*Table
      of
      Contents*


**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 JUNE 30, 2006**





or


 ̈
            **TRANSITION
                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE **SECURITIES
                EXCHANGE ACT OF 1934******For
                the transition period from ______________ to
                ______________**





Commission
      file number: **333-06489**





**Indiana**
            
            **THE
                MAJESTIC STAR CASINO, LLC**
            
            **43-1664986****Indiana**
            
            **THE
                MAJESTIC STAR CASINO CAPITAL CORP.**
            
            **35-2100872****Indiana**
            
            **MAJESTIC
                STAR CASINO CAPITAL CORP. II**
            
            **20-3879309**(State
                or other jurisdiction of incorporation or organization)
            
            (Exact
                name of registrant as specified in its charter)
            
            (I.R.S.
                Employer Identification No.)





**301
      FREMONT STREET**


**LAS
      VEGAS, NEVADA 89101**


**(702)
      388 - 2224**


(Address
      of principal executive offices, including zip code, 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
             ̈





Indicate
      by check mark whether the registrant is a large accelerated filer, an
      accelerated filer, or a non-accelerated filer. See definition of “accelerated
      filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check
      one):





Large
                accelerated filer
             ̈
            Accelerated
                filer
             ̈
            Non-accelerated
                filer
            x





Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act).





Yes
             ̈
            No
            x





As
      of
      June 30, 2006, shares outstanding of each of the registrant’s classes of
      common stock:





Class
            Number
                of sharesNot
                applicable
            Not
                applicable














**THE
      MAJESTIC STAR CASINO, LLC AND
      SUBSIDIARIES**


**(A
      Wholly Owned Subsidiary of Majestic Holdco, LLC)**





**Table
      of Contents**





PART
                I
            FINANCIAL
                INFORMATION
            Page
                No.Item
                1.
            Financial
                Statements.Condensed
                  Consolidated Balance Sheets as
                  of June 30, 2006 and December 31, 2005
                  (unaudited)
            1Condensed
                Consolidated Statements of
                Operations for the three and six months ended June 30, 2006 and 2005
                (unaudited)
            2Condensed
                Consolidated Statements of Cash Flows
                for the six months ended June 30, 2006 and 2005
                (unaudited)
            3Notes
                to the Condensed Consolidated
                Financial Statements (unaudited)
            5Item
                2.
            Management’s
                Discussion and Analysis of Financial Condition
                and Results of Operations.
            27Item
                3.
            Quantitative
                and Qualitative
                Disclosures About Market Risk.
            40Item
                4.
            Controls
                and Procedures.
            40PART
                II
            OTHER
                INFORMATIONItem
                1.
            Legal
                Proceedings.
            41Item
                1A.
            Risk
                Factors.
            41Item
                6.
            Exhibits.
            42SIGNATURES
            S-1








i
 *Table
            of
            Contents*


**PART
              I**
            **FINANCIAL
              INFORMATION****Item 1.**
            **Financial
              Statements.**





**THE
      MAJESTIC STAR CASINO, LLC AND
      SUBSIDIARIES**


**(A
      Wholly Owned Subsidiary of Majestic Holdco, LLC)**


**CONDENSED
      CONSOLIDATED BALANCE SHEETS**


**(unaudited)**


June
                30,
            
            December
                31,2006
            
            2005ASSETSCurrent
                assets:Cash
                and cash equivalents
            
            $
            22,426,639
            
            $
            32,368,249Restricted
                cash
            
            
            3,326,881
            
            
            3,190,000Accounts
                receivable, less allowance for doubtful accounts of $717,970
                and$668,575
                as of June 30, 2006 and December 31, 2005, respectively
            
            
            4,212,882
            
            
            4,599,414Inventories
            
            
            730,984
            
            
            787,881Prepaid
                expenses and deposits
            
            
            10,430,784
            
            
            2,433,601Receivable
                from affiliates
            
            
            590,785
            
            
            169,011Other
                current assets
            
            
            32,200
            
            
            137,914Total
                current assets
            
            
            41,751,155
            
            
            43,686,070Property,
                equipment and improvements, net
            
            
            269,932,533
            
            
            278,132,483Intangible
                assets, net
            
            
            127,125,086
            
            
            128,854,668Goodwill
            
            
            48,203,814
            
            
            47,250,794Other
                assets:Deferred
                financing costs, net of accumulated amortizationof
                $4,101,225 and $2,529,369 as of June 30, 2006 andDecember
                31, 2005, respectively
            
            
            14,451,980
            
            
            15,263,897Deferred
                financing costs, pushed down from Majestic Holdco, net ofaccumulated
                amortization of $269,669 and $19,519 as ofJune
                30, 2006 and December 31, 2005, respectively
            
            
            2,677,535
            
            
            2,804,227Other
                assets
            
            
            2,143,485
            
            
            1,966,693Total
                other assets
            
            
            19,273,000
            
            
            20,034,817Total
                assets
            
            $
            506,285,588
            
            $
            517,958,832LIABILITIES
                AND MEMBER'S DEFICITCurrent
                liabilities:Accounts
                payable
            
            $
            3,176,531
            
            $
            3,559,207Short-term
                note payable
            
            
            -
            
            
            984,590Current
                portion of long-term debt
            
            
            218,514
            
            
            174,447Accrued
                liabilities:Payroll
                and related
            
            
            8,957,661
            
            
            9,266,247Interest
            
            
            10,475,680
            
            
            7,216,379Property
                and franchise taxes
            
            
            9,432,332
            
            
            8,415,639Other
                accrued liabilities
            
            
            12,081,337
            
            
            16,456,976Total
                current liabilities
            
            
            44,342,055
            
            
            46,073,485Long-term
                debt, net of current maturities
            
            
            538,076,046
            
            
            547,403,183Long-term
                debt pushed down from Majestic Holdco, net of discount of
                $15,383,563and
                $18,203,665 as of June 30, 2006 and December 31, 2005,
                respectively
            
            
            48,116,437
            
            
            45,296,335Total
                liabilities
            
            
            630,534,538
            
            
            638,773,003Commitments
                and contingenciesMember's
                deficit
            
            
            (124,248,950
            )
            
            (120,814,171
            )Total
                liabilities and member's deficit
            
            $
            506,285,588
            
            $
            517,958,832


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





1
 ***Table
            of
            Contents***





**THE
      MAJESTIC STAR CASINO, LLC AND
      SUBSIDIARIES**


**(A
      Wholly Owned Subsidiary of Majestic Holdco, LLC)**


**CONDENSED
      CONSOLIDATED STATEMENTS OF OPERATIONS**


**(unaudited)**








For
                The Three Months Ended
            
            For
                The Six Months EndedJune
                30,
            
            June
                30,2006
            
            2005
            
            2006
            
            2005OPERATING
                REVENUES:Casino
            
            $
            89,942,156
            
            $
            68,275,963
            
            $
            193,827,647
            
            $
            139,358,610Rooms
            
            
            2,848,379
            
            
            1,917,569
            
            
            5,612,771
            
            
            3,711,673Food
                and beverage
            
            
            3,963,758
            
            
            3,460,000
            
            
            8,318,834
            
            
            6,970,376Other
            
            
            1,659,685
            
            
            1,392,747
            
            
            3,407,695
            
            
            2,450,477Gross
                revenues
            
            
            98,413,978
            
            
            75,046,279
            
            
            211,166,947
            
            
            152,491,136Less
                promotional allowances
            
            
            12,856,823
            
            
            11,986,248
            
            
            25,691,658
            
            
            22,576,045Net
                operating revenues
            
            
            85,557,155
            
            
            63,060,031
            
            
            185,475,289
            
            
            129,915,091OPERATING
                COSTS AND EXPENSES:Casino
            
            
            20,542,370
            
            
            16,212,746
            
            
            43,473,047
            
            
            33,505,625Rooms
            
            
            421,991
            
            
            441,108
            
            
            1,606,195
            
            
            825,053Food
                and beverage
            
            
            2,160,821
            
            
            1,464,502
            
            
            4,277,193
            
            
            2,965,843Other
            
            
            231,415
            
            
            242,399
            
            
            489,480
            
            
            501,877Gaming
                taxes
            
            
            20,031,927
            
            
            14,752,004
            
            
            44,455,255
            
            
            30,050,193Advertising
                and promotion
            
            
            4,388,475
            
            
            3,901,428
            
            
            8,538,620
            
            
            7,394,928General
                and administrative
            
            
            14,237,026
            
            
            10,166,239
            
            
            29,265,561
            
            
            20,572,736Corporate
                expense
            
            
            1,901,961
            
            
            3,961,114
            
            
            3,719,665
            
            
            5,158,184Economic
                incentive tax - City of Gary
            
            
            1,545,025
            
            
            1,124,610
            
            
            3,352,014
            
            
            2,287,972Depreciation
                and amortization
            
            
            7,847,099
            
            
            6,751,733
            
            
            15,619,848
            
            
            11,387,668Loss
                on investment in Buffington HarborRiverboats,
                LLC
            
            
            -
            
            
            603,500
            
            
            -
            
            
            1,209,198Loss
                (gain) on disposal of assets
            
            
            10,686
            
            
            37,835
            
            
            (4,304
            )
            
            37,975Total
                operating costs and expenses
            
            
            73,318,796
            
            
            59,659,218
            
            
            154,792,574
            
            
            115,897,252Operating
                income
            
            
            12,238,359
            
            
            3,400,813
            
            
            30,682,715
            
            
            14,017,839OTHER
                INCOME (EXPENSE):Interest
                income
            
            
            86,310
            
            
            86,414
            
            
            222,377
            
            
            98,616Interest
                expense
            
            
            (13,434,812
            )
            
            (7,443,649
            )
            
            (26,748,701
            )
            
            (14,680,024
            )Interest
                expense - debt pushed downfrom
                Majestic Holdco
            
            
            (1,575,896
            )
            
            -
            
            
            (3,070,254
            )
            
            -Other
                non-operating expense
            
            
            (23,955
            )
            
            (41,715
            )
            
            (51,203
            )
            
            (78,669
            )Total
                other expense
            
            
            (14,948,353
            )
            
            (7,398,950
            )
            
            (29,647,781
            )
            
            (14,660,077
            )Net
                (loss) income
            
            $
            (2,709,994
            )
            $
            (3,998,137
            )
            $
            1,034,934
            
            $
            (642,238
            )








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





2
 ***Table
            of
            Contents***





**THE
      MAJESTIC STAR CASINO, LLC AND
      SUBSIDIARIES**


**(A
      Wholly Owned Subsidiary of Majestic Holdco, LLC)**


**CONDENSED
      CONSOLIDATED STATEMENTS OF CASH FLOWS**


**(unaudited)**








For
                The Six Months EndedJune
                30,2006
            
            2005CASH
                FLOWS FROM OPERATING ACTIVITIES:Net
                income (loss)
            
            $
            1,034,934
            
            $
            (642,238
            )Adjustments
                to reconcile net income (loss) to net cashprovided
                by operating activities:Depreciation
            
            
            13,890,266
            
            
            9,797,852Amortization
            
            
            1,729,582
            
            
            1,589,816Amortization
                of deferred financing costs
            
            
            1,591,374
            
            
            -Amortization
                of bond discount on 12 1/2% senior discount notes anddeferred
                financing costs pushed down from Majestic Holdco
            
            
            3,070,253
            
            
            -Loss
                on investment in Buffington Harbor Riverboats, LLC
            
            
            -
            
            
            1,209,198(Gain)
                loss on disposal of assets
            
            
            (4,304
            )
            
            37,975Changes
                in operating assets and liabilities, net of effects of
                acquisition:Accounts
                receivable, net
            
            
            386,532
            
            
            163,735Related
                party payables
            
            
            (421,772
            )
            
            99,738Inventories
            
            
            56,897
            
            
            20,514Prepaid
                expenses and deposits
            
            
            (7,997,182
            )
            
            (3,389,137
            )Other
                assets
            
            
            (71,078
            )
            
            (443,921
            )Accounts
                payable
            
            
            (577,693
            )
            
            274,618Accrued
                payroll and other expenses
            
            
            (308,586
            )
            
            495,523Accrued
                interest
            
            
            3,259,445
            
            
            104,446Other
                accrued liabilities
            
            
            (3,865,509
            )
            
            (2,889,928
            )Net
                cash provided by operating activities
            
            
            11,773,159
            
            
            6,428,191CASH
                FLOWS FROM INVESTING ACTIVITIES:Increase
                in restricted cash
            
            
            (136,881
            )
            
            -Acquisition
                of property and equipment
            
            
            (5,577,292
            )
            
            (7,994,611
            )Additional
                acquisition costs related to Trump Indiana acquisition
            
            
            (953,020
            )
            
            -Decrease
                in prepaid leases and deposits
            
            
            -
            
            
            3,600Proceeds
                from disposal of equipment
            
            
            703,083
            
            
            200Net
                cash used in investing activities
            
            $
            (5,964,110
            )
            $
            (7,990,811
            )





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





3
 ***Table
            of
            Contents***





**THE
      MAJESTIC STAR CASINO, LLC AND SUBSIDIARIES**


**(A
      Wholly Owned Subsidiary of Majestic Holdco, LLC)**


**CONDENSED
      CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)**


**(unaudited)**








For
                The Six Months EndedJune
                30,2006
            
            2005CASH
                FLOWS FROM FINANCING ACTIVITIES:Issuance
                costs for the 9 1/2% senior secured notes
            
            $
            (132,764
            )
            $
            -Issuance
                costs for the 9 3/4% senior notes
            
            
            (670,876
            )
            
            -Issuance
                costs for the 12 1/2% senior discount notespushed
                down from Majestic Holdco
            
            
            (99,274
            )
            
            -Proceeds
                from line of credit
            
            
            24,963,368
            
            
            22,437,970Repayment
                of line of credit
            
            
            (34,283,222
            )
            
            (13,050,806
            )Advances
                to affiliates - net
            
            
            -
            
            
            (3,232,951
            )Repayment
                of debt
            
            
            (1,058,176
            )
            
            -Distributions
                to Barden Development, Inc.
            
            
            (4,469,715
            )
            
            (4,881,209
            )Net
                cash (used in) provided by financing activities
            
            
            (15,750,659
            )
            
            1,273,004Net
                decrease in cash and cash equivalents
            
            
            (9,941,610
            )
            
            (289,616
            )Cash
                and cash equivalents, beginning of period
            
            
            32,368,249
            
            
            16,721,729Cash
                and cash equivalents, end of period
            
            $
            22,426,639
            
            $
            16,432,113




For
                  The Six Months EndedJune
                  30,2006
              
              2005Supplemental
                  disclosure of cash flow information and non-cash investingand
                  financing activities:INTEREST
                  PAID:
              $
              21,998,628
              
              $
              14,575,579NON-CASH
                  INVESTING ACTIVITIES:Capital
                  assets acquired from incurring accounts payable and accrued
                  liabilities
              
              
              
              
              $
              1,382,849
              
              $
              95,163Capital
                  assets acquired from incurring debt
              
              
              
              
              $
              110,730
              
              $
              -Deferred
                  financing and transaction costs related to the Trump
                  acquisitionincluded
                  in accrued liabilities
              
              
              
              
              $
              75,504
              
              $
              -





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





4
 ***Table
            of Contents***
 **THE
          MAJESTIC STAR CASINO, LLC AND SUBSIDIARIES**
 **(A
          Wholly Owned Subsidiary of Majestic Holdco, LLC)**
 **NOTES
          TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **(unaudited)**








**NOTE
      1.
      ORGANIZATION**





The
      Majestic Star Casino, LLC (the “Company”) is a wholly owned subsidiary of
      Majestic Holdco, LLC (“Majestic Holdco”) which is a wholly owned subsidiary of
      Barden Development, Inc. (“BDI”). The Company was formed on December 8,
      1993 as an Indiana limited liability company to provide gaming and related
      entertainment to the public. The Company commenced gaming operations in the
      City
      of Gary at Buffington Harbor, located in Lake County, Indiana on June 7,
      1996.





The
      Company is a multi-jurisdictional gaming company with operations in three states
      - Indiana, Mississippi and Colorado. The Company owns and operates two riverboat
      gaming facilities located in Gary, Indiana (“Majestic Star” and “Majestic Star
      II”). As of December 21, 2005, the Company also owns 100% of Buffington
      Harbor Riverboats, L.L.C. (“BHR”). BHR had previously been a 50% joint venture
      with Trump Indiana, Inc. (“Trump Indiana”) See Note 4 - Trump Indiana
      Acquisition. Also, as part of the Trump Indiana acquisition, the Company
      acquired 50% of Buffington Harbor Parking Associates, LLC (“BHPA”) and through
      an affiliate of the Company, the other 50% interest in BHPA was contributed
      to
      the Company. Majestic Star, Majestic Star II, BHR and BHPA are referred to
      collectively as the “Majestic Properties.”





The
      Company also owns other subsidiaries that operate the following
“Fitzgeralds-brand” casino properties during the periods presented in the
      accompanying consolidated financial statements:





·
            A
                casino-hotel located in Tunica County, Mississippi (“Barden Mississippi
                Gaming, LLC” or “Fitzgeralds
                Tunica”).





·
            A
                casino located in Black Hawk, Colorado (“Barden Colorado Gaming, LLC” or
                “Fitzgeralds Black Hawk”).





The
      Company also has the following subsidiaries, which were formed for the purpose
      of facilitating financing transactions:





·
            The
                Majestic Star Casino Capital Corp. (“MSCC”) is a co-obligor with the
                Company for the $300.0 million 9 1⁄2% senior secured notes (the “Senior
                Secured Notes”) due 2010. MSCC has no assets or operations. See
                Note 6 - Long Term Debt.





·
            Majestic
                Star Casino Capital Corp. II (“MSCC II”) is a co-obligor with the
                Company for the $200.0 million 9 3⁄4% senior notes (the “Senior Notes”)
                due 2011. MSCC II has no assets or operations. See Note 6 - Long
                Term
                Debt.





Following
      the completion of the defeasance of the remaining Majestic Investor Holdings,
      LLC (“Investor Holdings”) 11.653% notes (“Investor Notes”) on March 6, 2006, we
      terminated the existence of Majestic Investor Capital Corp (an entity created
      to
      facilitate the issuance of the Investor Notes). We also merged Majestic
      Investor, LLC and Investor Holdings into The Majestic Star Casino, LLC on
      March 21, 2006 and March 22, 2006, respectively, thus making Barden
      Mississippi Gaming, LLC and Barden Colorado Gaming, LLC direct subsidiaries
      of
      The Majestic Star Casino, LLC.





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 direct
      and indirect subsidiaries.





5
 ***Table
            of Contents***
 **THE
          MAJESTIC STAR CASINO, LLC AND SUBSIDIARIES**
 **(A
          Wholly Owned Subsidiary of Majestic Holdco, LLC)**
 **NOTES
          TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
          (CONTINUED)**
 **(unaudited)**





**NOTE
      2. BASIS OF PRESENTATION**





The
      accompanying consolidated financial statements are unaudited. All inter-company
      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 accounting principles generally accepted in
      the
      United States of America, or “GAAP” for interim financial information and with
      the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly,
      certain information and footnote disclosures normally included in financial
      statements have been condensed or omitted. The preparation of financial
      statements in conformity with GAAP requires management to make estimates and
      assumptions that affect the reported amounts of assets and liabilities and
      disclosure of contingent assets and liabilities at the date of the financial
      statements and the reported amounts of revenues and expenses during the
      reporting period. Actual results could differ from those estimates.





In
      the
      opinion of management, all adjustments (which include normal recurring
      adjustments) considered necessary for a fair statement of the results for the
      interim periods have been made. The results for the six months ended
      June 30, 2006 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 Majestic Star
      Casino, LLC’s Annual Report on Form 10-K for the year ended December 31,
      2005.





PUSH
      DOWN
      OF DISCOUNT NOTES FROM MAJESTIC HOLDCO - The Company’s consolidated balance
      sheet as of June 30, 2006 and December 31, 2005 includes the $48.1
      million and $45.3 million, respectively, of senior discount notes, (“Discount
      Notes”) net of original issue discount, issued by Majestic Holdco in connection
      with the Trump Indiana acquisition in December 2005 (see Note 4). The Discount
      Notes are solely the obligation of Majestic Holdco and Majestic Holdco, Inc.
      (the co-issuer with Majestic Holdco) and are unsecured. Neither the Company
      nor
      any of its direct or indirect subsidiaries guarantees the Discount Notes nor
      are
      the equity or assets of the Company or its direct or indirect subsidiaries
      security for the Discount Notes. Further, the indentures governing the Senior
      Notes and the Senior Secured Notes and the loan and security agreement which
      governs our Senior Secured Credit Facility preclude distributions by the Company
      to Majestic Holdco unless certain financial tests are met. In addition to the
      push down of the Discount Notes, the Company is also reflecting $2.7 million
      and
      $2.8 million of Discount Notes issuance costs, net of amortization,
      respectively, on its consolidated balance sheets as of June 30, 2006 and
      December 31, 2005, and amortization of issuance costs of $126,000 and
      $250,000, respectively, and bond discount of $1.4 million and $2.8 million,
      respectively, on its consolidated statement of operations for the three and
      six
      months ended June 30, 2006. A likely scenario for the repayment of these
      Discount Notes is from cash flows of the Company or a refinancing of the
      Company’s indebtedness, together with the indebtedness of Majestic Holdco. The
      Discount Notes have been “pushed-down” to the Company pursuant to the guidelines
      of SEC Staff Accounting Bulletin Topic 5(J).





TERMINATED
      SALE OF FITZGERALDS BLACK HAWK - On July 12, 2004, the Company entered into
      an agreement to sell substantially all of the assets, subject to certain
      liabilities, of Fitzgeralds Black Hawk. On April 14, 2005, the Company and
      Legends Gaming, LLC (“Legends”) mutually agreed to terminate the Asset Purchase
      Agreement dated July 12, 2004, as amended (the “Purchase Agreement”). The
      Company took an approximately $2.3 million charge related to terminating this
      agreement. Because the Purchase Agreement was mutually terminated in April
      2005,
      the financial information of Fitzgeralds Black Hawk has been reclassified to
      be
      presented as continuing operations. During the period the property was
      considered as held for sale, no depreciation or amortization expense was
      recognized on Fitzgeralds Black Hawk’s assets. When the sale was terminated, in
      April 2005, depreciation and amortization of $1.5 million was caught up for
      the
      period in which no depreciation or amortization was recognized.





PURCHASE
      OF TRUMP INDIANA, INC. - On December 21, 2005, the Company completed the
      stock purchase of Trump Indiana, which included Trump Indiana’s 50% interests in
      BHR and BHPA. See Note 4 - Trump Indiana Acquisition.





6
 ***Table
            of Contents***
 **THE
          MAJESTIC STAR CASINO, LLC AND SUBSIDIARIES**
 **(A
          Wholly Owned Subsidiary of Majestic Holdco, LLC)**
 **NOTES
          TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
          (CONTINUED)**
 **(unaudited)**








PROMOTIONAL
      ALLOWANCES - Cash incentives related to gaming play are recorded as a reduction
      of gross revenues. Such amounts totaled $8.1 million and $7.9 million for the
      quarters ended June 30, 2006, and 2005, respectively, and $16.0 million and
      $14.5 million for the six months ended June 30, 2006 and 2005,
      respectively. In addition, the retail value of accommodations, food and
      beverage, and other services furnished to hotel/casino guests without charge
      is
      included in gross revenue and then deducted as promotional allowances. The
      estimated departmental cost of providing such promotional allowances is included
      in casino expenses as follows:








For
                The Three Months Ended June 30,
            
            For
                The Six Months Ended June 30,2006
            
            2005
            
            2006
            
            2005Rooms
            
            $
            1,053,417
            
            $
            601,656
            
            $
            1,641,773
            
            $
            1,210,349Food
                and Beverage
            
            
            2,690,074
            
            
            2,257,722
            
            
            5,259,727
            
            
            4,507,389Other
            
            
            121,441
            
            
            113,882
            
            
            238,307
            
            
            226,682Total
            
            $
            3,864,932
            
            $
            2,973,260
            
            $
            7,139,807
            
            $
            5,944,420








The
      following schedule lists total cash incentives and the retail cost of hotel,
      food, beverage, and other, which comprise the total promotional
      allowances.








For
                The Three Months Ended June 30,
            
            For
                The Six Months Ended June 30,2006
            
            2005
            
            2006
            
            2005Cash
                based promotional activities
            
            $
            6,416,100
            
            $
            6,220,021
            
            $
            12,304,051
            
            $
            11,276,570Slot
                club and other
            
            
            1,702,793
            
            
            1,728,723
            
            
            3,729,267
            
            
            3,233,613Retail
                cost of rooms, food, beverage and other
            
            
            4,737,930
            
            
            4,037,504
            
            
            9,658,340
            
            
            8,065,862Total
            
            $
            12,856,823
            
            $
            11,986,248
            
            $
            25,691,658
            
            $
            22,576,045








**NOTE
      3. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS**





In
      July
      2006, the FASB issued FASB Interpretation No. 48 (“FIN 48”) “Accounting for
      Uncertainty in Income Taxes - an interpretation of FASB Statement No. 109”,
      to clarify certain aspects of accounting for uncertain tax positions, including
      issues related to the recognition and measurement of those tax positions. This
      interpretation is effective for fiscal years beginning after December 15,
      2006. Because the Company is a limited liability company, this interpretation
      is
      not applicable and will have no impact on the Company’s results of operations
      and financial condition.








**NOTE
      4. TRUMP INDIANA ACQUISITION**





On
      December 21, 2005, the Company acquired Trump Indiana (subsequently renamed
      Majestic Star II) pursuant to a Stock Purchase Agreement (“SPA”) dated
      November 3, 2005 with Trump Entertainment Resorts Holdings, L.P. (“TERH”)
      for a purchase price of $253.0 million, subject to certain specified
      adjustments. Trump Indiana owned and operated a riverboat casino and land-based
      hotel adjacent to Majestic Star. As a result of the stock purchase, we acquired
      Trump Indiana’s 50% interest in our joint venture, BHR, which owns and operates
      the land-based pavilion and docking facility. The Company also acquired Trump
      Indiana’s 50% interest in BHPA, a joint venture with an affiliate of ours (which
      contributed its interest in BHPA at closing of the Trump Indiana acquisition),
      which owns and operates the parking garage.





7
 ***Table
            of Contents***
 **THE
          MAJESTIC STAR CASINO, LLC AND SUBSIDIARIES**
 **(A
          Wholly Owned Subsidiary of Majestic Holdco, LLC)**
 **NOTES
          TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
          (CONTINUED)**
 **(unaudited)**








The
      Company’s consolidated statement of operations for the three and six months
      ended June 30, 2006 includes results for Majestic Star II, BHR and
      BHPA. Prior to the purchase, the operations for BHR were accounted for under
      the
      equity method of accounting as an investment in a joint venture. Also, prior
      to
      December 21, 2005, the Company was a lessee of the parking garage owned and
      operated by BHPA. With the acquisition of Trump Indiana and contribution of
      our
      affiliate’s equity interest in BHPA, the lease was terminated and we recognized
      all of the operating expenses of BHPA during the three and six months ended
      June 30, 2006.





The
      acquisition of Trump Indiana is being accounted for under the purchase method
      of
      accounting. In order to assist the Company in assigning values to the assets
      acquired and liabilities assumed, the Company engaged a third party to assist
      with the valuation of the significant identifiable intangible assets acquired,
      as well as the other tangible assets acquired and certain liabilities assumed.
      The third party valuation report is still in draft form. In addition, the
      Company is working with TERH on finalizing the working capital adjustment to
      the
      purchase price. Since the purchase price allocation is still in process, the
      valuation of intangible and tangible assets, and liabilities assumed is subject
      to refinement. Changes to the allocation of the purchase price may also affect
      goodwill. The Company has up to one year from the acquisition date to finalize
      the valuation of intangible and tangible assets, and assumed liabilities.




Since
      December 31, 2005, goodwill had been adjusted as follows:





Goodwill
                as of December 31, 2005
            
            $
            41,328,396Severance
                payments
            
            
            1,138,784Other
            
            
            (185,764
            )Goodwill
                as of June 30, 2006
            
            $
            42,281,416





Prior
      to
      the Trump Indiana acquisition, the Company had identified approximately $14.4
      million of annualized costs that would be eliminated as part of our acquisition
      plan. In the first quarter of 2006, the Company began laying off employees
      to
      implement this plan. In conjunction with the layoffs, the Company incurred
      severance and other compensation that was outside the normal compensation and
      bonuses payable to its laid off employees. The Company has capitalized severance
      and other compensation accrued or paid as goodwill pursuant to the guidance
      in
      EITF 95-3.





In
      the
      first six months of 2006, the Company incurred other additional costs related
      to
      the acquisition in the amount of $0.3 million. These additional costs are
      comprised principally of professional fees. This was offset by tax-
      related adjustments of $0.5 million.








**NOTE
      5. INVESTMENT IN BUFFINGTON HARBOR RIVERBOATS, L.L.C.**





On
      October 31, 1995, the Company and Trump Indiana 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
      (“BHR Property”). The Company and Trump Indiana each had a 50% non-controlling
      interest in BHR. Prior to December 21, 2005, the Company accounted for its
      interest in the joint venture under the equity method of accounting.





8
 ***Table
            of Contents***
 **THE
          MAJESTIC STAR CASINO, LLC AND SUBSIDIARIES**
 **(A
          Wholly Owned Subsidiary of Majestic Holdco, LLC)**
 **NOTES
          TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
          (CONTINUED)**
 **(unaudited)**








BHR
      is
      responsible for the management, development and operation of the BHR Property.
      The Company and Trump Indiana had each entered into an agreement with BHR (the
      “Berthing Agreement”) to use the BHR Property for their respective gaming
      operations and had committed to pay the cash operating losses of BHR as
      additional berthing fees. All expenditures requiring a cash outlay by BHR were
      billed to Trump Indiana and the Company at cost. Accordingly, BHR recorded
      as
      expenses the cost of providing such services and recorded as other revenues
      the
      amounts billed to Trump Indiana and the Company.





The
      Company paid to BHR approximately $1.2 million and $2.5 million, respectively,
      of berthing fees for the three- and six-month periods ended June 30, 2005.
      Such amounts were recorded in general and administrative expense in the
      consolidated statements of operations. On December 21, 2005, BHR became a
      wholly owned subsidiary and the Berthing Agreements between BHR and the Company
      and between BHR and Trump Indiana were terminated.





Majestic
      Star uses the food and beverage operations at BHR to provide its casino
      customers with complimentary meals, beverages and services. The Company sends
      guests to these restaurants, and the other food and beverage operators at BHR
      and the proprietors of these businesses charge the Company for the meals served
      and the services provided. These proprietors are third-party vendors. The
      Company paid approximately $0.8 million and $1.7 million, respectively, to
      these
      restaurants, other food and beverage operators and for valet services for the
      three- and six-month periods ended June 30, 2005. Food, beverage and valet
      costs
      are recorded in casino expense in the Company’s consolidated statements of
      operations. After the Company and Trump Indiana reimbursed BHR for all cash
      operational losses, the remaining net loss of BHR resulted from depreciation
      expense associated with the BHR property and was recorded as equity in loss
      of
      joint venture in the Company’s consolidated statements of operations. Such loss
      was approximately $0.6 million and $1.2 million, respectively, for the three-
      and six- month periods ended June 30, 2005.





The
      following represents selected financial information for BHR for the three-
      and
      six-month periods ended June 30, 2005 when the Company accounted for its
      50% interest in BHR under the equity method:




STATEMENTS
                OF OPERATIONS
            
            For
                the
            
            For
                theThree
                Months Ended
            
            Six
                Months EndedJune 30,
                2005
            
            June 30,
                2005Gross
                revenues
            
            $
            2,898,855
            
            $
            5,947,525Operating
                loss
            
            $
            (1,205,968
            )
            $
            (2,417,308
            )Net
                loss
            
            $
            (1,207,000
            )
            $
            (2,418,396
            )








9
 ***Table
            of Contents***
 **THE
          MAJESTIC STAR CASINO, LLC AND SUBSIDIARIES**
 **(A
          Wholly Owned Subsidiary of Majestic Holdco, LLC)**
 **NOTES
          TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
          (CONTINUED)**
 **(unaudited)**








**NOTE
      6. LONG-TERM DEBT**





June 30,
              2006
            
            December 31,
              2005Long-term
                debt outstanding is as follows:$300,000,000
                of 9 1⁄2% senior secured notes
            
            $
            300,000,000
            
            $
            300,000,000$200,000,000
                of 9 3⁄4% senior notes
            
            
            200,000,000
            
            
            200,000,000$80,000,000
                senior secured credit facility
            
            
            37,892,491
            
            
            47,212,346Capitalized
                leases and other debt
            
            
            402,069
            
            
            365,284Total
                long-term debt
            
            
            538,294,560
            
            
            547,577,630Less
                current maturities
            
            
            218,514
            
            
            174,447Total
                long-term debt, net of current maturities
            
            $
            538,076,046
            
            $
            547,403,183





**AMENDMENTS
      TO THE SENIOR SECURED CREDIT FACILITY**





The
      Company has entered into various amendments to the loan and security agreement
      governing the senior secured credit facility (the “Senior Secured Credit
      Facility”) as listed in the Company’s Report on Form 10-K for the year ended
      December 31, 2005. In addition to those amendments, on April 13, 2006,
      the Company entered into Amendment Number Five (“Amendment Five”). Amendment
      Five modified the interest coverage ratio financial covenant for the
      twelve-month period ended March 31, 2006. Pursuant to Amendment Four, the
      Company was required to obtain an interest coverage ratio of 1.85:1.0. The
      interest coverage ratio was amended to 1.80:1.0 in Amendment Five. In addition,
      the definition of Consolidated Interest Expense was amended to exclude interest
      expense related to the pushdown of Majestic Holdco’s Discount
      Notes.





On
      July
      31, 2006, the Company entered into Amendment Number Six (“Amendment Six”) to the
      Senior Secured Credit Facility. Amendment Six modifies the last 12 month minimum
      EBITDA financial covenant and the last 12 month interest coverage ratio
      financial covenant for the applicable calendar quarterly periods. As amended,
      the Company is now required to have a minimum EBITDA of $65.0 million for the
      12
      months ended June 30, 2006, which periodically increases in $5.0 million
      increments to a maximum of $90.0 million for the 12 months ending March 31,
      2010 and periods thereafter. The interest coverage ratio is reduced to 1.50:1.0
      for the 12 months ended June 30, 2006, continuing through December 31,
      2007. The ratio increases to 1.60:1.0 in 2008, 1.70:1.0 in 2009 and to 1.80:1.0
      in 2010 and each period thereafter. In addition, the capital expenditures
      limitations have been increased to $25.0 million for each of the fiscal years
      2006 and 2007 and to $30.0 million for each of the fiscal years 2008, 2009
      and
      2010. This amendment allowed the Company to be in compliance with the financial
      covenants under the Senior Secured Credit Facility as of June 30,
      2006.





**OTHER
      DEBT**





The
      Company has various capital leases of approximately $0.4 million and other
      debt
      for equipment. Additional assets of $0.1 million were purchased through a
      capital lease during the quarter ended June 30, 2006.





10
 ***Table
            of Contents***
 **THE
          MAJESTIC STAR CASINO, LLC AND SUBSIDIARIES**
 **(A
          Wholly Owned Subsidiary of Majestic Holdco, LLC)**
 **NOTES
          TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
          (CONTINUED)**
 **(unaudited)**








**NOTE
      7. COMMITMENTS AND CONTINGENCIES**





LEGAL
      PROCEEDINGS





Various
      legal proceedings are pending against the Company. Management considers all
      such
      pending proceedings, comprised primarily of personal injury and equal employment
      opportunity (EEO) claims, to be routine litigation incidental to the Company’s
      business. Except as described in our Report on Form 10-K for the year ended
      December 31, 2005, 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, results of operations or cash flows. See
      our Report on Form 10-K for the year ended December 31, 2005 for a full
      description of our legal proceedings.





Anti-trust
      litigation. In June
      2003, a complaint was filed in the U.S. District Court for the Northern District
      of Mississippi against Tunica County casino owners and operators, including
      Barden Mississippi, the Tunica Casino Operators Association and the Tunica
      County Tourism Commission alleging violation of federal and state anti-trust
      claims, as well as various other tort and contract claims. Since the filing
      of
      the Annual Report on Form 10-K for the year ended December 31, 2005, plaintiffs
      filed a brief in support of their appeal on July 21, 2006 and the defendants
      have 30 days thereafter to respond. The trial date for the casino defendants'
      counterclaims has been continued until such time as the Fifth Circuit Court
      of
      Appeals rules on plaintiffs' appeal. The Company intends to vigorously defend
      against the appeal. At this time, it is too early to determine the outcome
      of
      this litigation and the effect, if any, on the Company's financial position
      and
      results of operations.





TAX
      MATTERS





Majestic
      Star Income Tax Protest. The
      Company has been assessed $2.6 million, plus interest, for the fiscal year
      1996
      and the period January 1, 1998 through June 18, 2001, by the Indiana Department
      of Revenue (the “Department”). On September 7, 2004, the Department assessed
      BDI, the Company’s ultimate parent and member, $1.3 million, plus penalties and
      interest for the remainder of 2001 and all of fiscal year 2002. The Department
      held a hearing on the 1996 through 2002 tax years on April 7, 2006, and is
      expected to issue its ruling later this year. BDI's non-resident shareholder
      has
      been assessed $0.2 million, plus penalty and interest, for 2003. The assessments
      relate to deductions for payments of taxes on adjusted gross gaming revenues
      the
      Company’s member took in computing adjusted gross income for Indiana state
      income tax purposes. The Department has taken the position that the Company
      had
      an obligation to withhold and remit tax for the non-resident shareholder of
      its
      member. The Company, BDI and BDI's non-resident shareholder have timely filed
      protests for all tax years at issue and those protests are currently pending
      before the Legal Division of the Department. On April 19, 2004, the Indiana
      Tax
      Court ruled in a similar case involving another Indiana casino, Aztar Indiana
      Gaming Corporation (“Aztar”), that the gross wagering tax is a tax based on or
      measured by income and that it must be added back to the taxable income base
      for
      the purpose of determining adjusted gross income for Indiana tax purposes.
      On
      September 28, 2004, the Indiana Supreme Court denied Aztar’s request to review
      the Indiana Tax Court’s decision, and thus, the Indiana Tax Court’s opinion in
      the Aztar case is controlling precedent on the wagering tax add-back issue.
      No
      liability has been accrued by the Company relating to this matter.





The
      Company’s indentures governing the Senior Secured Notes (the “Senior Secured
      Notes Indenture”) and the Senior Notes (the “Senior Notes Indenture”) and the
      loan agreement related to the Senior Secured Credit Facility allow the Company
      to make distributions to BDI for tax purposes. Accordingly, should BDI
      ultimately be found liable for additional state income taxes to the State of
      Indiana, the Company would make distributions sufficient to pay the additional
      tax. Any payments would be recorded as distributions in Member’s Deficit. The
      Company does not intend to make any distributions for the years in which an
      assessment was received until it has fully evaluated its options with BDI.
      In
      April 2005, and again in April 2006, BDI’s non-resident shareholder paid Indiana
      state income tax for fiscal years 2004 and 2005 pursuant to the Indiana Tax
      Court’s decision in Aztar. BDI’s non-resident shareholder determined that the
      arguments to be made by the Company and BDI related to the assessed years were
      not applicable to fiscal years 2004 and 2005.





11
 ***Table
            of Contents***
 **THE
          MAJESTIC STAR CASINO, LLC AND SUBSIDIARIES**
 **(A
          Wholly Owned Subsidiary of Majestic Holdco, LLC)**
 **NOTES
          TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
          (CONTINUED)**
 **(unaudited)**








Majestic
      Star Sales and Use Tax Assessments. In
      October 2005, the Department assessed Majestic Star for unpaid sales and use
      taxes, with penalties and interest, for the period 2001 through 2004. The sales
      and use tax assessments, with penalties and interest, total $0.3 million. The
      use tax portions of the assessments relate to capital and operating supply
      purchases, and food, merchandise and other products provided to the guests
      of
      Majestic Star at no charge. On November 15, 2005, Majestic Star paid $0.2
      million under the State of Indiana amnesty program to eliminate all use tax
      and
      a portion of the sales tax assessment for the 2001 through 2004 tax years.
      All
      penalties and interest associated with such payments were waived in their
      entirety pursuant to Indiana law. The remaining $0.1 million of the assessment
      relates to:




1.
              The
                difference between sales tax on the full retail price of merchandise
                and
                other products provided to Majestic Star’s customers at no charge less
                sales tax on the cost of this merchandise and other products,
                and2.
              Sales tax on the retail value of
                complimentary food provided to Majestic Star’s
                customers.








Both
      1
      and 2 above relate to the period August 2003 through 2004. On November 15,
      2005,
      Majestic Star filed a protest of the proposed assessments protesting the sales
      tax assessments related to this period. The Department held a hearing on the
      2003 and 2004 tax years on April 7, 2006, and is expected to issue its ruling
      later this year.





In
      addition, Majestic Star has a receivable on its balance sheet in the amount
      of
      $0.1 million related to the two items noted immediately above for the period
      2001 through July 2003. During this period of time, Majestic Star was remitting
      full sales tax on the retail value of complimentary food, merchandise and other
      products to the Department. In or around July 2003, the Department notified
      Majestic Star’s management that no sales tax should be paid on items provided on
      a complimentary basis to its customers. At that time Majestic Star established
      the receivable for sales taxes paid during the period 2001 through July 2003.
      In
      or around July 2003, Majestic Star also filed claims for refund with the
      Department in the total amount of $0.1 million for tax years 2001 and 2002
      and
      for the period January through July 2003, on food and other items provided
      to
      its customers on a complimentary basis. In December 2005, those refund claims
      were denied by the Department, and Majestic Star appealed those denials to
      the
      Indiana Tax Court on March 27, 2006. The Tax Court has ordered the parties
      to
      file status reports in that case by August 21, 2006. Majestic Star believes
      that
      it has no sales or use tax liability for food for human consumption purchased
      by
      it and prepared for serving to its customers on a complimentary basis based
      on
      the Hyatt decision. See the Company’s Annual Report on Form 10-K for the year
      ended December 31, 2005.





BHR
      Sales and Use Tax Assessment 2002-2004 Tax Years. In
      October 2005, the Department assessed BHR $0.3 million in unpaid sales and
      use
      taxes for the 2002 tax year, inclusive of interest and penalties. A substantial
      portion of the assessed sales tax is on complimentary food provided to the
      employees and patrons of Majestic Star and Trump Indiana based on the *retail* value of
      the items provided. In prior years, the Department had made similar assessments,
      but on the *cost* of
      those
      items to BHR. BHR has not reserved for the assessment related to the prepared
      meals provided to the employees and patrons of Majestic Star and Trump Indiana.
      On November 15, 2005, BHR paid the use tax portion of the assessment for
      the 2002 tax year under Indiana’s tax amnesty program, thereby eliminating
      interest and penalties on the amount paid. The remaining amount outstanding
      is
      $0.2 million. BHR has protested the remainder of the assessments for 2002.
      The
      Department held a hearing on the 2002 tax year on April 7, 2006, and is
      expected to issue its ruling later this year. On June 19, 2006, the Department
      assessed BHR $0.3 million in sales and use tax for 2003 and 2004, exclusive
      of
      interest and penalties, relating primarily to the same sales and use tax issues
      as were assessed in earlier years, concerning the provision of complimentary
      food to the employees and patrons of Majestic Star and Trump Indiana. BHR
      intends to protest the 2003 and 2004 assessments. Should the Department maintain
      its position that sales taxes are due on the retail value of complimentary
      meals
      BHR provided to employees of Majestic Star and Trump Indiana, BHR’s estimated
      2005 sales tax exposure for the complimentary meals will be $0.1 million.
      Pursuant to the terms of the SPA, TERH is obligated to indemnify the Company
      for
      50% of BHR’s pre-closing tax liabilities. Estimated exposure for the first six
      months of 2006, which would be the Company’s obligation only, would be
      approximately $0.1 million.





12
 ***Table
            of Contents***
 **THE
          MAJESTIC STAR CASINO, LLC AND SUBSIDIARIES**
 **(A
          Wholly Owned Subsidiary of Majestic Holdco, LLC)**
 **NOTES
          TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
          (CONTINUED)**
 **(unaudited)**








**NOTE
      8. RELATED PARTY TRANSACTIONS**





TRANSACTIONS
      BY OR WITH AFFILIATES





*Pushdown
      of Majestic Holdco Discount Notes.* The
      Company’s financial statements include the $63.5 million of Discount Notes, net
      of original issue discount of $15.4 million and $18.2 million as of
      June 30, 2006 and December 31, 2005, respectively, issued by Majestic
      Holdco in connection with the acquisition of Trump Indiana and other concurrent
      refinancing transactions. The Discount Notes are solely the obligation of
      Majestic Holdco and are unsecured. Neither the Company nor any of its direct
      or
      indirect subsidiaries guarantees the Discount Notes nor are the equity or assets
      of the Company or its direct or indirect subsidiaries security for the Discount
      Notes. Further, each of the Senior Secured Notes and Senior Notes Indentures
      and
      the loan and security agreement which governs our Senior Secured Credit Facility
      preclude distributions by the Company to Majestic Holdco unless certain
      financial tests are met. A likely scenario for the repayment of these Discount
      Notes is from cash flows of the Company or a refinancing of the Company’s
      indebtedness, together with the indebtedness of Majestic Holdco. The Discount
      Notes have been “pushed-down” to the Company pursuant to the guidelines of SEC
      Staff Accounting Bulletin Topic 5(J).





*Manager
      Agreement.* Distributions to BDI under the Manager Agreement dated October 7, 2003 are
      governed and limited by the terms of the indentures governing the Senior Secured
      Notes, the Senior Notes and the Discount Notes and by the terms of the Senior
      Secured Credit Facility. The distributions for each fiscal quarter may not
      exceed 1% of the Company’s consolidated net operating revenue and 5% of the
      Company’s consolidated cash flow (as defined in the indenture governing the
      Senior Secured Notes and the Senior Secured Credit Facility) for the immediately
      preceding fiscal quarter.





During
      the six months ended June 30, 2006 and 2005, Majestic Star made
      distributions totaling $3.6 million and $2.6 million, respectively, to BDI
      pursuant to the Manager Agreement.





*Tax
      Distributions* .
      Pursuant to the terms of each of the Senior Secured Notes and Senior Notes
      Indentures and the Senior Secured Credit Facility, the Company is permitted
      to
      make distributions for its member’s state and federal income tax liabilities. In
      the second quarter of 2006, the Company made a tax distribution of $0.9 million
      to BDI for 2005 state tax liabilities and estimated 2006 taxes. In the second
      quarter of 2005, the Company made a tax distribution of $2.3 million to BDI
      for
      2004 state tax liabilities and estimated 2005 taxes of which $0.7 million was
      reimbursed to the Company upon final determination of BDI’s tax
      liabilities.





*BHPA
      Rent Expense.* During
      the three and six months ended June 30, 2005, the Company incurred rent
      expense payable to BHPA totaling $0.5 million and $1.1 million, respectively.
      As
      a result of our acquisition of Trump Indiana and the contribution of AMB
      Parking’s equity interest in BHPA to the Company, on December 21, 2005,
      BHPA became an indirect wholly owned subsidiary of the Company, and the parking
      leases between BHPA and the Company and BHPA and Trump Indiana were
      terminated.





*Barden
      Nevada Expense Sharing Agreement* .
      The
      Company has entered into an expense sharing agreement dated October 7, 2003
      with Barden Nevada. The expense sharing agreement provides for a fee from Barden
      Nevada to the Company in the amount of the greater of (i) $0.5 million per
      year,
      or (ii) the actual amount of certain specified expenses incurred by the Company
      in connection with providing services to Barden Nevada. These transactions
      are
      included in general and administrative expenses in the consolidated statements
      of operations. For the three and six months ended June 30, 2006, the Company
      charged Barden Nevada $0.4 million and $0.7 million, respectively, pursuant
      to
      the expense sharing agreement. For the three and six months ended June 30,
      2005, the Company charged Barden Nevada $0.3 million and $0.7 million,
      respectively, pursuant to the expense sharing agreement.





13
 ***Table
            of Contents***
 **THE
          MAJESTIC STAR CASINO, LLC AND SUBSIDIARIES**
 **(A
          Wholly Owned Subsidiary of Majestic Holdco, LLC)**
 **NOTES
          TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
          (CONTINUED)**
 **(unaudited)**








*Barden
      Nevada Revolving Promissory Note.* On
      March 9, 2005, Barden Nevada entered into a revolving promissory note with
      the Company, whereby Barden Nevada may request advances from time to time from
      the Company up to $5.0 million. Interest is calculated based on the prime rate
      (as published in the Money Section of the Wall Street Journal), plus the margin
      spread paid by the Company under prime rate borrowings with Wells Fargo
      Foothill, the agent bank under the Senior Secured Credit Facility. Interest
      is
      paid quarterly, in arrears. Any costs that are funded by the Company and not
      repaid by Barden Nevada within 30 days will be added to the principal amount
      outstanding. All amounts outstanding under the promissory note are due and
      payable on October 7, 2007 along with the accrued and unpaid interest. As
      of June 30, 2006, the principal balance of the promissory note was
      $0.








**NOTE
      9. SEGMENT INFORMATION**





The
      Majestic Star Casino, LLC, either directly or indirectly through wholly owned
      subsidiaries, owns and operates four casino properties as follows: two riverboat
      casinos and a hotel located in Gary, Indiana; 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 three segments based on geographic location.
      The Properties, in each of their segments, market primarily to middle-income
      guests. The major products offered in each segment are as follows: casino,
      hotel
      rooms (at the Majestic Properties and Fitzgeralds Tunica), and food and
      beverage.





The
      accounting policies of each business segment are the same as those described
      in
      the summary of significant accounting policies in our Report on Form 10-K for
      the year ended December 31, 2005. There are minimal inter-segment
      sales.





A
      summary
      of the Properties’ operations by business segment for the three and six months
      ended June 30, 2006 and 2005 and a summary of the Properties’ assets and
      goodwill as of June 30, 2006 and December 31, 2005 are presented
      below:








14
 ***Table
            of Contents***
 **THE
          MAJESTIC STAR CASINO, LLC AND SUBSIDIARIES**
 **(A
          Wholly Owned Subsidiary of Majestic Holdco, LLC)**
 **NOTES
          TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
          (CONTINUED)**
 **(unaudited)**








For
                  The Three Months Ended
              
              For
                  The Six Months EndedJune
                  30,
              
              June
                  30,2006
              
              2005
              
              2006
              
              2005(in
                  thousands)Net
                  revenues:Majestic
                  Star
              
              $
              31,092
              
              $
              34,129
              
              $
              66,200
              
              $
              70,305Majestic
                  Star II
              
              
              24,870
              
              
              -
              
              
              59,154
              
              
              -Buffington
                  Harbor Riverboats
              
              
              102
              
              
              -
              
              
              221
              
              
              -Total
                  Majestic Properties
              
              
              56,064
              
              
              34,129
              
              
              125,575
              
              
              70,305Fitzgeralds
                  Tunica
              
              
              21,237
              
              
              20,519
              
              
              42,970
              
              
              42,035Fitzgeralds
                  Black Hawk
              
              
              8,256
              
              
              8,412
              
              
              16,930
              
              
              17,575Total
              
              $
              85,557
              
              $
              63,060
              
              $
              185,475
              
              $
              129,915Operating
                  income (loss):Majestic
                  Star
              
              $
              7,615
              
              $
              3,982
              
              $
              16,863
              
              $
              9,609Majestic
                  Star II
              
              
              6,078
              
              
              -
              
              
              15,597
              
              
              -Buffington
                  Harbor Riverboats
              
              
              (3,057
              )
              
              -
              
              
              (6,597
              )
              
              -Buffington
                  Harbor Parking Associates
              
              
              (362
              )
              
              -
              
              
              (724
              )
              
              -Total
                  Majestic Properties
              
              
              10,274
              
              
              3,982
              
              
              25,139
              
              
              9,609Fitzgeralds
                  Tunica
              
              
              1,907
              
              
              2,788
              
              
              5,586
              
              
              6,092Fitzgeralds
                  Black Hawk (1)
              
              
              1,988
              
              
              701
              
              
              3,730
              
              
              3,673Corporate
                  (2)
              
              
              (1,931
              )
              
              (3,985
              )
              
              (3,772
              )
              
              (5,202
              )Majestic
                  Investor Holdings (3)
              
              
              -
              
              
              (85
              )
              
              -
              
              
              (154
              )Total
              
              $
              12,238
              
              $
              3,401
              
              $
              30,683
              
              $
              14,018Segment
                  depreciation and amortization:Majestic
                  Star
              
              $
              1,902
              
              $
              2,166
              
              $
              3,772
              
              $
              4,236Majestic
                  Star II
              
              
              2,079
              
              
              -
              
              
              4,171
              
              
              -Buffington
                  Harbor Riverboats
              
              
              952
              
              
              -
              
              
              1,872
              
              
              -Buffington
                  Harbor Parking Associates
              
              
              145
              
              
              -
              
              
              290
              
              
              -Total
                  Majestic Properties
              
              
              5,078
              
              
              2,166
              
              
              10,105
              
              
              4,236Fitzgeralds
                  Tunica
              
              
              2,184
              
              
              2,533
              
              
              4,330
              
              
              5,009Fitzgeralds
                  Black Hawk (1)
              
              
              556
              
              
              1,960
              
              
              1,132
              
              
              1,960Corporate
              
              
              29
              
              
              24
              
              
              53
              
              
              44Majestic
                  Investor Holdings (3)
              
              
              -
              
              
              69
              
              
              -
              
              
              139Total
              
              $
              7,847
              
              $
              6,752
              
              $
              15,620
              
              $
              11,388


Expenditure
                  for additions to long-lived assets:Majestic
                  Star
              
              $
              663
              
              $
              1,937
              
              $
              2,740
              
              $
              2,828Majestic
                  Star II
              
              
              62
              
              
              -
              
              
              138
              
              
              -Buffington
                  Harbor Riverboats
              
              
              36
              
              
              -
              
              
              49
              
              
              -Total
                  Majestic Properties
              
              
              761
              
              
              1,937
              
              
              2,927
              
              
              2,828Fitzgeralds
                  Tunica
              
              
              835
              
              
              1,508
              
              
              1,337
              
              
              3,358Fitzgeralds
                  Black Hawk
              
              
              701
              
              
              1,402
              
              
              1,190
              
              
              1,809Corporate
              
              
              118
              
              
              -
              
              
              123
              
              
              -Total
              
              $
              2,415
              
              $
              4,847
              
              $
              5,577
              
              $
              7,995





15
 ***Table
            of Contents***
 **THE
          MAJESTIC STAR CASINO, LLC AND SUBSIDIARIES**
 **(A
          Wholly Owned Subsidiary of Majestic Holdco, LLC)**
 **NOTES
          TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
          (CONTINUED)**
 **(unaudited)**








As
                of
            
            As
                ofJune
                30,
            
            December
                31,2006
            
            2005(in
                thousands)Segment
                assets:Majestic
                Star (4)
            
            $
            118,579
            
            $
            243,475Majestic
                Star II
            
            
            226,102
            
            
            229,246Buffington
                Harbor Riverboats
            
            
            51,868
            
            
            53,751Buffington
                Harbor Parking Associates
            
            
            21,856
            
            
            21,592Total
                Majestic Properties
            
            
            418,405
            
            
            548,064Fitzgeralds
                Tunica
            
            
            71,384
            
            
            75,406Fitzgeralds
                Black Hawk
            
            
            39,334
            
            
            31,688Corporate
                (4)
            
            
            374,893
            
            
            289,353Majestic
                Investor Holdings (3)
            
            
            -
            
            
            1,896Total
            
            
            904,016
            
            
            946,407Less:
                Intercompany
            
            
            (397,730
            )
            
            (428,448
            )Total
            
            $
            506,286
            
            $
            517,959GoodwillMajestic
                Star II
            
            $
            42,281
            
            $
            41,328Fitzgeralds
                Tunica
            
            
            3,998
            
            
            3,998Fitzgeralds
                Black Hawk
            
            
            1,925
            
            
            1,925Total
            
            $
            48,204
            
            $
            47,251





(1)
            Fitzgeralds
                Black Hawk’s 2005 depreciation includes the $1.5 million of catch up
                depreciation and amortization expense for the period of time from
                July
                2004 to April 2005 when the assets of Fitzgeralds Black Hawk were
                held for
                sale and no depreciation or amortization expense was recorded during
                that
                period.


(2)
            Corporate
                expenses reflect payroll, benefits, travel and other costs associated
                with
                our corporate staff and are not allocated to the properties. In the
                three-
                and six- month periods ended June 30, 2005, corporate expenses includes
                the $2.3 million charge related to the termination of the Fitzgeralds
                Black Hawk sale.


(3)
            Majestic
                Investor Holdings was merged into the Company on March 22,
                2006.


(4)
            The
                combined assets of Majestic Star and Corporate include intercompany
                receivables from Majestic Star II, Fitzgeralds Tunica, BHR, BHPA and
                Fitzgeralds Black Hawk totaling approximately $397.7 million at
                June 30, 2006. At December 31, 2005, the combined assets of
                Majestic Star and Corporate include intercompany receivables from
                Majestic
                Star II, BHR, BHPA, Investor Holdings, Fitzgeralds Tunica and
                Fitzgeralds Black Hawk of $428.4 million. Intercompany receivables
                are
                eliminated in consolidation.








**NOTE
      10. SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION**





The
      Company is the co-issuer of $300.0 million of Senior Secured Notes and $200.0
      million of Senior Notes. Under the Senior Secured Notes Indenture, the Senior
      Notes Indenture and the loan and security agreement for the Senior Secured
      Credit Facility, Majestic Star II, Fitzgeralds Tunica, Fitzgeralds Black
      Hawk, BHR and BHPA are guarantor subsidiaries of the $300.0 million of Senior
      Secured Notes.





Our
      supplemental guarantor financial information contains financial information
      for
      The Majestic Star Casino, LLC, The Majestic Star Casino Capital Corp (co-issuer
      of the Senior Secured Notes but an entity with no operations), the guarantor
      subsidiaries and the eliminating entries necessary to consolidate such
      entities.











16
 ***Table
            of Contents***
 **THE
          MAJESTIC STAR CASINO, LLC AND SUBSIDIARIES**
 **(A
          Wholly Owned Subsidiary of Majestic Holdco, LLC)**
 **NOTES
          TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
          (CONTINUED)**
 **(unaudited)**





**NOTE
      10. SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION
      (CONTINUED)**





**CONDENSED
      CONSOLIDATING BALANCE SHEET**


**As
      of June 30, 2006**








The
                Majestic
            
            The
                MajesticStar
                Casino,
            
            Star
                Casino
            
            Guarantor
            
            Eliminating
            
            
            
            TotalLLC
            
            Capital
                Corp.
            
            Subsidiaries
            
            Entries
            
            
            
            ConsolidatedASSETSCurrent
                assets:Cash
                and cash equivalents
            
            $
            5,502,492
            
            $
            -
            
            $
            16,924,147
            
            $
            -
            
            
            
            
            $
            22,426,639Restricted
                cash
            
            
            2,166,881
            
            
            -
            
            
            1,160,000
            
            
            -
            
            
            
            
            
            3,326,881Accounts
                receivable, net
            
            
            853,402
            
            
            -
            
            
            3,359,480
            
            
            -
            
            
            
            
            
            4,212,882Inventories
            
            
            46,505
            
            
            -
            
            
            684,479
            
            
            -
            
            
            
            
            
            730,984Prepaid
                expenses and deposits
            
            
            4,444,635
            
            
            -
            
            
            5,986,149
            
            
            -
            
            
            
            
            
            10,430,784Receivable
                from affiliates
            
            
            2,183,992
            
            
            -
            
            
            3,307,191
            
            
            (4,900,398
            )
            
            (a
            )
            
            590,785Investment
                in subsidiaries
            
            
            96,513,611
            
            
            -
            
            
            -
            
            
            (96,513,611
            )
            
            (b
            )
            
            -Other
                current assets
            
            
            -
            
            
            -
            
            
            32,200
            
            
            -
            
            
            
            
            
            32,200Total
                current assets
            
            
            111,711,518
            
            
            -
            
            
            31,453,646
            
            
            (101,414,009
            )
            
            
            
            
            41,751,155Property,
                equipment and improvements, net
            
            
            74,224,093
            
            
            -
            
            
            195,708,440
            
            
            -
            
            
            
            
            
            269,932,533Intangible
                assets, net
            
            
            -
            
            
            -
            
            
            127,125,086
            
            
            -
            
            
            
            
            
            127,125,086Goodwill
            
            
            -
            
            
            -
            
            
            48,203,814
            
            
            -
            
            
            
            
            
            48,203,814Other
                assets:Deferred
                financing and transaction costsrelated
                to the acquisition of Trump Indiana
            
            
            14,451,980
            
            
            -
            
            
            -
            
            
            -
            
            
            
            
            
            14,451,980Deferred
                financing and transaction costspushed
                down from Majestic Holdco (1)
            
            
            2,677,535
            
            
            -
            
            
            -
            
            
            -
            
            
            
            
            
            2,677,535Long
                term receivable - related party
            
            
            290,059,182
            
            
            -
            
            
            6,257,546
            
            
            (296,316,728
            )
            
            (a
            )
            
            -Other
                assets
            
            
            347,750
            
            
            -
            
            
            1,795,735
            
            
            -
            
            
            
            
            
            2,143,485Total
                other assets
            
            
            307,536,447
            
            
            -
            
            
            8,053,281
            
            
            (296,316,728
            )
            
            
            
            
            19,273,000Total
                assets
            
            $
            493,472,058
            
            $
            -
            
            $
            410,544,267
            
            $
            (397,730,737
            )
            
            
            
            $
            506,285,588LIABILITIES
                AND MEMBER'S DEFICITCurrent
                liabilities:Accounts
                payable
            
            
            960,609
            
            
            -
            
            
            2,215,922
            
            
            -
            
            
            
            
            
            3,176,531Current
                portion of long-term debt
            
            
            58,198
            
            
            -
            
            
            160,316
            
            
            -
            
            
            
            
            
            218,514Payable
                to related party
            
            
            3,303,644
            
            
            -
            
            
            1,596,754
            
            
            (4,900,398
            )
            
            (a
            )
            
            -Accrued
                liabilities:Payroll
                and related
            
            
            2,961,245
            
            
            -
            
            
            5,996,416
            
            
            -
            
            
            
            
            
            8,957,661Interest
            
            
            10,475,239
            
            
            -
            
            
            441
            
            
            -
            
            
            
            
            
            10,475,680Property
                and franchise taxes
            
            
            3,703,394
            
            
            -
            
            
            5,728,938
            
            
            -
            
            
            
            
            
            9,432,332Other
                accrued liabilities
            
            
            3,940,032
            
            
            -
            
            
            8,141,305
            
            
            -
            
            
            
            
            
            12,081,337Total
                current liabilities
            
            
            25,402,361
            
            
            -
            
            
            23,840,092
            
            
            (4,900,398
            )
            
            
            
            
            44,342,055Due
                to related parties
            
            
            6,257,546
            
            
            -
            
            
            290,059,182
            
            
            (296,316,728
            )
            
            (a
            )
            
            -Long-term
                debt, net of current maturities
            
            
            537,944,664
            
            
            300,000,000
            
            
            131,382
            
            
            (300,000,000
            )
            
            (c
            )
            
            538,076,046Long-term
                debt pushed down from Majestic Holdco (2)
            
            
            48,116,437
            
            
            -
            
            
            -
            
            
            -
            
            
            
            
            
            48,116,437Total
                liabilities
            
            
            617,721,008
            
            
            300,000,000
            
            
            314,030,656
            
            
            (601,217,126
            )
            
            
            
            
            630,534,538Member's
                (deficit) equity
            
            
            (124,248,950
            )
            
            (300,000,000
            )
            
            96,513,611
            
            
            203,486,389
            
            
            (b)
                (c
            )
            
            (124,248,950
            )Total
                liabilities and member's (deficit) equity
            
            $
            493,472,058
            
            $
            -
            
            $
            410,544,267
            
            $
            (397,730,737
            )
            
            
            
            $
            506,285,588





17
 ***Table
            of Contents***
 **THE
          MAJESTIC STAR CASINO, LLC AND SUBSIDIARIES**
 **(A
          Wholly Owned Subsidiary of Majestic Holdco, LLC)**
 **NOTES
          TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
          (CONTINUED)**
 **(unaudited)**





**NOTE
      10. SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION
      (CONTINUED)**





**CONDENSED
      CONSOLIDATING BALANCE SHEET (CONTINUED)**


**As
      of June 30, 2006**








(a)
            To
                eliminate intercompany receivable and
                payables.





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





(c)
            As
                more fully described in Note 6. Long-Term Debt, the Majestic Star
                Casino
                Capital Corp. is a co-obligor of the Senior Secured Notes issued
                by the
                Company. Accordingly, such indebtedness has been presented as an
                obligation of both the issuer and the co-obligor in the above balance
                sheets.





(1)
            Reflects
                the pushdown of deferred financing costs related to the issuance
                of the
                Discount Notes of Majestic Holdco, net of amortization, pursuant
                to SEC
                Staff Accounting Bulletin Topic
                5(J).





(2)
            Reflects
                the pushdown of Majestic Holdco’s Discount Notes pursuant to SEC Staff
                Accounting Bulletin Topic 5(J).











18
 ***Table
            of Contents***
 **THE
          MAJESTIC STAR CASINO, LLC AND SUBSIDIARIES**
 **(A
          Wholly Owned Subsidiary of Majestic Holdco, LLC)**
 **NOTES
          TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)**
 **(unaudited)**





**NOTE
      10. SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION
      (CONTINUED)**





**CONDENSED
      CONSOLIDATING BALANCE SHEET**


**As
      of December 31, 2005**








The
                Majestic
            
            The
                MajesticStar
                Casino,
            
            Star
                Casino
            
            Guarantor
            
            Eliminating
            
            
            
            TotalLLC
            
            Capital
                Corp.
            
            Subsidiaries
            
            Entries
            
            
            
            ConsolidatedASSETSCurrent
                assets:Cash
                and cash equivalents
            
            $
            7,085,458
            
            $
            -
            
            $
            25,282,791
            
            $
            -
            
            
            
            
            $
            32,368,249Restricted
                cash
            
            
            900,000
            
            
            -
            
            
            2,290,000
            
            
            -
            
            
            
            
            
            3,190,000Accounts
                receivable, net
            
            
            1,528,727
            
            
            -
            
            
            3,070,687
            
            
            -
            
            
            
            
            
            4,599,414Inventories
            
            
            60,476
            
            
            -
            
            
            727,405
            
            
            -
            
            
            
            
            
            787,881Prepaid
                expenses and deposits
            
            
            918,195
            
            
            -
            
            
            1,515,406
            
            
            -
            
            
            
            
            
            2,433,601Receivable
                from affiliate
            
            
            9,851,352
            
            
            -
            
            
            -
            
            
            (9,682,341
            )
            
            (a
            )
            
            169,011Other
                current assets
            
            
            -
            
            
            -
            
            
            137,914
            
            
            -
            
            
            
            
            
            137,914Total
                current assets
            
            
            20,344,208
            
            
            -
            
            
            33,024,203
            
            
            (9,682,341
            )
            
            
            
            
            43,686,070Property,
                equipment and improvements, net
            
            
            75,421,809
            
            
            -
            
            
            202,710,674
            
            
            -
            
            
            
            
            
            278,132,483Intangible
                assets, net
            
            
            -
            
            
            -
            
            
            128,854,668
            
            
            -
            
            
            
            
            
            128,854,668Goodwill
            
            
            -
            
            
            -
            
            
            47,250,794
            
            
            -
            
            
            
            
            
            47,250,794Other
                assets:Deferred
                financing and transaction costsrelated
                to the acquisition of Trump Indiana
            
            
            15,263,897
            
            
            -
            
            
            -
            
            
            -
            
            
            
            
            
            15,263,897Deferred
                financing and transaction costspushed
                down from Majestic Holdco (1)
            
            
            2,804,227
            
            
            -
            
            
            -
            
            
            -
            
            
            
            
            
            2,804,227Long
                term receivable - related party
            
            
            418,765,178
            
            
            -
            
            
            -
            
            
            (418,765,178
            )
            
            (a
            )
            
            -Other
                assets
            
            
            228,363
            
            
            -
            
            
            1,738,330
            
            
            -
            
            
            
            
            
            1,966,693Total
                other assets
            
            
            437,061,665
            
            
            -
            
            
            1,738,330
            
            
            (418,765,178
            )
            
            
            
            
            20,034,817Total
                assets
            
            $
            532,827,682
            
            $
            -
            
            $
            413,578,669
            
            $
            (428,447,519
            )
            
            
            
            $
            517,958,832LIABILITIES
                AND MEMBER'S DEFICITCurrent
                liabilities:Accounts
                payable
            
            $
            1,775,675
            
            $
            -
            
            $
            1,783,532
            
            $
            -
            
            
            
            
            $
            3,559,207Note
                payable
            
            
            -
            
            
            -
            
            
            984,590
            
            
            -
            
            
            
            
            
            984,590Current
                portion of long-term debt
            
            
            -
            
            
            -
            
            
            174,447
            
            
            -
            
            
            
            
            
            174,447Payable
                to related party
            
            
            714,240
            
            
            -
            
            
            8,968,101
            
            
            (9,682,341
            )
            
            (a
            )
            
            -Accrued
                liabilities:Payroll
                and related
            
            
            3,095,817
            
            
            -
            
            
            6,170,430
            
            
            -
            
            
            
            
            
            9,266,247Interest
            
            
            7,215,793
            
            
            -
            
            
            586
            
            
            -
            
            
            
            
            
            7,216,379Property
                and franchise taxes
            
            
            3,763,331
            
            
            -
            
            
            4,652,308
            
            
            -
            
            
            
            
            
            8,415,639Other
                accrued liabilities
            
            
            5,465,515
            
            
            -
            
            
            10,991,461
            
            
            -
            
            
            
            
            
            16,456,976Total
                current liabilities
            
            
            22,030,371
            
            
            -
            
            
            33,725,455
            
            
            (9,682,341
            )
            
            
            
            
            46,073,485Investment
                in subsidiaries
            
            
            23,381,935
            
            
            -
            
            
            -
            
            
            (23,381,935
            )
            
            (b
            )
            
            -Due
                to related parties
            
            
            15,720,866
            
            
            -
            
            
            403,044,312
            
            
            (418,765,178
            )
            
            (a
            )
            
            -Long-term
                debt, net of current maturities
            
            
            547,212,346
            
            
            300,000,000
            
            
            190,837
            
            
            (300,000,000
            )
            
            (c
            )
            
            547,403,183Long-term
                debt pushed down from Majestic Holdco (2)
            
            
            45,296,335
            
            
            -
            
            
            -
            
            
            -
            
            
            
            
            
            45,296,335Total
                liabilities
            
            
            653,641,853
            
            
            300,000,000
            
            
            436,960,604
            
            
            (751,829,454
            )
            
            
            
            
            638,773,003Member's
                deficit
            
            
            (120,814,171
            )
            
            (300,000,000
            )
            
            (23,381,935
            )
            
            323,381,935
            
            
            (b)
                (c
            )
            
            (120,814,171
            )Total
                liabilities and member's deficit
            
            $
            532,827,682
            
            $
            -
            
            $
            413,578,669
            
            $
            (428,447,519
            )
            
            
            
            $
            517,958,832





19
 ***Table
            of Contents***
 **THE
          MAJESTIC STAR CASINO, LLC AND SUBSIDIARIES**
 **(A
          Wholly Owned Subsidiary of Majestic Holdco, LLC)**
 **NOTES
          TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
          (CONTINUED)**
 **(unaudited)**








**NOTE
      10. SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION
      (CONTINUED)**





**CONDENSED
      CONSOLIDATING BALANCE SHEET (CONTINUED)**


**As
      of December 31, 2005**








(a)
            To
                eliminate intercompany receivable and
                payables.





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





(c)
            As
                more fully described in Note 6. Long-Term Debt, the Majestic Star
                Casino
                Capital Corp. is a co-obligor of the Senior Secured Notes issued
                by the
                Company. Accordingly, such indebtedness has been presented as an
                obligation of both the issuer and the co-obligor in the above balance
                sheets.





(1)
            Reflects
                the pushdown of deferred financing costs related to the issuance
                of the
                Discount Notes of Majestic Holdco, net of amortization, pursuant
                to SEC
                Staff Accounting Bulletin Topic
                5(J).





(2)
            Reflects
                the pushdown of Majestic Holdco’s Discount Notes pursuant to SEC Staff
                Accounting Bulletin Topic 5(J).














20
 ***Table
            of Contents***
 **THE
          MAJESTIC STAR CASINO, LLC AND SUBSIDIARIES**
 **(A
          Wholly Owned Subsidiary of Majestic Holdco, LLC)**
 **NOTES
          TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
          (CONTINUED)**
 **(unaudited)**





**NOTE
      10. SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION
      (CONTINUED)**





**CONDENSED
      CONSOLIDATING STATEMENT OF OPERATIONS**


**For
      the Three Months Ended June 30, 2006**








The
                Majestic
            
            The
                MajesticStar
                Casino,
            
            Star
                Casino
            
            Guarantor
            
            Eliminating
            
            TotalLLC
            
            Capital
                Corp.
            
            Subsidiaries
            
            Entries
                (a)
            
            ConsolidatedOPERATING
                REVENUES:Casino
            
            $
            32,572,164
            
            $
            -
            
            $
            57,369,992
            
            $
            -
            
            $
            89,942,156Rooms
            
            
            -
            
            
            -
            
            
            2,848,379
            
            
            -
            
            
            2,848,379Food
                and beverage
            
            
            423,023
            
            
            -
            
            
            3,540,735
            
            
            -
            
            
            3,963,758Other
            
            
            717,239
            
            
            -
            
            
            942,446
            
            
            -
            
            
            1,659,685Gross
                revenues
            
            
            33,712,426
            
            
            -
            
            
            64,701,552
            
            
            -
            
            
            98,413,978Less
                promotional allowances
            
            
            2,620,584
            
            
            -
            
            
            10,236,239
            
            
            -
            
            
            12,856,823Net
                operating revenues
            
            
            31,091,842
            
            
            -
            
            
            54,465,313
            
            
            -
            
            
            85,557,155OPERATING
                COSTS AND EXPENSES:Casino
            
            
            5,997,951
            
            
            -
            
            
            14,544,419
            
            
            -
            
            
            20,542,370Rooms
            
            
            -
            
            
            -
            
            
            421,991
            
            
            -
            
            
            421,991Food
                and beverage
            
            
            459,821
            
            
            -
            
            
            1,701,000
            
            
            -
            
            
            2,160,821Other
            
            
            -
            
            
            -
            
            
            231,415
            
            
            -
            
            
            231,415Gaming
                taxes
            
            
            9,206,840
            
            
            -
            
            
            10,825,087
            
            
            -
            
            
            20,031,927Advertising
                and promotion
            
            
            1,239,149
            
            
            -
            
            
            3,149,326
            
            
            -
            
            
            4,388,475General
                and administrative
            
            
            3,804,336
            
            
            -
            
            
            10,432,690
            
            
            -
            
            
            14,237,026Corporate
                expense
            
            
            1,901,961
            
            
            -
            
            
            -
            
            
            -
            
            
            1,901,961Economic
                incentive tax - City of Gary
            
            
            867,014
            
            
            -
            
            
            678,011
            
            
            -
            
            
            1,545,025Depreciation
                and amortization
            
            
            1,930,649
            
            
            -
            
            
            5,916,450
            
            
            -
            
            
            7,847,099Loss
                on disposal of assets
            
            
            -
            
            
            -
            
            
            10,686
            
            
            -
            
            
            10,686Total
                operating costs and expenses
            
            
            25,407,721
            
            
            -
            
            
            47,911,075
            
            
            -
            
            
            73,318,796Operating
                income
            
            
            5,684,121
            
            
            -
            
            
            6,554,238
            
            
            -
            
            
            12,238,359OTHER
                INCOME (EXPENSE):Interest
                income
            
            
            47,966
            
            
            -
            
            
            38,344
            
            
            -
            
            
            86,310Interest
                expense
            
            
            (13,428,331
            )
            
            -
            
            
            (6,481
            )
            
            -
            
            
            (13,434,812
            )Interest
                expense - debt pushed downfrom
                Majestic Holdco (1) (2)
            
            
            (1,575,896
            )
            
            -
            
            
            -
            
            
            -
            
            
            (1,575,896
            )Other
                non-operating expense
            
            
            (23,955
            )
            
            -
            
            
            -
            
            
            -
            
            
            (23,955
            )Equity
                in net income of subsidiaries
            
            
            6,586,101
            
            
            -
            
            
            -
            
            
            (6,586,101
            )
            
            -Total
                other (expense) income
            
            
            (8,394,115
            )
            
            -
            
            
            31,863
            
            
            (6,586,101
            )
            
            (14,948,353
            )Net
                (loss) income
            
            $
            (2,709,994
            )
            $
            -
            
            $
            6,586,101
            
            $
            (6,586,101
            )
            $
            (2,709,994
            )





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





(1)
            Includes
                amortization of deferred financing costs related to the issuance
                of
                Majestic Holdco’s Discount Notes.





(2)
            Includes
                amortization of the discount on Majestic Holdco’s Discount
                Notes.





21
 ***Table
            of Contents***
 **THE
          MAJESTIC STAR CASINO, LLC AND SUBSIDIARIES**
 **(A
          Wholly Owned Subsidiary of Majestic Holdco, LLC)**
 **NOTES
          TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
          (CONTINUED)**
 **(unaudited)**





**NOTE
      10. SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION
      (CONTINUED)**





**CONDENSED
      CONSOLIDATING STATEMENT OF OPERATIONS**


**For
      the Three Months Ended June 30, 2005**








The
                Majestic
            
            The
                MajesticStar
                Casino,
            
            Star
                Casino
            
            Guarantor
            
            Eliminating
            
            TotalLLC
            
            Capital
                Corp.
            
            Subsidiaries
            
            Entries
                (a)
            
            ConsolidatedOPERATING
                REVENUES:Casino
            
            $
            37,442,188
            
            $
            -
            
            $
            30,833,775
            
            $
            -
            
            $
            68,275,963Rooms
            
            
            -
            
            
            -
            
            
            1,917,569
            
            
            -
            
            
            1,917,569Food
                and beverage
            
            
            417,474
            
            
            -
            
            
            3,042,526
            
            
            -
            
            
            3,460,000Other
            
            
            953,912
            
            
            -
            
            
            438,835
            
            
            -
            
            
            1,392,747Gross
                revenues
            
            
            38,813,574
            
            
            -
            
            
            36,232,705
            
            
            -
            
            
            75,046,279Less
                promotional allowances
            
            
            4,684,327
            
            
            -
            
            
            7,301,921
            
            
            -
            
            
            11,986,248Net
                operating revenues
            
            
            34,129,247
            
            
            -
            
            
            28,930,784
            
            
            -
            
            
            63,060,031OPERATING
                COSTS AND EXPENSES:Casino
            
            
            6,770,189
            
            
            -
            
            
            9,442,557
            
            
            -
            
            
            16,212,746Rooms
            
            
            -
            
            
            -
            
            
            441,108
            
            
            -
            
            
            441,108Food
                and beverage
            
            
            464,552
            
            
            -
            
            
            999,950
            
            
            -
            
            
            1,464,502Other
            
            
            -
            
            
            -
            
            
            242,399
            
            
            -
            
            
            242,399Gaming
                taxes
            
            
            10,774,190
            
            
            -
            
            
            3,977,814
            
            
            -
            
            
            14,752,004Advertising
                and promotion
            
            
            1,982,911
            
            
            -
            
            
            1,918,517
            
            
            -
            
            
            3,901,428General
                and administrative
            
            
            6,258,424
            
            
            -
            
            
            3,907,815
            
            
            -
            
            
            10,166,239Corporate
                expense
            
            
            3,961,114
            
            
            -
            
            
            -
            
            
            -
            
            
            3,961,114Economic
                incentive tax - City of Gary
            
            
            1,124,610
            
            
            -
            
            
            -
            
            
            -
            
            
            1,124,610Depreciation
                and amortization
            
            
            2,189,482
            
            
            -
            
            
            4,562,251
            
            
            -
            
            
            6,751,733Loss
                on investment in BuffingtonHarbor
                Riverboats, LLC
            
            
            603,500
            
            
            -
            
            
            -
            
            
            -
            
            
            603,500Loss
                on disposal of assets
            
            
            3,644
            
            
            -
            
            
            34,191
            
            
            -
            
            
            37,835Total
                operating costs and expenses
            
            
            34,132,616
            
            
            -
            
            
            25,526,602
            
            
            -
            
            
            59,659,218Operating
                (loss) income
            
            
            (3,369
            )
            
            -
            
            
            3,404,182
            
            
            -
            
            
            3,400,813OTHER
                INCOME (EXPENSE):Interest
                income
            
            
            64,762
            
            
            -
            
            
            21,652
            
            
            -
            
            
            86,414Interest
                expense
            
            
            (6,969,080
            )
            
            -
            
            
            (474,569
            )
            
            -
            
            
            (7,443,649
            )Other
                non-operating expense
            
            
            (41,715
            )
            
            -
            
            
            -
            
            
            -
            
            
            (41,715
            )Equity
                in net income of subsidiaries
            
            
            2,951,265
            
            
            -
            
            
            -
            
            
            (2,951,265
            )
            
            -Total
                other expense
            
            
            (3,994,768
            )
            
            -
            
            
            (452,917
            )
            
            (2,951,265
            )
            
            (7,398,950
            )Net
                (loss) income
            
            $
            (3,998,137
            )
            $
            -
            
            $
            2,951,265
            
            $
            (2,951,265
            )
            $
            (3,998,137
            )





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








22
 ***Table
            of Contents***
 **THE
          MAJESTIC STAR CASINO, LLC AND SUBSIDIARIES**
 **(A
          Wholly Owned Subsidiary of Majestic Holdco, LLC)**
 **NOTES
          TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
          (CONTINUED)**
 **(unaudited)**





**NOTE
      10. SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION
      (CONTINUED)**





**CONDENSED
      CONSOLIDATING STATEMENT OF OPERATIONS**


**For
      the Six Months Ended June 30, 2006**








The
                Majestic
            
            The
                MajesticStar
                Casino,
            
            Star
                Casino
            
            Guarantor
            
            Eliminating
            
            TotalLLC
            
            Capital
                Corp.
            
            Subsidiaries
            
            Entries
                (a)
            
            ConsolidatedOPERATING
                REVENUES:Casino
            
            $
            69,021,309
            
            $
            -
            
            $
            124,806,338
            
            $
            -
            
            $
            193,827,647Rooms
            
            
            -
            
            
            -
            
            
            5,612,771
            
            
            -
            
            
            5,612,771Food
                and beverage
            
            
            925,177
            
            
            -
            
            
            7,393,657
            
            
            -
            
            
            8,318,834Other
            
            
            1,401,637
            
            
            -
            
            
            2,006,058
            
            
            -
            
            
            3,407,695Gross
                revenues
            
            
            71,348,123
            
            
            -
            
            
            139,818,824
            
            
            -
            
            
            211,166,947Less
                promotional allowances
            
            
            5,147,804
            
            
            -
            
            
            20,543,854
            
            
            -
            
            
            25,691,658Net
                operating revenues
            
            
            66,200,319
            
            
            -
            
            
            119,274,970
            
            
            -
            
            
            185,475,289OPERATING
                COSTS AND EXPENSES:Casino
            
            
            12,334,810
            
            
            -
            
            
            31,138,237
            
            
            -
            
            
            43,473,047Rooms
            
            
            -
            
            
            -
            
            
            1,606,195
            
            
            -
            
            
            1,606,195Food
                and beverage
            
            
            968,983
            
            
            -
            
            
            3,308,210
            
            
            -
            
            
            4,277,193Other
            
            
            173
            
            
            -
            
            
            489,307
            
            
            -
            
            
            489,480Gaming
                taxes
            
            
            19,608,705
            
            
            -
            
            
            24,846,550
            
            
            -
            
            
            44,455,255Advertising
                and promotion
            
            
            2,624,287
            
            
            -
            
            
            5,914,333
            
            
            -
            
            
            8,538,620General
                and administrative
            
            
            8,243,111
            
            
            -
            
            
            21,022,450
            
            
            -
            
            
            29,265,561Corporate
                expense
            
            
            3,719,665
            
            
            -
            
            
            -
            
            
            -
            
            
            3,719,665Economic
                incentive tax - City of Gary
            
            
            1,787,746
            
            
            -
            
            
            1,564,268
            
            
            -
            
            
            3,352,014Depreciation
                and amortization
            
            
            3,824,953
            
            
            -
            
            
            11,794,895
            
            
            -
            
            
            15,619,848Gain
                on disposal of assets
            
            
            (2,727
            )
            
            -
            
            
            (1,577
            )
            
            -
            
            
            (4,304
            )Total
                operating costs and expenses
            
            
            53,109,706
            
            
            -
            
            
            101,682,868
            
            
            -
            
            
            154,792,574Operating
                income
            
            
            13,090,613
            
            
            -
            
            
            17,592,102
            
            
            -
            
            
            30,682,715OTHER
                INCOME (EXPENSE):Interest
                income
            
            
            122,586
            
            
            -
            
            
            99,791
            
            
            -
            
            
            222,377Interest
                expense
            
            
            (26,880,117
            )
            
            -
            
            
            131,416
            
            
            -
            
            
            (26,748,701
            )Interest
                expense - debt pushed downfrom
                Majestic Holdco (1) (2)
            
            
            (3,070,254
            )
            
            -
            
            
            -
            
            
            -
            
            
            (3,070,254
            )Other
                non-operating expense
            
            
            (51,203
            )
            
            -
            
            
            -
            
            
            -
            
            
            (51,203
            )Equity
                in net income of subsidiaries
            
            
            17,823,309
            
            
            -
            
            
            -
            
            
            (17,823,309
            )
            
            -Total
                other expense
            
            
            (12,055,679
            )
            
            -
            
            
            231,207
            
            
            (17,823,309
            )
            
            (29,647,781
            )Net
                income
            
            $
            1,034,934
            
            $
            -
            
            $
            17,823,309
            
            $
            (17,823,309
            )
            $
            1,034,934





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





(1)
            Includes
                amortization of deferred financing costs related to the issuance
                of
                Majestic Holdco’s Discount Notes.





(2)
            Includes
                amortization of the discount on Majestic Holdco’s Discount Notes.





23
 ***Table
            of Contents***
 **THE
          MAJESTIC STAR CASINO, LLC AND SUBSIDIARIES**
 **(A
          Wholly Owned Subsidiary of Majestic Holdco, LLC)**
 **NOTES
          TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
          (CONTINUED)**
 **(unaudited)**





**NOTE
      10. SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION
      (CONTINUED)**





**CONDENSED
      CONSOLIDATING STATEMENT OF OPERATIONS**


**For
      the Six Months Ended June 30, 2005**








The
                Majestic
            
            The
                MajesticStar
                Casino,
            
            Star
                Casino
            
            Guarantor
            
            Eliminating
            
            TotalLLC
            
            Capital
                Corp.
            
            Subsidiaries
            
            Entries
                (a)
            
            ConsolidatedOPERATING
                REVENUES:Casino
            
            $
            76,139,357
            
            $
            -
            
            $
            63,219,253
            
            $
            -
            
            $
            139,358,610Rooms
            
            
            -
            
            
            -
            
            
            3,711,673
            
            
            -
            
            
            3,711,673Food
                and beverage
            
            
            859,997
            
            
            -
            
            
            6,110,379
            
            
            -
            
            
            6,970,376Other
            
            
            1,619,030
            
            
            -
            
            
            831,447
            
            
            -
            
            
            2,450,477Gross
                revenues
            
            
            78,618,384
            
            
            -
            
            
            73,872,752
            
            
            -
            
            
            152,491,136Less
                promotional allowances
            
            
            8,313,399
            
            
            -
            
            
            14,262,646
            
            
            -
            
            
            22,576,045Net
                operating revenues
            
            
            70,304,985
            
            
            -
            
            
            59,610,106
            
            
            -
            
            
            129,915,091OPERATING
                COSTS AND EXPENSES:Casino
            
            
            13,901,276
            
            
            -
            
            
            19,604,349
            
            
            -
            
            
            33,505,625Rooms
            
            
            -
            
            
            -
            
            
            825,053
            
            
            -
            
            
            825,053Food
                and beverage
            
            
            976,839
            
            
            -
            
            
            1,989,004
            
            
            -
            
            
            2,965,843Other
            
            
            -
            
            
            -
            
            
            501,877
            
            
            -
            
            
            501,877Gaming
                taxes
            
            
            21,844,453
            
            
            -
            
            
            8,205,740
            
            
            -
            
            
            30,050,193Advertising
                and promotion
            
            
            3,707,589
            
            
            -
            
            
            3,687,339
            
            
            -
            
            
            7,394,928General
                and administrative
            
            
            12,528,453
            
            
            -
            
            
            8,044,283
            
            
            -
            
            
            20,572,736Corporate
                expense
            
            
            5,158,184
            
            
            -
            
            
            -
            
            
            -
            
            
            5,158,184Economic
                incentive tax - City of Gary
            
            
            2,287,972
            
            
            -
            
            
            -
            
            
            -
            
            
            2,287,972Depreciation
                and amortization
            
            
            4,279,929
            
            
            -
            
            
            7,107,739
            
            
            -
            
            
            11,387,668Loss
                on investment in BuffingtonHarbor
                Riverboats, LLC
            
            
            1,209,198
            
            
            -
            
            
            -
            
            
            -
            
            
            1,209,198Loss
                on disposal of assets
            
            
            3,644
            
            
            -
            
            
            34,331
            
            
            -
            
            
            37,975Total
                operating costs and expenses
            
            
            65,897,537
            
            
            -
            
            
            49,999,715
            
            
            -
            
            
            115,897,252Operating
                income
            
            
            4,407,448
            
            
            -
            
            
            9,610,391
            
            
            -
            
            
            14,017,839OTHER
                INCOME (EXPENSE):Interest
                income
            
            
            69,730
            
            
            -
            
            
            28,886
            
            
            -
            
            
            98,616Interest
                expense
            
            
            (13,730,887
            )
            
            -
            
            
            (949,137
            )
            
            -
            
            
            (14,680,024
            )Other
                non-operating expense
            
            
            (78,669
            )
            
            -
            
            
            -
            
            
            -
            
            
            (78,669
            )Equity
                in net income of subsidiaries
            
            
            8,690,140
            
            
            -
            
            
            -
            
            
            (8,690,140
            )
            
            -Total
                other expense
            
            
            (5,049,686
            )
            
            -
            
            
            (920,251
            )
            
            (8,690,140
            )
            
            (14,660,077
            )Net
                (loss) income
            
            $
            (642,238
            )
            $
            -
            
            $
            8,690,140
            
            $
            (8,690,140
            )
            $
            (642,238
            )





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








24
 ***Table
            of Contents***
 **THE
          MAJESTIC STAR CASINO, LLC AND SUBSIDIARIES**
 **(A
          Wholly Owned Subsidiary of Majestic Holdco, LLC)**
 **NOTES
          TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
          (CONTINUED)**
 **(unaudited)**








**NOTE
      10. SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION
      (CONTINUED)**





**CONDENSED
      CONSOLIDATING STATEMENT OF CASH FLOWS**


**For
      the Six Months Ended June 30, 2006**








The
                Majestic
            
            The
                MajesticStar
                Casino,
            
            Star
                Casino
            
            Guarantor
            
            Eliminating
            
            TotalLLC
            
            Capital
                Corp.
            
            Subsidiaries
            
            Entries
            
            ConsolidatedNET
                CASH (USED IN) PROVIDED BYOPERATING
                ACTIVITIES: (1)
            
            $
            (4,095,046
            )
            $
            -
            
            $
            15,868,205
            
            $
            -
            
            $
            11,773,159CASH
                FLOWS FROM INVESTING ACTIVITIES:Increase
                in restricted cash
            
            
            (16,881
            )
            
            -
            
            
            (120,000
            )
            
            -
            
            
            (136,881
            )Additional
                acquisition costs related toTrump
                Indiana acquisition
            
            
            -
            
            
            -
            
            
            (953,020
            )
            
            -
            
            
            (953,020
            )Acquisition
                of property and equipment
            
            
            (2,862,952
            )
            
            -
            
            
            (2,714,340
            )
            
            -
            
            
            (5,577,292
            )Merger
                of Majestic Investor Holdings into Majestic Star
            
            
            600,328
            
            
            -
            
            
            (600,328
            )
            
            -
            
            
            -Proceeds
                from disposal of assets
            
            
            134,068
            
            
            -
            
            
            569,015
            
            
            -
            
            
            703,083Net
                cash used in investing activities
            
            
            (2,145,437
            )
            
            -
            
            
            (3,818,673
            )
            
            -
            
            
            (5,964,110
            )CASH
                FLOWS FROM FINANCING ACTIVITIES:Issuance
                costs for the 9 1/2% senior secured notes
            
            
            (132,764
            )
            
            -
            
            
            -
            
            
            -
            
            
            (132,764
            )Issuance
                costs for the 9 3/4% senior notes
            
            
            (670,876
            )
            
            -
            
            
            -
            
            
            -
            
            
            (670,876
            )Issuance
                costs for the 12 1/2% senior discount notespushed
                down from Majestic Holdco (2)
            
            
            (99,274
            )
            
            -
            
            
            -
            
            
            -
            
            
            (99,274
            )Proceeds
                from line of credit
            
            
            24,963,368
            
            
            -
            
            
            -
            
            
            -
            
            
            24,963,368Repayment
                of line of credit
            
            
            (34,283,222
            )
            
            -
            
            
            -
            
            
            -
            
            
            (34,283,222
            )Repayment
                of debt
            
            
            -
            
            
            -
            
            
            (1,058,176
            )
            
            -
            
            
            (1,058,176
            )Cash
                advances from (to) affiliates
            
            
            19,350,000
            
            
            -
            
            
            (19,350,000
            )
            
            -
            
            
            -Distribution
                to Barden Development, Inc.
            
            
            (4,469,715
            )
            
            -
            
            
            -
            
            
            -
            
            
            (4,469,715
            )Net
                cash provided by (used in) financing activities
            
            
            4,657,517
            
            
            -
            
            
            (20,408,176
            )
            
            -
            
            
            (15,750,659
            )Net
                decrease in cash and cash equivalents
            
            
            (1,582,966
            )
            
            -
            
            
            (8,358,644
            )
            
            -
            
            
            (9,941,610
            )Cash
                and cash equivalents, beginning of period
            
            
            7,085,458
            
            
            -
            
            
            25,282,791
            
            
            -
            
            
            32,368,249Cash
                and cash equivalents, end of period
            
            $
            5,502,492
            
            $
            -
            
            $
            16,924,147
            
            $
            -
            
            $
            22,426,639





(1)
            Includes
                amortization of bond discount and deferred financing costs of $3.1
                million
                related to the pushdown of Majestic Holdco’s Discount Notes pursuant to
                SEC Staff Accounting Bulletin Topic
                5(J).





(2)
            Reflects
                the pushdown of issuance costs of Majestic Holdco’s Discount Notes
                pursuant to SEC Staff Accounting Bulletin Topic
                5(J).








25
 ***Table
            of Contents***
 **THE
          MAJESTIC STAR CASINO, LLC AND SUBSIDIARIES**
 **(A
          Wholly Owned Subsidiary of Majestic Holdco, LLC)**
 **NOTES
          TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
          (CONTINUED)**
 **(unaudited)**





**NOTE
      10. SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION
      (CONTINUED)**





**CONDENSED
      CONSOLIDATING STATEMENT OF CASH FLOWS**


**For
      the Six Months Ended June 30, 2005**








The
                Majestic
            
            The
                MajesticStar
                Casino,
            
            Star
                Casino
            
            Guarantor
            
            Eliminating
            
            TotalLLC
            
            Capital
                Corp.
            
            Subsidiaries
            
            Entries
            
            ConsolidatedNET
                CASH (USED IN) PROVIDED BYOPERATING
                ACTIVITIES:
            
            $
            (9,553,396
            )
            $
            -
            
            $
            15,981,587
            
            $
            -
            
            $
            6,428,191CASH
                FLOWS FROM INVESTING ACTIVITIES:Acquisition
                of property and equipment
            
            
            (2,827,255
            )
            
            -
            
            
            (5,167,356
            )
            
            -
            
            
            (7,994,611
            )Decrease
                in prepaid leases and deposits
            
            
            3,600
            
            
            -
            
            
            -
            
            
            -
            
            
            3,600Proceeds
                from disposal of assets
            
            
            -
            
            
            -
            
            
            200
            
            
            -
            
            
            200Net
                cash used in investing activities
            
            
            (2,823,655
            )
            
            -
            
            
            (5,167,156
            )
            
            -
            
            
            (7,990,811
            )CASH
                FLOWS FROM FINANCING ACTIVITIES:Proceeds
                from line of credit
            
            
            22,437,970
            
            
            -
            
            
            -
            
            
            -
            
            
            22,437,970Repayment
                of line of credit
            
            
            (13,050,806
            )
            
            -
            
            
            -
            
            
            -
            
            
            (13,050,806
            )Advances
                to affiliates - net
            
            
            (3,232,951
            )
            
            -
            
            
            -
            
            
            -
            
            
            (3,232,951
            )Cash
                advances from (to) affiliates
            
            
            9,275,000
            
            
            -
            
            
            (9,275,000
            )
            
            -
            
            
            -Distribution
                to Barden Development, Inc.
            
            
            (4,881,209
            )
            
            -
            
            
            -
            
            
            -
            
            
            (4,881,209
            )Net
                cash provided by (used in) financing activities
            
            
            10,548,004
            
            
            -
            
            
            (9,275,000
            )
            
            -
            
            
            1,273,004Net
                (decrease) increase in cash and cash equivalents
            
            
            (1,829,047
            )
            
            -
            
            
            1,539,431
            
            
            -
            
            
            (289,616
            )Cash
                and cash equivalents, beginning of period
            
            
            8,433,545
            
            
            -
            
            
            8,288,184
            
            
            -
            
            
            16,721,729Cash
                and cash equivalents, end of period
            
            $
            6,604,498
            
            $
            -
            
            $
            9,827,615
            
            $
            -
            
            $
            16,432,113








26
 ***Table
            of
            Contents***








**ITEM
      2.****Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operations.**








STATEMENT
      ON FORWARD-LOOKING INFORMATION





Throughout
      this report we make forward-looking statements. Forward-looking statements
      include the words “may,” “will,” “would,” “could,” “likely,” “estimate,”
“intend,” “plan,” “continue,” “believe,” “expect” or “anticipate” and other
      similar words and include all discussions about our acquisition and development
      plans. We do not guarantee that the transactions and events described in this
      report will happen as described or that any positive trends noted in this report
      will continue. The forward-looking statements contained in this report are
      generally located in the material set forth under the headings “Business,” and
“Management’s Discussion and Analysis of Financial Condition and Results of
      Operations,” but may be found in other locations as well. These forward-looking
      statements generally relate to our plans, objectives and expectations for future
      operations and are based upon management’s reasonable estimates of future
      results or trends. Although we believe that our plans and objectives reflected
      in or suggested by such forward-looking statements are reasonable, we may not
      achieve such plans or objectives. You should read this report completely and
      with the understanding that actual future results may be materially different
      from what we expect. We will not update forward-looking statements even though
      our situation may change in the future.





For
      a
      more complete description of the risk factors that may affect our business,
      see
      the risk factors set forth in Item 1A., Risk Factors, in the Company’s Annual
      Report on Form 10-K for the year ended December 31, 2005, and as updated in
      Part II of this report, and elsewhere in this report.





All
      future written and verbal forward-looking statements attributable to us or
      any
      person acting on our behalf are expressly qualified in their entirety by the
      cautionary statements contained or referred to in this report. In light of
      these
      risks, uncertainties and assumptions, the forward-looking events discussed
      in
      this report might not occur.





**OVERVIEW**





***The
      Company***





The
      Majestic Star Casino, LLC and its subsidiaries (collectively, the “Company”),
      operate two riverboat gaming facilities located in Gary, Indiana (separately
      “Majestic Star” and “Majestic Star II”) and two Fitzgeralds brand casino-hotels
      located in Tunica County, Mississippi (“Barden Mississippi” or “Fitzgeralds
      Tunica”) and Black Hawk, Colorado (casino only) (“Barden Colorado” or
“Fitzgeralds Black Hawk”). The Company has entered into an expense-sharing
      arrangement with Barden Nevada Gaming, LLC (“Barden Nevada” or “Fitzgeralds Las
      Vegas”) for support services. See Note 8 to the Condensed Consolidated Financial
      Statements.





27
 ***Table
            of
            Contents***








***Discount
      Notes***





A
      newly
      created entity and parent to the Company, Majestic Holdco, LLC (“Majestic
      Holdco”) issued, in conjunction with its co-issuer, Majestic Holdco, Inc., $63.5
      million aggregate principal at maturity of 12 1⁄2% Senior Discount Notes due
      2011 (the “Discount Notes”). The Company’s consolidated balance sheets as of
      June 30, 2006 and December 31, 2005, include the pushdown of Discount
      Notes of $45.3 million at December 31, 2005 and $48.1 million at
      June 30, 2006, net of original issue discount, that were issued by Majestic
      Holdco in connection with the financing for the Trump Indiana acquisition.
      Also
      being pushed down are financing costs of $2.7 million, net of amortization
      of
      $0.3 million as of June 30, 2006, and amortization of deferred financing costs
      and bond discount (reflected in interest expense in the Company’s consolidated
      statement of operations) of $1.6 million and $3.1 million, respectively for
      the
      three and six months ended June 30, 2006. A likely scenario for the
      repayment of these Discount Notes is from cash flows of the Company or a
      refinancing of the Company’s indebtedness, together with the indebtedness of
      Majestic Holdco. The Discount Notes have been “pushed-down” to the Company
      pursuant to the guidelines of SEC Staff Accounting Bulletin Topic 5(J). The
      Discount Notes are solely the obligation of Majestic Holdco and its co-issuer,
      Majestic Holdco, Inc. and are unsecured. Neither the Company nor any of its
      direct or indirect subsidiaries guarantees the Discount Notes nor are the equity
      or assets of the Company or any of its subsidiaries security for the Discount
      Notes. Further, each of the senior notes (the “Senior Notes”) and the senior
      secured notes (the “Senior Secured Notes”) indentures and the loan and security
      agreement which governs our senior secured credit facility ("Senior Secured
      Credit Facility") preclude distributions by the Company to Majestic Holdco
      unless certain financial tests are met.





**RESULTS
      OF OPERATIONS**





***Trump
      Indiana Acquisition***





On
      December 21, 2005, the Company purchased the Majestic Star II (formerly
      known as Trump Indiana) from Trump Entertainment Resorts Holdings L.P. (“TERH”)
      for a purchase price of $253.0 million, subject to adjustments for certain
      obligations, cash on hand and working capital. As part of that purchase, the
      Company also acquired Trump Indiana’s 50% joint venture interest in Buffington
      Harbor Riverboats, L.L.C. (“BHR”) and in Buffington Harbor Parking Associates,
      L.L.C. (“BHPA”). An affiliate of the Company contributed its 50% interest in
      BHPA to the Company at the time of the closing on the Trump Indiana acquisition.
      As a result of these transactions, Majestic Star II, BHR and BHPA are now all
      wholly owned subsidiaries of the Company. Majestic Star, Majestic Star II,
      BHR
      and BHPA are referred to collectively as the “Majestic Properties.”





Since
      the
      acquisition, we have spent a significant amount of time and effort to
      incorporate Majestic Star II into our other Gary, Indiana operations. We
      have substantially implemented our cost savings strategy that will
      result in approximately $14.4 million of cost savings on an annualized
      basis. However, reductions in marketing and promotions, increased competition,
      disruption to our gaming operations during the transition, road construction,
      lack of acceptance of the changes we made to our properties by our customers,
      and higher energy and fuel costs experienced by our customers, thus resulting
      in
      fewer trips to our Majestic Properties and lower discretionary spending on
      gambling, have impacted casino revenue.





As
      reported by the Indiana Gaming Commission, the casino revenues at our Majestic
      Properties declined by 11.1% for the six months ended June 30, 2006 compared
      to
      the same period in 2005, when the operating entities were Majestic Star and
      Trump Indiana. For all of the northwest Indiana gaming market, casino revenues
      have increased 4.7% in 2006 compared to 2005.





We
      are
      actively addressing those issues identified above that are within our control.
      In addition to those plans identified within Management’s Discussion and
      Analysis of Financial Condition and Results of Operations contained within
      the
      Company’s Report on Form 10-Q for the quarterly period ended March 31, 2006, we
      plan to:





·
            Reduce
                table game limits to introduce $3.00 games to distinguish the properties
                from our competitors and generate longer playing
                times;





·
            Raise
                table game maximum limits in the main casino areas from $500 to
                $5,000;





28
 ***Table
            of
            Contents***








·
            Enhance
                and target our advertising on radio, television, outdoor signage
                and
                publications to promote the new tournament programs, new table limits,
                free valet parking and Double Deck Blackjack;





·
            Remodel
                the porte cochere and front entrance to the BHR pavilion, add retail
                kiosks and re-open the Lakeshore
                Lounge.





·
            Add
                live DJ entertainment on both vessels starting in August
                2006.





We
      believe the programs listed above and in our previous 10-Q filing will enhance
      our revenues and cash flow; however, many of the programs take time to implement
      and to gain customer acceptance. Additionally, the Majestic Properties will
      continue to be subject to the enhanced marketing, promotions and amenities
      offered by our competitors. There is no guarantee that our immediate plans
      will
      improve our casino revenues and our cash flows in the near term or on a
      permanent basis.








***Overall
      Operating Results***





The
      discussion of our consolidated financial results for the three and six months
      ended June 30, 2006 is inclusive of the operating results of Majestic
      Star II, along with the additional 50% interest of BHR and BHPA, from the
      date of acquisition. In addition, our financial results are inclusive of
      interest expense and amortization of financing costs related to the pushdown
      of
      the Discount Notes, as discussed previously, and are exclusive of $1.1 million
      of severance payments made in connection with the Trump Indiana acquisition
      as
      those costs have been recorded as goodwill.





Consolidated
      gross operating revenues increased $23.4 million, or 31.1%, from $75.0 million
      in the three-month period ended June 30, 2005 to $98.4 million in the
      three-month period ended June 30, 2006. The increase is primarily due to
      the acquisition of Majestic Star II, which contributed $27.1 million to
      consolidated gross revenues for the quarter. Fitzgeralds Tunica and BHR also
      added $1.4 million and $0.1 million, respectively, to consolidated gross
      revenues, offset by a decrease of $5.1 million at Majestic Star and a decrease
      of $0.2 million at Fitzgeralds Black Hawk.





Consolidated
      casino revenues, which comprise 91.4% of consolidated gross revenues, increased
      $21.7 million, or 31.7%, to $89.9 million, in the three-month period ended
      June
      30, 2006, compared to the similar period last year, again due to Majestic
      Star II’s contribution, which was $25.5 million. Adding to the increase in
      consolidated casino revenue was a $1.2 million increase at Fitzgeralds Tunica
      resulting from higher slot revenues of $0.6 million due to increases in slot
      coin-in and slot win percentages of 0.5% and 2.4%, respectively, and a $0.6
      million increase in table games revenue from a 37.5% increase in drop offset
      by
      a 1.1% reduction in the hold percentage. These increases in consolidated casino
      revenue were offset by declines in casino revenue at Majestic Star of $4.9
      million and $0.2 million at Fitzgeralds Black Hawk. The decline at Majestic
      Star
      was due to a $0.2 million increase in table games revenue caused by a 10.0%
      decline in drop offset by a 14.9% increase in the hold percentage, and a $5.1
      million decline in slot revenue resulting from a decrease in slot coin-in of
      16.4%, offset by a 0.3% improvement in win percentage. Fitzgeralds Black Hawk’s
      decline in casino revenues of $0.2 million was mostly due to lower slot coin-in
      of 6.8%. The lower casino revenues at the Majestic Properties are primarily
      a
      result of lower than expected volumes due to the issues mentioned above.
      Fitzgeralds Black Hawk is also facing additional competition as remodeled
      casinos at competitors, new amenities and greater levels of marketing are making
      for a more competitive environment.





29
 ***Table
            of
            Contents***








In
      the
      three-month period ended June 30, 2006, as compared to the same three-month
      period last year, operating expenses increased $13.7 million, with most of
      this
      increase attributable to Majestic Star II. Majestic Star's operating expenses,
      including fifty percent of BHR and BHPA (for comparative purposes), declined
      from $30.1 million in the second quarter of last year to $25.2 million in the
      current quarter, a decrease of $4.9 million. Contributing to the reduction
      in
      operating expenses was the implementation of cost saving strategies in
      conjunction with our acquisition of Trump Indiana, reduction in gaming taxes
      at
      the property due to the decline in casino revenues and elimination of the lease
      expense paid to BHPA for the parking garage utilized by Majestic Star during
      the
      second quarter of 2005. Also in the second quarter of 2005, we incurred a charge
      of approximately $2.3 million related to the termination of the sale of our
      Fitzgeralds Black Hawk property. In addition, during the period the property
      was
      considered as held for sale, no depreciation or amortization expense was
      recognized. When the sale was terminated, depreciation and amortization of
      $1.5
      million was caught up in the second quarter of 2005 for the period in which
      no
      depreciation or amortization was recorded.





As
      a
      result of these changes in revenues and expenses, we had a consolidated net
      loss
      of $2.7 million during the three-month period ended June 30, 2006 compared
      to a net loss of $4.0 million during the same period in 2005.





For
      the
      six months ended June 30, 2006, consolidated gross operating revenues were
      $211.2 million compared to $152.5 million for the first six months of 2005,
      an
      increase of $58.7 million or 38.5%. The acquisition of Majestic Star II
      contributed $63.8 million of gross revenue, while Fitzgeralds Tunica and BHR
      added $2.6 million and $0.2 million, respectively, which was offset by a
      decrease of $7.3 million at Majestic Star and a decrease of $0.6 million at
      Fitzgeralds Black Hawk.





In
      the
      six month period ended June 30, 2006, as compared to the same prior year period,
      consolidated casino revenues, which comprised 91.8% of consolidated gross
      revenues during the period, increased $54.5 million, or 39.1%, to $193.8
      million, due to Majestic Star II’s contribution, which was $60.2 million.
      Adding to the increase in consolidated casino revenue was a $2.0 million
      increase at Fitzgeralds Tunica, that is comprised of a $1.4 million increase
      in
      slot revenue resulting from increases in slot coin-in and slot win percentages
      of 1.0% and 2.5%, respectively, and a $0.6 million increase in table games
      revenue from a 19.3% increase in drop offset by a 4.6% reduction in the hold
      percentage. These increases in consolidated casino revenue were offset by
      declines in casino revenue at Majestic Star of $7.1 million and $0.6 million
      at
      Fitzgeralds Black Hawk. The decline at Majestic Star was due to a $1.3 million
      decrease in table games revenue caused by a 15.1% decline in drop but a 6.2%
      increase in win percentage, and a $5.8 million decline in slot revenue resulting
      from a decrease in slot coin-in of 12.2%, offset by a 3.4% improvement in win
      percentage. Fitzgeralds Black Hawk’s decline in casino revenues of $0.6 million
      was mostly due to lower slot coin-in of 4.6%. As with the second quarter of
      2006, the lower casino revenues at the Majestic Properties are primarily a
      result of lower than expected volumes due to the issues mentioned above.
      Fitzgeralds Black Hawk is also facing additional competition as the construction
      disruption at competitors is no longer a factor in driving customers to our
      facility.





In
      the
      six-month period ended June 30, 2006, as compared to the same six month period
      last year, operating expenses increased $38.9 million, with most of this
      increase attributable to Majestic Star II. Majestic Star's operating expenses
      for the six months ended June 30, 2006, including fifty percent of the BHR
      and
      BHPA operating expenses (for comparability purposes), were down significantly
      from the first six months of 2005. In the first half of 2006, inclusive of
      fifty
      percent of BHR's and BHPA's operating expenses, Majestic Star's operating costs
      were $53.1 million, compared to $60.7 million last year. Contributing to the
      reduction in operating expenses was the implementation of cost saving strategies
      in conjunction with our acquisition of Trump Indiana, lower gaming taxes as
      a
      result of the property's lower casino revenues and elimination of the lease
      expense paid to BHPA, for the parking garage utilized by Majestic Star, during
      the first six months of 2005. The 2005 results are also impacted by the same
      expenses discussed in the quarterly results related to the termination of the
      Fitzgeralds Black Hawk sale.





Consolidated
      net income was $1.0 million in the six-month period ended June 30, 2006, an
      increase of $1.6 million when compared to a net loss of $0.6 million for the
      same period in 2005.





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An
      overview of the developments that affected our results during the three- and
      six-month periods ended June 30, 2006, or that may affect future results
      are listed below and discussed in greater detail in our discussion of operating
      results:





·
            Competition
                in our markets remains intense. The new casino and amenities at Boyd
                Gaming’s Blue Chip Casino have impacted our operations at the Majestic
                Properties. Recently, Harrah’s Entertainment announced plans for a $485.0
                million expansion project at its Horseshoe Casino in Hammond, Indiana.
                The
                Pokagon Indians have broken ground on a facility near the Indiana
                and
                Michigan state line that is scheduled to open in the summer of 2007.
                Various remodel and expansion projects have been recently completed
                by our
                competitors in the Black Hawk market, and these competitors have
                increased
                their marketing activities. In the Tunica market, a new casino project
                has
                been announced that is expected to begin construction in the summer
                of
                2007 and open 24 to 48 months later. If the level of competition
                in any of
                our markets increases, our financial performance and cash flows may
                be
                negatively impacted. In addition, higher gas prices may be impacting
                the
                frequency of trips to all of our casinos and negatively impacting
                the
                discretionary gaming budgets of our
                customers.





·
            The
                $25.0 million expansion plans for Fitzgeralds Black Hawk are scheduled
                to
                begin in third quarter 2006 and should be completed in the fourth
                quarter
                of 2007. This expansion will not only add more amenities for our
                guests,
                but will also increase the number of slot machines from approximately
                600
                to approximately 1,000, which will all be ticket-in ticket out (“TITO”).





·
            Fitzgeralds
                Tunica is looking to improve market share and attract a higher-valued
                gaming customer by enhancing the property with a $3.5 million hotel
                renovation project during the second half of 2006, which will include
                108
                hotel rooms as well as remodeling the hotel lobby and room corridors,
                and
                upgrading the elevator access areas. The remaining hotel rooms are
                anticipated to be renovated in 2007.




·
            The
                management team at Fitzgeralds Tunica is implementing changes to
                the
                property to make it more competitive in the Tunica market. Along
                with a
                new advertising program, management is also enhancing the property’s
                direct mail, guest development and hosting programs. Improvements
                have
                been made to the food and beverage operation. As we reposition the
                property in order to attract and retain a higher valued gaming customer,
                the near term margins and profitability at the property may decline
                as we
                build toward a longer term growth
                strategy.





·
            Beginning
                in the third quarter of 2006, the Majestic Properties will be remodeling
                the porte cochere and front entrance to the BHR pavilion as well
                as adding
                retail kiosks and re-opening the Lakeshore
                Lounge.





·
            In
                the first six months of 2006, we spent approximately $5.6 million
                for the
                purchase of slot machines and TITO implementation, re-branding Trump
                Indiana to Majestic Star II and integration of our computer system
                with Trump Indiana. As of June 30, 2006, we had 885, or 68.2%, of our
                slot machines at Fitzgeralds Tunica equipped with TITO and 403, or
                67.8%,
                of our slot machines at Fitzgeralds Black Hawk equipped with TITO.
                At
                Majestic Star and Majestic Star II, all of our slot machines are TITO
                equipped. Our goal is to have substantially all of our slot machines
                at
                all of our properties equipped with TITO by year end.





·
            In
                order to be in compliance with the financial covenants under our
                Senior
                Secured Credit Facility as of June 30, 2006, the Company negotiated
                amendment six ("Amendment
                Six”) to the Senior Secured Credit Facility. As discussed in more detail
                in Liquidity and Capital Resources, Amendment Six reduced the required
                minimum adjusted EBITDA financial covenant, reduced the interest
                coverage
                ratio covenant and increased our capital expenditures
                limitation.





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The
      following tables set forth information derived from the Company's statements
      of
      operations, balance sheets and statements of cash flows.





**Operating
      Results by Entity**





For
                The Three Months Ended
            
            For
                The Six Months EndedJune
                30,
            
            June
                30,2006
            
            2005
            
            2006
            
            2005(in
                thousands)Gross
                revenues:Majestic
                Star
            
            $
            33,712
            
            $
            38,814
            
            $
            71,348
            
            $
            78,618Majestic
                Star II
            
            
            27,141
            
            
            -
            
            
            63,775
            
            
            -Buffington
                Harbor Riverboats
            
            
            102
            
            
            -
            
            
            221
            
            
            -Total
                Majestic Properties
            
            
            60,955
            
            
            38,814
            
            
            135,344
            
            
            78,618Fitzgeralds
                Tunica
            
            
            27,867
            
            
            26,440
            
            
            56,163
            
            
            53,606Fitzgeralds
                Black Hawk
            
            
            9,592
            
            
            9,792
            
            
            19,660
            
            
            20,267Total
            
            $
            98,414
            
            $
            75,046
            
            $
            211,167
            
            $
            152,491Net
                revenues:Majestic
                Star
            
            $
            31,092
            
            $
            34,129
            
            $
            66,200
            
            $
            70,305Majestic
                Star II
            
            
            24,870
            
            
            -
            
            
            59,154
            
            
            -Buffington
                Harbor Riverboats
            
            
            102
            
            
            -
            
            
            221
            
            
            -Total
                Majestic Properties
            
            
            56,064
            
            
            34,129
            
            
            125,575
            
            
            70,305Fitzgeralds
                Tunica
            
            
            21,237
            
            
            20,519
            
            
            42,970
            
            
            42,035Fitzgeralds
                Black Hawk
            
            
            8,256
            
            
            8,412
            
            
            16,930
            
            
            17,575Total
            
            $
            85,557
            
            $
            63,060
            
            $
            185,475
            
            $
            129,915Casino
              revenues:Majestic Star
            
            $
            32,572
            
            $
            37,442
            
            $
            69,022
            
            $
            76,140Majestic Star II
            
            
            25,503
            
            
            -
            
            
            60,183
            
            
            -Total Majestic Properties
            
            
            58,075
            
            
            37,442
            
            
            129,205
            
            
            76,140Fitzgeralds Tunica
            
            
            22,912
            
            
            21,690
            
            
            46,264
            
            
            44,274Fitzgeralds Black Hawk
            
            
            8,955
            
            
            9,144
            
            
            18,359
            
            
            18,945Total
            
            $
            89,942
            
            $
            68,276
            
            $
            193,828
            
            $
            139,359









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**Operating
      Results by Entity (continued)**





For
                  The Three Months Ended
              
              For
                  The Six Months EndedJune
                  30,
              
              June
                  30,2006
              
              2005
              
              2006
              
              2005(in
                  thousands)
 Operating
          income (loss):
 Majestic
                  Star
              
              $7,615
              
              $3,982
              
              $16,863
              
              $9,609Majestic
                  Star II
              
              6,078
              
              -
              
              15,597
              
              -Buffington
                  Harbor Riverboats
              
              (3,057)
              
              -
              
              (6,597)
              
              -Buffington
                  Harbor Parking Associates
              
              (362)
              
              -
              
              (724)
              
              -Total
                  Majestic Properties
              
              10,274
              
              3,982
              
              25,139
              
              9,609Fitzgeralds
                  Tunica
              
              1,907
              
              2,788
              
              5,586
              
              6,092Fitzgeralds
                  Black Hawk (1)
              
              1,988
              
              701
              
              3,730
              
              3,673Corporate
                  (2)
              
              (1,931)
              
              (3,985)
              
              (3,772)
              
              (5,202)Majestic
                  Investor Holdings (3)
              
              -
              
              (85)
              
              -
              
              (154)Total
              
              $12,238
              
              $3,401
              
              $30,683
              
              $14,018Operating
                margin (4)Majestic
                Star
              
              
              24.5
              %
              
              11.7
              %
              
              25.5
              %
              
              13.7
              %Majestic
                Star II
              
              
              24.4
              %
              
              n/a
              
              
              26.4
              %
              
              n/aBuffington
                Harbor Riverboats
              
              
              -3005.1
              %
              
              n/a
              
              
              -2984.9
              %
              
              n/aTotal
                Majestic Properties
              
              
              18.3
              %
              
              11.7
              %
              
              20.0
              %
              
              13.7
              %Fitzgeralds
                Tunica
              
              
              9.0
              %
              
              13.6
              %
              
              13.0
              %
              
              14.5
              %Fitzgeralds
                Black Hawk
              
              
              24.1
              %
              
              8.3
              %
              
              22.0
              %
              
              20.9
              %Total
              
              
              14.3
              %
              
              5.4
              %
              
              16.5
              %
              
              10.8
              %Segment
                  depreciation and amortization:Majestic
                  Star
              
              $
              1,902
              
              $
              2,166
              
              $
              3,772
              
              $
              4,236Majestic
                  Star II
              
              
              2,079
              
              
              -
              
              
              4,171
              
              
              -Buffington
                  Harbor Riverboats
              
              
              952
              
              
              -
              
              
              1,872
              
              
              -Buffington
                  Harbor Parking Associates
              
              
              145
              
              
              -
              
              
              290
              
              
              -Total
                  Majestic Properties
              
              
              5,078
              
              
              2,166
              
              
              10,105
              
              
              4,236Fitzgeralds
                  Tunica
              
              
              2,184
              
              
              2,533
              
              
              4,330
              
              
              5,009Fitzgeralds
                  Black Hawk (1)
              
              
              556
              
              
              1,960
              
              
              1,132
              
              
              1,960Corporate
              
              
              29
              
              
              24
              
              
              53
              
              
              44Majestic
                  Investor Holdings (3)
              
              
              -
              
              
              69
              
              
              -
              
              
              139Total
              
              $
              7,847
              
              $
              6,752
              
              $
              15,620
              
              $
              11,388
  Expenditure
                  for additions to long-lived assets:Majestic
                  Star
              
              $
              663
              
              $
              1,937
              
              $
              2,740
              
              $
              2,828Majestic
                  Star II
              
              
              62
              
              
              -
              
              
              138
              
              
              -Buffington
                  Harbor Riverboats
              
              
              36
              
              
              -
              
              
              49
              
              
              -Total
                  Majestic Properties
              
              
              761
              
              
              1,937
              
              
              2,927
              
              
              2,828Fitzgeralds
                  Tunica
              
              
              835
              
              
              1,508
              
              
              1,337
              
              
              3,358Fitzgeralds
                  Black Hawk
              
              
              701
              
              
              1,402
              
              
              1,190
              
              
              1,809Corporate
              
              
              118
              
              
              -
              
              
              123
              
              
              -Total
              
              $
              2,415
              
              $
              4,847
              
              $
              5,577
              
              $
              7,995













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**Operating
      Results by Entity (continued)**





As
                of
            
            As
                ofJune
                30,
            
            December
                31,2006
            
            2005(in
                thousands)Segment
                assets:Majestic
                Star (5)
            
            $
            118,579
            
            $
            243,475Majestic
                Star II
            
            
            226,102
            
            
            229,246Buffington
                Harbor Riverboats
            
            
            51,868
            
            
            53,751Buffington
                Harbor Parking Associates
            
            
            21,856
            
            
            21,592Total
                Majestic Properties
            
            
            418,405
            
            
            548,064Fitzgeralds
                Tunica
            
            
            71,384
            
            
            75,406Fitzgeralds
                Black Hawk
            
            
            39,334
            
            
            31,688Corporate
                (5)
            
            
            374,893
            
            
            289,353Majestic
                Investor Holdings (3)
            
            
            -
            
            
            1,896Total
            
            
            904,016
            
            
            946,407Less:
                Intercompany
            
            
            (397,730
            )
            
            (428,448
            )Total
            
            $
            506,286
            
            $
            517,959GoodwillMajestic
                Star II
            
            $
            42,281
            
            $
            41,328Fitzgeralds
                Tunica
            
            
            3,998
            
            
            3,998Fitzgeralds
                Black Hawk
            
            
            1,925
            
            
            1,925Total
            
            $
            48,204
            
            $
            47,251





Notes:


(1)
            Fitzgeralds
                Black Hawk’s 2005 depreciation includes the $1.5 million catch up
                depreciation and amortization expense for the period of time from
                July
                2004 to April 2005 when the property's assets were held for sale
                and no
                depreciation or amortization expense was
                recorded.


(2)
            Corporate
                expenses reflect payroll, benefits, travel and other costs associated
                with
                our corporate staff and are not allocated to the properties. Included
                in
                the three- and six-month periods of 2005 is the $2.3 million charge
                related to the termination of the Fitzgeralds Black Hawk
                sale.


(3)
            Majestic
                Investor Holdings was merged into the Company on March 22,
                2006.


(4)
            Operating
                margin is calculated by dividing operating income (loss) by net
                revenues.


(5)
            The
                combined assets of Majestic Star and Corporate include intercompany
                receivables from Majestic Star II, Fitzgeralds Tunica, BHR, BHPA and
                Fitzgeralds Black Hawk totaling approximately $397.7 million at
                June 30, 2006. At December 31, 2005, the combined assets of
                Majestic Star and Corporate include intercompany receivables from
                Majestic
                Star II, BHR, BHPA, Investor Holdings, Fitzgeralds Tunica and
                Fitzgeralds Black Hawk of $428.4 million. Intercompany receivables
                are
                eliminated in consolidation.





THREE
      MONTHS ENDED JUNE 30, 2006 COMPARED TO THREE MONTHS ENDED JUNE 30,
      2005





Because
      of the Trump Indiana acquisition, including its joint venture interests in
      BHR
      and, together with a contribution from an affiliate of the Company, BHPA, on
      December 21, 2005, our consolidated financial results for the three and six
      months ended June 30, 2006 are not comparable to the same period in 2005.





Consolidated
      gross operating revenues increased $23.4 million, or 31.1%, from $75.0 million
      in the three-month period ended June 30, 2005 to $98.4 million in the
      three-month period ended June 30, 2006. The increase is primarily due to
      the acquisition of Majestic Star II, which contributed $27.1 million to
      consolidated gross revenues for the quarter. Fitzgeralds Tunica and BHR also
      added $1.4 million and $0.1 million, respectively, to consolidated gross
      revenues. These increases in gross revenues were offset by decreases of $5.1
      million at Majestic Star and $0.2 million at Fitzgeralds Black Hawk.





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Consolidated
      casino revenues, which comprise 91.4% of consolidated gross revenues, increased
      $21.7 million, or 31.7%, to $89.9 million, again due to Majestic Star II’s
      contribution, which was $25.5 million. Majestic Star’s casino revenues declined
      $4.9 million. Casino revenues at Fitzgeralds Tunica increased $1.2 million,
      or
      5.6%, and at Fitzgeralds Black Hawk, casino revenues declined $0.2 million,
      or
      2.1%, as compared to the second quarter of 2005. Lower casino revenues at the
      Majestic Properties are the result of lower volumes due to the issues mentioned
      above under the caption “Trump Indiana Acquisition.” Our Fitzgeralds Black Hawk
      property is also facing additional competition from our competitors’ recently
      remodeled casinos, which have new amenities and have undertaken greater levels
      of marketing.




Consolidated
      promotional allowances increased $0.9 million, or 7.3%. Majestic Star II
      added $2.3 million to consolidated promotional allowances, which was offset
      by a
      $2.1 million reduction in promotional expenses at Majestic Star. Fitzgeralds
      Black Hawk’s promotional allowances were consistent with the prior year. At
      Fitzgeralds Tunica, promotional allowances were $0.7 million higher, as the
      property was more aggressive in cash and hotel promotional activities, in order
      to increase its competitiveness in the Tunica market.





The
      $13.7
      million, or 22.9%, increase in consolidated operating expenses resulted
      primarily from the addition of the operating expenses of Majestic Star II,
      and 50% of the operating expenses of BHR and BHPA, which totaled $20.6 million.
      Operating expenses at Majestic Star (inclusive of 50% of BHR's and BHPA's
      operating expenses for comparability), Corporate, Investor Holdings, and
      Fitzgeralds Black Hawk declined by $4.9 million, $2.1 million, $0.1 million,
      and
      $1.4 million, respectively, offset by an increase of $1.6 million at Fitzgeralds
      Tunica. The components of these changes are discussed below.





Majestic
      Star II added $3.8 million to consolidated casino expenses, which had an
      overall increase of $4.3 million when compared with the second quarter of 2005.
      Casino expenses decreased $0.8 million at Majestic Star due to payroll and
      cost
      savings. Offsetting the decrease was an increase of $1.1 million at Fitzgeralds
      Tunica as a result of higher costs associated with increased promotions, payroll
      and other expenses related to progressive slot and table games, and $0.2 million
      at Fitzgeralds Black Hawk because of higher expenses related to participation
      slot games.





Consolidated
      advertising and promotion expenses are up $0.5 million as a result of the
      addition of Majestic Star II’s advertising and promotion expense.





Consolidated
      gaming and incentive taxes increased $5.7 million primarily due to $7.4 million
      of gaming and incentive taxes at Majestic Star II. Majestic Star’s gaming and
      incentive taxes declined by $1.8 million due to lower casino revenue and
      Fitzgeralds Tunica’s gaming taxes increased $0.1 million which is attributable
      to their higher casino revenues.





General
      and administrative expenses increased $4.1 million to $14.2 million for the
      second quarter of 2006 compared to $10.2 million in the second quarter of 2005.
      The Majestic Properties added $3.8 million of the increase, with all this
      attributable to Majestic Star II. Fitzgeralds Tunica’s general and
      administrative expenses increased $0.4 million, mostly due to increases in
      utilities and payroll. At Fitzgeralds Black Hawk, general and administrative
      expenses declined by $0.2 million primarily due to lower benefit costs.





Corporate
      expenses decreased $2.1 million to $1.9 million for the second quarter of 2006
      compared to $4.0 million for the same quarter in 2005. The decrease is mainly
      because of the $2.3 million termination charge related to the cancellation
      of
      the sale of Fitzgeralds Black Hawk, which was included in corporate expenses
      in
      2005, offset by increased payroll expenses and professional fees.





Consolidated
      depreciation and amortization expense increased by $1.1 million to $7.8 million.
      The addition of Majestic Star II, BHR and BHPA contributed $3.2 million of
      the
      increase. Depreciation expenses at Fitzgeralds Black Hawk decreased in 2006
      compared to 2005 by $1.4 million due to the $1.5 million of catch up
      depreciation recorded in the second quarter of 2005 related to the termination
      of the sale of Fitzgeralds Black Hawk. Fitzgeralds Tunica and Majestic Star
      both
      had declines in depreciation and amortization expense of $0.3 million as certain
      assets have become fully depreciated.





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In
      the
      three-month period ended June 30, 2005, BHR was owned equally by Majestic
      Star and Trump Indiana, with each entity accounting for its interest under
      the
      equity method. Operating losses of BHR were reimbursed by the two members,
      with
      the exception of depreciation expense. For that reason, the Company reported
      a
      loss on investment in BHR of $0.6 million for the second quarter of 2005. With
      the acquisition of Trump Indiana, we now own 100% of BHR, and BHR’s results for
      2006 are consolidated into our overall operating results.





Consolidated
      other expense increased by $7.5 million to $14.9 million. The main component
      of
      consolidated other expense is interest expense, which increased $7.6 million
      (including $1.6 million of bond and financing cost amortization attributable
      to
      the Discount Notes) due to higher levels of debt during the second quarter
      of
      2006 due to the financing obtained to facilitate the acquisition of Trump
      Indiana.








SIX
      MONTHS ENDED JUNE 30, 2006 COMPARED TO SIX MONTHS ENDED JUNE 30,
      2005





For
      the
      six months ended June 30, 2006, consolidated gross operating revenues were
      $211.2 million compared to $152.5 million for the first six months of 2005,
      an
      increase of $58.7 million or 38.5%. The acquisition of Majestic Star II
      contributed $63.8 million while Fitzgeralds Tunica and BHR added $2.6 million
      and $0.2 million of gross operating revenues, respectively. These increases
      were
      offset by a $7.3 million decrease at Majestic Star and a decrease of $0.6
      million at Fitzgeralds Black Hawk.





Consolidated
      casino revenues, which comprised 91.8% of consolidated gross revenues during
      the
      period, increased $54.5 million, or 39.1%, to $193.8 million, again due to
      Majestic Star II’s contribution, which was $60.2 million. Majestic Star’s
      casino revenues declined $7.1 million. Casino revenues at Fitzgeralds Tunica
      increased $2.0 million, or 4.5%, and at Fitzgeralds Black Hawk declined $0.6
      million, or 3.1%. Lower casino revenues at the Majestic Properties are primarily
      a result of issues discussed previously under the caption “Trump Indiana
      Acquisition.” Our Fitzgeralds Black Hawk property is also facing additional
      competition from our competitors’ recently remodeled casinos with new amenities
      and greater levels of marketing.





Consolidated
      promotional allowances increased $3.1 million, or 13.8%. Majestic Star II
      added $4.6 million to consolidated promotional allowances, which was offset
      by a
      $3.2 million, or 38.1%, decline at Majestic Star. Fitzgeralds Black Hawk’s
      promotional allowance remained consistent with last year’s expense. At
      Fitzgeralds Tunica, promotional allowances were $1.6 million higher on a
      year-to-date basis in 2006 compared to 2005, as the property was more aggressive
      in cash and hotel promotional activities, in order to increase its
      competitiveness in the Tunica market.





The
      $38.9
      million, or 33.6%, increase in consolidated operating expenses resulted
      primarily from the addition of the operating expenses of Majestic Star II
      and fifty percent of the operating expenses of BHR and BHPA, which totaled
      $47.3
      million. Excluding the addition of Majestic Star II, BHR and BHPA, total
      consolidated operating expenses declined by $12.2 million. The components of
      these changes are discussed below.





Majestic
      Star II added $10.3 million to consolidated casino expenses, which had an
      overall increase of $10.0 million when comparing the first six months of 2006
      to
      2005. Casino expenses decreased $1.6 million at Majestic Star because of cost
      cutting measures but increased $0.8 million at Fitzgeralds Tunica due to higher
      costs associated with increased complimentaries and $0.4 million at Fitzgeralds
      Black Hawk due to higher slot participation fees.





While
      consolidated advertising and promotion expenses increased $1.1 million as a
      result of the addition of Majestic Star II’s advertising and promotion
      expense, without Majestic Star II, there would have been a decline of $0.7
      million in consolidated advertising and promotion expense due to cost cutting
      measures at Majestic Star resulting from lower payroll and other costs offset
      by
      a $0.4 million increase at Fitzgeralds Tunica as a result of production and
      advertising costs, and entertainment expense.





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The
      increase of $15.5 million in consolidated gaming and incentive taxes is
      primarily attributable to the addition of $18.0 million from Majestic Star
      II.
      The remaining properties had a decrease in gaming and incentive taxes of $2.6
      million. Majestic Star’s gaming and incentive taxes declined by $2.7 million,
      offset by a $0.2 million increase at Fitzgeralds Tunica. The increase and
      decrease in gaming and incentive taxes at Majestic Star and Fitzgeralds Tunica,
      respectively, are directly linked to the change in casino revenues at the
      properties.





General
      and administrative expenses increased $8.7 million to $29.3 million for the
      six
      months ended June 30, 2006 compared to $20.6 million for the same period in
      2005. The Majestic Properties contributed $8.2 million of the increase, with
      most of this coming from Majestic Star II. Fitzgeralds Tunica also experienced
      $0.7 million higher general and administrative costs due to increased payroll
      and increased utility costs. These increases were offset by a $0.2 million
      reduction of general and administrative costs at Fitzgeralds Black Hawk.





Corporate
      expenses decreased $1.4 million to $3.7 million for the first six months of
      2006
      compared to $5.2 million for the same period in 2005. The decrease is mainly
      because of the $2.3 million termination charge related to the cancellation
      of
      the sale of Fitzgeralds Black Hawk, offset by increased payroll expenses and
      professional fees.





Consolidated
      depreciation and amortization expense increased by $4.2 million to $15.6
      million. The addition of Majestic Star II, BHR and BHPA contributed $6.3 million
      of the increase. Fitzgeralds Black Hawk depreciation and amortization expense
      decreased in 2006 compared to 2005 by $0.8 million due to the catch up
      depreciation recorded in the second quarter of 2005 as a result of the
      termination of the sale of the property. Fitzgeralds Tunica and Majestic Star
      had declines in depreciation and amortization expense of $0.7 million and $0.5
      million, respectively. The declines are because certain assets have become
      fully
      depreciated.





In
      the
      six-month period ended June 30, 2005, BHR was owned equally by Majestic
      Star and Trump Indiana with each entity accounting for its interest under the
      equity method. Operating losses of BHR were reimbursed by the two members,
      with
      the exception of depreciation expense. For that reason, the Company reported
      a
      loss on investment in BHR of $1.2 million for the six-month period in 2005.
      With
      the acquisition of Trump Indiana on December 21, 2005, we now own 100% of
      BHR, and BHR’s results for 2006 are consolidated into our overall operating
      results.





Consolidated
      other expense increased by $15.0 million to $29.6 million. The main component
      of
      consolidated other expense is interest expense, which increased $15.1 million
      (including $3.1 million of bond and financing cost amortization attributable
      to
      the Discount Notes) due to higher levels of debt during the six months ended
      June 30, 2006 incurred in connection with the acquisition of Trump
      Indiana








**LIQUIDITY
      AND CAPITAL RESOURCES**





We
      generate our cash flows from operating activities. For the six-month periods
      ended June 30, 2006 and 2005, we reported cash flows from operating
      activities of $11.8 million and $6.4 million, respectively. We use our cash
      flows to meet our financial obligations, which consist principally of financing
      our daily operations of our casinos, servicing our debt, funding capital
      improvements and projects, and making distributions to BDI under the manager
      agreement and for tax distributions.





Through
      June 30, 2006, investing activities used $6.0 million of cash, which was
      mostly due to acquisition of assets. In the first six months of 2006, we
      purchased slot machines and continued to implement TITO technology, re-branded
      Trump Indiana to Majestic Star II and integrated Trump Indiana’s computer
      systems with those of Majestic Star. For the same period in 2005, we spent
      $8.0
      million primarily for slot machines at Majestic Star, Fitzgeralds Tunica and
      Fitzgeralds Black Hawk and for a new slot player tracking and marketing system
      at Fitzgeralds Black Hawk.





Financing
      activities caused a decrease in cash of $15.8 million through June 30, 2006
      as a result of net paydowns of $9.3 million on our Senior Secured Credit
      Facility and another $1.1 million of other debt payments. The Company also
      made
      $4.5 million of distributions to BDI, the ultimate parent and manager of the
      Company.





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To
      date,
      we have financed our operations with internal cash flows and borrowings under
      our $80.0 million Senior Secured Credit Facility. At June 30, 2006, $37.9
      million was outstanding and $42.1 million was available under the Senior Secured
      Credit Facility. The Company had unrestricted cash and cash equivalents of
      $22.4
      million at June 30, 2006.





With
      an
      estimated start date in the third quarter of 2006, the Fitzgeralds Black Hawk
      property will expand its facility by rebuilding the Masonic Building as a part
      of a major casino expansion. Management expects the casino expansion to cost
      approximately $25.0 million, including the re-construction of the Masonic
      Building and the purchase of associated gaming equipment and other furniture
      and
      fixtures. The building will have two levels of gaming and a third level with
      a
      food outlet. The construction is anticipated to be completed in the fourth
      quarter of 2007 and will be financed with cash flow and borrowings under the
      Senior Secured Credit Facility. Fitzgeralds Black Hawk also intends to rebuild
      the Rohling Inn, another historical building on Fitzgeralds Black Hawk’s
      property. The re-building is necessary due to its partial collapse when a
      contractor for the City of Black Hawk was burying a storm sewer pipe on the
      property of Fitzgeralds Black Hawk, causing damage to the building. We are
      currently in discussion with the insurance company to determine the amount
      of
      the proceeds from the policy, but there is a risk of a short-fall of insurance
      proceeds of up to $2.0 million. The Company anticipates subrogating the claim
      back to the City of Black Hawk and its contractor. However, there is no
      assurance that the Company will be successful with its claim. In the interim,
      the Company will need to advance the funds to cover any shortfall from insurance
      proceeds.





In
      addition, the Company is undertaking projects at both Fitzgeralds Tunica and
      the
      Majestic Properties to upgrade the existing facilities, in the second half
      of
      2006, to enhance our customers’ experiences at these locations. At Fitzgeralds
      Tunica, work will begin in the third quarter on the renovation of 108 rooms
      in
      the hotel along with remodeling the hotel lobby, hotel corridors and elevator
      access areas. The cost of this project is expected to be approximately $3.5
      million. The Majestic Properties will be remodeling the porte cochere and front
      entrance to the BHR pavilion as well as adding retail kiosks and re-opening
      the
      Lakeshore Lounge, all of which is expected to cost $1.1 million.





The
      Company owns 240 acres that are available for future improvements at Buffington
      Harbor. However, the Company is precluded, by the Senior Secured Credit
      Facility, from making capital expenditures in excess of $25.0 million per year
      (except for $7.5 million for TITO slot machines at Fitzgeralds Tunica and
      Fitzgeralds Black Hawk and the $25.0 million Fitzgeralds Black Hawk expansion)
      in 2006 and 2007. In 2008 through 2010, the limit on capital expenditures
      increases to $30.0 million. In addition, the Company is precluded from incurring
      additional debt unless certain financial tests are met. As a result of the
      Company's capital expenditure and debt incurrence limitations, the Company
      may
      need to seek partners to provide financing for these improvements, receive
      a
      contribution from its member and amend the capital expenditure covenant
      contained within the Senior Secured Credit Facility. In addition, the Company
      acquired, on December 31, 2005, 2.45 acres of land at its Fitzgeralds Black
      Hawk property. This land is available for development; however, obtaining
      capital to commence development is limited, as previously
      explained.





Management
      believes that the Company's cash flow from operations and its current line
      of
      credit will be adequate to meet the Company's anticipated normal operating
      requirements for working capital, its planned capital expenditures and its
      significant contractual obligations with respect to amounts outstanding under
      the Senior Secured Credit Facility, the Senior Secured Notes and the Senior
      Notes and tax distributions and distributions under the manager agreement with
      BDI. The Company will be required to pay any amounts outstanding on the Senior
      Secured Credit Facility, plus accrued interest thereon, in 2010. In addition,
      beginning April 15, 2009, our parent will likely look to us to distribute cash
      to pay interest on the Discount Notes. Our ability to distribute cash to
      Majestic Holdco is limited unless certain financial tests are met. The Senior
      Secured Notes mature in October 2010 and the Senior Notes mature in January
      2011. No assurance can be given that our operating cash flows or proceeds from
      additional financings, if available, will be sufficient to pay those obligations
      at maturity.





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Each
      of
      the Senior Secured Notes and the Senior Notes Indentures and the loan and
      security agreement for the Senior Secured Credit Facility allow for
      distributions to BDI to pay income taxes. The ultimate resolution of the
      assessments by the Indiana Department of Revenue against the Company and BDI,
      in
      the amount of $4.1 million, plus penalties and interest (as more fully described
      in Note 7 to the Financial Statements - Commitments and Contingencies) could
      have a material impact on the Company's liquidity in the period that the taxes
      are paid, if any, to the extent that the Company uses such liquidity to make
      distributions to BDI for tax purposes. As part of the $4.5 million in
      distributions to date in 2006 to BDI, $0.9 million was paid for current tax
      obligations separate from the assessments still outstanding with the Indiana
      Department of Revenue.





The
      purchase of certain gaming facilities by larger more recognized brand names
      or
      the expansion of gaming in jurisdictions in which gambling is already legal
      or
      currently illegal could significantly increase competition for the Company
      and
      thereby require additional investment by the Company in its facilities, gaming
      devices and marketing efforts. If necessary, and to the extent permitted under
      the indentures governing the Senior Secured Notes and Senior Notes, the Company
      would seek additional financing through borrowings of debt or equity financing,
      subject to any governmental approvals. 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.





On
      April 13, 2006, the Company entered into Amendment Number Five to the Loan
      and Security Agreement, as amended (“Amendment Five”). Amendment Five modified
      the interest coverage ratio financial covenant, as defined in the Loan and
      Security Agreement, for the twelve-month period ended March 31, 2006. As a
      result of Amendment Four, the Company was required to obtain an interest
      coverage ratio of 1.85:1.0. The interest coverage ratio was amended to 1.80:1.0.
      In addition, the definition of Consolidated Interest Expense was amended to
      exclude interest expense related to the pushdown of Majestic Holdco's Discount
      Notes.





On
      July
      31, 2006, the Company entered into Amendment Number Six (“Amendment Six”) to the
      Senior Secured Credit Facility. Amendment Six further modifies the last 12
      month
      minimum EBITDA financial covenant and the last 12 month interest coverage ratio
      financial covenant for the applicable calendar quarterly periods. As amended,
      the Company is now required to have a minimum EBITDA of $65.0 million for the
      12
      months ended June 30, 2006, which periodically increases in $5.0 million
      increments to a maximum of $90.0 million for the 12 months ending March 31,
      2010 and periods thereafter. The interest coverage ratio is reduced to 1.50:1.0
      for the 12 months ended June 30, 2006, continuing through December 31,
      2007. The ratio increases to 1.60:1.0 in 2008, 1.70:1.0 in 2009 and to 1.80:1.0
      in 2010 and each period thereafter. In addition, the capital expenditures
      limitations have been increased to $25.0 million for each of the fiscal years
      2006 and 2007 and to $30.0 million for each of the fiscal years 2008, 2009
      and
      2010. This amendment allowed the Company to be in compliance with the financial
      covenants under the Senior Secured Credit Facility as of June 30,
      2006.








**CRITICAL
      ACCOUNTING POLICIES**





Our
      consolidated financial statements are prepared in accordance with accounting
      principles generally accepted in the United States of America, which require
      our
      management to make estimates and assumptions about the effects of matters that
      are inherently uncertain. We have summarized our significant accounting policies
      in Note 2 to our consolidated financial statements contained in our Annual
      Report on Form 10-K for the year ended December 31, 2005 and in Note 2 to
      the interim financial statements as of June 30, 2006 as contained herein.







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**RECENTLY
      ISSUED ACCOUNTING PRONOUNCEMENTS**





In
      July
      2006, the FASB issued FASB Interpretation No. 48 (“FIN 48”) “Accounting for
      Uncertainty in Income Taxes - an interpretation of FASB Statement No. 109”,
      to clarify certain aspects of accounting for uncertain tax positions, including
      issues related to the recognition and measurement of those tax positions. This
      interpretation is effective for fiscal years beginning after December 15,
      2006. Because the Company is a limited liability company, this interpretation
      is
      not applicable and will have no impact on the Company’s results of operations
      and financial condition.








**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,
      2005.








**Item
      4.****Controls
      and Procedures.**





Disclosure
      Controls and Procedures





As
      of the
      end of the period covered by 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 to cause the material information required to be
      disclosed by the Company in the reports that it files or submits under the
      Securities Exchange Act of 1934 to be recorded, processed, summarized and
      reported within the time periods specified in the SEC's rules and
      forms.





We
      maintain disclosure controls and procedures that are designed to ensure that
      information required to be disclosed in our Exchange Act reports is recorded,
      processed, summarized and reported within the time periods specified in the
      SEC's rules and forms, and that such information is accumulated and communicated
      to our management, including our Chief Executive Officer and Chief Financial
      Officer, as appropriate, to allow timely decisions regarding required
      disclosure. In designing and evaluating the disclosure controls and procedures,
      management recognized that any controls and procedures, no matter how well
      designed and operated, can provide only reasonable assurance of achieving the
      desired control objectives.





Changes
      in Internal Control Over Financial Reporting





There
      have been no changes in the Company's internal controls during the quarter
      ended
      June 30, 2006 that have materially affected, or are reasonably likely to
      materially affect the Company's financial reporting.








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**PART
              I****I**
            **OTHER
              INFORMATION****Item 1.**
            **Legal
              Proceedings.**





Information
      regarding Legal Proceedings appears in Part I - Item 3 of our Report on Form
      10-K for the fiscal year ended December 31, 2005. The following information
      is an update to those matters previously disclosed in our Report on Form
      10-K:





Anti-trust
      litigation. In
      June
      2003, a complaint was filed in the U.S. District Court for the Northern District
      of Mississippi against Tunica County casino owners and operators, including
      Barden Mississippi, the Tunica Casino Operators Association and the Tunica
      County Tourism Commission alleging violation of federal and state anti-trust
      claims, as well as various other tort and contract claims. Since the filing
      of
      the Annual Report on Form 10-K for the year ended December 31, 2005, plaintiffs
      filed a brief in support of their appeal on July 21, 2006 and the defendants
      have 30 days thereafter to respond. The trial date for the casino dependants’
counterclaims has been continued until such time as the Fifth Circuit Court
      of
      Appeals rules on plaintiffs’ appeal. The Company intends to vigorously defend
      against the appeal. At this time, it is too early to determine the outcome
      of
      this litigation and the effect, if any, on the Company’s financial position and
      results of operations.





Majestic
      Star Income Tax Protest. The
      Indiana Department of Revenue (“Department”) held a hearing on the 1996 through
      2002 tax years on April 7, 2006, and is expected to issue its ruling later
      this year. BDI's non-resident shareholder has been assessed $0.2 million, plus
      penalty and interest, for 2003.





Majestic
      Star Sales and Use Tax Assessments. The
      Department held a hearing on the 2003 and 2004 tax years on April 7, 2006,
      and is expected to issue its ruling later this year. In regard to the matters
      for the period 2001 through July 2003, the Tax Court has ordered the parties
      to
      file status reports in the case by August 21, 2006.





BHR
      Sales and Use Tax Assessments - 1998-2001 Tax Years. The Tax
      Court has scheduled a conference in late August 2006.





BHR
      Sales and Use Tax Assessments - 2002-2004 Tax Years. On
      June
      19, 2006, the Department assessed BHR $0.3 million in sales and use tax for
      2003
      and 2004, exclusive of interest and penalties, relating primarily to the same
      sales and use tax issues as were assessed in earlier years, concerning the
      provision of complimentary food to the employees and patrons of Majestic Star
      and Trump Indiana. BHR intends to protest the 2003 and 2004
      assessments.








**Item
      1A.****Risk
      Factors.**





Information
      regarding risk factors appears in Part I - Item IA of our Report on Form 10-K
      for the fiscal year ended December 31, 2005. The following risk factors
      reflect certain material changes from the risks previously disclosed in our
      Report on Form 10-K:





**Increased
      competition in the Chicagoland market will have a significant impact on how
      we
      operate our business to remain competitive.**





On
      April 27, 2006, Harrah’s Entertainment announced plans for a $485 million
      renovation and expansion of its Horseshoe Casino in Hammond, Indiana that is
      tentatively scheduled to open in mid-2008. The facility is expected to more
      than
      double the size of their existing facility. While we cannot determine what
      effect this will have on the future operations of our Majestic Properties,
      a
      renovated and expanded Horseshoe Casino in Hammond will have a significant
      impact on how we operate our business to remain competitive.





In
      addition, the Pokagon Indians have broken ground on a facility near the Indiana
      and Michigan state line that is scheduled to open in the summer of 2007. If
      this
      facility adds the announced 3,000 slot machines, 90 table games and 20 poker
      tables and has the advantage of being a land-based facility, it may have an
      impact on our ability to be competitive in the market.





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**Increased
      competition in Tunica market may negatively affect our operations**





Myriad
      Entertainment & Resorts, Inc. is moving forward with plans for its $1.9
      billion resort in Tunica. They have stated that construction on the project
      is
      expected to begin in the summer of 2007 and take 24 to 48 months to complete.
      If
      the project is completed, the addition of 80,000 square feet of casino space
      may
      have a negative impact on our operations in this market.





**We
      may not realize any of the anticipated benefits of the Majestic Star II
      acquisition**





Most
      of
      the cost-savings strategies that were planned in connection with the acquisition
      of Trump Indiana were put into effect during March 2006. The implementation
      did
      cause disruption on the casino floor as the gaming area was reconfigured. The
      layoff of approximately 300 employees was also completed as we consolidated
      operations between the two facilities. Cost savings have resulted in better
      margins at our Majestic Properties; however, we have also experienced a
      significant decline in revenues. As we attempt to rebuild our revenues, we
      may
      need to adjust some of our cost savings strategies. There is no assurance that
      we will be able to significantly grow our revenues or maintain higher margins
      over time.





**We
      may experience customer dissatisfaction to the changes we make at the Majestic
      Properties**





We
      made
      significant changes to the casino floors at Majestic Star and Majestic Star
      II.
      Our customers may dislike the changes we made and continue to make. An advantage
      of the previously operated Majestic Star and Trump Indiana casinos was two,
      full
      service, gaming alternatives conveniently located for our casino guests. With
      the changes made to Majestic Star and Majestic Star II, our customers may no
      longer perceive our casinos as two casino alternatives, but rather as one casino
      on two vessels.





**Higher
      energy costs may negatively affect our customers discretionary income and may
      reduce the number of trips to our casinos**





Due
      to
      the recent increase in energy prices, there is a greater risk that our patrons
      will have less discretionary income. Customers may also be less likely to travel
      or to reduce the number of trips to our casinos due to higher fuel costs.





**A
      shortfall in the amount of insurance proceeds related to our Black Hawk
      construction projects could limit our ability to implement our other planned
      expenditures at our properties**





If
      there
      is a shortfall in the insurance proceeds we expect to receive for the rebuilding
      of the Rohling Inn at Black Hawk, we will need to reallocate our capital
      expenditure budget to cover these costs in order to stay within our capital
      expenditures limitation in our loan covenants. This will limit our ability
      to
      implement our other planned expenditures at our properties.








**Item
      6.****Exhibits.**





(a)
            The
                following exhibits are filed as part of this
                report:




Exhibit
                  No.
              Description
                  of Document3.1*
              Articles
                  of Incorporation of Majestic Star Casino Capital Corp.
                  II.3.2*
              Bylaws
                  of Majestic Star Casino Capital Corp. II.3.3*
              Amendment
                  to Bylaws of Majestic Star Casino Capital Corp. II.3.4*
              Second
                  Amended and Restated Certificate of Incorporation of The Majestic
                  Star
                  Casino II, Inc.




42


3.5*
              Amended
                  and Restated Bylaws of The Majestic Star Casino II,
                  Inc.3.6*
              Certificate
                  of Formation of Buffington Harbor Riverboats, LLC3.7*
              Certificate
                  of Formation of Buffington Harbor Parking Associates,
                  LLC10.1**
              Amendment
                  Number Five to Loan and Security Agreement among the Company, the
                  Barden
                  Subsidiaries, Wells Fargo Foothill and General Electric Capital
                  Corporation.10.2***
              Employment
                  Agreement entered into April 6, 2006, by and between The Majestic
                  Star
                  Casino, LLC and Kirk Saylor.10.3****
              Amendment
                  Number Six to Loan and Security Agreement among the Company, the
                  Barden
                  Subsidiaries, Wells Fargo Foothill, General Electric Capital Corporation
                  and Allied Irish Bank.31.1*****
              Certification
                  of Chief Executive Officer pursuant to Rule 15d-14 of the Securities
                  Exchange Act of 1934, as adopted pursuant to Section 302 of the
                  Sarbanes-Oxley Act of 2002.31.2*****
              Certificate
                  of Chief Financial Officer pursuant to Rule 15d-14 of the Securities
                  Exchange Act of 1934, as adopted pursuant to Section 302 of the
                  Sarbanes-Oxley Act of 2002.32*****
              Certification
                  pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
                  906 of
                  the Sarbanes-Oxley Act of 2002.*
              Incorporated
                  by reference to the Company’s Registration Statement 333-134325, dated May
                  19, 2006 .**
              Incorporated
                  by reference to the Company’s Current Report on Form 8-K dated April 13,
                  2006.***
              Incorporated
                  by reference to the Company’s Current Report on Form 8-K dated May 15,
                  2006.****
              Incorporate
                  by reference to the Company’s Current Report on Form 8-K dated August 4,
                  2006.*****
              Filed
                  herewith.







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**SIGNATURES**





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





Dated:
                August 14, 2006THE
                MAJESTIC STAR CASINO, LLC*/s/
                Don H. Barden*Don
                H. BardenChairman,
                President and Chief Executive Officer(Principal
                Executive Officer)*/s/
                Jon S. Bennett*Jon
                S. BennettVice
                President and Chief Financial Officer(Principal
                Financial and Accounting Officer)THE
                MAJESTIC STAR CASINO CAPITAL CORP.*/s/
                Don H. Barden*Don
                H. BardenPresident
                and Chief Executive Officer(Principal
                Executive Officer)*/s/
                Jon S. Bennett*Jon
                S. BennettVice
                President and Chief Financial Officer(Principal
                Financial and Accounting Officer)MAJESTIC
                STAR CASINO CAPITAL CORP. II*/s/
                Don H. Barden*Don
                H. BardenPresident
                and Chief Executive Officer(Principal
                Executive Officer)*/s/
                Jon S. Bennett*Jon
                S. BennettVice
                President and Chief Financial Officer(Principal
                Financial and Accounting Officer)
              
              
              S-1