<PAGE>
 
                                 UNITED STATES

                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549


                                   FORM 10-Q


(Mark One)


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


For the quarterly period ended           January 25, 1998
                              ---------------------------------------

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


For the transition period from
                               ---------------------------------------

Commission File Number:              333-38093
                        ----------------------------------------------

    Isle of Capri Black Hawk L.L.C./Isle of Capri Black Hawk Capital Corp.
    ----------------------------------------------------------------------

            (Exact name of registrant as specified in its charter)


        Colorado                                     84-1422931
--------------------------------------------------------------------------------
(State of Organization)                            (IRS Employer
                                                Identification No.)

 711 Washington Loop, Second Floor, Biloxi, Mississippi          39530
--------------------------------------------------------------------------------
        (Address of principal executive offices)               (Zip Code)

 
                                (228) 436-7000
   ------------------------------------------------------------------------
             (Registrant's telephone number, including area code)

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

                                 Yes        No   X
                                     -----     -----
<PAGE>
 
                        ISLE OF CAPRI BLACK HAWK L.L.C.

                                   FORM 10-Q

                                     INDEX


Part I - FINANCIAL INFORMATION

         Item 1.  Financial Statements 
                  Consolidated Balance Sheet January 25, 1998 
                    (unaudited)                                             1
                  Consolidated Statement of Operations for the
                    three months ended January 25, 1998 and for
                    the period April 25, 1997 (date of inception)
                    through January 25, 1998 (unaudited)                    2
                  Consolidated Statement of Cash Flows for the
                    period April 25, 1997 (date of inception) through
                    January 25, 1998 (unaudited)                            3
                  Consolidated Statement of Members' Equity
                    (unaudited)                                             4
                  Notes to Unaudited Consolidated Financial Statements    5-8

         Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                  CONDITION AND RESULTS OF OPERATIONS                    9-11

Part II - OTHER INFORMATION
         Item 1. Legal Proceedings                                         12
         Item 2. Changes in Securities                                     12
         Item 3. Defaults Upon Senior Securities                           12
         Item 4. Submission of Matters to a Vote of Security Holders       12
         Item 5. Other Information                                         12
         Item 6. Exhibits and Reports on Form 8-K                          12

         SIGNATURES                                                        13

         EXHIBIT LIST                                                      14
<PAGE>
 
                        ISLE OF CAPRI BLACK HAWK L.L.C.
                          (DEVELOPMENT STAGE COMPANY)

                          CONSOLIDATED BALANCE SHEET

<TABLE>
<CAPTION>
                                                  January 25, 1998
                                                  -----------------
                                                     (Unaudited)
<S>                                               <C>
ASSETS
CURRENT ASSETS:
  Cash                                                 $   613,000
  Accrued interest receivable                              347,000
  Prepaid expenses                                         398,000
                                                       -----------
TOTAL CURRENT ASSETS                                     1,358,000
                                                       -----------
 
PROPERTY, PLANT AND EQUIPMENT:
  Land and land improvements                            14,544,000
  Construction in progress                              11,690,000
                                                       -----------
Property and equipment, net                             26,234,000
                                                       -----------
 
OTHER ASSETS:
  Restricted cash                                       64,609,000
  Deferred financing costs, net of accumulated
     amortization of $290,000                            4,363,000
                                                       -----------
TOTAL ASSETS                                           $96,564,000
                                                       ===========

 
LIABILITIES AND MEMBERS' EQUITY
CURRENT LIABILITIES:
  Accounts payable - trade                             $ 3,912,000   
  Accounts payable - related parties                        77,000   
  Accrued liabilities                                                
     Interest                                            4,088,000    
     Other                                                 513,000   
                                                       -----------   
TOTAL CURRENT LIABILITIES                                8,590,000   
                                                       -----------   
LONG-TERM DEBT                                          75,000,000   
                                                       -----------   
 
MEMBERS' EQUITY
  Member's capital - Casino America of Colorado, Inc.    7,122,000
  Member's capital - Blackhawk Gold, Ltd.                5,852,000
                                                       -----------
Total members' equity                                   12,974,000
                                                       -----------
 
TOTAL LIABILITIES AND MEMBERS' EQUITY                  $96,564,000
                                                       ===========
 
</TABLE>


           SEE NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS.

                                       1
<PAGE>
 
                        ISLE OF CAPRI BLACK HAWK L.L.C.
                          (DEVELOPMENT STAGE COMPANY)
                                        
                      CONSOLIDATED STATEMENT OF OPERATIONS
                                        

                                        
                                  (UNAUDITED)

<TABLE> 
<CAPTION> 
                                                                                 APRIL 25, 1997
                                                                              (DATE OF INCEPTION)
                                                    THREE MONTHS ENDED             THROUGH
                                                     January 25, 1998          JANUARY 25, 1998
                                                    ------------------        -------------------              
<S>                                                     <C>                   <C>
INTEREST EXPENSE, NET OF CAPITALIZED INTEREST OF
  $688,000 AND $1,096,000, RESPECTIVELY                  $(1,813,000)             $(3,282,000)
INTEREST INCOME                                              570,000                1,251,000 
                                                         -----------              ----------- 
     Net loss                                            $(1,243,000)             $(2,031,000)
                                                         ===========              ===========  
 
</TABLE>

                                        
           SEE NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS.

                                       2
<PAGE>
 
                        ISLE OF CAPRI BLACK HAWK L.L.C.
                          (DEVELOPMENT STAGE COMPANY)

                      CONSOLIDATED STATEMENT OF CASH FLOWS
                                        
                                        
                                  (UNAUDITED)
                                        
 
<TABLE>  
<CAPTION> 
                                                             APRIL 25, 1997
                                                           (DATE OF INCEPTION)
                                                                THROUGH
                                                            January 25, 1998
                                                            ----------------
<S>                                                          <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss                                                        $(2,031,000)
Adjustments to reconcile net loss to net cash
  used in operating activities:
    Amortization of deferred financing costs                        290,000  
    Changes in current assets and liabilities:                                  
      Accounts receivable                                            (1,000)
      Prepaid expenses and other                                   (398,000)
      Accounts payable and accrued liabilities                    6,587,000 
                                                               ------------ 
    NET CASH PROVIDED BY OPERATING ACTIVITIES                  $  4,447,000 
                                                                            
                                                                            
CASH FLOWS FROM INVESTING ACTIVITIES:                                       
    Purchase of land                                             (7,400,000) 
    Purchase of property, plant and equipment                    (9,075,000)
    Increase in restricted cash                                 (64,609,000)
                                                               ------------ 
    NET CASH USED IN INVESTING ACTIVITIES                       (81,084,000)
CASH FLOWS FROM FINANCING ACTIVITIES:                                       
    Proceeds from borrowings                                     72,000,000 
    Deferred financing costs                                     (1,438,000) 
    Principal payment on land mortgage                             (396,000)
    Capital contribution received                                 7,084,000
                                                               ------------
      NET CASH PROVIDED BY FINANCING ACTIVITIES                  77,250,000
                                                                           
Net increase in cash                                                613,000
Cash, beginning of period                                               ---
                                                               ------------
Cash, end of period                                                 613,000
                                                               ============ 
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING
 AND FINANCING ACTIVITIES:
    Debt issued for: 
       Underwriting fees on first mortgage notes                  3,000,000 
    Capital contributions:                                                  
       Land, net of mortgage of $396,000                          7,604,000 
       Financing fees                                               137,000 
       Property and equipment                                       180,000  
</TABLE>

           SEE NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS.
                                        

                                       3

<PAGE>
 
                        ISLE OF CAPRI BLACK HAWK L.L.C.
                          (DEVELOPMENT STAGE COMPANY)
                                        
                   CONSOLIDATED STATEMENT OF MEMBERS' EQUITY
                                        
                                        
                                  (UNAUDITED)
                                        
<TABLE> 
<CAPTION> 
                            Casino America of     Blackhawk         Total
                              Colorado, Inc.      Gold, Ltd.   Members' Equity
                            -----------------     ----------   ---------------
<S>                              <C>              <C>          <C>
BALANCE, APRIL 25, 1997
(DATE OF INCEPTION)              $      ---      $     ---     $        ---
  Capital contribution
      development costs              317,000                        317,000
  Capital contribution - cash      7,084,000                      7,084,000
  Capital contribution - land        100,000      7,504,000       7,604,000
  Equity transfer                    833,000       (833,000)            ---
  Net loss                        (1,212,000)      (819,000)     (2,031,000)
                                 -----------     ----------     -----------
BALANCE, JANUARY 25, 1998        $ 7,122,000     $5,852,000     $12,974,000
                                 ===========     ==========     ===========
</TABLE>


           SEE NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS.
                                        

                                       4

<PAGE>
 
                        ISLE OF CAPRI BLACK HAWK L.L.C.
                          (DEVELOPMENT STAGE COMPANY)

             NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Note 1.  Summary of Significant Accounting Policies
         ------------------------------------------

         Organization and Basis of Presentation
         --------------------------------------

         On April 25, 1997 ("Date of Inception"), Isle of Capri Black Hawk
         L.L.C. (the "Company") (formerly ICB L.L.C.), a Colorado limited
         liability company, was formed. The Company is owned by Casino America
         of Colorado, Inc. ("Casino America of Colorado"), a wholly owned
         subsidiary of Casino America, Inc. ("Casino America"), and Blackhawk
         Gold, Ltd. ("Blackhawk Gold"), a wholly owned subsidiary of Nevada Gold
         and Casinos, Inc. ("Nevada Gold"). The Company is a Development Stage
         Company and has not commenced gaming operations. The principal purpose
         of the Company is to develop and operate a casino entertainment complex
         in Black Hawk, Colorado (the "Isle-Black Hawk"), which is anticipated
         to open in late 1998 or early 1999.

         On August 20, 1997, the Company and Isle of Capri Capital Corp.
         ("Capital Corp."), a wholly owned subsidiary of the Company that had no
         operations, assets or liabilities, issued $75,000,000 of 13% First
         Mortgage Notes due 2004 with Contingent Interest (the "Notes") in order
         to finance the construction and development of a casino entertainment
         complex in Black Hawk, Colorado.

         The rights and obligations of Casino America of Colorado and Blackhawk
         Gold are governed in part by the Amended and Restated Operating
         Agreement of the Company ("the Agreement") dated as of July 29, 1997.
         The Agreement provides that the Company will continue until December
         31, 2096, or until such date that dissolution may occur. Pursuant to
         the Agreement, Casino America of Colorado contributed cash, land
         purchase rights and development costs to the Company and Blackhawk Gold
         contributed cash and land to the Company.

         On July 29, 1997, Casino America of Colorado, Casino America, Blackhawk
         Gold and Nevada Gold also entered into a Members Agreement (the
         "Members Agreement") which addressed the development of the Isle-Black
         Hawk, management of the Company, additional capital contributions, and
         other matters. On August 20, 1997, pursuant to the Members Agreement,
         Casino America of Colorado purchased from Blackhawk Gold a 4.2%
         ownership interest (the "Transferred Interest") in the Company for
         $700,000, and Blackhawk Gold had 180 days within which to reacquire all
         or a portion of the Transferred Interest for $700,000, together with
         interest. In addition, pursuant to the Members Agreement, Blackhawk
         Gold had the right to sell up to an additional 4.8% ownership interest
         in the Company to Casino America of Colorado (the "Put"), for up to
         $800,000, and to repurchase, within 180 days, any ownership interest
         sold pursuant to the Put, with the repurchase price being the price for
         which such ownership interest was sold, together with interest. On
         November 13, 1997, pursuant to the Put, Casino America of Colorado
         purchased an additional .8% ownership interest from Blackhawk Gold for
         $133,333. On February 16, 1998, pursuant to the Put, Casino America of
         Colorado acquired an additional 4.0% ownership interest from Blackhawk
         Gold for $666,000, exhausting Blackhawk Gold's right to sell any
         additional ownership interest pursuant to the Put. Simultaneously,
         Blackhawk Gold repurchased from Casino America of Colorado, a 4.0%
         ownership interest out of the Transferred Interest for $714,000, which
         includes interest. As a 


                                       5
<PAGE>
 
         result, following the transfers pursuant to the Put and the repurchase
         of a portion of the Transferred Interest discussed above, Casino
         America of Colorado has an ownership interest in the Company of 60% and
         Blackhawk Gold has an ownership interest in the Company of 40%. Profits
         and losses of the Company are allocated in proportion to ownership
         interests.

         The accompanying unaudited consolidated financial statements 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, consisting of normal recurring
         adjustments, considered necessary for a fair presentation have been
         included. Operating results for the period from April 25, 1997 (date of
         inception) through January 25, 1998 are not necessarily indicative of
         the results that may be expected for the fiscal year ending April 26,
         1998. For further information, refer to the Company's Form S-4
         Registration Statement, filed with the Securities and Exchange
         Commission, registration no. 333-38093.

         Cash and cash equivalents
         -------------------------

         The Company considers cash and all highly liquid investments with a
         maturity at the time of purchase of three months or less to be cash
         equivalents. (At January 25, 1998, there were no cash equivalents.)

         Pre-opening costs
         -----------------

         Pre-opening costs include costs such as salaries, recruiting and
         training associated with activities necessary to open the casino
         entertainment complex. These costs are initially capitalized and then
         expensed when the related business commences operations. From inception
         to date, the Company's sole business activity has been developing the
         Isle-Black Hawk.

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

         No provision for Federal or state income taxes is recorded in the
         Financial Statements as income taxes are the responsibilities of the
         individual members.

         Certain significant risks and uncertainties
         -------------------------------------------

         Gaming regulation licensing. The Company's ability to conduct gaming
         operations in the State of Colorado depends on the licensing or
         qualification of the Company, Casino America, and Nevada Gold. No
         Colorado gaming license has been issued to the Company, to date. Such
         licensing and qualifications will be reviewed periodically by the
         gaming authorities in Colorado.

         Competition.  The Black Hawk/Central City, Colorado market has many
         established casinos.  The market is highly competitive and other
         significant development projects are currently being planned or are
         under construction.

         Construction risks. Construction projects entail significant risks,
         including, but not limited to, costs overruns, delays in receipt of
         governmental approvals, shortages of materials or skilled labor, labor
         disputes, unforeseen environmental or engineering problems, work
         stoppages, fire and other natural disasters, construction scheduling

                                       6

<PAGE>
 
         problems and weather interference, any of which, if it occurred, could
         delay construction and/or result in substantial increases in costs to
         the Company. Statement of Financial Accounting Standards No. 121,
         "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
         Assets to be Disposed Of," requires impairment losses to be recognized
         for long-lived assets used in operations when indicators of impairment
         are present and the undiscounted cash flows are not sufficient to
         recover the assets' carrying amounts. An impairment loss is measured by
         comparing the fair value of the asset to its carrying amount.

         Revenue and promotional allowances
         ----------------------------------

         Casino revenues will be the net win from gaming activities which is the
         difference between gaming wins and losses. Casino revenues will be
         presented net of accruals for the anticipated payouts of progressive
         electronic gaming device jackpots. Revenue will not include the retail
         amount of food, beverage, and other items provided gratuitously to
         customers. The cost of providing such complimentary services will be
         included in casino expense.

Note 2.  Property, plant and equipment
         -----------------------------

         Property, plant and equipment are stated at cost except for land
         contributed by Blackhawk Gold, which is stated at its appraised value.
         Depreciation will be computed, upon the commencement of gaming
         operations, using the straight-line method over the estimated useful
         lives of the property, plant and equipment.

Note 3.  Other assets
         ------------

         Restricted cash - represents cash proceeds from the sale of the Notes
         held in trust by IBJ Schroder Bank and Trust in New York, as trustee.
         These funds are held in three separate accounts (Construction
         Disbursement, Completion Reserve, Interest Reserve), with use
         restricted by an indenture between the Company and the trustee, dated
         August 20, 1997 in connection with the issuance of the Notes (the
         "Indenture"). Amounts in the Construction Disbursement Account, which
         contained approximately $45.4 million at January 25, 1998, will be used
         for the development, construction and opening of the casino
         entertainment complex by the Company in Black Hawk, Colorado. Amounts
         in the Completion Reserve Account, approximately $5.1 million, will be
         used in the event there are insufficient funds in the Construction
         Disbursement Account to complete the casino entertainment complex.
         Amounts in the Interest Reserve Account, approximately $14.1 million,
         will be used to pay the first three fixed interest payments on the
         Notes, which were issued pursuant to the Indenture.

         Deferred financing costs -  are being amortized over the life of the
         Notes commencing on the date of issuance, August 20, 1997.

Note 4.  Long-term debt
         --------------

         Long-term debt consists of $75,000,000 in 13% First Mortgage Notes with
         Contingent Interest, due August 31, 2004. The Notes were issued under
         the Indenture. Interest on the Notes is payable semiannually on
         February 28 and August 31 of each year, commencing February 28, 1998.
         Additionally, contingent interest is payable on the Notes on each
         interest payment date, in an aggregate principal amount of 5% of the
         Company's Consolidated Cash Flow (as defined in the Indenture),

                                       7

<PAGE>
 
         provided that no Contingent Interest shall be payable prior to
         commencement of operations and may, under certain circumstances, be
         deferred.

         The Notes are redeemable at the option of the Company, in whole or in
         part, at any time on or after August 1, 2001 at the redemption prices
         (expressed as percentages of principal amount) set forth below plus
         accrued and unpaid interest to the redemption date, if redeemed during
         the 12-month period beginning on August 31 of the years indicated
         below:



<TABLE>                                                         
<CAPTION>                                                      
         Year                                            Percentage     
         -------------------------------------------  ----------------- 
         <S>                                            <C> 
         2001.......................................              106.5%
         2002.......................................              103.2%
         2003 and thereafter........................              100.0% 
</TABLE>

         Beginning with the first operating year after the Company begins
         gaming operations, the Company will be required to offer to purchase,
         at the price of 101% of the aggregate principal amount thereof, the
         maximum principal amount of the Notes that may be purchased with 50%
         of the Company's excess cash flow.

         Substantially all of the Company's assets are pledged as collateral for
         long-term debt. At January 25, 1998, the Company was in compliance with
         all debt covenants.

         On October 17, 1997, the Company filed a Registration Statement on
         Form S-4 (registration number 333-38093) relating to an exchange offer
         for the Notes.  The Registration Statement was declared effective by
         the Commission on December 22, 1997, and the exchange offer was
         consummated on January 21, 1998. The exchange offer was accepted by the
         holders of all of the Notes.

Note 5.  Related Party Transactions
         --------------------------

         Completion Capital Commitment.  Casino America has provided a
         Completion Capital Commitment pursuant to which it has committed to
         contribute to the Company up to $5.0 million in the event that such
         amounts are necessary to cause the Isle-Black Hawk to commence
         operations on or before April 1, 1999, or if the Isle-Black Hawk has
         not begun operating by such date.

         Management Agreement.  On April 25, 1997, the Company entered into a
         Management Agreement, which was subsequently amended and restated (the
         "Management Agreement"), with Casino America, which will manage the
         casino entertainment complex in exchange for a fee.  The management
         fee will be equal to two percent of revenues, plus ten percent of
         operating income, but not to exceed four percent of revenues.  The
         management fee will go into effect upon commencement of casino
         operations.

         Lease Agreement. On January 2, 1998, Casino America of Colorado
         acquired approximately 0.7 acres of property contiguous to the property
         being developed by the Isle-Black Hawk for expansion of entrance and
         signage (the "Acquired Property"). On January 2, 1998, the Company, as
         Lessee, entered into a Lease Agreement with Casino America of Colorado
         for the Acquired Property and will utilize the Acquired Property in
         developing the Isle-Black Hawk. The lease payment consists of $102,000
         paid upon the inception of the lease and of $17,000 per month,
         commencing July 15, 1998, and continuing until December 31, 2002, and
         thereafter on a year to year basis. During the term of the lease, the
         Company has the right to purchase the property for $1,500,000 plus all
         interest and out-of-pocket costs that Casino America of Colorado
         incurred in connection with the purchase and ownership of the land,
         less any payments made by the Company, as lessee.

                                       8

<PAGE>
 
                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                 FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with, and is qualified in
its entirety by, the Company's financial statements, including the notes
thereto, and other financial information included elsewhere in this report.

The following discussion includes "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended.  In particular,
statements concerning the effects of increased competition in the Company's
market, the Company's excavation and site preparation activities and the
Company's possible plans to develop a hotel at its facility, are forward-looking
statements.  Although the Company believes that the expectations reflected in
such forward-looking statements are reasonable, there can be no assurance that
such expectations are reasonable or that they will be correct.  Actual results
may vary materially from those expected.  Important factors that could cause
actual results to differ with respect to the Company's planned capital
expenditures principally include a lack of available capital resources,
construction and development risks such as cost overruns, shortages of materials
and labor and unforeseen delays resulting from weather interference, failure to
obtain necessary approvals, further development of the competitive environment
in the Black Hawk market, environmental issues and changes in gaming laws and
regulations in the jurisdiction in which the Company operates.  Other important
factors that could cause the Company's actual results to differ materially from
expectations are discussed under "Risk Factors" in the Company's Form S-4
Registration Statement, filed with the Securities and Exchange Commission,
registration no. 333-38093.


DEVELOPMENT ACTIVITIES


     The Company was organized in April 1997 and was initially capitalized with
cash contributions from its members in the aggregate amount of $1,000.  Since
that time, the Company's activities have been limited to applying for certain
necessary permits, licenses and approvals to enable it to construct and operate
the Isle-Black Hawk; arranging for the design, construction and financing of the
Isle-Black Hawk; coordinating the contribution to the Company of the property on
which the Isle-Black Hawk will be developed and other capital contributions and
conducting excavation at the site in preparation for construction.  It is
anticipated that the Isle-Black Hawk will include a 55,000 square foot gaming
facility featuring approximately 1,100 slot machines, up to 24 table games and
on-site covered parking for approximately 1,000 vehicles, and various other
amenities.  On August 25, 1997, the Company was issued an excavation permit and
began excavation on or about August 25, 1997.  The excavation activity is
ongoing and is substantially completed. On March 3, 1998, the Company was issued
a foundation permit and began pouring the foundation for the Isle-Black Hawk on
or about March 6, 1998. Subject to the delays inherent in construction projects
of the magnitude of the Isle-Black Hawk, and subject to obtaining the necessary
gaming licenses, other permits and financing, the Company expects to open the
Isle-Black Hawk for business in late 1998 or early 1999.


The general contractor (the "Contractor") for the Isle-Black Hawk construction
project notified the Company in November, 1997, that excavation and site
preparation activities had uncovered a greater amount of less stable weathered
rock and overburden soil than originally anticipated.  As a result, the Company
added $2.7 million to the development and construction budget for the Isle-Black
Hawk, consisting of $2.0 million to cover the additional excavation and site
preparation costs and an additional $0.7 million to maintain the project's
construction schedule.  The Company accordingly amended its excavation and
construction budget on December 19, 1997.  The additional $2.7 million is to be
drawn from past and future interest earnings on amounts in the Construction
Disbursement 

                                       9

<PAGE>
 
Account. The Company believes that sufficient funds remain to enable the Isle-
Black Hawk to be developed as planned and open for business within the
anticipated time frame.


RESULTS OF OPERATIONS

     The Company is in the development stage and does not have any historical
operating results other than interest expense on the Company's outstanding
indebtedness, interest income on the Company's restricted cash, the receipt of
certain capital contributions and the capitalization of certain costs.  The
capitalized costs have consisted primarily of license and permit application,
design, construction and financing fees.  Future operating results are subject
to significant business, economic, regulatory and competitive uncertainties and
contingencies, many of which are beyond the control of the Company.  While the
Company believes that the Isle-Black Hawk, if completed and opened, will be able
to attract a sufficient number of patrons and achieve the level of activity and
revenues necessary to permit the Company to meet its payment obligations,
including with respect to the Notes, there can be no assurance that the Company
will be able to achieve these results.  Capital Corp. is a wholly owned
subsidiary of the Company and was incorporated for the sole purpose of serving
as co-issuer of the Notes in order to facilitate the Offering.  Capital Corp.
will not have any operations or material assets and will not have any revenues.

LIQUIDITY AND CAPITAL RESOURCES

     The Company's initial development expenses were incurred by its members as
provided in the Members Agreement and capitalized on the closing date of the
First Mortgage Notes.  The Company expects to fund the continued development of
the Isle-Black Hawk from a combination of (i) previous equity contributions
(primarily real estate and up to $1.0 million of cash and third party
development costs) valued at approximately $15.4 million, (ii) net proceeds of
$72.0 million from the sale of the First Mortgage Notes, which were deposited
and invested as set forth in the Cash Collateral and Disbursement Agreement, and
(iii) furniture, fixtures and equipment financing in the amount of up to $15.0
million. In addition, Casino America provided the Completion Capital Commitment,
pursuant to which it committed to contribute up to $5.0 million to the Company
in the event that amounts in the Construction Disbursement Account and the
Completion Reserve Account are insufficient to cause the Isle-Black Hawk to
become operating on or before April 1, 1999, or if the Isle-Black Hawk is not
operating by such date.  The Company added approximately $2.7 million to the
development and construction budget for the Isle-Black Hawk, to be drawn from
past and future interest earnings in the Construction Disbursement Account, to
provide for an increase in the "guaranteed maximum price" under the Design/Build
Agreement due to the discovery of a greater amount of less stable weathered rock
and overburden soil at the construction site than was originally anticipated and
to maintain the project's construction schedule. See the previous discussion on
Development Activities. The Company did not exercise an option on March 1, 1998,
to construct a 119-room hotel (the "Hotel Option"). The Company is reviewing
alternative approaches to enable the construction of the planned hotel, however
as of the date of this filing, no definitive arrangements have been made. If the
Company does proceed with the development of a hotel, the Company intends to
fund a portion of the costs of construction for the hotel, which are anticipated
to be approximately $6.3 million, through future cost savings achieved through
value engineering, the availability of contractor's funds represented by the
contractor's contingency allowance and interest earnings on amounts deposited in
the Construction Disbursement Account and the Completion Reserve Account.


     Following the commencement of operations of the Isle-Black Hawk, the
Company expects to fund its operating and capital needs from operating cash
flows.  The Company intends to establish initial working capital reserves to
provide for reasonably anticipated short-term liquidity needs.  However, there
can be no assurance that any additional financing, if needed to meet its
liquidity needs, will be available to the Company in the future, or that, if
available, any such financing will be on terms favorable to the Company.  There
can be no assurance that the Company's estimate of its 

                                      10

<PAGE>
 
reasonably foreseeable liquidity needs is or will be accurate or that new
business developments or other unforeseen events will not occur, resulting in
the need to raise additional funds. The Company expects that the adequacy of its
operating cash flow will depend, among other things, upon customer acceptance of
the Isle-Black Hawk, the continued development of the Black Hawk, Colorado
market as a gaming destination, the intensity of the Company's competition, the
efficiency of operations, depth of customer demand, the effectiveness of the
Company's marketing and promotional efforts and the performance by the manager
of its responsibilities, pursuant to the Management Agreement.

                                      11

<PAGE>
 
                          PART II - OTHER INFORMATION


Item 1.  Legal Proceedings - None
         -----------------       

Item 2.  Changes in Securities - None
         ---------------------       

Item 3.  Defaults upon Senior Securities - None
         -------------------------------       

Item 4.  Submission of Matters to a Vote of Security Holders  - None
         ---------------------------------------------------        

Item 5.  Other Information - None
         -----------------       

Item 6.  Exhibits and Reports on Form 8-K -
         --------------------------------  

     A.   Exhibits
          --------

          A list of exhibits included as part of this Form 10-Q is set forth in
          the Exhibit Index that immediately precedes such exhibits, which is
          incorporated herein by reference.

     B.  Reports on Form 8-K
         -------------------

          During the quarter ended January 25, 1998, the Company filed the
          following reports on Form 8-K:

          None.

                                      12
<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.



                              ISLE OF CAPRI BLACK HAWK L.L.C.


Dated: March 11, 1998         By:  /s/ Rexford A. Yeisley
                                   ----------------------
                                  Rexford A. Yeisley
                                  Chief Financial Officer & Treasurer
                                  (Duly Authorized Officer and
                                  Principal Financial Officer
                                  and Accounting Officer)

                                      13

<PAGE>
 
                               INDEX TO EXHIBITS


EXHIBIT NUMBER                        DESCRIPTION
--------------                        -----------
     27             Financial Data Schedule

     10.1           Lease Agreement dated January 2, 1998 by and between Casino
                    America of Colorado, Inc. and Isle of Capri Black Hawk
                    L.L.C.

                                      14