth
nor offered to  repurchase a portion of the AC Notes as required if such minimum
level of consolidated tangible net worth is not maintained.  In addition, AC has
failed to maintain the minimum consolidated fixed charge coverage ratio required
under the  Indenture  and has  advanced  funds to BGI in  excess of the  amounts
permitted to be so advanced  under the  Indenture.  Also,  AC incurred new notes
payable  (in the  amount of  approximately  $2,545,000)  for the  purchase  of a
computerized reporting and player club system and new slot machines in excess of
the $1,000,000 allowed.

      AC has a contingent  obligation  resulting from the AC Limited Guaranty on
the CQC Notes,  an aggregate of $20,000,000 in principal  amount of which remain
outstanding.  The amount and extent of such guaranty are in dispute. As a result
of a September  1994 ruling of the  Missouri  Gaming  Commission  denying  CQC's
gaming  license  application,  CQC has adopted a plan to sell its assets for the
purpose of  repaying,  to the extent  possible,  the  outstanding  CQC Notes and
accrued interest  thereon.  See "Business - Capitol Queen & Casino,  Inc." 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. To the extent
any funds CQC may  realize  from the sale of its  assets are not  sufficient  to
repay the CQC Notes and accrued interest thereon,  AC may be obligated under the
AC Limited Guaranty of the CQC Notes to fund the a portion of shortfall.

      Moreover,  because it has failed to pay  interest  due on the Notes and it
has not yet effected the sale of its assets, CQC is in default of the CQC Notes.
CQC is not able to pay the outstanding CQC Notes without an infusion of capital,
which is not expected to be available.  If AC is obligated  under the AC Limited
Guaranty  to pay a  portion  of the CQC  Notes  it is not  expected  to have the
resources to satisfy such obligation should it materialize.  If the AC Notes and
the CQC Notes are  accelerated,  substantial  doubt exists about AC's ability to
continue  as a going  concern.  See  "Notes to  Financial  Statements  - Arizona
Charlie's,   Inc.  -  Missouri  Gaming  License,   Default  Under   Indebtedness
Management's Plans, and Going Concern".

      AC's ability to obtain  capital,  is  significantly  restricted  under the
Indentures  governing  the AC Notes  and the CQC  Notes.  The  ability  of AC to
service its debt obligations  (and to comply with the consolidated  tangible net
worth covenant) will be dependent upon its future performance, which performance
will be influenced by prevailing economic conditions and financial, business and
competitive factors, many of which are beyond AC's control.

      On November 14, 1997,  AC filed a voluntary  petition  under Chapter 11 of
the U.S.  Bankruptcy  Code  with the  United  States  Bankruptcy  Court  for the
District of Nevada  (the  "Bankruptcy  Court") in Las Vegas,  Nevada in order to
provide it protection from creditors while it attempts to negotiate a settlement
with the holders of the AC Notes and the CQC Notes.

      On March 17,  1998,  CQC filed for  bankruptcy  protection  in the  United
States  Bankruptcy  Court for the  District of Nevada in Las Vegas,  Nevada (the
"Bankruptcy  Court") under Chapter 11 of the United States Bankruptcy Code (Case
NO. 98- 22172 LBR) to purse financial  reorganization of CQC and to facilitate a
sale of the gaming vessel, the principal asset of CQC, to a third party. A third
party  bid for the  purchase  of the  vessel  was  filed  with a Motion of Order
Authorizing  Sale of  Personal  Property  and  hearing on the motion was set for
April 16, 1998. On April 16, 1998, the parties requested the hearing be deferred
to April 29, 1998. On April 29, 1998, the third party buyer withdrew its bid and
there being no other willing  buyers present to make a bid, the sale of the boat
was  continued  to June 5,  1998 to allow  CQC to  solicit  additional  bids and
offers. Subsequently,  CQC received a conditional offer from a third party and a
new hearing date of May 15, 1998 was scheduled (in lieu of the June 5, 1998 date
which  was  vacated)  to  consider  this  bid  and  any  others  that  might  be
forthcoming. The third party, however, then requested a continuance to allow for
additional  time to complete its diligence  investigation  regarding the vessel,
and there being no other bidders  prepared to offer a competitive bid to that of
the third party, a further continuance was request and granted to June 15, 1998,
at which  time the third  party  bid and that of any  competing  buyers  will be
considered.  Since CQC does not presently engage in any business operations, the
Company did not experience any material changes in its operations as a result of
the bankruptcy filing.

      During the course of the  bankruptcy  proceeding  AC has been  involved in
litigation with certain of its creditors.  Specifically,  the holders of the CQC
Notes  asserted a claim  against AC under its limited  guaranty of the CQC Notes
for the full deficiency which might arise after proceeds from the sales of CQC's
assets are applied to the CQC Notes.  On November 14, 1997, AC filed a complaint
to  declare  its   obligations   under  the  limited   guaranty   discharged  or
alternatively  to avoid the limited  guaranty.  The trustee  under the indenture
with  respect to the CQC Notes  answered  this  complaint  and  denies  that the
limited  guaranty  has been  satisfied  and denies that the limited  guaranty is
avoidable.  The  litigation  presently  is in the  discovery  phase.  A trial to
determine  the amount (if any) of  liability  under the AC Limited  Guaranty  is
scheduled to begin before the Bankruptcy Court on August 17, 1998.

      In addition, holders of the AC Notes claim a valid and enforceable lien in
all of AC's assets,  including  all real  property and personal  property  which
comprise  Arizona  Charlie's  Hotel and Casino.  On February 2, 1998, AC filed a
motion  disputing  certain aspects of the liens claimed by the holders of the AC
Notes  and  seeking  for the  Bankruptcy  Court to  determine  the  value of the
collateral  securing the AC Note holders' claims. The Bankruptcy Court conducted
an initial  hearing on April 3, 1998,  and  indicated  an intention to value the
liens of the  holders  of the AC Notes at the  hearing  of  confirmation  of the
Competing Plans.

     Currently pending before the Bankruptcy Court in the AC Bankruptcy Case are
three competing plans of reorganization:  (i) a plan of reorganization  filed by
AC  on  February  17,  1998  (as  amended,  "the  AC  Plan");  (ii)  a  plan  of
reorganization  filed by Fertitta Enterprises and Station Casinos on May 8, 1998
(as amended,  the "Station Plan");  and (iii) a plan of reorganization  filed on
May 8, 1998 by High River Limited Partnership, an entity owned and controlled by
Carl  Icahn  (as  amended,  the  "High  River  Plan").   Disclosure   statements
accompanying  the  Debtor's  Plan,  the  Station  Plan,  and the High River Plan
(collectively,  the  "Competing  Plans") were approved by the  Bankruptcy  Court
following a hearing held on May 15, 1998. As a  consequence,  creditors  will be
asked to vote on the  Competing  Plans in the near  future,  and the  Bankruptcy
Court has set a confirmation  hearing on the Competing  Plans scheduled to begin
on June 18, 1998.  Set forth in the table below is a comparison  of the material
terms of the  Competing  Plans.  See  "Note to  Financial  Statements  _ Arizona
Charlie's, Inc. - Arizona Charlie's, Inc. Bankruptcy Filing".


Impact of the Year 2000 Issue

      The Year 2000 Issue is the result of computer programs being written using
two digits rather than four to define the applicable  year. Any of the Company's
computer programs that have  date-sensitive  software may recognize a date using
"00" as the year 1900 rather than the year 2000.  This could  result in a system
failure or miscalculations causing disruptions of operations,  including,  among
other things, a temporary inability to process  transactions,  send invoices, or
engage in similar normal business activities.

      The  Company  has  completed  certain  modifications  to  portions  of its
software  so that its  computer  systems  will  properly  utilize  dates  beyond
December 31, 1999. According,  management believes that with these modifications
the Year 2000 Issue will not have a material  impact on the financial  position,
operations or cash flows of the Company.

Forward Looking Statements

      The statements in this Management's  Discussion and Analysis which are not
historical  fact are forward  looking  statements  that are made pursuant to the
Safe Harbor provisions of the Private Securities  Litigation Reform Act of 1995.
The  statements  are  subject  to risks and  uncertainties,  including,  but not
limited  to  increased  competition,  both in Nevada  and  other  jurisdictions,
dependence  on the Las  Vegas  area and the  Southern  California  region  for a
majority  of  the  Company's   customers  and   uncertainties   associated  with
construction  projects,  including the related  disruption of operations and the
availability of financing, if necessary.




Accounting Pronouncements

      In June 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting  Standards No. 130, "Reporting  Comprehensive Income ("SFAS
130"),  which  establishes  standard for reporting and display of  comprehensive
income and its  components.  SFAS 130  requires a separate  statement  to report
components of comprehensive income for each period presented.  The provisions of
SFAS 130 are  effective  for fiscal  years  beginning  after  December 15, 1997.
Management  believes that the Company  currently  does not have items that would
require presentation in a separate statement of comprehensive income.

      In June 1997, the financial Accounting Standards Board issued Statement of
Financial  Accounting  Standards  No.  131,  "Disclosures  about  Segments  of a
Enterprise  and  Related   Information"  ("SFAS  131"),  which  supersedes  FASB
Statement No. 14, "Financial  Reporting for Segments of a Business  Enterprise."
SFAS 131  establishes  standards  for the way that public  business  enterprises
report information about operating  segments in annual financial  statements and
requires that those  enterprises  report  selected  information  about operating
segments  in interim  financial  reported  issued to  shareholders.  SFAS 131 is
effective  for fiscal  years  beginning  after  December  15, 1997 and  requires
restatement  of  earlier  periods  presented.  SFAS 131 will not have a material
effect on the  Company's  financial  statements as the required  information  is
either  currently  being presented by the Company to it is not applicable to the
Company.

      In April 1998,  the American  Institute of  Certified  Public  Accountants
issued  Statement  of  Position  98-5  (SOP 98- 5),  Reporting  on the  Costs of
Start-Up Activities.  SOP 98-5 requires that the Company expense its pre-opening
and related  promotional  expense as  incurred  rather  than  capitalize  it and
amortize it over the  estimated  period of  economic  benefit of such costs have
been the  Company's  policy in the past.  During  fiscal 1998,  the Company will
adopt SOP 98-5.  The  adoption  will have no impact on the  financial  position,
result  of  operations  or cash  flows  of the  Company  as all  start-up  costs
previously capitalized had been expensed in prior periods.


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  shareholders  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 five Becker  Gaming Group  ("BGG")
locations and one  additional  location owned by an unrelated  party,  which are
expected to be renewed in general course.


Results  of  operations for the three and nine-months  ended
March 31, 1998 and 1997

      SC's results of operations  decreased for the  three-month  and nine-month
periods  ended  March 31, 1998  compared to the same  periods in the prior year,
however, the nine-month revenues show an increase as compared to the same period
last year. Total revenues decreased $20,000,  or 2.9%, from $673,000 to $653,000
for the three-month period ended March 31, 1998 as a result of higher than usual
jackpots.  The  nine-month  results  show an  increase  of  $22,000 or 1.1% from
$1,974,000 to $1,996,000 due to the addition of five locations.

     The total number of gaming  machines  operated  during the  three-month and
nine-month  periods  ended March 31, 1998 were 259  compared to 247 for the same
periods in 1997. The total number of gaming machines from the BGG locations that
are serviced by SC was 115 in both the 1998 and 1997 periods.  Slot service fees
from BGG for the  three-month  and nine-month  periods ended March 31, 1998 were
virtually unchanged at $21,000 and $63,000,  respectively,  compared to the same
1997 periods.

     Gaming  machine  route  and  service   expenses  for  the  three-month  and
nine-month  periods ended March 31, 1998 increased by 15.9% to $363,000 and 6.2%
to  $1,062,000  when  compared  to the same  periods  in the  prior  year.  Both
increases were the result of hiring extra personnel to provide security services
for route operations during the three-month period ended March 31, 1998.

     General and administrative expenses for the three-month period increased by
$54,000 or 675.0% to $62,000 from $8,000,  and for the  nine-month  period ended
March 31, 1998  increased  by 318.4% to $159,000  from  $38,000,  reflecting  an
increase in supply  expenses,  primarily  for  purchases  of new gaming  machine
parts,  currency  acceptors  and updating  slot machine  programs.  In addition,
beginning October,  1997, SC began making payments for storage,  maintenance and
insurance  costs to maintain the CQC riverboat  including legal fees as a result
of AC's Chapter 11 bankruptcy filing.

     Management  fees remained  virtually  unchanged at $33,000 and $101,000 for
the three-month and nine-month periods ended March 31, 1998 when compared to the
same periods in the prior year.

      Depreciation and amortization  increased by 1.4% and 7.0% from $73,000 and
$215,000 to $74,000 and  $230,000 for the  three-month  and  nine-month  periods
ended March 31, 1998,  reflecting  increased  depreciation costs associated with
the purchase of additional slot machines and vehicles in the 1998 periods.

      During the three-month and nine-month periods ended March 31, 1998, SC had
other  expenses  (net of other  income) of  approximately  $131,000 and $170,000
compared  to  $40,000  and  ($2,000)  for the same  periods  in 1997.  The large
increase in other expenses resulted from an adjustment to interest income due SC
from AC for the months of November and December,  1997. Also SC is not recording
any interest  income from AC for the 1998  three-month  period  because AC is in
bankruptcy.  Another factor  contributing to the increase is a result of selling
old slot machines at below book value.

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 taxes payable for the
three-month and nine-month periods ended March 31, 1998 amounted to ($3,000) and
$77,000 from  $73,000 and  $169,000 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  nine-month  period ended
March 31, 1998  decreased  to $647,000  from  $772,000  for the 1997  nine-month
period, due mostly to a decrease in net income of $249,000 offset by an increase
in accounts payable in the amount of $113,000.

      Cash flows used in investing  activities for the  nine-month  period ended
March 31, 1998 amounted to $306,000,  compared to $1,124,000 for the same period
in 1997. The decrease of $818,000, or 72.8% was due primarily to the decrease in
related party notes receivable of $900,000. Repayments from notes receivable and
proceeds  from sale of equipment  increased  $125,000 and $73,000  respectively,
partially offset by an increase in related party  receivables of $255,000 and an
increased capital expenditures of $50,000.

      Cash flows used by financing  activities for the  nine-months  ended March
31, 1998  increased  $203,000 to  $325,000.  The  increase is due to  additional
principal  payments on new and existing notes payable totaling  $301,000 for the
1998 nine-month  period,  partially  offset by $98,000 increase in proceeds from
notes payable in the current period.

      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.

      In  July  1994,  SC  entered  into  an  agreement  with a  bank  for a new
$1,200,000  non-revolving  line of  credit.  Each  advance  under  the  line was
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
until the defaults  under the AC and CQC Notes are resolved.  Advances under the
agreement bear interest at rates ranging from the bank's prime rate plus 1.5% to
2.0%. As of March 31, 1998, the amount  outstanding under the non-revolving line
of credit totaled $333,000.

      SC's  management  believes that it has  sufficient  funds through the 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,  however, it is likely that further capital
would be  necessary.  SC's 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 issued a limited guarantee ("The SC Limited Guaranty") for 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 is in default under the Indenture  governing the AC Notes,  the
AC Notes have been  accelerated.  See  "Arizona  Charlie's,  Inc._Liquidity  and
Capital  Resources Claims by Trustee." AC does not have the resources to pay the
AC Notes.  In  addition,  AC may have  limited  liability  under the AC  Limited
Guaranty of the CQC Notes which may exceed the amount which it could immediately
support or repay.  In either case,  SC, as  guarantor of the AC Notes,  may have
liability  under the SC Limited  Guaranty,  and such liability  could exceed the
amount which it could immediately support. Accordingly, substantial doubt exists
about SC's  ability to  continue  as a going  concern if the  Trustee for the AC
Notes and CQC Notes is able to enforce its acceleration  thereof.  See "Notes to
Financial  Statements  Sunset Coin,  Inc. - Guarantee  Obligation,  Management's
Plans and Going Concern."

Capitol Queen & Casino, Inc.

     Analysis of  Development  Stage  Activities for the period January 20, 1993
(the date of inception) through March 31, 1998

      CQC was  organized  on January  20,  1993 for the  purpose of  developing,
constructing,  owning and operating the Capitol Queen.  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 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 subsequently terminated
the Capitol Queen project and is currently  marketing its assets for sale.  Such
assets include its riverboat and the Jefferson City land site.

     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
with funds  remaining in the project  escrow account and the net proceeds 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 at a total cost of  $20,200,000.  CQC
incurred an extraordinary loss of approximately  $4,089,000 in 1995,  reflecting
the premium  paid to retire the debt of $200,000  and the  write-off of related,
unamortized  debt issue costs and original  issue  discount in the  aggregate of
$3,889,000.  At March 31,  1998,  approximately  $32,000  remained in the escrow
account held by the Indenture Trustee 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  payments  of  $1,200,000  on each of
November 15, 1995, May 15, 1996,  November 15, 1996, May 15, 1997,  November 15,
1997 and May 15, 1998.  Further,  AC does not have available funds to advance on
behalf of CQC. See  "Liquidity  and Capital  Resources - Capitol Queen & Casino,
Inc. - Claims by Trustee".

      During the period from  inception  through  March 31, 1998,  CQC had total
operating expenses of $15,458,000 consisting primarily of an abandonment loss of
$6,034,000  arising from the denial of the  company's  license  application  and
management's subsequent decision to terminate the Capitol Queen project and sell
its assets.  Also,  at March,  1996,  CQC  wrote-down  the cost of the riverboat
assets  to  their  net  realizable  value  based  on  estimates  provided  by  a
shipbuilder  and  marine  brokers  which  resulted  in an  abandonment  loss  of
$4,392,000  in the 1996  fiscal  year.  The cost of the  riverboat  was  further
written down at March 31, 1998 to $6,200,000 based on recent offers received for
the  riverboat,   which  resulted  in  an  additional  or  abandonment  loss  of
$1,300,000.  Also  included in operating  expenses are  amortization  expense of
$1,575,000   associated   with  debt  issue  costs  and  $2,157,000  of  project
development  costs.  For the same period,  CQC incurred  $17,188,000 of interest
cost, of which $683,000 was capitalized by CQC as required by generally accepted
accounting  principles,  as  part  of the  riverboat  construction.  CQC  earned
interest income of $1,267,000 for the period from inception to March 31, 1998.

Liquidity and Capital Resources

      For the period from  inception  through  March 31, 1998,  net cash used in
development  stage  activities  was  $5,244,000.  Cash flows  used in  investing
activities for the period was $13,922,000 which included  $12,936,000 of capital
expenditures related to the construction of the riverboat and acquisition of the
Jefferson  City  land  site.  At March 31,  1998,  CQC had  expended  a total of
approximately  $21,810,000 on the  development  and  construction of the Capitol
Queen project including on-going maintenance and insurance costs.

       CQC's  obligations  consist of the $20,000,000 in principal amount of the
outstanding  CQC Notes and past due interest  thereon of $7,853,500 at March 31,
1998, which includes  amounts accrued on unpaid interest.  On March 17, 1998 CQC
filed a petition for reorganization  under Chapter 11 of the Bankruptcy Code. As
such, CQC has ceased accruing interest on the CQC Notes as of March 17, 1998, as
it is not  probable  that  post-petition  interest  for these  notes  will be an
allowed claim in CQC's  bankruptcy  proceedings.  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.  Additionally,  on July 3, 1997 CQC
received a notice of acceleration  from the trustee of the CQC Notes.  Moreover,
CQC,  because it has not paid certain  interest due on its Notes and has not yet
effected the sale of its assets, is in default of the CQC Indenture. As a result
of the above items the CQC Notes have been classified as a prepetition liability
subject to compromise as of March 31, 1998.


Claims by Trustee

      AC currently has outstanding  $55,000,000 of 12% First Mortgages Notes due
2000.  SC has issued a limited  guaranty  with  respect to the AC Notes (the "SC
Limited  Guaranty").  CQC currently  has  outstanding  $20,000,000  of 12% First
Mortgage  Notes due 2000.  AC has issued a limited  guaranty with respect to the
CQC Notes (the "AC Limited Guaranty"). The amount and extent of AC's guaranty of
the CQC Notes is in dispute due to certain  provisions  of the  Indenture  under
which the CQC Notes were issued,  as well as certain  provisions of State and/or
Federal  Law  that  may  be   applicable   in  or  with   respect  to  financial
restructuring. It is AC's position that, based on advice from legal counsel, its
limited  guaranty  does not  create  a  material  liability  on its part for the
payment of the obligations  under the CQC Notes. A trial to determine the amount
(if any) of liability under the AC Limited Guaranty is scheduled to begin before
the Bankruptcy Court on August 17, 1998.

     IBJ Schroder Bank & Trust Company,  as Trustee under the  Indentures  under
which such Notes are outstanding, has declared the AC Notes and the CQC Notes to
be in default and has declared all such Notes to be immediately due and payable.
The Trustee has also notified AC that the purported  obligations of AC under its
guaranty have been accelerated and has declared the obligations of AC thereunder
to be due.  The Trustee has taken no further  action to enforce the Notes or the
purported  guaranties  thereof or to  foreclose  on any assets of AC or CQC.  No
assurance can be given, however, that the Trustee will not do so.

      On March 17, 1998,  Capitol Queen & Casino,  Inc. the  "Registrant" or the
"Company") filed a voluntary petition for reorganization under Chapter 11 of the
Bankruptcy  Code with the United  States  Bankruptcy  Court for the  District of
Nevada (Las  Vegas,  Nevada).  The file number in the case is 98-22172  LBR with
Judge Linda Riegle presiding.

      On November 14, 1997,  AC filed a voluntary  petition  under Chapter 11 of
the U.S.  Bankruptcy  Code  with the  United  States  Bankruptcy  Court  for the
District of Nevada  (the  "Bankruptcy  Court") in Las Vegas,  Nevada in order to
provide it protection from creditors while it attempts to negotiate a settlement
with the holders of the AC Notes and the CQC Notes.


PART II.  OTHER INFORMATION

Item 1.  Legal Proceedings

      BGI,  CQC,  and the  Nevada  Operating  Companies  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,  cash flows, or financial condition of BGI,
CQC, or the Nevada Operating Companies.

      By letters dated July 3, 1997 and July 17, 1997, IBJ Schroder Bank & Trust
Company,  the  trustee  on the CQC  Indenture  dated as of  November  15,  1993,
declared all of the  Securities  (as defined in the Indenture) to be immediately
due and  payable,  together  with  all  accrued  and  unpaid  interest  thereon.
Subsequent  letters from IBJ Schroder Bank & Trust Company,  dated  September 5,
1997,  provided  notices  of  defaults  by CQC  and AC  under  their  respective
Indentures  and also served  Notice of  Acceleration  on AC with  respect to its
Securities and its Limited Guaranty of the CQC debt. CQC and AC retained counsel
to assist them in dealing with the  Bondholders and on July 16, 1997, a proposal
for the financial  restructuring of the CQC and AC indebtedness was presented to
the Bondholders through the Trustee and Counsel to one of the major Bondholders.
The Bondholders orally responded to such offer as of September 10, 1997.

      On November 14, 1997,  Arizona  Charlie's,  Inc. (the "Company") filed for
bankruptcy  protection in the United States Bankruptcy Court for the District of
Nevada in Las Vegas,  Nevada (the  "Bankruptcy  Court")  under Chapter 11 of the
United States  Bankruptcy  Code (Case No.  97-28781 LBR) to pursue the financial
reorganization  of the Company.  The Company  currently  is operating  under the
Bankruptcy Code as debtor-in-possession. The Bankruptcy Court has entered orders
allowing  the  Company  to  honor  certain  of the  pre-  petition  debts of its
customers (such as hotel room deposits and outstanding  gaming chips) and to pay
the pre-petition wages of its employees.  As a result of this filing the Company
did not experience any material  changes in the operations of Arizona  Charlie's
Hotel & Casino, located in Las Vegas, Nevada, which is owned and operated by the
Company.

      On February  17, 1998,  the Company  filed a Plan of  Reorganization  (the
"Plan") and an accompanying  Disclosure  Statement (the "Disclosure  Statement")
with the  Bankruptcy  Court.  The Plan provides for a restructure  of the claims
against the  Company,  which the  Company  believes  will allow its  business to
continue successfully.  The Plan also is structured to provide certain creditors
with the option of  receiving  up front cash in lieu of deferred  payments  over
several years. For example, the Plan provides the Bondholders with the option of
receiving  $45,000,000 in cash on the Plan's effective date in full satisfaction
of their allowed claims or payment of a higher amount over time. Likewise, trade
unsecured  creditors  can elect to  receive  cash on the  effective  date in the
amount of 80% of their allowed claims in lieu of a 100% payout over time.

      The Company expects, but no assurance can be given, to receive funding for
the Plan from several sources.  First, the Company  anticipates  receiving up to
$55,000,000  from United  Healthcare  Financial  Services for use in making cash
payments to electing  creditors.  Second, the Company will receive $1,500,000 in
cash plus the release of over  $7,000,000  in claims from certain  affiliates of
the Company, including Becker Gaming, Inc., in return for retaining their equity
interests in the Company.  Finally, the Company will use net income generated by
the casino to help fund the Plan.

     The holders of claims and interests of the Company are permitted to vote to
accept or reject the plan.  After the Disclosure  Statement has been approved by
the  Bankruptcy  Court and there has been  voting on the Plan,  there  will be a
hearing on the Plan to determine whether it should be confirmed. At the hearing,
the  Bankruptcy  Court will  consider  whether  the Plan  satisfies  the various
requirements of the Bankruptcy  Code. The Bankruptcy Court also will receive and
consider a ballot  report which will  present a tally of the votes  accepting or
rejecting  the Plan  cast by those  entitled  to vote.  Therefore,  given  these
contingencies,  there can be no  assurances  that the Plan as  submitted  by the
Company will be confirmed.


Item 5.  Other Information

Bankruptcy or Receivership

       On November 14, 1997,  AC filed for  bankruptcy  protection in the United
States  Bankruptcy  Court for the  District of Nevada in Las Vegas,  Nevada (the
"Bankruptcy  Court") under Chapter 11 of the United States Bankruptcy Code (Case
No.  97-28781 LBR) to pursue the  financial  reorganization  of the Company.  AC
currently is operating  under the Bankruptcy Code as  debtor-in-possession.  The
Bankruptcy  Court  has  entered  orders  allowing  AC to  honor  certain  of the
pre-petition debts of its customers (such as hotel room deposits and outstanding
gaming chips) and to pay the pre-petition wages of its employees. As a result of
the  filing,  the  Company  did  not  experience  any  material  changes  in the
operations of Arizona  Charlie's Hotel & Casino,  located in Las Vegas,  Nevada,
which is owned and operated by the Company.

      On March 17,  1998,  CQC filed for  bankruptcy  protection  in the  United
States  Bankruptcy  Court for the  District of Nevada in Las Vegas,  Nevada (the
"Bankruptcy  Court") under Chapter 11 of the United States Bankruptcy Code (Case
NO. 98- 22172 LBR) to purse financial  reorganization of CQC and to facilitate a
sale of the gaming vessel, the principal asset of CQC, to a third party. A third
party  bid for the  purchase  of the  vessel  was  filed  with a Motion of Order
Authorizing  Sale of  Personal  Property  and  hearing on the motion was set for
April 16, 1998. On April 16, 1998, the parties requested the hearing be deferred
to April 29, 1998. On April 29, 1998, the third party buyer withdrew its bid and
there being no other willing  buyers present to make a bid, the sale of the boat
was  continued  to June 5,  1998 to allow  CQC to  solicit  additional  bids and
offers. Subsequently,  CQC received a conditional offer from a third party and a
new hearing date of May 15, 1998 was scheduled (in lieu of the June 5, 1998 date
which  was  vacated)  to  consider  this  bid  and  any  others  that  might  be
forthcoming. The third party, however, then requested a continuance to allow for
additional  time to complete its diligence  investigation  regarding the vessel,
and there being no other bidders  prepared to offer a competitive bid to that of
the third party, a further continuance was request and granted to June 15, 1998,
at which  time the third  party  bid and that of any  competing  buyers  will be
considered.  Since CQC does not presently engage in any business operations, the
Company did not experience any material changes in its operations as a result of
the bankruptcy filing.


Item 6.  Exhibits and Reports on Form 8-K

     No exhibits are included herein:

     The  Company  did not file any  reports on form 8-K during the  nine-months
ended March 31, 1998.

================================================================================
<PAGE>

                                   SIGNATURES

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



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





Date:    May 20, 1998                       /S/ Bruce F. Becker
         ---------------------              -------------------
                                            Bruce F. Becker
                                            President, Chief Executive
                                            Officer (Principal Executive
                                            Officer)






Date:    May 20, 1998                       /S/ Jerry Griffis
         ----------------                   -----------------
                                            Jerry Griffis
                                            Chief Financial Officer
                                            (Principal Financial and
                                            Accounting Officer)
================================================================================
<PAGE>