<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 SEPTEMBER 30, 2002

                                       or

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

                        Commission file number: 333-06489

<Table>
<S>                        <C>                                                         <C>
INDIANA                                THE MAJESTIC STAR CASINO, LLC                       43-1664986

INDIANA                            THE MAJESTIC STAR CASINO CAPITAL CORP.                  35-2100872

(State or other            (Exact name of registrant as specified in its charter)       (I.R.S. Employer
jurisdiction of                                                                        Identification No.)
incorporation or
organization)
</Table>

                           ONE BUFFINGTON HARBOR DRIVE
                                  GARY, INDIANA
                                   46406-3000
                                 (219) 977-7823

        (Registrant's address and telephone number, including area code)

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

Yes  [X]     No  [ ]

Shares outstanding of each of the registrant's classes of common stock as of
September 30, 2002:

<Table>
<Caption>
Class                               Number of shares
-----                               ----------------
<S>                                 <C>
Not applicable                      Not applicable
</Table>


<PAGE>

                          THE MAJESTIC STAR CASINO, LLC

                                      INDEX

<Table>
<Caption>
PART I            FINANCIAL INFORMATION                                                    PAGE NO.
                                                                                           --------
<S>      <C>      <C>                                                                      <C>
         Item 1.  Consolidated Financial Statements

                  Consolidated Balance Sheets as of September 30, 2002
                           and December 31, 2001................................................1

                  Consolidated Statements of Operations for the three and nine months
                           ended September 30, 2002 and 2001....................................2

                  Consolidated Statements of Cash Flows for the nine months
                           ended September 30, 2002 and 2001....................................3

                  Notes to Financial Statements.................................................4

         Item 2.  Management's Discussion and Analysis of Financial
                           Condition and Results of Operations.................................22

         Item 3.  Quantitative and Qualitative Disclosures About Market Risk...................33

         Item 4.  Controls and Procedures......................................................33

PART II           OTHER INFORMATION

         Item 1.  Legal Proceedings............................................................34

         Item 6.  Exhibits and Reports on Form 8-K.............................................34

SIGNATURES.....................................................................................35

CERTIFICATIONS.................................................................................36
</Table>


                                       i
<PAGE>

                 PART 1 - FINANCIAL INFORMATION

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS

                          THE MAJESTIC STAR CASINO, LLC
                           CONSOLIDATED BALANCE SHEETS
                                   (UNAUDITED)

<Table>
<Caption>
                                                                         September 30,         December 31,
                                                                             2002                  2001
<S>                                                                      <C>                  <C>
ASSETS
Current Assets:
       Cash and cash equivalents                                          $ 32,339,313         $ 25,925,291
       Accounts receivable, less allowance for doubtful accounts
              of $369,019 and $359,702, respectively                         2,998,541            3,079,523
       Inventories                                                             858,501              995,708
       Prepaid expenses                                                      3,237,211            2,190,255
       Note receivable due from affiliate                                      700,000              700,000
       Due from Buffington Harbor Riverboats, L.L.C                            152,637              333,838
                                                                         ----------------------------------
              Total current assets                                          40,286,203           33,224,615
                                                                         ----------------------------------

Property, equipment and improvements, net                                  166,846,883          170,195,013

Intangible assets, net                                                      18,090,497           19,290,753

Goodwill                                                                     5,521,620           10,602,250

Other Assets:
       Deferred financing costs, net of accumulated amortization
              of $3,813,582 and $2,202,831, respectively                     9,895,390           10,530,426
       Investment in Buffington Harbor Riverboats, L.L.C                    32,131,035           33,898,771
       Restricted cash                                                       1,000,000            1,000,000
       Other assets, prepaid leases and deposits                            12,513,386           12,317,704
                                                                         ----------------------------------
              Total other assets                                            55,539,811           57,746,901
                                                                         ----------------------------------

              Total Assets                                                $286,285,014         $291,059,532
                                                                         ==================================

LIABILITIES AND MEMBERS' DEFICIT
Current Liabilities:
       Current maturities of long-term debt                               $    142,714         $  6,656,574
       Accounts payable                                                      2,638,211            2,978,502
       Payroll and related                                                   5,408,925            6,194,601
       Accrued interest                                                      9,465,323            8,294,312
       Other accrued liabilities                                            13,160,072           13,020,097
                                                                         ----------------------------------
              Total current liabilities                                     30,815,245           37,144,086
                                                                         ----------------------------------

Long-term debt, net of current maturities                                  274,981,984          273,896,933
                                                                         ----------------------------------

              Total Liabilities                                            305,797,229          311,041,019

Commitments and contingencies

Members' Deficit:
       Members' contributions                                               29,000,000           29,000,000
       Accumulated deficit                                                 (48,512,215)         (48,981,487)
                                                                         ----------------------------------
              Total Members' Deficit                                       (19,512,215)         (19,981,487)
                                                                         ----------------------------------

              Total Liabilities and Member's Deficit                      $286,285,014         $291,059,532
                                                                         ==================================
</Table>


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


                                       1
<PAGE>

                          THE MAJESTIC STAR CASINO, LLC

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)

<Table>
<Caption>
                                                THREE MONTHS ENDED SEPTEMBER 30,          NINE MONTHS ENDED SEPTEMBER 30,
                                                   2002                 2001                 2002                 2001
<S>                                           <C>                  <C>                  <C>                  <C>
REVENUES:
 Casino                                        $ 77,690,257          $30,881,266         $223,250,545        $  93,812,489
 Rooms                                            3,809,375                   --           11,836,762                   --
 Food and beverage                                5,340,626              384,987           16,157,349            1,210,326
 Other                                            1,528,812              449,846            4,341,279            1,317,041
                                              ----------------------------------------------------------------------------

  Gross Revenues                                 88,369,070           31,716,099          255,585,935           96,339,856

  less promotional allowances                   (11,552,945)          (1,702,574)         (32,312,620)          (4,798,170)
                                              ----------------------------------------------------------------------------

  Net Revenues                                   76,816,125           30,013,525          223,273,315           91,541,686

COSTS AND EXPENSES:
 Casino                                          21,691,035            5,954,375           63,528,133           18,126,914
 Rooms                                            2,342,772                   --            6,784,231                   --
 Food and beverage                                3,435,986              578,333           10,197,664            1,764,562
 Other                                              396,134                   --            1,171,573                   --
 Gaming taxes                                    13,908,520            8,638,565           40,933,961           26,148,146
 Advertising and promotion                        5,109,333            1,829,984           15,239,909            5,335,866
 General and administrative                      13,311,515            5,698,251           37,083,273           17,587,757
 Economic incentive - City of Gary                1,072,350              926,963            2,959,492            2,815,998
 Depreciation and amortization                    5,555,340            1,992,645           15,789,459            6,439,641
 Loss on disposal of assets                           9,889                   --                  461               12,114
 Pre-opening expenses                                    --                   --              124,269                   --
                                              ----------------------------------------------------------------------------
  Total costs and expenses                       66,832,874           25,619,116          193,812,425           78,230,998
                                              ----------------------------------------------------------------------------

  Operating income                                9,983,251            4,394,409           29,460,890           13,310,688

OTHER INCOME (EXPENSE):
 Loss on investment in
   Buffington Harbor Riverboats, L.L.C             (600,304)            (636,751)          (1,808,204)          (2,185,746)
 Interest income                                     57,212               89,124              135,182              333,548
 Interest expense                                (8,071,962)          (3,880,266)         (24,356,423)         (11,123,541)
 Other non-operating expense                        (49,524)             (40,165)            (141,815)             (87,644)
                                              ----------------------------------------------------------------------------
  Total other income (expense)                   (8,664,578)          (4,468,058)         (26,171,260)         (13,063,383)

  Net income (loss)                            $  1,318,673          $   (73,649)        $  3,289,630         $    247,305
                                              ============================================================================
</Table>

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


                                       2
<PAGE>

                         THE MAJESTIC STAR CASINO, LLC
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (UNAUDITED)

<Table>
<Caption>
                                                                        NINE MONTHS ENDED SEPTEMBER 30,
                                                                            2002                2001
<S>                                                                     <C>                 <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income                                                            $  3,289,630      $   247,305
Adjustments to reconcile net income to net cash provided by
      operating activities:
      Depreciation                                                      11,489,565        5,007,549
      Amortization                                                       4,299,894        1,432,092
      Loss on investment in Buffington Harbor Riverboats, L.L.C          1,808,204        2,185,746
      Loss on sale of assets                                                   461           12,114
Changes in operating assets and liabilities:
      Decrease in accounts receivable                                      200,668          349,692
      Decrease in inventories                                              137,208           20,028
      (Increase) decrease in prepaid expenses                           (1,241,104)         136,683
      (Increase) decrease in other assets                                  869,913       (1,204,280)
      Decrease in accounts payable                                        (536,664)        (281,380)
      Decrease in related party payables                                        --               --
      Increase (decrease) in accrued payroll and related expenses         (872,124)         341,893
      Increase (decrease) in accrued interest                            1,171,011       (3,285,642)
      Increase (decrease) in other accrued liabilities                   1,573,976          (80,934)
                                                                         --------------------------
          Net cash provided by operating activities                     22,190,638        4,880,866
                                                                         --------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
      Payment of acquisition related costs                                (986,158)              --
      Proceeds from seller from purchase price adjustment                3,800,000               --
      Acquisition of property, equipment and vessel improvements        (8,194,614)      (4,826,140)
      Distribution from Buffington Harbor Riverboats, L.L.C                     --        8,825,416
      Decrease in prepaid lease and deposits                               428,005       (6,213,615)
      Purchase of naming rights                                                 --       (1,000,000)
      Investment in Buffington Harbor Riverboats, L.L.C                    (40,455)        (171,117)
      Proceeds from sale of equipment                                       52,717            1,850
                                                                         --------------------------
          Net cash used in investing activities                         (4,940,505)      (3,383,606)
CASH FLOWS FROM FINANCING ACTIVITIES:
      Line of credit, net                                               (6,500,000)      (5,300,000)
      Payment of 11.653% Senior Secured Notes issuance costs            (1,410,945)              --
      Cash advances to/from affiliates, net                                     --               --
      Cash paid to reduce long-term debt                                  (104,808)        (977,715)
      Distribution to Barden Development, Inc.                          (2,820,358)              --
                                                                        ---------------------------
          Net cash used in financing activities                        (10,836,111)      (6,277,715)
                                                                        ---------------------------
Net increase in cash and cash equivalents                                6,414,022       (4,780,455)
Cash and cash equivalents, beginning of period                          25,925,291       16,119,512
                                                                        ---------------------------
Cash and cash equivalents, end of period                              $ 32,339,313      $11,339,057
                                                                       ============================
INTEREST PAID:
      Equipment Debt                                                       $38,510      $    33,817
      Senior Secured Notes - Fixed Interest 10-7/8%                   $ 14,137,500      $14,137,500
      Senior Secured Notes - Fixed Interest 11.653%                   $  8,707,126      $        --
      Lines of credit                                                 $    301,649      $   237,886
SUPPLEMENTAL NONCASH OPERATING AND FINANCING ACTIVITIES:
Elimination of slot based progressives                                $    400,000      $        --
Elimination of slot club                                              $  1,300,000      $        --
</Table>

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


                                       3
<PAGE>

                          THE MAJESTIC STAR CASINO, LLC
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 1. BASIS OF PRESENTATION

         The Majestic Star Casino, LLC (the "Company") was formed on December 8,
1993 to provide gaming and related entertainment to the public. The Company
commenced gaming operations in the City of Gary ("Gary") at Buffington Harbor,
located in Lake County, Indiana on June 7, 1996. Majestic Investor, LLC was
formed on September 12, 2000 as an "unrestricted subsidiary" of the Company
under the Indenture relating to the Company's 10-7/8% Senior Secured Notes.
Majestic Investor, LLC was initially formed to satisfy the Company's off-site
development obligations under the Development Agreement with Gary.

         Majestic Investor, LLC entered into a definitive purchase and sale
agreement dated as of November 22, 2000, as amended December 4, 2000, with
Fitzgeralds Gaming Corporation ("Fitzgeralds") and certain of its affiliates to
purchase substantially all of the assets of three of its subsidiaries for
approximately $149.0 million in cash, subject to adjustment in certain
circumstances, plus assumption of certain liabilities. Majestic Investor, LLC
assigned all of its rights and obligations to Majestic Investor Holdings, LLC, a
wholly-owned subsidiary of Majestic Investor, LLC, following the formation of
Majestic Investor Holdings, LLC. Majestic Investor Holdings, LLC completed the
purchase of the Fitzgeralds assets on December 6, 2001 and commenced operations
on December 7, 2001. The three Fitzgeralds brand casinos are "restricted
subsidiaries" of Majestic Investor Holdings, LLC under the Indenture relating to
Majestic Investor Holdings, LLC's 11.653% Senior Secured Notes and "unrestricted
subsidiaries" under the Company's Indenture relating to the Company's 10-7/8%
Senior Secured Notes.

         Except where otherwise noted, the words "we," "us," "our," and similar
terms, as well as the "Company," refer to The Majestic Star Casino, LLC and all
of its subsidiaries.

         The accompanying consolidated financial statements are unaudited and
include the accounts of the Company and its wholly-owned subsidiary, Majestic
Investor, LLC. All intercompany transactions and balances have been eliminated.
Investments in affiliates in which the Company has the ability to exercise
significant influence, but not control, are accounted for by the equity method.
These 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 (which include normal recurring adjustments)
considered necessary for a fair presentation of the results for the interim
periods have been made. The results for the nine months ended September 30,
2002, are not necessarily indicative of results to be expected for the full
fiscal year. The financial statements should be read in conjunction with the
financial statements and notes thereto included in the Company's Annual Report
on Form 10-K for the year ended December 31, 2001.

         Certain reclassifications have been made to the 2001 financial
statements to conform to the 2002 presentation. These reclassifications have no
effect on previously reported net income.


                                       4
<PAGE>

                          THE MAJESTIC STAR CASINO, LLC
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)


NOTE 2. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

         In April 2002, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 145, "Rescission of
FASB statements No. 4, 44 and 64, Amendment of FASB Statement No. 13 and
Technical Corrections" which is effective for fiscal years beginning after May
15, 2002. SFAS No. 145 updates, clarifies, and simplifies existing accounting
pronouncements. Management does not expect SFAS No. 145 to have a material
impact on the Company's consolidated financial position, results of operations
or cash flows.

         In June 2002, the FASB issued SFAS No. 146 "Accounting for Costs
Associated with Exit or Disposal Activities" which will become effective for
exit or disposal activities initiated after December 31, 2002. SFAS No. 146
supersedes Emerging Issues Task Force Issue No. 94-3 "Liability Recognition for
Certain Employee Termination Benefits and Other Costs to Exit an Activity." SFAS
No. 146 requires that a liability for a cost associated with an exit or disposal
activity be recognized when the liability is incurred and states that an
entity's commitment to an exit plan, by itself, does not create a present
obligation that meets the definition of a liability. SFAS No. 146 also
establishes that fair value is the objective for initial measurement of the
liability. Adoption of SFAS No. 146 will have no impact on our historical
consolidated financial position or results of operations.

         In October 2002, the FASB issued SFAS No. 147, "Acquisition of Certain
Financial Institutions," which is not applicable to the Company.

NOTE 3. INVESTMENT IN BUFFINGTON HARBOR RIVERBOATS, L.L.C. ("BHR")

         On October 31, 1995, the Company and Trump Indiana, Inc. (the "Joint
Venture Partner") entered into the First Amended and Restated Operating
Agreement of BHR for the purpose of acquiring and developing certain facilities
for the gaming operations in the City of Gary, Indiana ("BHR Property"). BHR is
responsible for the management, development and operation of the BHR Property.
The Company and the Joint Venture Partner have each entered into an agreement
with BHR (the "Berthing Agreement") to use BHR Property for their respective
gaming operations and have committed to pay cash operating losses of BHR as
additional berthing fees. The Company and the Joint Venture Partner share
equally in the operating expenses relating to the BHR Property, except for costs
associated with food and beverage and gift shop, which are allocated based on
percentage of use by the casino customers of the Company and the Joint Venture
Partner. The Company accounts for its 50% interest in BHR under the equity
method, whereby the initial investments are recorded at cost and then adjusted
for the Company's share of BHR's net income or loss.


                                       5
<PAGE>

                          THE MAJESTIC STAR CASINO, LLC
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

The following represents selected financial information of BHR:

                      Buffington Harbor Riverboats, L.L.C.
                            Statements of Operations
                                  (Unaudited)


<Table>
<Caption>
                                Three Months                             Nine Months
                             Ended September 30,                      Ended September 30,
                           2002                2001                2002                2001
                       ------------------------------------------------------------------------
<S>                    <C>                 <C>                 <C>                 <C>
Gross Revenue          $ 3,950,620         $ 4,351,336         $11,873,207          $12,690,559
Operating Income       $    28,769         $     7,661         $    36,289          $    23,831
Net Loss               $(1,199,488)        $(1,273,498)        $(3,612,758)         $(4,371,488)
</Table>

NOTE 4. ACQUISITIONS

         On December 6, 2001, the Company, through certain indirect wholly-owned
subsidiaries, completed the acquisition of substantially all of the assets and
assumed certain liabilities of Fitzgeralds Las Vegas, Inc. ("Fitzgeralds Las
Vegas"), Fitzgeralds Mississippi Inc. ("Fitzgeralds Tunica") and 101 Main Street
Limited Liability Company ("Fitzgeralds Black Hawk") (the "Fitzgeralds assets")
for approximately $152.7 million in cash, which includes the purchase price of
$149.0 million and professional fees and other expenses related to the
acquisition. Pursuant to the terms of the purchase and sale agreement, the
parties agreed to a $3.8 million purchase price reduction on May 9, 2002, based
upon a negotiated settlement of the value of working capital at December 6,
2001. We are accounting for the acquisition under the purchase method.
Accordingly, the purchase price is allocated to the assets acquired and
liabilities assumed based upon their estimated fair values at the date of
acquisition. We determined the estimated fair value of property and equipment
and intangible assets based upon third-party valuations.

         The purchase price was determined based upon estimates of future cash
flows and the net worth of the assets acquired. Majestic Investor Holdings, LLC
funded the acquisition through the issuance of its 11.653% Senior Secured Notes.
The following table summarizes the estimated fair value of the assets acquired
and the liabilities assumed at the acquisition date.


                                       6
<PAGE>

                           THE MAJESTIC STAR CASINO, LLC
         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 4. ACQUISITIONS (CONTINUED)

<Table>
<Caption>
                                    At December 6, 2001
                                    -------------------
                                      (in millions)
<S>                                 <C>
Current assets                            $ 12.2
Property and equipment                     122.9
Intangible assets                           19.4
Goodwill                                    10.6
Other noncurrent assets                      2.0
                                          ------

          Total assets acquired            167.1
                                          ------

Current liabilities                         14.0
Other noncurrent liabilities                 0.4
                                          ------

          Total liabilities assumed         14.4
                                          ------

Net                                       $152.7
                                          ======
</Table>

         The Company (Gary property only) has no intangible assets. Intangible
assets at Majestic Investor Holdings, LLC primarily include $9.8 million for
customer relationships, $3.7 million for tradename and $5.2 million for gaming
licenses. Intangible assets for customer relationships and tradenames are being
amortized over a period of 8-10 years. In accordance with SFAS No. 142, goodwill
and other indefinite lived intangible assets, such as the Barden Nevada Gaming,
LLC's gaming license, are not amortized but instead are subject to impairment
tests at least annually.

NOTE 5. OTHER INTANGIBLE ASSETS

         The gross carrying amount and accumulated amortization of the
intangible assets, other than goodwill, as of September 30, 2002, are as
follows:

<Table>
<Caption>
                                  Gross Carrying          Accumulated
                                      Amount              Amortization
                                   (in thousands)        (in thousands)
                                  --------------         --------------

<S>                               <C>                    <C>
Amortized intangible assets:

Customer relationships               $ 9,800               $(1,007)
Tradename                              3,700                  (302)
Riverboat excursion license              700                    --
                                     -------               -------

Total                                $14,200               $(1,309)
                                     =======               =======

Unamortized intangible assets:

Gaming license                       $ 5,200               $    --
                                     -------               -------

Total                                $ 5,200               $    --
                                     =======               =======
</Table>


                                       7
<PAGE>

                          THE MAJESTIC STAR CASINO, LLC
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

         The amortization expense recorded on the intangible assets for the
three and nine months ended September 30, 2002 was $0.4 million and $1.2
million, respectively. The estimated amortization expense for each of the five
succeeding fiscal years is as follows (amounts in thousands):


<Table>
<Caption>
       For the year ending December 31,
       --------------------------------
<S>                          <C>
       2002                  $1,595
       2003                  $1,642
       2004                  $1,642
       2005                  $1,642
       2006                  $1,642
</Table>

NOTE 6. GOODWILL

         The changes in the carrying amount of goodwill for the nine months
ended September 30, 2002 are as follows:

<Table>
<Caption>
                                    (In thousands)
<S>                                 <C>
Balance as of January 1, 2002          $10,602
Goodwill acquired                          296
                                       -------
Balance as of March 31, 2002            10,898

Purchase price adjustment               (3,800)
Goodwill adjustments                      (549)
Goodwill acquired                          164
                                       -------
Balance as of June 30, 2002              6,713

Goodwill adjustments                    (1,191)
                                       -------
Balance as of September 30, 2002       $ 5,522
                                       -------
</Table>

         The increase in goodwill acquired primarily relates to professional
fees incurred by the Company related to the acquisition of Fitzgeralds Tunica,
Fitzgeralds Black Hawk, and Fitzgeralds Las Vegas. The decrease in goodwill is
primarily due to a $3.8 million purchase price adjustment resulting from the
final purchase price settlement of the acquired assets and liabilities of the
Fitzgeralds Las Vegas, Fitzgeralds Tunica and Fitzgeralds Black Hawk properties
and adjustments of estimates of liabilities for slot based programs.

         In accordance with SFAS No. 142, goodwill is not amortized but instead
is subject to impairment testing at least annually.


                                       8
<PAGE>

                          THE MAJESTIC STAR CASINO, LLC
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)


NOTE 7. COMMITMENTS AND CONTINGENCIES

Legal Proceedings

         There have been no significant changes in the legal proceedings
previously described in the Company's Annual Report on Form 10-K for the year
ended December 31, 2001.

Gaming Regulations

         The ownership and operation of riverboat gaming operations in Indiana
are subject to strict state regulation under the Riverboat Gambling Act ("Act")
and the administrative rules promulgated thereunder. The Indiana Gaming
Commission ("IGC") is empowered to administer, regulate and enforce the system
of riverboat gaming established under the Act and has jurisdiction and
supervision over all riverboat gaming operations in Indiana, as well as all
persons on riverboats where gaming operations are conducted. The IGC is
empowered to regulate a wide variety of gaming and nongaming related activities,
including the licensing of supplies to, and employees at, riverboat gaming
operations and to approve the form of entity qualifiers and intermediary and
holding companies. Indiana is a relatively new jurisdiction and the emerging
regulatory framework is not yet complete. The IGC has adopted certain final
rules and has published others in proposed or draft form, which are proceeding
through the review and final adoption process. The IGC has broad rulemaking
power, and it is impossible to predict what effect, if any, the amendment of
existing rules or the finalization of currently new rules might have on the
Company's operations.

         A change in the Indiana state law governing gaming took effect on July
1, 2002 which enables Indiana's riverboat casinos to operate dockside. The IGC
approved Majestic Star's flexible boarding plan that allows the continuous
ingress and egress of patrons for the purpose of gambling while the riverboat is
docked. The plan went into effect on August 5, 2002 and imposes a graduated
wagering tax based upon adjusted gross receipts. The graduated wagering tax will
have a starting rate of 15% with a top rate of 35% for adjusted gross receipts
in excess of $150 million. For the period July 1 through August 4, 2002, the
wagering tax was raised by statute to 22.5% of adjusted gross receipts. Prior to
July 1, 2002, Indiana gaming taxes were levied on adjusted gross receipts, as
defined by Indiana gaming laws, at the rate of 20%. In addition to the wagering
tax, an admissions tax of $3 per turnstile count is assessed. Prior to August
5, 2002, Indiana imposed an admissions tax of $3 per patron turnstile count at
every boarding time plus the count of the patrons that stayed over on the
vessel from a previous boarding time period.

         The ownership and operation of our other casino gaming facilities in
Nevada, Mississippi and Colorado are also subject to various state and local
regulations in the jurisdictions where they are located. In Nevada, our gaming
operations are subject to the Nevada Gaming Control Act, and to the licensing
and regulatory control of the Nevada Gaming Commission, the Nevada State Gaming
Control Board and various local ordinances and regulations, including, without
limitation, applicable city and county gaming and liquor licensing authorities.
In Mississippi, our gaming operations are subject to the Mississippi Gaming
Control Act, and to the licensing and/or regulatory control of the Mississippi
Gaming Commission, the Mississippi State Tax Commission and various state and
local regulatory agencies, including liquor licensing authorities. In Colorado,
our gaming operations are subject to the Limited Gaming Act of 1991, which
created the Division of Gaming within the Colorado Department of Revenue and the
Colorado Limited Gaming Control Commission to license, implement, regulate and
supervise the conduct of limited gaming. Our operations are also subject to the
Colorado Liquor Code and the state and local liquor licensing authorities.

         The Company's directors, officer, managers and key employees are
required to hold individual licenses, the requirements for which vary from
jurisdiction to jurisdiction. Licenses and permits for gaming operations and of
individual licensees are subject to revocation or non-renewal for cause. Under
certain circumstances, holders of our securities are required to secure
independent licenses and permits.

Other Contingencies

         Buffington Harbor Parking Associates ("BHPA") was formed by the Joint
Venture Partner and AMB Parking, LLC (a company indirectly owned by Don H.
Barden, Chairman and CEO of the Company) to construct and operate the 2,000
space covered parking garage. BHPA opened the parking garage in June 2002. The
Company and the Joint Venture Partner each entered into identical leases with
BHPA with lease payments sufficient to service the debt incurred by BHPA to
construct the parking garage. Each party is required to make monthly lease
payments equal to 50 percent of BHPA's debt service requirement for the
following month. In the event that the Joint Venture Partner fails to make its
lease payment for any given month, upon notice by BHPA, the Company is obligated
to make additional lease payment for such month equal to the remaining 50
percent of BHPA's debt service requirement.

                                       9
<PAGE>

                          THE MAJESTIC STAR CASINO, LLC
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)


NOTE 8. SEGMENT INFORMATION

         The Company owns and operates four properties as follows: a riverboat
casino located in Gary, Indiana; a casino and hotel located in downtown Las
Vegas, Nevada; a casino and hotel located in Tunica, Mississippi; and a casino
located in Black Hawk, Colorado (collectively, the "Properties"). The Company
identifies its business in four segments based on geographic location. The
Properties, in each of their segments, market primarily to middle-income slot
customers. The major products offered in each segment are as follows: casino,
hotel rooms (except in Gary, Indiana and Black Hawk, Colorado) and food and
beverage.

         The accounting policies of each business segment are the same as those
described in the summary of significant accounting policies previously described
in Note 1 to the audited financial statements included in the Company's Annual
Report on Form 10-K for the year ended December 31, 2001. There are minimal
inter-segment sales. Corporate costs are allocated to the business segment
through a management service fee from Majestic Star and are fully reflected in
the expense line titled "General and Administrative" expenses.

         A summary of the Properties' operations by business segment for the
three and nine months ended September 30, 2002 and 2001 is presented below (in
thousands):

                                       10
<PAGE>

<Table>
<Caption>
                                                                  FOR THE                          AS OF AND FOR THE
                                                                              (a)                                     (a)
                                                   THREE MONTHS ENDED  THREE MONTHS ENDED  NINE MONTHS ENDED   NINE MONTHS ENDED
                                                   SEPTEMBER 30, 2002  SEPTEMBER 30, 2001  SEPTEMBER 30, 2002  SEPTEMBER 30, 2001
                                                   ------------------------------------------------------------------------------
<S>                                                <C>                 <C>                 <C>                 <C>
Net revenues:
     Majestic Star Casino                               $33,510            $30,013           $  94,268            $ 91,542
     Fitzgeralds Tunica                                  22,409             21,113              66,515              63,176
     Fitzgeralds Black Hawk                               9,062              9,525              24,969              25,916
     Fitzgeralds Las Vegas                               11,835             12,675              37,521              40,600
                                                        ------------------------------------------------------------------
                                                        $76,816            $73,326           $ 223,273            $221,234
                                                        -------------------------------------------------------------------

Income (loss) from operations:
     Majestic Star Casino                               $ 5,450            $ 4,412           $  16,027            $ 13,332
     Fitzgeralds Tunica                                   3,867              5,249              11,812              15,579
     Fitzgeralds Black Hawk                               2,254              2,649               5,037               6,217
     Fitzgeralds Las Vegas                                 (922)              (281)             (1,341)              2,227
     Unallocated and other(1)                              (666)               980              (2,074)                (21)
                                                        -------------------------------------------------------------------
                                                        $ 9,983            $13,009           $  29,461            $ 37,334
                                                        -------------------------------------------------------------------

Segment depreciation and amortization
     Majestic Star Casino                               $ 1,730            $ 1,993           $   5,084            $  6,440
     Fitzgeralds Tunica                                   1,866                 --               5,481                  --
     Fitzgeralds Black Hawk                                 364                 --               1,091                  --
     Fitzgeralds Las Vegas                                  938                 --               2,203                  --
     Unallocated and other(1)                               657                 --               1,930                  --
                                                        -------------------------------------------------------------------
                                                        $ 5,555            $ 1,993           $  15,789            $  6,440
                                                        -------------------------------------------------------------------

Expenditures for additions to long-lived assets:
     Majestic Star Casino                               $   772            $ 3,129               4,276            $  4,824
     Fitzgeralds Tunica                                     324                 97               1,820                 627
     Fitzgeralds Black Hawk                                 524                  3                 963                 156
     Fitzgeralds Las Vegas                                  335                 13               1,135                 161
                                                        -------------------------------------------------------------------
                                                        $ 1,955            $ 3,242           $   8,194            $  5,768
                                                        -------------------------------------------------------------------

Segment assets:
     Majestic Star Casino                                                                    $ 118,011
     Fitzgeralds Tunica                                                                         89,832
     Fitzgeralds Black Hawk                                                                     30,896
     Fitzgeralds Las Vegas                                                                      43,464
     Unallocated and other(1)                                                                  147,358
                                                                                             ---------
                                                                                             $ 429,561
     Less: intercompany                                                                       (143,276)
                                                                                             ---------
                                                                                             $ 286,285
                                                                                             ---------
Goodwill:
     Majestic Star Casino                                                                    $      --
     Fitzgeralds Tunica                                                                          3,998
     Fitzgeralds Black Hawk                                                                      1,524
     Fitzgeralds Las Vegas                                                                          --
                                                                                             ---------
                                                                                             $   5,522
                                                                                             ---------
</Table>

(1)      Unallocated and other include corporate items and eliminations that are
         not allocated to the operating segments.

(a)      The segment information provided for the Fitzgeralds properties is
         derived from prior year consolidated financial information provided by
         the predecessor company and is for the quarter and three quarters ended
         September 30, 2001.


                                       11
<PAGE>
                          THE MAJESTIC STAR CASINO, LLC
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 9. RELATED PARTY TRANSACTIONS

         During the nine months ended September 30, 2002, the Company made
distributions of approximately $976,000 to Barden Development, Inc. ("BDI").
These distributions were made in accordance with the Management Agreement
between the Company and BDI dated June 18, 1999.

         During the nine months ended September 30, 2002, Majestic Investor
Holdings, LLC made distributions of approximately $1,844,000 to BDI. These
distributions were made in accordance with the Management Agreement between
Majestic Investor Holdings, LLC and BDI dated December 5, 2001.

         In December 2001, Majestic Investor Holdings, LLC issued a $700,000
note to BDI. The note bears interest at a rate of 7% per annum and is due and
payable in full on December 12, 2002.

NOTE 10. EMPLOYEE LOANS

         During 2001, The Majestic Star Casino, LLC made a $300,000 employee
loan to Mr. Barden. This loan bears interest at a rate of 7% per annum and is
due and payable in full on December 12, 2002.

         On January 31, 2002, The Majestic Star Casino, LLC made a $200,000
employee loan to Mr. Kelly. This loan bears no interest and is due and payable
in full on January 31, 2005.

NOTE 11. SUPPLEMENTAL FINANCIAL INFORMATION

         The Company's $130.0 million, 10 7/8% Senior Secured Notes are secured
by substantially all of the assets of the Majestic Star Casino, but not the
assets of Majestic Investor Holdings, LLC and its wholly-owned subsidiaries
which include the three Fitzgeralds' casino properties acquired on December 6,
2001.

         Majestic Investor Holdings, LLC's $152.6 million, 11.653% Senior
Secured Notes are unconditionally and irrevocably guaranteed, jointly and
severally, by all of the restricted subsidiaries (the "Guarantor Subsidiaries")
of Majestic Investor Holdings, LLC. The guarantees rank senior in right of
payment to all existing and future subordinated indebtedness of these restricted
subsidiaries and equal in right of payment with all existing and future senior
indebtedness of these restricted subsidiaries.

         The following condensed consolidating information presents condensed
consolidating balance sheets as of September 30, 2002 and December 31, 2001, and
condensed consolidating statements of operations for the three and nine months
ended September 30, 2002 and 2001, and condensed consolidating statements of
cash flows for the nine months ended September 30, 2002 and 2001 for The
Majestic Star Casino, LLC, Majestic Investor Holdings, LLC, and the restricted


                                       12
<PAGE>

                          THE MAJESTIC STAR CASINO, LLC
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)


NOTE 11. SUPPLEMENTAL FINANCIAL INFORMATION (CONTINUED)

subsidiaries of Majestic Investor Holdings, LLC (on a combined and individual
basis) and the elimination entries necessary to combine such entities on a
consolidated basis. The Majestic Star Casino Capital Corp. ("MSCCC") and
Majestic Investor, LLC, wholly-owned subsidiaries of The Majestic Star Casino,
LLC, and Majestic Investor Capital Corp. ("MICC"), a wholly-owned subsidiary of
Majestic Investor, LLC, do not have any material assets, obligations or
operations. Therefore, no information has been presented below for these
subsidiaries.


                                       13
<PAGE>

Condensed consolidating balance sheets as of September 30, 2002 (Unaudited)

<Table>
<Caption>
                                                   Majestic Star  Majestic Investor   Guarantor     Eliminating            Total
                                                    Casino, LLC     Holdings, LLC   Subsidiaries      Entries          Consolidated
<S>                                                <C>            <C>               <C>            <C>                 <C>
ASSETS
Current Assets:
 Cash and cash equivalents                          $ 10,673,090    $  6,309,143     $ 15,357,080  $                   $ 32,339,313
 Accounts receivable (net)                             1,813,221          43,919        1,141,401                         2,998,541
 Inventories                                              48,567              --          809,934                           858,501
 Prepaid expenses and other current assets             1,691,006       4,863,078        1,704,102     (4,168,338)(a)      4,089,848
                                                   --------------------------------------------------------------------------------
   Total current assets                               14,225,884      11,216,140       19,012,517     (4,168,338)        40,286,203
                                                   --------------------------------------------------------------------------------


Property, equipment and vessel improvements, net      47,838,933              --      119,007,950                       166,846,883
Intangible assets, net                                        --              --       18,090,497                        18,090,497
Due from related parties                                 992,165     129,116,043               --   (130,108,208)(b)             --
Investment in Buffington Harbor Riverboats, L.L.C     32,131,035              --               --                        32,131,035
Other assets                                          13,822,890       7,025,837        8,081,669                        28,930,396
Investment in subsidiaries                            10,606,903      16,459,909               --    (27,066,812)(b)             --
                                                   --------------------------------------------------------------------------------
   Total Assets                                     $119,617,810    $163,817,929     $164,192,633  $(161,343,358)      $286,285,014
                                                   ================================================================================

LIABILITIES AND MEMBERS' DEFICIT
Current Liabilities:
 Current maturities of long-term debt               $         --    $         --     $    142,714  $                   $    142,714
 Accounts payable, accrued and other                  10,331,039       6,176,822       14,164,670                        30,672,531
                                                   --------------------------------------------------------------------------------
   Total current liabilities                          10,331,039       6,176,822       14,307,384             --         30,815,245
                                                   --------------------------------------------------------------------------------

Due to related parties                                        --         992,165      133,284,381   (134,276,546)(a)(b)          --
Long-term debt, net of current maturities            128,798,986     146,042,039          140,959                       274,981,984
                                                   --------------------------------------------------------------------------------

   Total Liabilities                                 139,130,025     153,211,026      147,732,724   (134,276,546)       305,797,229

Commitments and contingencies

 Members' Equity (Deficit):                          (19,512,215)     10,606,903       16,459,909    (27,066,812)(b)    (19,512,215)
                                                   --------------------------------------------------------------------------------
   Total Liabilities and Member's Equity (Deficit)  $119,617,810    $163,817,929     $164,192,633  $(161,343,358)      $286,285,014
                                                   ================================================================================
</Table>

(a)    To eliminate intercompany receivables and payables.
(b)    To eliminate intercompany accounts and investment in subsidiaries.


                                       14
<PAGE>

Condensed consolidating balance sheets as of December 31, 2001

<Table>
<Caption>
                                                     Majestic Star  Majestic Investor   Guarantor   Eliminating           Total
                                                      Casino, LLC     Holdings, LLC    Subsidiaries   Entries         Consolidated
<S>                                                  <C>            <C>               <C>           <C>               <C>
ASSETS
Current Assets:
  Cash and cash equivalents                          $  8,220,476     $    498,363    $ 17,206,452  $                  $ 25,925,291
  Accounts receivable, net                              1,642,462          269,501       1,196,044        (28,484)(a)     3,079,523
  Inventories                                              38,144               --         957,564                          995,708
  Prepaid expenses and other current assets             1,213,056          707,467       1,303,570             --         3,224,093
                                                     ------------------------------------------------------------------------------
    Total current assets                               11,114,138        1,475,331      20,663,630        (28,484)       33,224,615
                                                     ------------------------------------------------------------------------------

Property and equipment, net                            47,767,051               --     122,427,962                      170,195,013
Intangible assets, net                                         --               --      19,290,753                       19,290,753
Due from related parties                                1,177,829      150,855,685              --   (152,033,514)(b)            --
Investment in Buffington Harbor Riverboats, L.L.C      33,898,771               --              --                       33,898,771
Other assets                                           14,869,249       14,545,956       5,025,618          9,557 (a)    34,450,380
Investment in subsidiaries                             12,532,295          935,731              --    (13,468,026)(b)            --
                                                     ------------------------------------------------------------------------------
    Total Assets                                     $121,359,333     $167,812,703    $167,407,963  $(165,520,467)     $291,059,532
                                                     ==============================================================================

LIABILITIES AND MEMBERS' EQUITY (DEFICIT)
Current Liabilities:
  Current maturities of long-term debt               $          --    $   6,500,000   $     156,574 $                  $  6,656,574
  Accounts payable, accrued and other                   12,784,191        2,526,703      15,195,545       (18,927)(a)    30,487,512
                                                     ------------------------------------------------------------------------------
    Total current liabilities                           12,784,191        9,026,703      15,352,119       (18,927)       37,144,086
                                                     ------------------------------------------------------------------------------

Due to related parties                                          --        1,168,273     150,865,241  (152,033,514)(b)            --
Long-term debt, net of current maturities              128,556,629      145,085,432         254,872                     273,896,933
                                                     ------------------------------------------------------------------------------

    Total Liabilities                                  141,340,820      155,280,408     166,472,232  (152,052,441)      311,041,019

Commitments and contingencies                                   --               --              --            --                --

  Members' Equity (Deficit):                           (19,981,487)      12,532,295         935,731   (13,468,026)(b)   (19,981,487)
                                                     ------------------------------------------------------------------------------
    Total Liabilities and Member's Equity (Deficit)  $ 121,359,333    $ 167,812,703   $ 167,407,963 $(165,520,467)     $291,059,532
                                                     ==============================================================================
</Table>

(a)  To eliminate intercompany receivables and payables.
(b)  To eliminate intercompany accounts and investment in subsidiaries.


                                       15
<PAGE>

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS FOR THE THREE MONTHS ENDED
SEPTEMBER 30, 2002
(UNAUDITED)

<Table>
<Caption>
                                                  MAJESTIC STAR  MAJESTIC INVESTOR   GUARANTOR      ELIMINATING
                                                   CASINO, LLC      HOLDINGS, LLC   SUBSIDIARIES       ENTRIES         CONSOLIDATED
<S>                                               <C>            <C>                <C>             <C>                <C>
REVENUES:
      Casino                                       $35,847,438       $        --     $41,842,819    $         --       $ 77,690,257
      Rooms                                                 --                --       3,809,375              --          3,809,375
      Food and beverage                                404,204                --       4,936,422              --          5,340,626
      Other                                            501,110                --       1,027,702              --          1,528,812
                                                  ---------------------------------------------------------------------------------

           Gross Revenues                           36,752,752                --      51,616,318              --         88,369,070

           less promotional allowances              (3,242,480)               --      (8,310,465)             --        (11,552,945)
                                                  ---------------------------------------------------------------------------------

           Net Revenues                             33,510,272                --      43,305,853              --         76,816,125

COSTS AND EXPENSES:
      Casino                                         6,619,298                --      15,071,737              --         21,691,035
      Rooms                                                 --                --       2,342,772              --          2,342,772
      Food and beverage                                571,153                --       2,864,833              --          3,435,986
      Other                                                 --                --         396,134              --            396,134
      Gaming taxes                                   8,927,379                --       4,981,141              --         13,908,520
      Advertising and promotion                      2,258,415                --       2,850,918              --          5,109,333
      General and administrative                     6,882,000             8,175       6,421,340              --         13,311,515
      Economic incentive - City of Gary              1,072,350                --              --              --          1,072,350
      Depreciation and amortization                  1,730,000           657,668       3,167,672              --          5,555,340
      Loss on disposal of assets                            --                --           9,889              --              9,889
                                                  ---------------------------------------------------------------------------------

           Total costs and expenses                 28,060,595           665,843      38,106,436              --         66,832,874
                                                  ---------------------------------------------------------------------------------

           Operating income                          5,449,677          (665,843)      5,199,417              --          9,983,251

OTHER INCOME (EXPENSE):
      Loss on investment in
         Buffington Harbor Riverboats, L.L.C          (600,304)               --              --              --           (600,304)
      Interest income                                   23,992            19,190          14,030              --             57,212
      Interest expense                              (3,608,999)       (4,454,389)         (8,574)             --         (8,071,962)
      Other non-operating expense                      (38,593)          (10,931)             --              --            (49,524)
      Equity in net income (loss)
                      of subsidiaries                   92,900         5,204,873              --      (5,297,773)(a)             --
                                                  ---------------------------------------------------------------------------------
           Total other income (expense)             (4,131,004)          758,743           5,456      (5,297,773)        (8,664,578)

           Net income (loss)                       $ 1,318,673       $    92,900     $ 5,204,873     $(5,297,773)      $  1,318,673
                                                  =================================================================================
</Table>

(a) To eliminate equity in net income of subsidiaries.


                                       16
<PAGE>

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS FOR THE THREE MONTHS ENDED
SEPTEMBER 30, 2001
(UNAUDITED)

<Table>
<Caption>
                                                                   UNRESTRICTED
                                                    PARENT          SUBSIDIARY       CONSOLIDATED
<S>                                              <C>               <C>               <C>
REVENUES:
      Casino                                     $30,881,266           $     --       $30,881,266
      Food and beverage                              384,987                 --           384,987
      Other                                          449,846                 --           449,846
                                                 ------------------------------------------------

           Gross Revenues                         31,716,099                 --        31,716,099

           less promotional allowances            (1,702,574)                --        (1,702,574)
                                                 ------------------------------------------------

           Net Revenues                           30,013,525                 --        30,013,525

COSTS AND EXPENSES:
      Casino                                       5,954,375                 --         5,954,375
      Food and beverage                              578,333                 --           578,333
      Gaming taxes                                 8,638,565                 --         8,638,565
      Advertising and promotion                    1,829,984                 --         1,829,984
      General and administrative                   5,680,669             17,582         5,698,251
      Economic incentive - City of Gary              926,963                 --           926,963
      Depreciation and amortization                1,992,645                 --         1,992,645
                                                 ------------------------------------------------

           Total costs and expenses               25,601,534             17,582        25,619,116
                                                 ------------------------------------------------

           Operating income                        4,411,991            (17,582)        4,394,409

OTHER INCOME (EXPENSE):
      Loss on investment in
        Buffington Harbor Riverboats, L.L.C         (636,751)                --          (636,751)
      Interest income                                 26,377             62,747            89,124
      Interest expense                            (3,880,266)                --        (3,880,266)
      Other non-operating expense                    (40,165)                --           (40,165)
                                                 ------------------------------------------------
           Total other income (expense)           (4,530,805)            62,747        (4,468,058)

           Net income (loss)                     $  (118,814)          $ 45,165       $   (73,649)
                                                 ================================================
</Table>


                                       17
<PAGE>

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS FOR THE NINE MONTHS ENDED
SEPTEMBER 30, 2002
(UNAUDITED)

<Table>
<Caption>
                                                 MAJESTIC STAR  MAJESTIC INVESTOR    GUARANTOR     ELIMINATING
                                                  CASINO, LLC     HOLDINGS, LLC    SUBSIDIARIES      ENTRIES           CONSOLIDATED
<S>                                              <C>             <C>                <C>            <C>                 <C>
REVENUES:
    Casino                                       $ 98,626,635      $         --     $124,623,910   $         --        $223,250,545
    Rooms                                                  --                --       11,836,762             --          11,836,762
    Food and beverage                               1,239,364                --       14,917,985             --          16,157,349
    Other                                           1,446,292                --        2,894,987             --           4,341,279
                                                 ----------------------------------------------------------------------------------

          Gross Revenues                          101,312,291                --      154,273,644             --         255,585,935

          less promotional allowances              (7,044,482)               --      (25,268,138)            --         (32,312,620)
                                                 ----------------------------------------------------------------------------------

          Net Revenues                             94,267,809                --      129,005,506             --         223,273,315

COSTS AND EXPENSES:
    Casino                                         18,329,449                --       45,198,684             --          63,528,133
    Rooms                                                  --                --        6,784,231             --           6,784,231
    Food and beverage                               1,625,960                --        8,571,704             --          10,197,664
    Other                                                  --                --        1,171,573             --           1,171,573
    Gaming taxes                                   26,153,991                --       14,779,970             --          40,933,961
    Advertising and promotion                       5,335,363                --        9,904,546             --          15,239,909
    General and administrative                     18,761,477            19,878       18,301,918             --          37,083,273
    Economic incentive - City of Gary               2,959,492                --               --             --           2,959,492
    Depreciation and amortization                   5,083,954         1,930,193        8,775,312             --          15,789,459
    (Gain)/loss on disposal of assets                  (8,850)               --            9,311             --                 461
    Pre-opening expenses                                   --           124,269               --             --             124,269
                                                 ----------------------------------------------------------------------------------

          Total costs and expenses                 78,240,836         2,074,340      113,497,249             --         193,812,425
                                                 ----------------------------------------------------------------------------------

          Operating income                         16,026,973        (2,074,340)      15,508,257             --          29,460,890

OTHER INCOME (EXPENSE):
    Loss on investment in
          Buffington Harbor Riverboats, L.L.C      (1,808,204)               --               --             --          (1,808,204)
    Interest income                                    40,158            53,988           41,036             --             135,182
    Interest expense                              (10,784,602)      (13,546,708)         (25,113)            --         (24,356,423)
    Other non-operating expense                      (103,509)          (38,306)              --             --            (141,815)
    Equity in net income (loss) of subsidiaries       (81,186)       15,524,180               --    (15,442,994)(a)              --
                                                 ----------------------------------------------------------------------------------
          Total other income (expense)            (12,737,343)        1,993,154           15,923    (15,442,994)        (26,171,260)

          Net income (loss)                      $  3,289,630      $    (81,186)    $ 15,524,180   $(15,442,994)       $  3,289,630
                                                 ==================================================================================
</Table>

(a)  To eliminate equity in net income of subsidiaries.


                                       18
<PAGE>

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS FOR THE NINE MONTHS ENDED
SEPTEMBER 30, 2001
(UNAUDITED)

<Table>
<Caption>
                                                                   UNRESTRICTED
                                                    PARENT          SUBSIDIARY       CONSOLIDATED
<S>                                              <C>               <C>               <C>
REVENUES:
      Casino                                     $ 93,812,489          $     --      $ 93,812,489
      Food and beverage                             1,210,326                --         1,210,326
      Other                                         1,317,041                --         1,317,041
                                                 ------------------------------------------------

           Gross Revenues                          96,339,856                --        96,339,856

           less promotional allowances             (4,798,170)               --        (4,798,170)
                                                 ------------------------------------------------

           Net Revenues                            91,541,686                --        91,541,686

COSTS AND EXPENSES:
      Casino                                       18,126,914                --        18,126,914
      Food and beverage                             1,764,562                --         1,764,562
      Gaming taxes                                 26,148,146                --        26,148,146
      Advertising and promotion                     5,335,866                --         5,335,866
      General and administrative                   17,566,287            21,470        17,587,757
      Economic incentive - City of Gary             2,815,998                --         2,815,998
      Depreciation and amortization                 6,439,641                --         6,439,641
      Loss on disposal of assets                       12,114                --            12,114
                                                 ------------------------------------------------

           Total costs and expenses                78,209,528            21,470        78,230,998
                                                 ------------------------------------------------

           Operating income (loss)                 13,332,158           (21,470)       13,310,688

OTHER INCOME (EXPENSE):
      Loss on investment in
        Buffington Harbor Riverboats, L.L.C        (2,185,746)               --        (2,185,746)
      Interest income                                 165,483           168,065           333,548
      Interest expense                            (11,123,541)               --       (11,123,541)
      Other non-operating expense                     (87,644)               --           (87,644)
                                                 ------------------------------------------------
           Total other income (expense)           (13,231,448)          168,065       (13,063,383)

           Net income                            $    100,710          $146,595      $    247,305
                                                 ================================================
</Table>


                                       19
<PAGE>

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED
SEPTEMBER 30, 2002 (UNAUDITED)

<Table>
<Caption>
                                                        MAJESTIC STAR MAJESTIC INVESTOR  GUARANTOR    ELIMINATING      CONSOLIDATED
                                                          CASINO, LLC   HOLDINGS, LLC   SUBSIDIARIES    ENTRIES            TOTAL
<S>                                                     <C>           <C>               <C>           <C>              <C>
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES:      $ 7,308,679   $(10,568,902)   $ 22,405,364   $ 3,045,497(a) $ 22,190,638
                                                         --------------------------------------------------------------------------

CASH FLOWS FROM INVESTING ACTIVITIES:
 Acquisition related costs                                         --       (986,158)             --            --         (986,158)
 Proceeds from seller from purchase price adjustment               --      3,800,000              --            --        3,800,000
 Acquisition of property and equipment                     (4,276,313)            --      (3,918,301)           --       (8,194,614)
 Increase in prepaid leases and deposits                      428,005             --              --            --          428,005
 Investment in Buffington Harbor Riverboats, L.L.C            (40,455)            --              --       (40,455)
 Proceeds from sale of equipment                                8,850             --          43,867            --           52,717
                                                         --------------------------------------------------------------------------

   Net cash provided by (used in) investing activities     (3,879,913)     2,813,842      (3,874,434)           --       (4,940,505)
                                                         --------------------------------------------------------------------------

CASH FLOWS FROM FINANCING ACTIVITIES:
 Payment of 11.653% Senior Secured Notes issuance costs            --     (1,410,945)             --            --       (1,410,945)
 Line of credit, net                                               --     (6,500,000)             --            --       (6,500,000)
 Cash advances to/from affiliates                                  --     23,320,999     (20,275,494)   (3,045,497)(a)           --
 Cash paid to reduce long-term debt                                --             --        (104,808)           --         (104,808)
 Distribution to Barden Development, Inc.                    (976,152)    (1,844,206)             --            --       (2,820,358)
                                                         --------------------------------------------------------------------------

   Net cash provided by (used in) financing activities       (976,152)    13,565,840     (20,380,302)   (3,045,497)     (10,836,111)
                                                         --------------------------------------------------------------------------

Net increase (decrease) in cash and cash equivalents        2,452,614      5,810,780      (1,849,372)           --        6,414,022
Cash and cash equivalents, beginning of period              8,220,476        498,363      17,206,452            --       25,925,291
                                                         --------------------------------------------------------------------------
Cash and cash equivalents, end of period                  $10,673,090   $  6,309,143    $ 15,357,080   $        --    $  32,339,313
                                                         --------------------------------------------------------------------------
</Table>

(a)  To eliminate intercompany receivables and payables.



                                       20
<PAGE>

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED
SEPTEMBER 30, 2001 (UNAUDITED)

<Table>
<Caption>
                                                                                       UNRESTRICTED
                                                                        PARENT          SUBSIDIARY       CONSOLIDATED
<S>                                                                  <C>               <C>               <C>
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES:                  $ 5,555,566        $ (674,700)      $ 4,880,866
                                                                     ------------------------------------------------

CASH FLOWS FROM INVESTING ACTIVITIES:
      Acquisition of property, equipment and vessel improvements       (4,826,140)               --        (4,826,140)
      Distribution from Buffington Harbor Riverboats, L.L.C             8,825,416                --         8,825,416
      Increase in prepaid lease and deposits                           (6,213,615)               --        (6,213,615)
      Purchase of naming rights                                        (1,000,000)               --        (1,000,000)
      Proceeds from sale of slot machines                                   1,850                --             1,850
      Investment in Buffington Harbor Riverboats, L.L.C                  (171,117)               --          (171,117)
                                                                     ------------------------------------------------

           Net cash used in investing activities                       (3,383,606)               --        (3,383,606)
                                                                     ------------------------------------------------

CASH FLOWS FROM FINANCING ACTIVITIES:
      Line of credit, net                                              (5,300,000)               --        (5,300,000)
      Cash paid to reduce long-term debt                                 (977,715)               --          (977,715)
                                                                     ------------------------------------------------

           Net cash used in financing activities                       (6,277,715)               --        (6,277,715)
                                                                     ------------------------------------------------

Net decrease in cash and cash equivalents                              (4,105,755)         (674,700)       (4,780,455)
Cash and cash equivalents, beginning of period                         12,550,681         3,568,831        16,119,512
                                                                     ------------------------------------------------
Cash and cash equivalents, end of period                              $ 8,444,926        $2,894,131       $11,339,057
                                                                     ------------------------------------------------
</Table>


NOTE 12. SUBSEQUENT EVENTS

         At September 30, 2002, Majestic Star employed approximately 1,035
persons and the BHR Joint Venture ("BHR") employed approximately 234 persons.
Majestic Star and BHR have collective bargaining agreements with Local 1 of the
Hotel Employees and Restaurant Employees International Union ("H.E.R.E.")
covering approximately 66 employees of Majestic Star and approximately 110
employees of the BHR Joint Venture. Majestic Star's H.E.R.E. members are
exclusively in food and beverage positions. The agreements expired on June 30,
2001 and a new agreement was ratified on November 6, 2002 and expires on October
31, 2004 for Majestic Star employees. The annual incremental cost of the
contract is approximately $50,000 per year and the average annual wage increase
is 3.3% for the total bargaining unit. The agreement also includes retroactive
pay of approximately $49,000 for all employees that were on the payroll as of
the date of ratification. BHR's agreement is currently being negotiated.

         On October 17, 2002, Majestic Investor Holdings, LLC redeemed
$865,000 of its 11.653% Senior Secured Notes at a discount to par of 87 3/4%,
plus accrued interest of $38,359.


                                       21
<PAGE>

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

STATEMENT OF FORWARD-LOOKING INFORMATION

         This quarterly report includes statements that constitute
"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, and are subject to the safe harbor provisions of those sections and
the Private Securities Litigation Reform Act of 1995. Words such as "believes,"
"anticipates," "estimates", "plans", "intends", "will", "could", or "expects"
used in the Company's press releases and reports filed with the Securities and
Exchange Commission are intended to identify forward-looking statements. All
forward-looking statements involve risks and uncertainties. Although the Company
believes its expectations are based upon reasonable assumptions within the
bounds of its current knowledge of its business and operations, there can be no
assurances that actual results will not materially differ from expected results.
The Company cautions that these and similar statements included in this report
and in previously filed periodic reports are further qualified by important
factors that could cause actual results to differ materially from those in the
forward-looking statements. Such factors include, without limitation, the
following: the risk of the Joint Venture Partner not making its lease payments
when due in connection with the parking facility constructed at the Company's
gaming complex; the ability to fund planned development needs and to service
debt from existing operations; increased competition in existing markets or the
opening of new gaming jurisdictions; a decline in the public acceptance of
gaming; the limitation, conditioning or suspension of the Company's gaming
license; increases in or new taxes imposed on gaming revenues; admission taxes;
taxes on gaming devices; a finding of unsuitability by regulatory authorities
with respect to the Company or its officers, or key employees; loss and/or
retirement of key executives; a significant increase in fuel or transportation
prices; adverse economic conditions in the Company's markets; severe and unusual
weather in the Company's markets; non-renewal of the Company's or any of its
operating subsidiaries' gaming license from the appropriate regulatory
authorities; adverse results of significant litigation matters; and future
occurrences of terrorist attacks or other destabilizing events.

         We caution readers not to place undue reliance on forward-looking
statements, which speak only as of the date thereof. All subsequent written and
oral forward-looking statements attributable to us are expressly qualified in
their entirety by the cautionary statements and factors that may affect future
results contained throughout this report. The Company undertakes no obligation
to publicly release any revisions to such forward-looking statements to reflect
events or circumstances after the date hereof.

         The following discussion should be read in conjunction with, and is
qualified in its entirety by, our financial statements, including the notes
thereto listed in Item 1.

OVERVIEW

         The Majestic Star Casino ("Majestic Star"), the Company's riverboat
gaming facility located in Gary, Indiana, has been owned and operated by the
Company since 1996. On December 6, 2001, the Company, through certain
"unrestricted subsidiaries," acquired three Fitzgeralds brand casino-hotels.


                                       22
<PAGE>
         The Company's 10 7/8% Senior Secured Notes (the "Notes") are secured
primarily by the assets of the riverboat casino. The Fitzgeralds assets are held
by the "unrestricted subsidiaries" and excluded from the collateral securing the
Notes. As the Company's noteholders have no recourse to the Fitzgeralds assets,
Management's Discussion and Analysis of Financial Condition and Results of
Operations focuses primarily on the results of the Majestic Star Casino as well
as the Company and its subsidiaries on a consolidated basis. For a discussion of
the results of the Fitzgeralds properties, please refer to the Majestic Investor
Holdings, LLC Quarterly Report on Form 10-Q for the quarterly period ended
September 30, 2002, as filed with the Securities and Exchange Commission (the
"Investor Holdings 10-Q").

         The gaming operations of Majestic Star may be affected by inclement
weather in the Chicago metropolitan market. Due to the climate in the Chicago
metropolitan area, Majestic Star's operations are expected to be seasonal with
stronger results generally expected during the period from May through
September. Accordingly, the Company's results of operations are expected to
fluctuate from quarter to quarter and the results for any fiscal quarter may not
be indicative of results for future fiscal quarters.

         At September 30, 2002, Majestic Star employed approximately 1,035
persons and the BHR Joint Venture ("BHR") employed approximately 234 persons.
Majestic Star and BHR have collective bargaining agreements with Local 1 of the
Hotel Employees and Restaurant Employees International Union ("H.E.R.E.")
covering approximately 66 employees of Majestic Star and approximately 110
employees of the BHR Joint Venture. Majestic Star's H.E.R.E. members are
exclusively in food and beverage positions. The agreements expired on June 30,
2001 and a new agreement was ratified on November 6, 2002 and expires on October
31, 2004 for Majestic Star employees. The annual incremental cost of the
contract is approximately $50,000 per year and the average annual wage increase
is 3.3% for the total bargaining unit. The agreement also includes retroactive
pay of approximately $49,000 for all employees that were on the payroll as of
the date of ratification. BHR's agreement is currently being negotiated.

         On October 18, 2002, Jon Bennett was named as the Company's Vice
President and Chief Financial Officer. Mr. Bennett will oversee all aspects of
the Company's financial management, accounting and reporting processes for its
four casinos and two hotels.

RESULTS OF OPERATIONS

         The following discussion provides a comparison of the results of
operations of Majestic Star, and the Company and its subsidiaries on a
consolidated basis, for the three and nine month periods ended September 30,
2002, with the three and nine month periods ended September 30, 2001. On a
consolidated basis, gross revenues increased approximately $56,653,000 and
$159,246,000 (or 178.6% and 165.3%) to approximately $88,369,000 and
$255,586,000 during the three and nine months ended September 30, 2002, compared
to $31,716,000 and $96,340,000 during the three and nine months ended September
30, 2001. Such increase is primarily the result of the acquisition of the
Fitzgeralds casino properties on December 6, 2001.

         The following table sets forth information derived from the Company's
consolidated statements of income for the three and nine months ended September
30, 2002 and 2001, expressed as a percentage of gross revenues.


                                       23
<PAGE>

           CONSOLIDATED STATEMENTS OF OPERATIONS - SUMMARY INFORMATION
                             (DOLLARS IN THOUSANDS)

<Table>
<Caption>
                                         THREE MONTHS ENDED SEPTEMBER 30,                 NINE MONTHS ENDED SEPTEMBER 30,
                                             2002                2001                         2002               2001
                                         --------------------------------                 -------------------------------
<S>                                      <C>                <C>                           <C>               <C>
Gross Revenues                            $88,369           $31,716                         $255,586          $96,340
Operating Income                          $ 9,983           $ 4,394                         $ 29,461          $13,311
Adjusted EBITDA(1)                        $15,770           $ 6,387                         $ 45,597          $19,762
</Table>

      CONSOLIDATED STATEMENTS OF OPERATIONS - PERCENTAGE OF GROSS REVENUES

<Table>
<Caption>
                                                         THREE MONTHS ENDED SEPTEMBER 30,          NINE MONTHS ENDED SEPTEMBER 30,
                                                            2002                   2001              2002                   2001
                                                         --------------------------------          -------------------------------
<S>                                                      <C>                    <C>                <C>                    <C>
REVENUES:
      Casino                                                87.9%                  97.4%             87.4%                  97.3%
      Rooms                                                  4.3%                     -%              4.6%                     -%
      Food and beverage                                      6.1%                   1.2%              6.3%                   1.3%
      Other                                                  1.7%                   1.4%              1.7%                   1.4%
                                                          -----------------------------            -----------------------------
           Gross Revenues                                  100.0%                 100.0%            100.0%                 100.0%
           less promotional allowances                     (13.1)%                 (5.4)%           (12.6)%                 (5.0)%
                                                          -----------------------------            -----------------------------
           Net Revenues                                     86.9%                  94.6%             87.4%                  95.0%
COSTS AND EXPENSES:
      Casino                                                24.5%                  18.8%             24.9%                  18.8%
      Rooms                                                  2.7%                    -%               2.7%                     -%
      Food and beverage                                      3.9%                   1.8%              4.0%                   1.8%
      Other                                                  0.4%                    -%               0.5%                     -%
      Gaming taxes                                          15.7%                  27.2%             16.0%                  27.1%
      Advertising and promotion                              5.8%                   5.8%              6.0%                   5.5%
      General and administrative                            15.1%                  18.0%             14.5%                  18.3%
      Economic incentive - City of Gary                      1.2%                   2.9%              1.2%                   2.9%
      Depreciation and amortization                          6.3%                   6.3%              6.2%                   6.7%
      (Gain)/loss on disposal of assets                      0.0%                     -%              0.0%                   0.0%
      Pre-opening expenses                                     -%                     -%              0.0%                     -%
                                                          -----------------------------            -----------------------------
           Total costs and expenses                         75.6%                  80.8%             76.0%                  81.1%
                                                          -----------------------------            -----------------------------
           Operating income                                 11.3%                  13.8%             11.4%                  13.9%
OTHER INCOME (EXPENSE):
      Loss on investment in
        Buffington Harbor Riverboats, L.L.C                 (0.7)%                 (2.0)%            (0.7)%                 (2.3)%
      Interest income                                        0.1%                   0.3%              0.1%                   0.3%
      Interest expense                                      (9.1)%                (12.2)%            (9.5)%                (11.5)%
      Other non-operating expense                           (0.1)%                 (0.1)%            (0.1)%                 (0.1)%
                                                          -----------------------------            -----------------------------
           Total other income (expense)                     (9.8)%                (14.0)%           (10.2)%                (13.6)%
           Net income (loss)                                 1.5%                  (0.2)%             1.2%                   0.3%
                                                          =============================            =============================

Adjusted EBITDA:(1)                                         17.8%                  20.1%             17.8%                  20.5%
</Table>

NOTES:

(1)   Adjusted EBITDA (defined as earnings before interest, income taxes,
      depreciation and amortization, (gain)/loss on sale of assets, other
      non-operating expenses and excluding pre-opening costs associated with the
      acquisition of the Fitzgeralds casinos, reorganization items related to
      the bankruptcy of the predecessor company and approximately $222,000 for
      severance payments associated with dockside gaming) is presented solely as
      a supplemental disclosure to assist in the evaluation of the Company's
      ability to generate cash flow. In particular, the Company believes that an
      analysis of Adjusted EBITDA enhances the understanding of the financial
      performance of companies with substantial depreciation and amortization.

      Results from any one or more periods are not necessarily indicative of
      annual results or continuing trends.

                                       24
<PAGE>

COMPARISON OF THE THREE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001

         Consolidated gross revenues for the three months ended September 30,
2002 amounted to approximately $88,369,000, an increase of approximately
$56,653,000, or 178.6% from consolidated gross revenues recorded in the three
months ended September 30, 2001. The increase was principally attributable to
the acquisition of the Fitzgeralds casino properties on December 6, 2001.
Majestic Star accounted for approximately $36,753,000, or 41.6% of gross
revenues for the three months ended September 30, 2002, which reflects an
increase of approximately $5,037,000 in Majestic Star's revenues on an
unconsolidated basis, or 15.9%, compared to the three months ended September 30,
2001. Effective August 5, 2002, Majestic Star commenced dockside gaming.
Dockside gaming eliminates the requirement to cruise and provides the guests
with continual access to the riverboat casino. The $5,037,000, or 15.9%,
increase in gross revenues at Majestic Star was primarily attributable to a
$4,926,000, or 18.8%, increase in slot revenues which resulted from increased
patronage after the commencement of dockside gaming and the recent opening of
the 2000 space parking garage at the gaming facility.

         The Company's business can be separated into four operating
departments: casino, hotel rooms (except Fitzgeralds Black Hawk and Majestic
Star), food and beverage and other. Consolidated casino revenues for the three
months ended September 30, 2002 totaled approximately $77,690,000, of which slot
machines accounted for approximately $68,549,000, or 88.2%, and table games
accounted for approximately $9,141,000, or 11.8%. Majestic Star's casino
revenues during the three months ended September 30, 2002 totaled approximately
$35,847,000, an increase of approximately $4,966,000, or 16.1%, of which slot
machines accounted for approximately $31,105,000, or 86.8%, and table games
accounted for approximately $4,742,000, or 13.2%. The average number of slot
machines in operation at Majestic Star increased to 1,546 during the three
months ended September 30, 2002, from 1,420 during the three months ended
September 30, 2001. The average win per slot machine per day at Majestic Star
increased to approximately $219 for the three months ended September 30, 2002,
from approximately $200 during the three months ended September 30, 2001. The
average number of table games in operation at Majestic Star during the three
months ended September 30, 2002 and 2001, was 54 and 49, respectively. The
average win per table game per day during the three months ended September 30,
2002 decreased to approximately $961, compared to approximately $1,043 during
the three months ended September 30, 2001. The average daily win per patron was
approximately $58 during the three months ended September 30, 2002, compared to
an average daily win per patron of $66 for the three months ended September 30,
2001.

         Consolidated hotel room revenues totaled $3,809,000, or 4.3% of the
gross revenues for the three months ended September 30, 2002 and was attributed
to operations of two of the Fitzgeralds properties. Majestic Star does not
operate a hotel.

         Consolidated food and beverage revenues for the three months ended
September 30, 2002 totaled approximately $5,341,000, or 6.1% of gross revenues,
compared to approximately $385,000, or 1.2% of gross revenues for the three
months ended September 30, 2001. Majestic Star accounted for approximately
$404,000, or 7.6% of consolidated food and beverage revenues for the three
months ended September 30, 2002, which reflects an increase of approximately
$19,000 in such revenues at Majestic Star, or 4.9%, compared to the three months
ended September 30, 2001.

         Consolidated other revenues for the three months ended September 30,
2002 totaled approximately $1,529,000, or 1.7% of consolidated gross revenues,
compared to approximately $450,000, or 1.4% of consolidated gross revenues
during the three months ended September 30, 2001. Majestic Star accounted for
approximately $501,000, or 32.8% of consolidated other


                                       25
<PAGE>

revenues for the three months ended September 30, 2002, an increase of $51,000,
or 11.4%, compared to the three months ended September 30, 2001. Other revenue
at Majestic Star consisted primarily of commission income.

         Consolidated promotional allowances deducted from the Company's
consolidated gross revenues for the three months ended September 30, 2002 and
2001 were approximately $11,553,000, or 13.1% of consolidated gross revenues,
and $1,703,000, or 5.4% of consolidated gross revenues, respectively. Of this
amount, Majestic Star accounted for approximately $3,242,000, or 28.1% of
consolidated promotional allowances, an increase of $1,539,000, or 90.4%,
compared to the three months ended September 30, 2001. The increase in
promotional allowances is primarily attributed to a 21.2 % increase in rated
slot play and associated incentives. Promotional allowances provided to the
Majestic Star's gaming patrons at facilities located in and/or owned by BHR for
the three months ended September 30, 2002 and 2001 were approximately $285,000
and $197,000, respectively, and are characterized in the financial statements as
an expense. BHR and other third party operators of food kiosks invoice the
Company monthly for these promotional allowances at cost, which approximates
retail value.

         Consolidated casino operating expenses for the three months ended
September 30, 2002 totaled approximately $21,691,000, or 24.5% of consolidated
gross revenues and 27.9% of consolidated casino revenues, respectively, compared
to approximately $5,954,000, or 18.8% of gross revenues and 19.3% of casino
revenues, respectively, for the three months ended September 30, 2001. These
expenses were primarily comprised of salaries, wages and benefits, and operating
expenses of the casinos. Majestic Star's casino operating expenses accounted for
approximately $6,619,000, or 18.0% of Majestic Star gross revenues and 18.5% of
Majestic Star casino revenues, compared to approximately $5,954,000, or 18.8% of
Majestic Star gross revenues and 19.3% of Majestic Star casino revenues,
respectively, for the three months ended September 30, 2001.

         Consolidated gaming taxes totaled approximately $13,909,000 for the
three months ended September 30, 2002, compared to approximately $8,639,000 for
the three months ended September 30, 2001. During the three months ended
September 30, 2002, in Indiana gaming taxes were levied on adjusted gross
receipts, as defined by Indiana gaming laws, at a flat rate of 22.5% of adjusted
gross receipts for the period July 1, 2002 through August 4, 2002. Beginning
August 5, 2002, in connection with the commencement of dockside gaming, Majestic
Star began using an effective rate to calculate gaming tax expense associated
with adjusted gross receipts. On August 5, 2002, a graduated tax structure with
a starting rate of 15% and a top rate of 35% for adjusted gross receipts in
excess of $150 million was implemented by the State of Indiana and Majestic
Star accounted for approximately $8,927,000 and $8,639,000 of gaming taxes
during the three months ended September 30, 2002 and 2001, respectively. An
additional $1,072,000 was paid during the three months ended September 30,
2002, compared to approximately $927,000 in the three months ended
September 30, 2001, to the City of Gary under an agreement whereby Majestic
Star pays 3% of the adjusted gross receipts directly to the city.

         Advertising and promotion expenses included salaries, wages and
benefits of the marketing and casino service departments, as well as promotions,
advertising and special events. Consolidated advertising and promotion expenses
for the three months ended September 30, 2002 totaled approximately $5,109,000,
or 5.8% of gross revenues, compared to approximately $1,830,000, or 5.8% of
gross revenues during the three months ended September 30, 2001. Of this amount,
Majestic Star accounted for approximately $2,258,000 for the three months ended


                                       26
<PAGE>

September 30, 2002, and approximately $1,830,000 for the three months ended
September 30, 2001. The $428,000, or 23.4%, increase in advertising and
promotion expenses during the three months ended September 30, 2002, was
primarily the result of an increase in marketing expenditures associated with
flexible boarding and the newly opened parking garage.

         Consolidated general and administrative expenses for the three months
ended September 30, 2002 were approximately $13,312,000, or 15.1% of gross
revenues, compared to $5,698,000, or 18.0% of gross revenues, during the three
months ended September 30, 2001. Majestic Star accounted for approximately
$6,882,000 for the three months ended September 30, 2002 and $5,681,000 for the
three months ended September 30, 2001. These expenses included approximately
$1,422,000 for berthing fees paid to BHR and $1,592,000 for marine operations,
including housekeeping during the three months ended September 30, 2002. The
$1,201,000, or 21.1%, increase in these expenses is primarily attributed to an
increase of approximately $390,000 for the parking garage lease, approximately
$361,000 for corporate expenses which did not exist in the prior year,
approximately $314,000 for property insurance and taxes and a special charge of
approximately $222,000 for severance payments related to implementing dockside
during the three months ended September 30, 2002.

         Consolidated depreciation and amortization for the three months ended
September 30, 2002 was approximately $5,555,000, or 6.3% of gross revenues,
compared to approximately $1,993,000, or 6.3% of gross revenues, during the
three months ended September 30, 2001. Depreciation and amortization attributed
to Majestic Star for the three months ended September 30, 2002 was approximately
$1,730,000, of which approximately $1,437,000 relates to depreciation expense
and approximately $293,000 relates to amortization expense, compared to
approximately $1,993,000 during the three months ended September 30, 2001. The
dollar decrease totaled approximately $263,000, or 13.2%. The decrease for the
three months ended September 30, 2002 is primarily attributable to machinery and
equipment being fully depreciated and deferred licensing fees being fully
amortized.

         Consolidated operating income for the three months ended September 30,
2002 was $9,983,000, or 11.3% of gross revenues, compared to an operating income
for the three months ended September 30, 2001 of $4,394,000, or 13.9% of gross
revenues. Operating income attributed to Majestic Star for the three months
ended September 30, 2002 was approximately $5,450,000, or 14.8% of gross
Majestic Star revenues, compared to $4,412,000, or 13.9% of gross revenues,
during the three months ended September 30, 2001. The $1,038,000, or 23.5%,
increase in operating income is principally attributed to an 11.7% increase in
net revenues and a $263,000, or 13.2%, decrease in depreciation and
amortization.

         The consolidated net interest expense for the three months ended
September 30, 2002 was approximately $8,015,000, or 9.0% of gross revenues,
compared to approximately $3,791,000, or 11.9% of gross revenues for the same
period last year. Net interest expense attributed to Majestic Star for the three
months ended September 30, 2002 was approximately $3,585,000, or 9.8% of gross
revenues, compared to $3,854,000, or 12.2% of gross revenues for the same period
last year, a decrease of $269,000, or 7.0%.

         The Company's loss relating to its investment in BHR, principally for
depreciation and amortization, for the three months ended September 30, 2002 and
2001, was approximately $600,000 and $637,000, respectively. Costs of
approximately $1,422,000 and $1,511,000 associated with operating BHR are
included in the operating expense line "General and Administrative" and are
fully reflected in operating income for the three months ended September 30,
2002 and 2001, respectively. Other non-operating expenses attributed to Majestic
Star of


                                       27
<PAGE>

$39,000 and $40,000 for the three months ended September 30, 2002 and 2001,
respectively, represent fees associated with the Majestic Star Credit Facility.

         As a result of the foregoing, the Company realized consolidated net
income of approximately $1,319,000 for the three months ended September 30, 2002
compared to a consolidated net loss of approximately $74,000 during the three
months ended September 30, 2001. Majestic Star (Gary property only) realized net
income of $1,226,000 during the three months ended September 30, 2002, compared
to a net loss of $119,000 during the three months ended September 30, 2001. The
$1,345,000 increase in net income is principally attributed to an increase in
net revenues combined with a decrease as previously discussed in depreciation,
amortization and loss on investment in BHR.

COMPARISON OF THE NINE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001

         Consolidated gross revenues for the nine months ended September 30,
2002 amounted to approximately $255,586,000 an increase of approximately
$159,246,000, or 165.3%, from consolidated gross revenues recorded in the nine
months ended September 30, 2001. The increase was principally attributable to
the acquisition of the Fitzgeralds casino properties on December 6, 2001.
Majestic Star accounted for approximately $101,312,000, or 39.6% of consolidated
gross revenues for the nine months ended September 30, 2002, which reflects an
increase of $4,972,000 in Majestic Star's revenues on an unconsolidated basis
compared to the nine months ended September 30, 2001. Effective August 5, 2002,
Majestic Star commenced dockside gaming. Dockside gaming eliminates the
requirement to cruise and provides the guests with continual access to the
riverboat casino. Management believes dockside gaming will result in increased
patronage of its riverboat gaming facility.

         The Company's business can be separated into four operating
departments: casino, hotel rooms (except Fitzgeralds Black Hawk and Majestic
Star), food and beverage and other. Consolidated casino revenues for the nine
months ended September 30, 2002 totaled approximately $223,251,000, of which
slot machines accounted for approximately $195,787,000, or 87.7%, and table
games accounted for approximately $27,464,000, or 12.3%. Majestic Star's casino
revenues during the nine months ended September 30, 2002 totaled approximately
$98,627,000, an increase of approximately $4,815,000, or 5.1%, of which slot
machines accounted for approximately $85,178,000, or 86.4%, and table games
accounted for approximately $13,449,000, or 13.6%. The average number of slot
machines in operation at Majestic Star increased to 1,498 during the nine months
ended September 30, 2002, from 1,426 during the nine months ended September 30,
2001. The average win per slot machine per day at Majestic Star increased
slightly to approximately $208 for the nine months ended September 30, 2002,
from approximately $203 during the nine months ended September 30, 2001. The
average number of table games in operation at Majestic Star during the nine
months ended September 30, 2002 and 2001, was 52 and 50, respectively. The
average win per table game per day during the nine months ended September 30,
2002, decreased to approximately $941 compared to approximately $1,073 during
the nine months ended September 30, 2001. The average daily win per patron was
approximately $65 during the nine months ended September 30, 2002, compared to
an average daily win per patron of $68 for the nine months ended September 30,
2001.

         Consolidated hotel room revenues totaled $11,837,000, or 4.6% of the
gross revenues for the nine months ended September 30, 2002 and was attributed
to operations of two of the Fitzgeralds properties. Majestic Star does not
operate a hotel.

         Consolidated food and beverage revenues for the nine months ended
September 30, 2002, totaled approximately $16,157,000, or 6.3% of gross
revenues, compared to approximately


                                       28
<PAGE>

$1,210,000, or 1.3% of gross revenues, for the nine months ended September 30,
2001. Majestic Star accounted for approximately $1,239,000, or 7.7% of
consolidated food and beverage revenues for the nine months ended September 30,
2002, which reflects an increase of $29,000 in such revenues at Majestic Star,
or 2.4%, compared to the nine months ended September 30, 2001.

         Consolidated other revenues for the nine months ended September 30,
2002 totaled approximately $4,341,000, or 1.7% of gross revenues, compared to
approximately $1,317,000, or 1.4% of gross revenues during the nine months ended
September 30, 2001. Majestic Star accounted for approximately $1,446,000, or
33.7% of consolidated other revenues for the nine months ended September 30,
2002, an increase of $129,000, or 9.8%, compared to the nine months ended
September 30, 2001. Other revenue at Majestic Star consisted primarily of
commission income.

         Consolidated promotional allowances deducted from the Company's gross
revenues for the nine months ended September 30, 2002 and 2001, were
approximately $32,313,000, or 12.6% of gross revenues, and $4,798,000, or 5.0%
of gross revenues, respectively. Of this amount, Majestic Star accounted for
approximately $7,044,000, or 21.8% of consolidated promotional allowances, an
increase of $2,246,000, or 46.8%, compared to the nine months ended September
30, 2001. The increase in promotional allowances is primarily attributed to a
7.6% increase in rated slot play and associated incentives. Promotional
allowances provided to the Majestic Star's gaming patrons at facilities located
in and/or owned by BHR for the nine months ended September 30, 2002 and 2001
were approximately $688,000 and $578,000, respectively, and are characterized in
the financial statements as an expense. BHR and other third party operators of
food kiosks invoice the Company monthly for these promotional allowances at
cost, which approximates retail value.

         Consolidated casino operating expenses for the nine months ended
September 30, 2002 totaled approximately $63,528,000, or 24.9% of gross revenues
and 28.5% of casino revenues, respectively, compared to approximately
$18,127,000, or 18.8% of gross revenues and 19.3% of casino revenues,
respectively, for the nine months ended September 30, 2001. These expenses were
primarily comprised of salaries, wages and benefits, and operating expenses of
the casinos. Majestic Star's casino operating expenses accounted for
approximately $18,329,000, or 18.1% of Majestic Star gross revenues and 18.6% of
Majestic Star casino revenues, compared to approximately $18,127,000, or 18.8%
of Majestic Star gross revenues and 19.3% of Majestic Star casino revenues,
respectively, for the nine months ended September 30, 2001. The dollar increase
of approximately $202,000, or 1.1% is primarily attributed to an increase in
casino expenses of $414,000 for progressive expense, $221,000 in payroll and
related benefits and $164,000 for the cost of complementaries which was
partially offset by various operating expenses.

         Consolidated gaming taxes totaled approximately $40,934,000 for the
nine months ended September 30, 2002, compared to approximately $26,148,000 for
the nine months ended September 30, 2001. During the six months ended June 30,
2002, Indiana gaming taxes were levied on adjusted gross receipts, as defined by
Indiana gaming laws, at the rate of 20% plus $3 per passenger per the state
passenger count. During the three months ended September 30, 2002, in Indiana,
gaming taxes were levied on adjusted gross receipts, as defined by Indiana
gaming laws, at a flat rate of 22.5% of adjusted gross receipts for the period
July 1, 2002 through August 4, 2002. Beginning August 5, 2002, in connection
with the commencement of dockside gaming, Majestic Star began using an effective
rate to calculate gaming tax expense associated with adjusted gross receipts. On
August 5, 2002 a graduated tax structure with a starting rate of 15% and a top
rate of 35% for adjusted gross receipts in excess of $150 million was
implemented by the State of Indiana and Majestic Star accounted for
approximately $26,154,000 and


                                       29
<PAGE>

$26,148,000 of gaming taxes during the nine months ended September 30, 2002 and
2001, respectively. An additional $2,959,000 was paid during the nine months
ended September 30, 2002, compared to approximately $2,816,000 in the nine
months ended September 30, 2001, to Gary under an agreement whereby Majestic
Star pays 3% of the adjusted gross receipts directly to the City of Gary.

         Consolidated advertising and promotion expenses includes salaries,
wages and benefits of the marketing and casino service departments, as well as
promotions, advertising and special events. Consolidated advertising and
promotion expenses for the nine months ended September 30, 2002 totaled
approximately $15,240,000, or 6.0% of gross revenues, compared to approximately
$5,336,000, or 5.5% of gross revenues during the nine months ended September 30,
2001. Of this amount, Majestic Star accounted for approximately $5,335,000 for
the nine months ended September 30, 2002 and approximately $5,336,000 for the
nine months ended September 30, 2001.

         Consolidated general and administrative expense for the nine months
ended September 30, 2002, were approximately $37,194,000, or 14.6% of gross
revenues, compared to $17,588,000, or 18.3% of gross revenues, during the nine
months ended September 30, 2001. Majestic Star accounted for approximately
$18,761,000 for the nine months ended September 30, 2002 and $17,566,000 for the
nine months ended September 30, 2001. These expenses included approximately
$4,372,000 for berthing fees paid to BHR and $4,727,000 for marine operations,
including housekeeping during the nine months ended September 30, 2002.

         Consolidated depreciation and amortization for the nine months ended
September 30, 2002, was approximately $15,789,000, or 6.2% of gross revenues,
compared to approximately $6,440,000, or 6.7% of gross revenues, during the nine
months ended September 30, 2001. Depreciation and amortization attributed to
Majestic Star for the nine months ended September 30, 2002 was approximately
$5,084,000, or 5.0% of Majestic Star's gross revenues, of which approximately
$4,204,000 is depreciation expense and approximately $880,000 is amortization
expense, compared to approximately $6,440,000, or 6.7% for the nine months ended
September 30, 2001. The dollar decrease totaled approximately $1,356,000, or
21.1% for the nine months ended September 30, 2002 and is primarily attributable
to machinery and equipment being fully depreciated and deferred licensing fees
being fully amortized.

         Consolidated operating income for the nine months ended September 30,
2002 was $29,461,000, or 11.4% of gross revenues, compared to an operating
income for the nine months ended September 30, 2001 of $13,311,000, or 13.9% of
gross revenues. Operating income attributed to Majestic Star for the nine months
ended September 30, 2002 was approximately $16,027,000, or 15.8% of gross
Majestic Star revenues, compared to $13,332,000, or 13.9% of gross revenues,
during the nine months ended September 30, 2001. The $2,695,000, or 20.2%
increase in operating income is principally attributed to a $2,726,000, or 3.0%
increase in net revenues and a decrease in depreciation and amortization as
previously discussed.

         The consolidated net interest expense for the nine months ended
September 30, 2002 was approximately $24,221,000, or 9.4% of gross revenues,
compared to approximately $10,790,000, or 11.2% of gross revenues for the same
period last year. Net interest expense attributed to Majestic Star for the nine
months ended September 30, 2002 was approximately $10,744,000, or 10.6% of gross
revenues, compared to $10,958,000, or 11.4% of gross revenues for the same
period last year.

         The Company's loss relating to its investment in BHR, principally for
depreciation and amortization, for the nine months ended September 30, 2002 and
2001 was approximately


                                       30
<PAGE>

$1,808,000 and $2,186,000, respectively. Costs of approximately $4,372,000 and
$4,718,000 associated with operating BHR are included in the operating expense
line "General and Administrative" and are fully reflected in operating income
for the nine months ended September 30, 2002 and 2001, respectively. Other
non-operating expenses attributed to Majestic Star of $104,000 and $88,000 for
the nine months ended September 30, 2002 and 2001, respectively, represent fees
associated with the Majestic Star Credit Facility.

         As a result of the foregoing, the Company realized consolidated net
income of approximately $3,290,000 for the nine months ended September 30, 2002
compared to consolidated net income of approximately $247,000 during the nine
months ended September 30, 2001. Majestic Star realized net income of $3,371,000
during the nine months ended September 30, 2002, compared to net income of
$101,000 during the nine months ended September 30, 2001, an increase of
$3,270,000, or 3,237.6%. The increase in net income is principally attributed to
an increase in net revenues combined with a decrease as previously discussed in
depreciation, amortization and loss on investment in BHR.

         Adjusted EBITDA is presented solely as a supplemental disclosure and is
used by the Company to assist in the evaluation of the cash generating ability
of its gaming business. Consolidated Adjusted EBITDA represents earnings before
interest, income taxes, depreciation and amortization, (gain)/loss on sale of
assets, other non-operating expenses and excluding pre-opening costs associated
with the acquisition of the Fitzgeralds casinos, reorganization items related to
the bankruptcy of the predecessor company and approximately $222,000 for
severance payments associated with dockside gaming. Consolidated Adjusted EBITDA
during the three and nine months ended September 30, 2002 was approximately
$15,770,000 and $45,597,000, respectively, or 17.8% and 17.8% of gross revenues.
Adjusted EBITDA attributed to Majestic Star during the three and nine months
ended September 30, 2002 was approximately $7,401,000 and $21,324,000,
respectively, or 20.1% and 21.0% of gross Majestic Star revenues, compared to
approximately $6,405,000 and $19,784,000, respectively, or 20.2% or 20.5% of
gross Majestic Star revenues during the three and nine months ended September
30, 2001. The increases of $996,000 and $1,540,000, or 15.6% and 7.8%,
respectively, in Adjusted EBITDA at Majestic Star is primarily the result of an
increase in net revenues. The growth in net revenues and Adjusted EBITDA in the
third quarter ended September 30, 2002 is a result of dockside gaming combined
with the new 2,000 space parking garage, each of which the Company believes
resulted in increased patronage of its riverboat gaming facility. Adjusted
EBITDA for Majestic Star during the three and nine months ended September 30,
2002 and 2001 excludes loss on investment in BHR, gain or loss on disposal of
assets and certain non-operating items, including a special charge of $222,000
for severance payments related to dockside gaming. Adjusted EBITDA should be
viewed only in conjunction with all of the Company's financial data and
statements, and should not be construed as an alternative either to income from
operations (as an indicator of the Company's operating performance) or to cash
flows from operating activities as a measure of liquidity.

LIQUIDITY AND CAPITAL RESOURCES

         At September 30, 2002, the Company had cash and cash equivalents of
approximately $32.3 million. This amount included $21.6 million at Majestic
Investor Holdings, LLC and $10.7 million at Majestic Star. During the nine
months ended September 30, 2002, the Company's capital expenditures were
approximately $8.2 million, which included approximately $4.3 million at
Majestic Star primarily for vessel improvements and gaming equipment.

         The Company has met its capital requirements to date through net cash
from operations and proceeds of $3.8 million from Fitzgeralds Gaming Corporation
related to the purchase price adjustment on certain assets and liabilities
acquired by Majestic Investor Holdings, LLC on December 6, 2001. For the nine
months ended September 30, 2002, on a consolidated basis, net cash provided by
operating activities totaled approximately $22.2 million and cash used by
investing activities totaled approximately $4.9 million, compared to net cash
provided by


                                       31
<PAGE>
operating activities of approximately $4.9 million and cash used by investing
activities of approximately $3.4 million, on a consolidated basis, during the
nine months ended September 30, 2001. At Majestic Star for the nine months ended
September 30, 2002, net cash provided by operating activities totaled
approximately $7.3 million and cash used by investing activities totaled
approximately $3.9 million, compared to approximately $5.6 million provided by
operating activities and $3.4 million used by investing activities, during the
nine months ended September 30, 2001. On a consolidated basis, for the nine
months ended September 30, 2002, cash used by financing activities totaled
approximately $10.8 million, compared to $6.3 million used in financing
activities during the nine months ended September 30, 2001. At Majestic Star for
the nine months ended September 30, 2002, cash used by financing activities
totaled approximately $976,000, compared to $6.3 million used in financing
activities during the nine months ended September 30, 2001. At September 30,
2002, this amount includes distributions made to Barden Development, Inc. of
$976,000 in accordance with the Management Agreement between the Company and BDI
dated June 18, 1999.

         In connection with the issuance by Majestic Investor Holdings, LLC
("Majestic Investor Holdings") of $152,632,000 of unregistered 11.653% Senior
Secured Notes due 2007 (the "Unregistered Notes") on December 6, 2001, Majestic
Investor Holdings entered in a registration rights agreement pursuant to which
it agreed to file with the Securities and Exchange Commission ("SEC") a
registration statement (the "Registration Statement") to exchange up to
$152,632,000 principal amount of 11.653% Senior Secured Notes due 2007
registered under the Securities Act of 1933 (the "Registered Notes") for any and
all of its outstanding Unregistered Notes. The registration rights agreement
requires Majestic Investor Holdings to pay liquidated damages to the holders of
the Unregistered Notes if the Registration Statement was not declared effective
by the SEC on or prior to April 5, 2002. The Registration Statement was declared
effective by the SEC on August 8, 2002 and Majestic Investor Holdings is
required to pay liquidated damages pursuant to the terms of the registration
rights agreement for the period from April 6, 2002 until August 8, 2002. On May
31, 2002, in connection with the first scheduled interest payment on the
Unregistered Notes, Majestic Investor Holdings made its initial liquidated
damages payment of $61,053 to the holders of the Notes. The final liquidated
damages payment of $114,474 will be paid to the holders of the Unregistered
Notes with the next scheduled interest payment on November 30, 2002. Pursuant to
the Registration Statement, the offer to exchange the Registered Notes for any
or all of the Unregistered Notes commenced on August 8, 2002 and completed on
Friday, September 6, 2002 at 5 p.m. Eastern Standard Time. On October 17, 2002,
Majestic Investor Holdings redeemed $865,000 of the 11.653% Senior Secured Notes
at a discount to par of 87 3/4%, plus accrued interest of $38,359.

         Management believes that the Company's cash flow from operations and
its current lines of credit will be adequate to meet the Company's anticipated
future requirements for working capital, its capital expenditures and scheduled
payments of interest and principal on its 10 7/8% Senior Secured Notes, lease
payments to Buffington Harbor Parking Associates, a joint venture between Trump
Indiana and AMB Parking (a company indirectly owned by Don H. Barden, Chairman
and CEO of the Company) and other permitted indebtedness for the year 2002. No
assurance can be given, however, that such proceeds and operating cash flow, in
light of increased competition, principally barge/dockside gambling in Illinois,
the purchase of certain Indiana gaming facilities by larger more recognized
brand names, and the potential of new Native American operated casinos in our
general vicinity will be sufficient for such purposes. If necessary and to the
extent permitted under the Indenture, the Company will seek additional financing
through borrowings and debt or equity financing. There can be no assurance that
additional financing, if needed, will be available to the Company, or that, if
available, the financing will be on terms favorable to the Company. In addition,
there is no assurance that the Company's estimate of its reasonably anticipated
liquidity needs is accurate or that unforeseen events will not occur, resulting
in the need to raise additional funds.


                                       32
<PAGE>

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

         In April 2002, the Financial Accounting Standards Board ("FASB") issued
SFAS No. 145, "Rescission of FASB statements No. 4, 44 and 64, Amendment of FASB
Statement No. 13 and Technical Corrections" which is effective for fiscal years
beginning after May 15, 2002. SFAS No. 145 updates, clarifies, and simplifies
existing accounting pronouncements. Management does not expect SFAS No. 145 to
have a material impact on the Company's consolidated financial position, results
of operations or cash flows.

         In June 2002, the FASB issued SFAS No. 146 "Accounting for Costs
Associated with Exit or Disposal Activities" which will become effective for
exit or disposal activities initiated after December 31, 2002. SFAS No. 146
supersedes Emerging Issues Task Force Issue No. 94-3 "Liability Recognition for
Certain Employee Termination Benefits and Other Costs to Exit an Activity." SFAS
No. 146 requires that a liability for a cost associated with an exit or disposal
activity be recognized when the liability is incurred and states that an
entity's commitment to an exit plan, by itself, does not create a present
obligation that meets the definition of a liability. SFAS No. 146 also
establishes that fair value is the objective for initial measurement of the
liability. Adoption of SFAS No. 146 will have no impact on our historical
consolidated financial position or results of operations.

         In October 2002, the FASB issued SFAS No. 147, "Acquisition of Certain
Financial Institutions," which is not applicable to the Company.

RECENTLY ENACTED LEGISLATION AND TAX STRUCTURE

         A change in the Indiana state law governing gaming took effect on July
1, 2002 which enables Indiana's riverboat casinos to operate dockside. The IGC
approved Majestic Star's flexible boarding plan that allows the continuous
ingress and egress of patrons for the purpose of gambling while the riverboat is
docked. The plan went into effect on August 5, 2002 and imposes a graduated
wagering tax based upon adjusted gross receipts. The graduated wagering tax will
have a starting rate of 15% with a top rate of 35% for adjusted gross receipts
in excess of $150 million. For the period July 1 through August 4, 2002, the
wagering tax was raised by statute to 22.5% of adjusted gross receipts. Prior to
July 1, 2002, Indiana gaming taxes were levied on adjusted gross receipts, as
defined by Indiana gaming laws, at the rate of 20%. Majestic Star has forecasted
its gaming revenues for the period August 5, 2002 through December 31, 2002, and
based upon those forecasted revenues, determined an estimated effective gaming
tax rate for that period of time. Gaming revenue tax expenses for the period
August 5, 2002 through September 30, 2002 were calculated at the effective rate.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         There have been no material changes from the information reported in
the Company's Annual Report on Form 10-K for the fiscal year ended December 31,
2001.

ITEM 4. CONTROLS AND PROCEDURES

         Within the 90 days prior to the date of this report, the Company
carried out an evaluation, under the supervision and with the participation of
the Company's management, including its Chief Executive Officer and Chief
Financial Officer, of the effectiveness of the design and operation of the
Company's disclosure controls and procedures pursuant to Rule 15d-15 of the
Securities Exchange Act of 1934. Based upon that evaluation, the Company's Chief
Executive Officer and Chief Financial Officer concluded that the Company's
disclosure controls and procedures are effective in timely alerting them to
material information related to the Company required to be disclosed in the
Company's periodic SEC reports. There have been no significant


                                       33
<PAGE>

changes in the Company's internal controls or in other factors which could
significantly affect internal controls subsequent to the date the Company
carried out its evaluation.

PART II OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

           Various legal proceedings are pending against the Company. Management
considers all such pending proceedings, primarily personal injury and equal
employment opportunity (EEO) claims, to be ordinary litigation incidental to the
character of the Company's business. Management believes that the resolution of
these proceedings will not, individually or in the aggregate, have a material
effect on the Company's financial condition or results of operations.

           There have been no material changes in the legal proceedings
previously described in the Company's Annual Report on Form 10-K for the year
ended December 31, 2001.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits

The exhibit numbers in the following list correspond to the number assigned to
such exhibits in the Exhibit Tables of Item 601 of Regulation S-K:

      Exhibit Numbers                         Descriptions

           10.1            Employment Agreement dated as of October 21, 2002
                           by and between the Company and Jon Scott Bennett,
                           filed herewith.

           99.1            Certification Pursuant to 18 U.S.C. Section 1350, as
                           Adopted Pursuant to Section 906 of the Sarbanes-Oxley
                           Act of 2002, filed herewith.

           99.2            Certification Pursuant to 18 U.S.C. Section 1350, as
                           Adopted Pursuant to Section 906 of the
                           Sarbanes-Oxley Act of 2002, filed herewith.



(b) There were no reports on Form 8-K filed during the quarter ended September
    30, 2002


                                       34
<PAGE>

                                   SIGNATURES


Pursuant to the requirements of Section 13 or 15(d) 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.


THE MAJESTIC STAR CASINO, LLC



By: /s/ Don H. Barden                                        November 13, 2002
    ----------------------------------------------------
    Don H. Barden, President and Chief Executive Officer


By: /s/ Jon S. Bennett                                       November 13, 2002
    ----------------------------------------------------
    Jon S. Bennett, Vice President and Chief Financial
    Officer (Principal Financial and Accounting Officer)


THE MAJESTIC STAR CASINO CAPITAL CORP.


By: /s/ Don H. Barden                                        November 13, 2002
    ----------------------------------------------------
    Don H. Barden, President and Chief Executive Officer


By: /s/ Jon S. Bennett                                       November 13, 2002
    ----------------------------------------------------
    Jon S. Bennett, Vice President and Chief Financial
    Officer (Principal Financial and Accounting Officer)


                                       35
<PAGE>

                                 CERTIFICATIONS

I, Don H. Barden, certify that:


1.       I have reviewed this quarterly report on Form 10-Q of The Majestic Star
         Casino, LLC and The Majestic Star Casino Capital Corp.;

2.       Based on my knowledge, this quarterly report does not contain any
         untrue statement of a material fact necessary to make the statements
         made, in light of the circumstances under with such statements were
         made, not misleading with respect to the period covered by this
         quarterly report;

3.       Based on my knowledge, the financial statements, and other financial
         information included in this quarterly report, fairly present in all
         material respects the financial condition, results of operations and
         cash flows of the registrant as of, and for, the periods presented in
         this quarterly report;

4.       The registrant's other certifying officers and I are responsible for
         establishing and maintaining disclosure controls and procedures (as
         defined in Exchange Act Rules 13a - 14 and 15d - 14) for the registrant
         and have:

         a)       designed such disclosure controls and procedures to ensure
                  that material information relating to the registrant,
                  including its consolidated subsidiaries, is made known to us
                  by others within those entities, particularly during the
                  period in which this quarterly report is being prepared;

         b)       evaluated the effectiveness of the registrant's disclosure
                  controls and procedures as of a date within 90 days prior to
                  the filing date of this quarterly report (the "Evaluation
                  Date"); and

         c)       presented in this quarterly report our conclusions about the
                  effectiveness of the disclosure controls and procedures based
                  on our evaluation as of the Evaluation Date;

5.       The registrant's other certifying officers and I have disclosed, based
         on our most recent evaluation, to the registrant's auditors and the
         audit committee of registrant's board of directors (or persons
         performing the equivalent functions):

         a)       all significant deficiencies in the design or operation of
                  internal controls which could adversely affect the
                  registrant's ability to record, process, summarize and report
                  financial data and have identified for the registrant's
                  auditors any material weaknesses in internal controls; and

         b)       any fraud, whether or not material, that involves management
                  or other employees who have a significant role in the
                  registrant's internal controls; and

6.       The registrant's other certifying officers and I have indicated in this
         quarterly report whether there were significant changes in internal
         controls or in other factors that could significantly affect internal
         controls subsequent to the date of our most recent evaluation,
         including any corrective actions with regard to significant
         deficiencies and material weaknesses.



Date:  November 13, 2002


/s/ Don H. Barden
-------------------------------------
Don H. Barden
President and Chief Executive Officer


                                       36
<PAGE>



I, Jon S. Bennett, certify that:

1.       I have reviewed this quarterly report on Form 10-Q of The Majestic Star
         Casino, LLC and The Majestic Star Casino Capital Corp.;

2.       Based on my knowledge, this quarterly report does not contain any
         untrue statement of a material fact necessary to make the statements
         made, in light of the circumstances under with such statements were
         made, not misleading with respect to the period covered by this
         quarterly report;

3.       Based on my knowledge, the financial statements, and other financial
         information included in this quarterly report, fairly present in all
         material respects the financial condition, results of operations and
         cash flows of the registrant as of, and for, the periods presented in
         this quarterly report;

4.       The registrant's other certifying officers and I are responsible for
         establishing and maintaining disclosure controls and procedures (as
         defined in Exchange Act Rules 13a - 14 and 15d - 14) for the registrant
         and have:

         a)       designed such disclosure controls and procedures to ensure
                  that material information relating to the registrant,
                  including its consolidated subsidiaries, is made known to us
                  by others within those entities, particularly during the
                  period in which this quarterly report is being prepared;

         b)       evaluated the effectiveness of the registrant's disclosure
                  controls and procedures as of a date within 90 days prior to
                  the filing date of this quarterly report (the "Evaluation
                  Date"); and

         c)       presented in this quarterly report our conclusions about the
                  effectiveness of the disclosure controls and procedures based
                  on our evaluation as of the Evaluation Date;

5.       The registrant's other certifying officers and I have disclosed, based
         on our most recent evaluation, to the registrant's auditors and the
         audit committee of registrant's board of directors (or persons
         performing the equivalent functions):

         a)       all significant deficiencies in the design or operation of
                  internal controls which could adversely affect the
                  registrant's ability to record, process, summarize and report
                  financial data and have identified for the registrant's
                  auditors any material weaknesses in internal controls; and

         b)       any fraud, whether or not material, that involves management
                  or other employees who have a significant role in the
                  registrant's internal controls; and

6.       The registrant's other certifying officers and I have indicated in this
         quarterly report whether there were significant changes in internal
         controls or in other factors that could significantly affect internal
         controls subsequent to the date of our most recent evaluation,
         including any corrective actions with regard to significant
         deficiencies and material weaknesses.



Date:  November 13, 2002




/s/ Jon S. Bennett
------------------------------------------
Jon S. Bennett
Vice President and Chief Financial Officer


                                       37
<PAGE>

                                 EXHIBIT INDEX

<Table>
<Caption>
        EXHIBIT NUMBER     DESCRIPTION
        --------------     -----------
<S>                        <C>
           10.1            Employment Agreement dated as of October 21, 2002
                           by and between the Company and Jon Scott Bennett,
                           filed herewith.

           99.1            Certification Pursuant to 18 U.S.C. Section 1350, as
                           Adopted Pursuant to Section 906 of the Sarbanes-Oxley
                           Act of 2002, filed herewith.

           99.2            Certification Pursuant to 18 U.S.C. Section 1350, as
                           Adopted Pursuant to Section 906 of the
                           Sarbanes-Oxley Act of 2002, filed herewith.
</Table>