**UNITED
        STATES**
 **SECURITIES
        AND EXCHANGE COMMISSION**
 **Washington,
        D. C. 20549**
 
 **FORM
        10-Q**
 (Mark
                  One)x
              **QUARTERLY
                  REPORT PURSUANT TO SECTION 13 OR 15(d)****OF
                  THE SECURITIES EXCHANGE ACT OF 1934**
 
 **FOR
        THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2005**
 
 
 or
  ̈
              **TRANSITION
                  REPORT PURSUANT TO SECTION 13 OR 15(d)****OF
                  THE SECURITIES EXCHANGE ACT OF 1934**
 
 Commission
        file number: **333-06489**
 
 **Indiana**
              
              **THE
                  MAJESTIC STAR CASINO, LLC**
              
              **43-1664986****Indiana**
              
              **THE
                  MAJESTIC STAR CASINO CAPITAL CORP.**
              
              **35-2100872**(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 an accelerated filer (as defined
        in Rule
        12b-2 of the Exchange Act).
 
 Yes
               ̈
              No
              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
        September 30, 2005, shares outstanding of each of the registrant’s classes of
        common stock:
 
 Class
              Number
                  of shares
 Not
                  applicable
              Not
                  applicable
  
  **THE
        MAJESTIC STAR CASINO, LLC AND SUBSIDIARIES**
 **(A
        Wholly Owned Subsidiary of Barden Development, Inc.)**
 
 **Index**
 
 PART
                  I
              FINANCIAL
                  INFORMATION
              Page
                  No.Item
                  1.
              Consolidated
                  Financial StatementsConsolidated
                  Balance Sheets as of September 30, 2005 and December 31, 2004
                  (unaudited)
              1Consolidated
                  Statements of Operations for the three and nine months ended September
                  30,
                  2005 and 2004 (unaudited)
              2Consolidated
                  Statements of Changes in Member’s Deficit for the nine months ended
                  September 30, 2005 and the year ended December 31, 2004
                  (unaudited)
              3Consolidated
                  Statements of Cash Flows for the nine months ended September 30,
                  2005 and
                  2004 (unaudited)
              4Notes
                  to the Consolidated Financial Statements
              6Item
                  2.
              Management’s
                  Discussion and Analysis of Financial Condition and Results of
                  Operations
              29Item
                  3.
              Quantitative
                  and Qualitative Disclosures About Market Risk
              46Item
                  4.
              Controls
                  and Procedures
              46PART
                  II
              OTHER
                  INFORMATIONItem
                  1.
              Legal
                  Proceedings
              47Item
                  6.
              Exhibits
              49SIGNATURES
              S-1
   i
  
 
 
 
 **PART
        I**
 
 **FINANCIAL
        INFORMATION**
 
 
 **Item
        1**
 
 **Consolidated
        Financial Statements**
 
 
 
 
  
  **THE
        MAJESTIC STAR CASINO, LLC AND SUBSIDIARIES**
 **(A
        Wholly Owned Subsidiary of Barden Development, Inc.)**
 **CONSOLIDATED
        BALANCE SHEETS**
 **(unaudited)**
 September
                  30,
              
              December
                  31,2005
              
              2004ASSETSCurrent
                  assets:Cash
                  and cash equivalents
              
              $
              17,537,507
              
              $
              14,327,452Restricted
                  cash
              
              
              2,150,000
              
              
              2,540,008Accounts
                  receivable, less allowance for doubtful accounts of$604,245
                  and$617,040as
                  of September 30, 2005 and December 31, 2004, respectively
              
              
              2,034,303
              
              
              2,064,981Inventories
              
              
              652,215
              
              
              520,485Prepaid
                  expenses and deposits
              
              
              2,351,316
              
              
              2,212,396Receivable
                  from affiliate
              
              
              174,199
              
              
              715,216Assets
                  held for sale
              
              
              -
              
              
              30,683,526Total
                  current assets
              
              
              24,899,540
              
              
              53,064,064Property,
                  equipment and improvements, net
              
              
              159,677,987
              
              
              142,181,216Intangible
                  assets, net
              
              
              6,860,496
              
              
              5,229,904Goodwill
              
              
              5,922,398
              
              
              3,997,904Other
                  assets:Deferred
                  financing costs, net of accumulated amortizationof
                  $2,410,960 and $1,767,700as
                  of September 30, 2005 andDecember
                  31, 2004, respectively
              
              
              4,449,798
              
              
              5,361,723Deferred
                  financing and transaction costs related to the acquisitionof
                  Trump Indiana, Inc.
              
              
              851,179
              
              
              -Note
                  receivable - affiliate
              
              
              4,453,331
              
              
              -Investment
                  in Buffington Harbor Riverboats, LLC
              
              
              25,687,995
              
              
              27,432,270Other
                  assets
              
              
              9,957,023
              
              
              9,109,383Total
                  other assets
              
              
              45,399,326
              
              
              41,903,376Total
                  assets
              
              $
              242,759,747
              
              $
              246,376,464LIABILITIES
                  AND MEMBER'S DEFICITCurrent
                  liabilities:Accounts
                  payable
              
              $
              2,390,689
              
              $
              1,751,530Accrued
                  liabilities:Payroll
                  and related
              
              
              6,548,331
              
              
              6,303,165Interest
              
              
              12,278,522
              
              
              5,523,719Property
                  and franchise taxes
              
              
              5,233,128
              
              
              5,329,172Other
                  accrued liabilities
              
              
              10,643,799
              
              
              10,296,594Liabilities
                  related to assets held for sale
              
              
              -
              
              
              2,713,847Total
                  current liabilities
              
              
              37,094,469
              
              
              31,918,027Long-term
                  debt
              
              
              315,000,341
              
              
              316,857,960Total
                  liabilities
              
              
              352,094,810
              
              
              348,775,987COMMITMENTS
                  AND CONTINGENCIESMember's
                  deficit
              
              
              (109,335,063
              )
              
              (102,399,523
              )Total
                  liabilities and member's deficit
              
              $
              242,759,747
              
              $
              246,376,464
 
 The
        accompanying notes are an integral part of these consolidated financial
        statements.
  1
  **THE
        MAJESTIC STAR CASINO, LLC AND SUBSIDIARIES**
 **(A
        Wholly Owned Subsidiary of Barden Development, Inc.)**
 **CONSOLIDATED
        STATEMENTS OF OPERATIONS**
 **(unaudited)**
 
 For
                  The Three Months Ended
              
              For
                  The Nine Months EndedSeptember
                  30,
              
              September
                  30,2005
              
              2004
              
              2005
              
              2004OPERATING
                  REVENUES:Casino
              
              $
              69,486,837
              
              $
              68,057,307
              
              $
              208,845,447
              
              $
              209,709,096Rooms
              
              
              2,004,744
              
              
              2,026,708
              
              
              5,716,417
              
              
              5,820,214Food
                  and beverage
              
              
              3,561,963
              
              
              3,634,910
              
              
              10,532,339
              
              
              10,104,083Other
              
              
              1,366,804
              
              
              1,215,897
              
              
              3,817,281
              
              
              3,430,777Gross
                  revenues
              
              
              76,420,348
              
              
              74,934,822
              
              
              228,911,484
              
              
              229,064,170Less
                  promotional allowances
              
              
              11,683,525
              
              
              10,441,801
              
              
              34,259,570
              
              
              30,146,887Net
                  operating revenues
              
              
              64,736,823
              
              
              64,493,021
              
              
              194,651,914
              
              
              198,917,283OPERATING
                  COSTS AND EXPENSES:Casino
              
              
              16,882,422
              
              
              17,349,524
              
              
              50,388,047
              
              
              53,132,523Rooms
              
              
              448,211
              
              
              449,177
              
              
              1,273,264
              
              
              1,381,473Food
                  and beverage
              
              
              1,468,569
              
              
              1,719,229
              
              
              4,434,412
              
              
              4,553,092Other
              
              
              259,099
              
              
              781,859
              
              
              760,976
              
              
              1,346,943Gaming
                  taxes
              
              
              15,025,064
              
              
              14,573,456
              
              
              45,075,257
              
              
              45,084,994Advertising
                  and promotion
              
              
              3,951,372
              
              
              4,309,813
              
              
              11,346,300
              
              
              12,242,110General
                  and administrative
              
              
              10,815,662
              
              
              10,199,378
              
              
              31,388,398
              
              
              33,933,759Corporate
                  expense
              
              
              1,367,628
              
              
              825,766
              
              
              6,525,812
              
              
              2,506,052Economic
                  incentive tax - City of Gary
              
              
              1,131,164
              
              
              1,087,049
              
              
              3,419,136
              
              
              3,423,286Depreciation
                  and amortization
              
              
              5,420,949
              
              
              4,430,590
              
              
              16,808,617
              
              
              13,525,920Loss
                  on investment in Buffington HarborRiverboats,
                  LLC
              
              
              611,448
              
              
              616,058
              
              
              1,820,646
              
              
              1,854,406Loss
                  (gain) on disposal of assets
              
              
              23,378
              
              
              (13,065
              )
              
              61,353
              
              
              6,292Total
                  operating costs and expenses
              
              
              57,404,966
              
              
              56,328,834
              
              
              173,302,218
              
              
              172,990,850Operating
                  income
              
              
              7,331,857
              
              
              8,164,187
              
              
              21,349,696
              
              
              25,926,433OTHER
                  INCOME (EXPENSE):Interest
                  income
              
              
              82,747
              
              
              17,862
              
              
              181,363
              
              
              28,265Interest
                  expense
              
              
              (7,474,473
              )
              
              (7,117,213
              )
              
              (22,154,497
              )
              
              (21,371,498
              )Other
                  non-operating expense
              
              
              (37,191
              )
              
              (44,656
              )
              
              (115,860
              )
              
              (168,504
              )Total
                  other expense
              
              
              (7,428,917
              )
              
              (7,144,007
              )
              
              (22,088,994
              )
              
              (21,511,737
              )Net
                  (loss) income
              
              $
              (97,060
              )
              $
              1,020,180
              
              $
              (739,298
              )
              $
              4,414,696
 
 The
        accompanying notes are an integral part of these consolidated financial
        statements.
  2
  **THE
        MAJESTIC STAR CASINO, LLC AND SUBSIDIARIES**
 **(A
        Wholly Owned Subsidiary of Barden Development, Inc.)**
 **CONSOLIDATED
        STATEMENTS OF CHANGES IN MEMBER'S DEFICIT**
 **For
        the Nine Months Ended September 30, 2005 and the Year Ended December 31,
        2004**
 **(unaudited)**
 
 Member's
                  DeficitBalance,
                  December 31, 2003
              
              $
              (102,166,955
              )Net
                  income
              
              
              5,018,526Distribution
                  to Barden Development, Inc.
              
              
              (5,251,094
              )Balance,
                  December 31, 2004
              
              $
              (102,399,523
              )Net
                  loss
              
              
              (739,298
              )Distributions
                  to Barden Development, Inc.
              
              
              (6,196,242
              )Balance,
                  September 30, 2005
              
              $
              (109,335,063
              )
 
 The
        accompanying notes are an integral part of these consolidated financial
        statements.
  3
  **THE
        MAJESTIC STAR CASINO, LLC AND SUBSIDIARIES**
 **(A
        Wholly Owned Subsidiary of Barden Development, Inc.)**
 **CONSOLIDATED
        STATEMENTS OF CASH FLOWS**
 **(unaudited)**
 
 For
                  The Nine Months EndedSeptember
                  30,2005
              
              2004CASH
                  FLOWS FROM OPERATING ACTIVITIES:Net
                  (loss) income
              
              $
              (739,298
              )
              $
              4,414,696Adjustments
                  to reconcile (net loss) income to net cashprovided
                  by operating activities:Depreciation
              
              
              14,537,875
              
              
              11,600,690Amortization
              
              
              2,270,742
              
              
              1,925,230Loss
                  on investment in Buffington Harbor Riverboats, LLC.
              
              
              1,820,646
              
              
              1,854,406Loss
                  on disposal of assets
              
              
              61,353
              
              
              6,292Changes
                  in operating assets and liabilities:Decrease
                  (increase) in accounts receivable, net
              
              
              93,411
              
              
              (381,805
              )Decrease
                  in related parties receivables
              
              
              541,017
              
              
              102,079Decrease
                  in inventories
              
              
              37,155
              
              
              81,244Increase
                  in prepaid expenses and deposits
              
              
              (50,971
              )
              
              (1,045,667
              )(Increase)
                  decrease in other assets
              
              
              (602,907
              )
              
              859,944Increase
                  (decrease) in accounts payable
              
              
              101,738
              
              
              (4,594,723
              )Decrease
                  in accrued payroll and other expenses
              
              
              (54,433
              )
              
              (603,790
              )Increase
                  in accrued interest
              
              
              6,754,803
              
              
              6,069,975(Decrease)
                  increase in other accrued liabilities
              
              
              (1,539,873
              )
              
              2,181,420Net
                  cash provided by operating activities
              
              
              23,231,258
              
              
              22,469,991CASH
                  FLOWS FROM INVESTING ACTIVITIES:Decrease
                  (increase) in restricted cash
              
              
              390,008
              
              
              (390,008
              )Acquisition
                  of property and equipment
              
              
              (10,072,329
              )
              
              (31,976,010
              )(Increase)
                  decrease in prepaid leases and deposits
              
              
              (71,400
              )
              
              10,683Investment
                  in Buffington Harbor Riverboats, LLC
              
              
              (76,371
              )
              
              (71,606
              )Proceeds
                  from disposal of equipment
              
              
              23,900
              
              
              249,373Net
                  cash used in investing activities
              
              
              (9,806,192
              )
              
              (32,177,568
              )CASH
                  FLOWS FROM FINANCING ACTIVITIES:Issuance
                  cost for the 9 1/2% senior secured notes
              
              
              -
              
              
              (229,507
              )Issuance
                  cost for the $80.0 million secured credit facility
              
              
              -
              
              
              (58,652
              )Proceeds
                  from line of credit
              
              
              23,389,581
              
              
              32,901,293Repayment
                  of line of credit
              
              
              (25,349,296
              )
              
              (23,244,786
              )Repayment
                  of note from related party
              
              
              -
              
              
              133,000Advances
                  on revolving credit facility with affiliate
              
              
              (4,453,331
              )
              
              -Distribution
                  to Barden Development, Inc.
              
              
              (6,196,242
              )
              
              (3,943,307
              )Net
                  cash (used in) provided by financing activities
              
              
              (12,609,288
              )
              
              5,558,041Net
                  increase (decrease) in cash and cash equivalents
              
              
              815,778
              
              
              (4,149,536
              )Cash
                  related to discontinued operations
              
              
              -
              
              
              (2,324,826
              )Cash
                  and cash equivalents, beginning of period
              
              
              14,327,452
              
              
              22,058,016Cash
                  previously classified as held for sale
              
              
              2,394,277
              
              
              -Cash
                  and cash equivalents, end of period
              
              $
              17,537,507
              
              $
              15,583,654
 
 The
        accompanying notes are an integral part of these consolidated financial
        statements.
  4
  **THE
        MAJESTIC STAR CASINO, LLC AND SUBSIDIARIES**
 **(A
        Wholly Owned Subsidiary of Barden Development, Inc.)**
 **CONSOLIDATED
        STATEMENT OF CASH FLOWS (CONTINUED)**
 **(unaudited)**
 
 For
                  The Nine Months EndedSeptember
                  30,2005
              
              2004INTEREST
                  PAID:Line
                  of credit
              
              $
              2,100,513
              
              $
              1,453,480Notes
                  - fixed interest at 11.653%
              
              
              949,137
              
              
              949,137Senior
                  Secured Notes - Fixed Interest, 9.5%
              
              
              12,350,000
              
              
              12,898,889Total
              
              $
              15,399,650
              
              $
              15,301,506NON-CASH
                  INVESTING ACTIVITIES:Capital
                  assets acquired from incurring accounts payable and accrued
                  liabilities
              
              $
              359,201
              
              $
              -Deferred
                  financing and transaction costs related to the Trump
                  acquisitionincluded
                  in accounts payable
              
              
              851,179
              
              
              -Credit
                  received from Naming Rights Agreement and applied to
                  acquisitionof
                  170 acres of property from an affiliate
              
              
              -
              
              
              1,500,000Total
              
              $
              1,210,380
              
              $
              1,500,000
 
 The
        accompanying notes are an integral part of these consolidated financial
        statements.
  5
  **THE
        MAJESTIC STAR CASINO, LLC AND SUBSIDIARIES**
 **(A
        Wholly Owned Subsidiary of Barden Development, Inc.)**
 **NOTES
        TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 
 **NOTE
                  1.**
              **Organization**
 
 The
        Majestic Star Casino, LLC (the “Company”) is a wholly owned subsidiary of Barden
        Development, Inc. (“BDI”) and 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 that directly owns and operates
        one riverboat gaming facility located in Gary, Indiana (“Majestic Star”).
        Through its wholly owned subsidiary, Majestic Investor Holdings, LLC (“Investor
        Holdings”), the Company also indirectly owns other subsidiaries that operate two
“Fitzgeralds-brand” casino properties:
 
 -  A
        casino-hotel located in Tunica County, Mississippi (“Fitzgeralds Tunica” or
“Barden Mississippi”).
 
 -  A
        casino
        located in Black Hawk, Colorado (“Fitzgeralds Black Hawk” or “Barden Colorado”).
 
 The
        Company also has the following subsidiaries, which were formed for the purpose
        of facilitating financing transactions:
 
 -  Majestic
        Star Casino Capital Corp. (“MSCC”) was originally formed for the purpose of
        facilitating the offering of the Company’s $130.0 million 10 7/8% senior secured
        notes due 2006 (the “10 7/8% notes”). The 10 7/8% notes were fully
        purchased and redeemed on October 7, 2003. MSCC similarly facilitated the
        offering of, and is a co-obligor with the Company of, the $260.0 million
        9 1⁄2%
        senior secured notes due 2010. MSCC has no assets or operations. See Note
        7 -
        Long Term Debt.
 
 -  Majestic
        Investor Capital Corp. (a wholly owned subsidiary of Investor Holdings),
        was
        formed specifically to facilitate the offering of Investor Holdings’ $152.6
        million 11.653% senior secured notes due 2007 (the “11.653% notes”).
        Approximately 89.3%, or $135.5 million, of the 11.653% notes were purchased
        and
        redeemed on October 7, 2003 with the remaining 11.653% outstanding notes
        becoming unsecured.  This subsidiary has no assets or operations.
        See Note
        7 - Long Term Debt.
 
 The
        Company also has a non-controlling 50% interest in a corporate joint venture
        formed for the purpose of acquiring, developing and operating certain facilities
        for the gaming operations in the City of Gary. See Note 6 - Investment in
        Buffington Harbor Riverboats, L.L.C.
 
 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.
 
 **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. Significant estimates incorporated into our consolidated
        financial statements include the estimated useful lives of depreciable and
        amortizable assets, the estimated allowance for doubtful accounts receivable,
        estimated cash flow in assessing the recoverability of long-lived assets
        and
        estimated liabilities for our self-insured medical and worker’s compensation
        plans, property taxes, slot club point programs, and litigation, claims and
        assessments. Actual results could differ from those estimates.
  6
  **THE
        MAJESTIC STAR CASINO, LLC AND SUBSIDIARIES**
 **(A
        Wholly Owned Subsidiary of Barden Development, Inc.)**
 **NOTES
        TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)**
 
 In
        the
        opinion of management, all adjustments (which include normal recurring
        adjustments) considered necessary for a fair presentation of the results
        for the
        interim periods have been made. The results for the three and nine months
        ended
        September 30, 2005 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,
        2004.
 
 PROMOTIONAL
        ALLOWANCES
 
 Cash
        incentives related to gaming play are recorded as a reduction of gross revenues.
        Such amounts totaled $7.5 million and $6.2 million for the three months ended
        September 30, 2005 and 2004, respectively, and $22.0 million and $18.4 million
        for the nine months ended September 30, 2005 and 2004, 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
        costs of providing such promotional allowances are included primarily in
        casino
        expenses as follows:
  
 For
                  The Three Months Ended September 30,
              
              For
                  The Nine Months Ended September 30,2005
              
              2004
              
              2005
              
              2004Rooms
              
              $
              570,475
              
              $
              618,950
              
              $
              1,779,035
              
              $
              1,769,690Food
                  and Beverage
              
              
              2,218,392
              
              
              2,213,383
              
              
              6,654,510
              
              
              6,419,423Other
              
              
              121,246
              
              
              111,638
              
              
              347,987
              
              
              347,683Total
              
              $
              2,910,113
              
              $
              2,943,971
              
              $
              8,781,532
              
              $
              8,536,796
 
 
 The
        estimated retail value of such promotional allowances included in operating
        revenues for the three-month periods ended September 30, 2005 and 2004 is
        $4.1
        million and $4.2 million, respectively, and for the nine-month periods ended
        September 30, 2005 and 2004 is $12.2 million and $11.8 million,
        respectively.
 
 The
        following schedule lists total cash incentives and the retail costs of rooms,
        food, beverage, and other merchandise, which comprise the total promotional
        allowances for each of the three- and nine-month periods ended September
        30,
        2005 and 2004.
 
 For
                  The Three Months Ended September 30,
              
              For
                  The Nine Months Ended September 30,2005
              
              2004
              
              2005
              
              2004Cash
                  based promotional activities
              
              $
              5,707,760
              
              $
              4,751,091
              
              $
              16,984,330
              
              $
              14,530,027Slot
                  club and other
              
              
              1,826,565
              
              
              1,466,722
              
              
              5,060,178
              
              
              3,830,887Retail
                  cost of rooms, food, beverage and other
              
              
              4,149,200
              
              
              4,223,988
              
              
              12,215,062
              
              
              11,785,973Total
              
              $
              11,683,525
              
              $
              10,441,801
              
              $
              34,259,570
              
              $
              30,146,887
 
 
 RECENT
        ACCOUNTING PRONOUNCEMENTS
 
 In
        November 2004, the Financial Accounting Standards Board issued Statement
        of
        Financial Accounting Standards No. 151, “Inventory Costs-an amendment of ARB No.
        43, Chapter 4” (“SFAS 151”). SFAS 151 amends ARB No. 43, Chapter 4, “Inventory
        Pricing,” to clarify the accounting for abnormal amounts of idle facility
        expense, freight, handling costs, and wasted material (spoilage). SFAS 151
        is
        effective for financial statements for fiscal years beginning after June
        15,
        2005. The Company does not anticipate that adoption of SFAS 151 will have
        a
        material impact on its financial position, results of operations or its cash
        flows.
  7
  **THE
        MAJESTIC STAR CASINO, LLC AND SUBSIDIARIES**
 **(A
        Wholly Owned Subsidiary of Barden Development, Inc.)**
 **NOTES
        TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)**
 
 In
        December 2004, the Financial Accounting Standards Board issued Statement
        of
        Financial Accounting Standards No. 153, “Exchanges of Nonmonetary Assets-an
        amendment of APB Opinion No. 29” (“SFAS 153”). SFAS 153 amends APB Opinion No.
        29, “Accounting for Nonmonetary Transactions,” to eliminate the exception for
        nonmonetary exchanges of similar productive assets and replace it with a
        general
        exception for exchanges of nonmonetary assets that do not have commercial
        substance (i.e., if the future cash flows of the entity are expected to change
        significantly as a result of the exchange). SFAS 153 is effective for financial
        statements for fiscal years beginning after June 15, 2005. The Company does
        not
        anticipate that adoption of SFAS 153 will have a material impact on its
        financial position, results of operations or its cash flows.
 
 In
        May
        2005, the Financial Accounting Standards Board issued Statement of Financial
        Accounting Standards No. 154, “Accounting Changes and Error Corrections-a
        replacement of APB No. 20 and FASB Statement No. 3” (“SFAS 154”). SFAS 154
        replaces APB No. 20, “Accounting Changes” and FASB Statement No. 3, “Reporting
        Accounting Changes in Interim Financial Statements” and changes the requirements
        for the accounting for and reporting of a change in accounting principle.
        SFAS
        154 is effective for accounting changes and corrections of errors made in
        fiscal
        years beginning after December 15, 2005. The Company does not anticipate
        that
        adoption of SFAS 154 will have a material impact on its financial position,
        results of operations or its cash flows.
 
 **Note
                  3.**
              **Mutual
                  Termination of Sale of Fitzgeralds Black
                  Hawk**
 
 On
        April
        14, 2005, Barden Colorado and Legends Gaming, LLC (“Legends”) mutually agreed to
        terminate the Asset Purchase Agreement dated July 12, 2004, as amended (the
        “Purchase Agreement”), pursuant to which Barden Colorado had agreed to sell and
        Legends had agreed to purchase substantially all of the assets of the
        Fitzgeralds-brand casino located in Black Hawk, Colorado.
 
 In
        connection with the mutual termination of the Purchase Agreement, the earnest
        money deposit originally placed into escrow by Legends at the time of execution
        of the Purchase Agreement was returned to Legends. In addition, the Company
        paid
        Legends approximately $2.7 million, consisting of $0.7 million in reimbursement
        of certain costs which were incurred in re-routing a storm sewer pipe below
        grade and certain related transaction costs which the parties had agreed
        to
        share equally together with $2.0 million as a termination fee. The Company
        took
        a charge in the second quarter of 2005 for the payment of the termination
        fee
        and its portion of the shared transaction costs and certain other transaction
        expenses. The charge was $2.3 million. The reimbursement of $0.7 million
        of
        costs incurred in re-routing the storm sewer pipe below grade was
        capitalized.
 
 Additionally,
        the Company took a charge of approximately $1.5 million in the second quarter
        of
        2005 for the depreciation and amortization expense that was not recorded
        while
        Barden Colorado was held for sale during the period July 12, 2004 (the date
        of
        the Purchase Agreement) to April 14, 2005. The corresponding catch-up
        depreciation and amortization in the nine months ended September 30, 2005
        is
        $0.9 million (for the period July 12, 2004 to December 31, 2004).
 
 Because
        the purchase agreement was mutually terminated, the results of Fitzgeralds
        Black
        Hawk are not reflected as discontinued operations in the accompanying
        consolidated statements of operations for any of the periods presented.
        Additionally, its assets and liabilities are not classified on the consolidated
        balance sheet as assets held for sale and as liabilities related to assets
        held
        for sale as of September 30, 2005. However, since Fitzgeralds Black Hawk
        was
        held for sale as of December 31, 2004, the assets that were held for sale
        and
        liabilities related to assets held for sale are still classified as such
        in the
        December 31, 2004 consolidated balance sheet and related footnote
        disclosures.
  8
  **THE
        MAJESTIC STAR CASINO, LLC AND SUBSIDIARIES**
 **(A
        Wholly Owned Subsidiary of Barden Development, Inc.)**
 **NOTES
        TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED** )
 
 **Note
                  4.**
              **Restricted
                  Cash**
 
 As
        of
        September 30, 2005, restricted cash consists of certificates of deposit
        aggregating $2.1 million, which serve as security for letters of credit
        supporting various self-insured worker’s compensation programs. As of December
        31, 2004, restricted cash consists of the aforementioned $2.1 million in
        certificates of deposit and cash of $0.4 million, which served as security
        for a
        bond relating to the appeal of an award rendered against the Company in the
        U.S.
        District Court for the Northern District of Mississippi. The Company settled
        such pending appeal and paid the award in the second quarter of 2005. The
        bond
        and the associated restricted cash were subsequently released in
 early
        August 2005.
 
 **NOTE
                  5.**
              **Intangible
                  Assets**
 
 Intangible
        assets at Fitzgeralds Tunica and Fitzgeralds Black Hawk primarily include
        $7.8
        million for customer relationships, $3.5 million for trade names, and $0.7
        million for an excursion license for a riverboat which commenced full operations
        on March 18, 2004. Intangible assets for customer relationships and trade
        names
        are being amortized over periods of 8 and 10 years, respectively. The riverboat
        excursion license is being amortized over 15 years, the period of the license.
        In accordance with Statement of Financial Accounting Standards ("SFAS") Number
        142 (“SFAS 142”), goodwill is not amortized but instead subject to impairment
        tests at least annually. The Company conducts its annual test in December.
        No
        additions or impairments of goodwill were recorded in either of the fiscal
        quarters or nine-month periods ended September 30, 2005 and 2004.
 
 The
        gross
        carrying amount and accumulated amortization of the Company's intangible
        assets,
        other than goodwill, as of September 30, 2005 and December 31, 2004 are as
        follows:
 
 As
                  of September 30, 2005
              
              Gross
                  Carrying
              
              Accumulated
              
              Net
                  Amount
              
              ExpectedAmount
              
              Amortization
              
              September
                  30, 2005
              
              LifeAmortized
                  intangible assets:
              
              (in
                  thousands)Customer
                  relationship
              
              $
              7,840
              
              $
              (3,742
              )
              $
              4,098
              
              
              8
                  yrsTrade
                  name
              
              
              3,450
              
              $
              (1,317
              )
              
              2,133
              
              
              10
                  yrsRiverboat
                  excursion license
              
              
              700
              
              
              (71
              )
              
              629
              
              
              15
                  yrsTotal
                  intangible assets
              
              $
              11,990
              
              $
              (5,130
              )
              $
              6,860
 
 
 As
                  of December 31, 2004
              
              Gross
                  Carrying
              
              Accumulated
              
              Net
                  Amount
              
              ExpectedAmount
              
              Amortization
              
              December
                  31, 2004
              
              LifeAmortized
                  intangible assets:
              
              (in
                  thousands)Customer
                  relationship
              
              $
              4,954
              
              $
              (1,900
              )
              $
              3,054
              
              
              8
                  yrsTrade
                  name
              
              
              2,180
              
              
              (669
              )
              
              1,511
              
              
              10
                  yrsRiverboat
                  excursion license
              
              
              700
              
              
              (35
              )
              
              665
              
              
              15
                  yrsTotal
                  intangible assets
              
              $
              7,834
              
              $
              (2,604
              )
              $
              5,230
 
 
 In
        accordance with SFAS No. 144, Fitzgeralds Black Hawk had discontinued amortizing
        its intangible assets on July 12, 2004, the date of the sales agreement
        discussed above in Note 3 - Mutual Termination of Sale of Fitzgeralds Black
        Hawk. Consequently, there had been no amortization expense recorded on its
        intangible assets for the period from July 12, 2004 to April 14, 2005. As
        a
        result of the termination of the sale, the Company recorded a catch-up
        adjustment for amortization in the second quarter of 2005. The amount of
        catch-up amortization in the nine months ended September 30, 2005 is $0.2
        million (for the period July 12, 2004 to December 31, 2004).
  9
  **THE
        MAJESTIC STAR CASINO, LLC AND SUBSIDIARIES**
 **(A
        Wholly Owned Subsidiary of Barden Development, Inc.)**
 **NOTES
        TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED** )
 
 **NOTE
                  6.**
              **Investment
                  in Buffington Harbor Riverboats, L.L.C.**
 
 On
        October 31, 1995, the Company and Trump Indiana, Inc., our Joint Venture
        Partner
        ("Trump Indiana"), entered into the First Amended and Restated Operating
        Agreement of Buffington Harbor Riverboats, LLC (“BHR”) for the purpose of
        acquiring and developing a dock, pavilion and parking facilities for the
        gaming
        operations in the City of Gary ("BHR Property"). BHR is responsible for the
        management, development and operation of the BHR Property. The Company and
        Trump
        Indiana have each entered into an agreement with BHR (the "Berthing Agreement")
        to use BHR Property for their respective gaming operations and have committed
        to
        pay the cash operating losses of BHR as additional berthing fees. All
        expenditures requiring a cash outlay by BHR are billed to Trump Indiana and
        the
        Company at cost. Accordingly, BHR records as expenses the cost of providing
        such
        services and records as other revenues the amounts billed to Trump Indiana
        and
        the Company.
 
 The
        Company has paid BHR approximately $1.3 million and $3.8 million of berthing
        fees for the three- and nine-month periods ended September 30, 2005, and
        $1.3
        million and $5.2 million for the three- and nine-month periods ended September,
        2004, respectively. Such amounts are recorded in general and administrative
        expense in the consolidated statements of operations.
 
 Majestic
        Star uses the food and beverage operations at BHR to provide its casino
        customers with complimentary meals, beverages and services. All of the
        restaurants at BHR, which include Passports-A World Class Buffet and Koko
        Taylor’s Blues Café, are run by third party operators. Majestic Star sends
        guests to these restaurants and the other food and beverage operations at
        BHR,
        and the proprietors of these businesses charge Majestic Star for the meals
        served and the services provided. In addition, Majestic Star reimburses BHR
        for
        valet services it provides to guests of Majestic Star. Majestic Star paid
        approximately $0.9 million and $2.6 million to BHR, and to restaurants and
        other
        food and beverage operations at BHR, for valet services in the three- and
        nine-month periods ended September 30, 2005, and approximately $0.6 million
        and
        $1.7 million in the three- and nine-month periods ended September 30, 2004,
        respectively. Food, beverage and valet costs are recorded in casino expense
        in
        the Company's consolidated statements of operations. After Majestic Star
        and
        Trump Indiana reimburse BHR for all cash operating losses, the remaining
        net
        loss of BHR results from depreciation expense associated with the BHR property
        and is recorded as a loss on investment in Buffington Harbor Riverboats,
        LLC on
        the Company’s consolidated statement of operations. The allocated net losses
        were approximately $1.2 million for each of the three-month periods ended
        September 30, 2005 and 2004, and $3.6 million and $3.7 for the nine-month
        periods ended September 30, 2005 and 2004, respectively. Because of the nature
        of the BHR arrangement, the Company records its equity in the loss of BHR
        as a
        component of operating income in the accompanying financial
        statements.
  10
  **THE
        MAJESTIC STAR CASINO, LLC AND SUBSIDIARIES**
 **(A
        Wholly Owned Subsidiary of Barden Development, Inc.)**
 **NOTES
        TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)**
 
 The
        following represents selected financial information for BHR as of September
        30,
        2005 and December 31, 2004 and for the three and nine months ended September
        30,
        2005 and 2004.
 
 September
                  30,
              
              December
                  31,BALANCE
                  SHEETS
              
              2005
              
              2004Cash
              
              $
              703,874
              
              $
              311,052Current
                  assets, excluding cash
              
              
              1,214,671
              
              
              2,233,904Property,
                  plant and equipment, net
              
              
              53,823,681
              
              
              57,199,307Other
                  assets
              
              
              79,802
              
              
              82,359Total
                  assets
              
              $
              55,822,028
              
              $
              59,826,622Current
                  liabilities
              
              $
              4,225,207
              
              $
              4,657,377Capital
                  lease obligation, net of current
              
              
              220,831
              
              
              304,704Total
                  liabilities
              
              
              4,446,038
              
              
              4,962,081Total
                  members' equity
              
              
              51,375,990
              
              
              54,864,541Total
                  liabilities and members' equity
              
              $
              55,822,028
              
              $
              59,826,622The
                  Majestic Star Casino, LLC member's equity
              
              $
              25,687,995
              
              $
              27,432,270
 
 For
                  The Three Months Ended
              
              For
                  The Nine Months EndedSeptember
                  30,
              
              September
                  30,STATEMENTS
                  OF INCOME
              
              2005
              
              2004
              
              2005
              
              2004Gross
                  revenue
              
              $
              2,898,642
              
              $
              2,951,871
              
              $
              8,846,167
              
              $
              8,536,109Operating
                  loss
              
              $
              (1,062,791
              )
              $
              (1,232,095
              )
              $
              (3,480,099
              )
              $
              (3,708,453
              )Net
                  loss
              
              $
              (1,222,896
              )
              $
              (1,232,116
              )
              $
              (3,641,292
              )
              $
              (3,708,812
              )
  BHR
        1995-1997 Sales and Use Tax Assessment
 
 In
        October 1999, the Indiana Department of State Revenue (the “Department”)
        assessed BHR $1.0 million related to a sales and use tax audit pertaining
        to the
        years 1995 to 1997. The assessment was comprised of $0.8 million for taxes
        owed,
        $0.1 million for interest and $0.1 million for penalties. In December 1999,
        BHR
        filed a protest on a portion of the assessment (the “Initial Protest”). The
        protest covered BHR’s purchases of specified kitchen equipment that BHR believed
        was exempt from tax since it was property used or consumed in the direct
        production of food products, tax on purchases of “materials” under lump sum
        construction contracts, which required the contractor to pay any and all
        taxes
        related to the purchase of such materials, improper assessment of use tax
        on
        purchases on which BHR paid sales tax, improper assessment of use tax on
        purchases, and the interest and penalties related to the protested items.
        In
        December 1999, BHR paid $0.6 million of the assessment that was not under
        dispute.
 
 In
        August
        2002, BHR and the Department entered into a Memorandum of Agreement which
        resolved a number of issues related to the Initial Protest. In November 2002,
        BHR made an additional payment of $0.1 million related to the Memorandum
        of
        Agreement.
 
 In
        October 2005, the Department issued its Letter of Findings on the remaining
        assessments outstanding. The Department upheld its initial assessment, but
        agreed to waive all penalties associated with the assessment. With interest,
        the
        balance due is $0.2 million.
  BHR
          has
          made the necessary accrual for the remaining assessment due and Majestic
          Star
          has recorded its proportionate share of 50% of the accrual as a liability
          due to
          BHR.
  11
  
 **THE
        MAJESTIC STAR CASINO, LLC AND SUBSIDIARIES**
 **(A
        Wholly Owned Subsidiary of Barden Development, Inc.)**
 **NOTES
        TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)**
 
 BHR
        1998-2002 Sales and Use Tax Assessment
 
 In
        October 2002, the Department assessed BHR for unpaid sales and use taxes,
        along
        with interest, for the years 1998 through 2001, in the amount of $0.4 million.
        The assessments relate to the purchases of capital and related items, supplies,
        the lease of vehicles and rental of other items, where no taxes were paid
        when
        the items were purchased. In addition, included in the assessment for the
        years
        1999 through 2001, is a tax on BHR’s provision of food, provided on a
        complimentary basis, to the patrons and employees of Trump Indiana and Majestic
        Star as “retail transactions” subject to sales tax at the partners’ reimbursed
        costs to BHR. In October 2005, the Department further assessed BHR an additional
        $0.3 million, inclusive of interest and penalties, for the year 2002. The
        2002
        assessment is for many of the similar items as found in the 1998 through
        2001
        assessment. However, in the 2002 assessment, the Department is now assessing
        complimentary food provided to the patrons of Trump Indiana and Majestic
        Star
        based on the retail value of the transactions rather than the reimbursed
        costs
        as described for the 1999 through 2001 years. Based on the current method
        of
        assessing tax on complimentary food, it is estimated that an additional tax
        assessment of $0.1 million would apply to 2003. As a result of BHR outsourcing
        its restaurant operations to third parties, no tax would be due for 2004
        and the
        nine months ended September 30, 2005. Any sales and use tax obligations would
        be
        the responsibility of the third party restaurant operators.
 
 BHR
        has
        accrued or paid for the 1998 through 2002 sales and use tax assessments related
        to capital purchases, operating and supply purchases and leased items. The
        remaining amount outstanding of $0.6 million, relates to the sales and use
        tax
        on complimentary meals. BHR is disputing the assessment of sales tax on food
        provided at no charge, to the employees and patrons of Trump Indiana and
        Majestic Star, pursuant to the decision in Hyatt Corp. v. Indiana Department
        of
        State Revenue (“Hyatt”). In Hyatt, the Department assessed Hyatt for
        complimentary continental breakfasts and amenity meals provide to its customers,
        plus the free meals provided to Hyatt’s full time employees. Under Indiana Code,
        sales of food intended for human consumption are exempt from sales tax. Food
        includes many food products (cereal, milk, eggs, meat, fish, vegetables,
        fruit,
        spices, etc) that are prepared for human consumption. In Hyatt, the petitioner,
        a hotel operator, sought a refund for use tax paid on food purchased for
        complimentary meals that were provided to both guests and employees. Hyatt
        prevailed. BHR is arguing that since its inception, it has acted as the agent
        of
        Majestic Star and Trump Indiana with authority to purchase, prepare and provide
        food to their employees and patrons. This arrangement was memorialized in
        a
        written Limited Agency Agreement dated effective January 1, 2001. BHR’s position
        has been that all acts performed by it in its agency capacity (including
        the
        purchase, preparation and delivery of food) should be treated as though the
        acts
        had been performed by BHR’s joint venture partners, Majestic Star and Trump
        Indiana.
 
 BHR
        has
        not reserved for the assessment related to the prepared meals provided to
        the
        guests of Majestic Star and Trump Indiana. BHR continues to pursue its dispute
        with the Department.
  12
  **THE
        MAJESTIC STAR CASINO, LLC AND SUBSIDIARIES**
 **(A
        Wholly Owned Subsidiary of Barden Development, Inc.)**
 **NOTES
        TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)**
 
 **NOTE
                  7.**
              **Long-term
                  Debt**
 
 September
                  30,
              
              December
                  31,2005
              
              2004Long-term
                  debt outstanding is as follows:9
                  1/2% senior secured notes due 2010
              
              $
              260,000,000
              
              $
              260,000,000Senior
                  secured credit facility
              
              
              39,005,285
              
              
              40,965,00011.653%
                  unsecured notes
              
              
              15,995,056
              
              
              15,892,960Long-term
                  debt
              
              $
              315,000,341
              
              $
              316,857,960Less
                  current maturities
              
              
              -
              
              
              -Total
                  long-term debt
              
              $
              315,000,341
              
              $
              316,857,960
 
 
 9
1⁄2%
        SENIOR SECURED NOTES DUE 2010
 
 The
        9 1⁄2%
        notes bear interest at a fixed annual rate of 9.5% payable semi-annually
        on
        April 15 and October 15 of each year with a final payment of interest and
        principal due on October 15, 2010. The 9 1⁄2% notes are collateralized by
        substantially all of the current and future assets of the Company and the
        subsidiary guarantors, other than certain excluded assets. The 9 1⁄2% notes are
        also collateralized by our equity interests held by BDI and our equity interests
        in the subsidiary guarantors.
 
 The
        indenture governing the 9 1⁄2% notes contains covenants which, among other things,
        restrict the Company's ability to (i) make asset sales; (ii) make certain
        payments to, or investments in, third parties; (iii) incur additional
        indebtedness or liens on any assets; (iv) enter into transactions with
        affiliates; and (v) sell any restricted subsidiaries' assets. In addition,
        upon
        a Change of Control as defined in the indenture governing the 9 1⁄2% notes,
        the Company will be required to offer to repurchase all of the outstanding
        9 1⁄2% notes at a cash price equal to 101% of the principal amount thereof,
        plus accrued and unpaid interest to the date of repurchase.
  SENIOR
        SECURED CREDIT FACILITY
 
 The
        Company has an $80.0 million credit facility with Wells Fargo Foothill, Inc.
        (“Wells Fargo”). Subject to certain exceptions, the $80.0 million credit
        facility is secured by a pledge of our equity held by BDI and the equity
        of our
        subsidiary guarantors and a first priority lien on substantially all of the
        assets of the Company. Borrowings under the $80.0 million credit facility
        bear
        interest at the Company's choice of LIBOR plus a range of 3.00% to 3.50%
        or
        Wells Fargo's base rate (which approximates the prime rate) plus a range
        of
        0.25% to 0.75%. The range is determined based on the Company's EBITDA (earnings
        before interest, taxes, depreciation, amortization and other adjustments
        as
        defined in the Loan and Security Agreement and amendments thereto). Full
        payment
        of any outstanding balance under the $80.0 million credit facility is due
        upon
        maturity of the agreement in October 2007. The $80.0 million credit facility
        includes covenants similar to those set forth in the indenture governing
        the 9
1⁄2% notes, and also requires the Company to maintain, as defined in the
        covenants, minimum EBITDA and interest coverage ratios, which increase
        periodically, and an annual limit on capital expenditures. During the nine
        months ended September 30, 2005, the Company incurred interest expense on
        borrowings ranging from 5.65% to 7.50%.
 
 At
        September 30, 2005 and at December 31, 2004, the Company had available borrowing
        capacity under the $80.0 million credit facility of approximately $41.0 million
        and $39.0 million, respectively.
  13
  **THE
        MAJESTIC STAR CASINO, LLC AND SUBSIDIARIES**
 **(A
        Wholly Owned Subsidiary of Barden Development, Inc.)**
 **NOTES
        TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)**
 
 On
        March
        17, 2005, the Company entered into Amendment Number Two to the Loan and Security
        Agreement (“Amendment Two”). Amendment Two clarifies that the Company’s 2004
        purchase of 170 acres of land located adjacent to the Buffington Harbor gaming
        complex is not a “Capital Expenditure” under the Loan and Security Agreement nor
        is it subject to the fiscal year Capital Expenditure limitations set forth
        in
        the Loan and Security Agreement. Amendment Two is effective as of March 1,
        2005.
 
 On
        August
        10, 2005, the Company entered into Amendment Number Three to the Loan and
        Security Agreement (“Amendment Three”). Amendment Three modifies the definition
        of EBITDA such that the Company can add back to EBITDA the termination charge
        of
        $2.3 million related to the sale of substantially all of the assets of
        Fitzgeralds Black Hawk (see Note 3 - Mutual Termination of Sale of Fitzgeralds
        Black Hawk). In addition, the Company also amended the quarterly interest
        coverage ratio covenant contained in the Loan and Security Agreement, starting
        with the third quarter of 2005 through the fourth quarter of 2006. These
        amendments are effective as of June 15, 2005.
 
 11.653%
        UNSECURED NOTES
 
 At
        September 30, 2005 and December 31, 2004, Investor Holdings had debt outstanding
        of $16.0 million and $15.9 million, respectively, related to its 11.653%
        notes,
        net of unamortized original issue discount of $0.3 million and $0.4 million,
        respectively. The 11.653% notes bear interest at a fixed rate of 11.653%
        per
        annum payable semi-annually on May 31 and November 30 each year. The 11.653%
        notes will mature on November 30, 2007. There are no guarantees related to
        the
        11.653% notes, and the 11.653% notes are unsecured.
 
 **NOTE
                  8.**
              **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 claims, to be routine litigation incidental to the Company’s
        business. Except as described below, 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.
 
 On
          July
          14, 2005, the City of Black Hawk delivered a Notice of Abatement to Fitzgeralds
          Black Hawk. The notice alleged that a partially demolished historic structure
          owned by Fitzgeralds Black Hawk (the “Masonic Building”) constituted a public
          nuisance, and ordered that Fitzgeralds Black Hawk make substantial progress
          within seven (7) days to abate the nuisance by rebuilding the Masonic Building.
          Previously, the Masonic Building was partially demolished to preserve the
          façade
          and southwest wall by shoring, and in anticipation of encapsulating the
          remaining portions into a casino expansion. Two of the walls of the structure
          now remain in place supported by iron shoring beams.
 
 In
          response to the Notice of Abatement, we proposed to the City of Black Hawk
          a
          four-phased proposal to address the Masonic Building and casino expansion,
          with
          later phases being contingent upon obtaining financing. Under the proposal’s
          phase-one, which was not contingent on financing, the iron shoring beams
          on the
          outside of the façade and wall would have been moved to the inside to
          immediately improve the Masonic Building’s appearance, and casino expansion
          would be initiated by installation of caissons in the Building’s interior
          footprint, **** at
          an
          estimated cost of between $0.4 million and $0.5 million. While City of
          Black
          Hawk officials initially encouraged the submission of this phase-one proposal,
          it was rejected by Black Hawk’s City Council at its meeting on August 24, 2005.
 
 At
          that
          meeting, the City Council instead demanded that we use the funds available
          for
          phase-one construction, to exercise our option to purchase nearby vacant
          land
          owned by the City of Black Hawk. In response, Fitzgeralds Black Hawk proposed
          to
          exercise its option as requested, but to address financing constraints
          by making
          payments over three years. The City of Black Hawk rejected this offer,
          and by
          letter of October 3, 2005 instead notified us that it had unilaterally
          terminated our option, and would immediately entertain other offers to
          purchase
          the vacant land. Accordingly, on October 6, 2005, we filed a Complaint
          in the
          District Court for Jefferson County, Colorado, styled *Barden
          Colorado Gaming, LLC v. City of Black Hawk of Black Hawk* ,
          seeking
          a declaration that the option remains valid until September of 2006. Acquiring
          the vacant land under option would cost the Company approximately $1.5
          million.
 
 On
          November 10, 2005, Fitzgeralds Black Hawk was served with a Verified Complaint
          in an action styled *City
          of Black Hawk of Black Hawk v. Barden Colorado Gaming LLC* .
          The
          Verified Complaint, which has been filed in the Municipal Court for the
          City of
          Black Hawk, asserts that Fitzgeralds Black Hawk maintains a partially demolished
          historic building which constitutes a public nuisance. At this time, the
          City of
          Black Hawk seeks a finding that the structure violates the Municipal Code,
          an
          injunction prohibiting Fitzgeralds Black Hawk from keeping the alleged
          nuisance,
          an injunction directing Fitzgeralds Black Hawk to rebuild the historic
          structure, and assessment of a penalty in the amount of $499 for each day
          of the
          alleged violation, beginning on June 1, 2005. Fitzgeralds Black Hawk’ answer is
          due, and a hearing will be held, on December 21, 2005.  Fitzgeralds
          Black Hawk is currently evaluating the facts and applicable law as it relates
          to
          this case and thus it is too early to determine the likely outcome. Fitzgeralds
          Black Hawk expects the casino expansion to cost approximately $24.0 million,
          including the re-construction of the Masonic Building and the purchase
          of
          associated gaming equipment and other furniture and fixtures. The cost
          to
          re-construct the Masonic Building, without engaging in the full casino
          expansion, is anticipated to cost between $13.0 million and $16.0
          million.
  In
        July
        2004, a former employee of The Majestic Star Casino, LLC filed a collective
        action against the Company and the motor vessel Majestic Star to collect
        overtime wages which plaintiff alleges were not paid in violation of the
        Fair
        Labor Standards Act. On September 6, 2005, the Company and the plaintiffs
        entered into a Release and Settlement Agreement pursuant to which the Company
        paid the plaintiffs $13,000 in exchange for a full and final release of all
        claims arising out of plaintiffs’ employment with the Company. The parties
        executed a Joint Stipulation of Dismissal and filed the same on September
        15,
        2005.
  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. The plaintiffs
        claim
        the defendants made a joint decision to refuse to advertise on the plaintiffs’
        website. The plaintiffs are seeking treble, compensatory and punitive damages
        totaling approximately $33.0 million, plus interest and attorney’s fees. Each of
        the casino defendants, including Barden Mississippi, has filed counterclaims
        against the plaintiffs alleging, among other claims, trademark infringement.
        The
        plaintiffs’ antitrust and common law tort claims against the Tunica County
        Tourism Commission have been dismissed. The casino defendants have filed
        a
        motion for summary judgment on each of the claims alleged against them and
        the
        plaintiffs have filed a motion for summary judgment with respect to each
        of the
        casino defendants’ counterclaims. Both motions are currently pending before the
        court. The parties have agreed to postpone the mediation that was previously
        scheduled for October 6 and
        7, 2005 to
        a date not yet determined. The trial date for this matter is currently set
        for
        August 28, 2006. The Company intends to vigorously defend against the lawsuit;
        however, it is too early to determine the outcome and the effect, if any,
        on the
        Company’s financial position and results of operations. The Company has
        established an accrual of $65,000 related to this litigation.
  14
  **THE
        MAJESTIC STAR CASINO, LLC AND SUBSIDIARIES**
 **(A
        Wholly Owned Subsidiary of Barden Development, Inc.)**
 **NOTES
        TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)**
 
 MAJESTIC
        STAR SALES AND USE TAX ASSESSMENT
 
 In
        October 2005, the Department assessed Majestic Star for unpaid sales and
        uses
        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
        sales and 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. Subsequent to the assessment, Majestic
        Star’s management met with a representative of the Department to discuss the
        audit findings. Majestic Star has accrued $0.2 million at September 30, 2005
        based on what it believes to be its liability. 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,
                  and
 2.
              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.
 
 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. At 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 the time Majestic Star established
        the receivable for sales taxes paid during the period 2001 through July 2003.
        Majestic Star also filed a claim for refund with the Department for the taxes
        paid. That claim is currently outstanding. Majestic Star believes that it
        has no
        liability for prepared food for human consumption based on the Hyatt decision
        (see Note 6-Investment in Buffington Harbor Riverboats, LLC for a discussion
        of
        Hyatt). In addition, Majestic Star believes it only has a liability for sales
        tax on the cost, and not retail value, of merchandise and other products
        provided to its customers at no charge. Majestic Star is pursing its dispute
        with the Department.
 
 GAMING
        REGULATIONS
 
 The
        ownership and operation of riverboat gaming operations in Indiana are subject
        to
        strict state regulation under the Riverboat Gambling Act (the "Act") and
        the
        administrative rules promulgated thereunder. The Indiana Gaming Commission
        ("IGC") is empowered to administer, regulate and enforce the system of riverboat
        gaming established under the Act and has jurisdiction and supervision over
        all
        riverboat gaming operations in Indiana, as well as over all persons on
        riverboats where gaming operations are conducted. The IGC is empowered to
        regulate a wide variety of gaming and non-gaming related activities, including
        the licensing of suppliers to, and employees at, riverboat gaming operations
        and
        to approve the form of entity qualifiers and intermediary and holding companies.
        The IGC has broad rulemaking power, and it is impossible to predict what
        effect,
        if any, the amendment of existing rules or the finalization of proposed rules
        might have on the Company's operations.
 
 The
        ownership and operation of our casino gaming facilities in Mississippi and
        Colorado are also subject to various state and local regulations in the
        jurisdictions where they are located. In Mississippi, our gaming operations
        are
        subject to the Mississippi Gaming Control Act, and to the licensing and/or
        regulatory control of the Mississippi Gaming Commission, the Mississippi
        State
        Tax Commission and various state and local regulatory agencies, including
        liquor
        licensing authorities. In Colorado, our gaming operations are subject to
        the
        Limited Gaming Act of 1991, which created the Division of Gaming within the
        Colorado Department of Revenue and the Colorado Limited Gaming Control
        Commission, which is empowered to license, implement, regulate and supervise
        the
        conduct of limited gaming. Our Colorado operations are also subject to the
        Colorado Liquor Code and the state and local liquor licensing authorities.
 
 The
        Company's directors, officers, managers and key employees may be required
        to
        hold individual licenses. The requirements vary from jurisdiction to
        jurisdiction. Licenses and permits for gaming operations and for individual
        licensees are subject to revocation or non-renewal for cause. Under certain
        circumstances, holders of our securities are required to secure independent
        licenses and permits.
  15
  **THE
        MAJESTIC STAR CASINO, LLC AND SUBSIDIARIES**
 **(A
        Wholly Owned Subsidiary of Barden Development, Inc.)**
 **NOTES
        TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)**
 
 OTHER
        CONTINGENCIES
 
 The
        Company and Trump Indiana have each entered into parallel operating lease
        agreements with Buffington Harbor Parking Associates, LLC (“BHPA”), each having
        a term until December 31, 2018. The gross rental payments are designed to
        provide BHPA with sufficient funds to service its debt over the life of the
        lease agreement. The operating lease agreement calls for the Company and
        Trump
        Indiana to make monthly lease payments for the full monthly amount due BHPA,
        although each party is entitled to a credit for 50% of such payment if the
        other
        party makes its monthly payment. Since the inception of the lease, neither
        the
        Company nor Trump Indiana has had to make a payment greater than 50% of the
        required rent.  Majestic Star's share of the monthly amount due BHPA
        is
        approximately $0.2 million.
 
 LETTER
        OF CREDIT/SURETY BOND
 
 As
        part
        of a self-insured worker’s compensation program at Majestic Star, the Company
        was required to post a letter of credit in the amount of $0.9 million to
        secure
        payment of claims. To collateralize the letter of credit, the bank required
        that
        Majestic Star purchase a $0.9 million certificate of deposit. Such certificate
        of deposit is recorded in restricted cash on the Company's consolidated balance
        sheets (see Note 4 - Restricted Cash).
 
 To
        secure
        payment of claims under the workers’ compensation programs at Fitzgeralds
        Tunica, Fitzgeralds Black Hawk and Fitzgeralds Las Vegas, Investor Holdings
        was
        required to post a letter of credit of $1.25 million, which is secured by
        a
        certificate of deposit in a similar amount. Such certificate of deposit is
        recorded in restricted cash on the Company’s consolidated balance sheet (see
        Note 4 - Restricted Cash).
 
 The
        State
        of Mississippi has required Fitzgeralds Tunica to post surety bonds as security
        for current and future sales and gaming revenue tax obligations. Fitzgeralds
        Tunica has four surety bonds; a $0.6 million bond in place with the Mississippi
        State Tax Commission and three $5,000 bonds with the Mississippi Alcoholic
        Beverage Control. These surety bonds are secured only by personal guaranties
        of
        Don H. Barden. If Mr. Barden is required to make payments to the bonding
        companies as a result of the guaranties, the Company will be obligated to
        reimburse Mr. Barden for any such payments.
 
 The
        Company had posted an appeal bond in the amount of $0.4 million regarding
        the
        unfavorable ruling against the Company by the U.S. District Court for the
        Northern District of Mississippi. This bond was secured by a letter of credit.
        Investor Holdings in turn had restricted $0.4 million of its cash to secure
        the
        letter of credit. The Company settled the matter and paid the judgment during
        the second quarter of 2005 and the bond was released in August 2005. The
        letter
        of credit has been terminated and the restricted cash released.
 
 **NOTE
                  9.**
              **Related
                  Party Transactions**
 
 MANAGER
        AGREEMENT
 
 Distributions
        to BDI under the Manager Agreement dated October 7, 2003 are governed and
        limited by the terms of the indenture governing the 9 1⁄2% notes and by the terms
        of the $80.0 million 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
        9 1⁄2% notes and the Loan and Security Agreement for the $80.0 million credit
        facility) for the immediately preceding fiscal quarter. The Company is compliant
        with the distribution limitations within the Manager Agreement.
 
 During
        the quarters ended September 30, 2005 and 2004, Majestic Star made distributions
        of $1.3 million and $1.5 million, respectively. During each of the nine-month
        periods ended September 30, 2005 and 2004, Majestic Star made distributions
        of
        $3.9 million to BDI pursuant to the Manager Agreement.
  16
  **THE
        MAJESTIC STAR CASINO, LLC AND SUBSIDIARIES**
 **(A
        Wholly Owned Subsidiary of Barden Development, Inc.)**
 **NOTES
        TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)**
 
 TAX
        DISTRIBUTIONS
 
 Pursuant
        to the terms in the indenture governing the 9 1⁄2% notes and the loan agreement
        for the $80.0 million credit facility, the Company is permitted to make
        distributions for its member’s state and federal income tax liabilities.
 
 In
        the
        second quarter of 2005, Majestic Star made a tax distribution of $2.3 million
        to
        BDI for 2004 state tax liabilities and estimated 2005 taxes.
 
 TRANSACTIONS
        BY OR WITH AFFILIATES
 
 During
        the three- and nine-month periods ended September 30, 2005, the Company incurred
        rent expense payable to BHPA totaling $0.5 million and $1.6 million,
        respectively, compared to $0.5 million and $2.0 million, respectively, during
        the  three- and nine-month periods ended September 30, 2004. Accrued
        rent
        payable to BHPA was $1.1 million at both September 30, 2005 and December
        31,
        2004.
 
 BARDEN
        NEVADA EXPENSE SHARING AGREEMENT
 
 The
        Company has entered into an expense sharing agreement dated October 7, 2003
        with
        Barden Nevada Gaming, LLC (“Barden Nevada”), a wholly owned subsidiary of Barden
        Development, Inc. and a Fitzgeralds branded hotel and casino in Las Vegas,
        Nevada (“Fitzgeralds Las Vegas”). 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.
        During each of three-month periods ended September 30, 2005 and 2004, the
        expense sharing fees charged to Barden Nevada were $0.3 million. During the
        nine
        months ended September 30, 2005 and 2004, the expense sharing fees charged
        to
        Barden Nevada were $1.0 million and $0.8 million, respectively.
 
 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,
        the
        agent bank under the Company’s $80.0 million credit facility (see Note 7 -
        Long-Term Debt). Interest is paid quarterly, in arrears. Any normal operating
        costs that are funded by the Company and not repaid by Barden Nevada within
        thirty days and any interest not paid when due 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 accrued and unpaid interest. As
        of
        September 30, 2005, the principal balance of the note was $4.5
        million.
  17
  **THE
        MAJESTIC STAR CASINO, LLC AND SUBSIDIARIES**
 **(A
        Wholly Owned Subsidiary of Barden Development, Inc.)**
 **NOTES
        TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)**
 .
 **NOTE
                  1****0.**
              **Subsequent
                  Event**
 
 On
        November 3, 2005, the Company entered into a Stock Purchase Agreement (the
        “Stock Purchase Agreement”) with Trump Entertainment Resorts Holdings, L.P.
        (“Trump Holdings”) for the purchase by the Company of 100% of the stock of Trump
        Indiana. Trump Indiana owns and operates a casino vessel and hotel at Buffington
        Harbor in Gary, Indiana. The Company will pay a purchase price of $253.0
        million, less (i) 50% of the amount of long term debt and capitalized lease
        obligations and other non-current liabilities of BHR and BHPA as of the Closing
        Date, (ii) the amount of any long term debt, capitalized lease obligations
        and
        other non-current liabilities of Trump Indiana as of the Closing Date, (iii)
        the
        $2.0 million Riverboat Owner’s License transfer fee required under Indiana law,
        (iv) the severance obligations to certain employees to the extent not satisfied
        by Trump Indiana prior to the closing, (v) any commitment fee payable to
        the
        underwriter’s of the acquisition, up to a certain limitation, (vi) any amounts
        that Trump Indiana owes the City of Gary pursuant to its development agreement
        with the City of Gary and (vii) other adjustments for working capital, cash
        and
        customary representations and warranties. Upon executing the Stock Purchase
        Agreement, the Company paid Trump Holdings a $5.0 million deposit, which
        will be
        credited against the purchase price at closing, and is refundable to the
        Company
        only if Trump Holdings should fail to close under certain circumstances.
        The
        Company currently owns a casino vessel adjacent to Trump Indiana’s casino
        vessel, and through a joint venture with Trump Indiana, owns and operates
        Buffington Harbor Riverboats, LLC, which manages all ancillary operations
        at
        Buffington Harbor (see Note 6 - Investment in Buffington Harbor Riverboats,
        LLC). BHR will become a wholly owned subsidiary of the Company upon acquisition
        of Trump Indiana. Trump Indiana and BDI, jointly own the parking garage located
        at Buffington Harbor (see Note 8 - Commitments and Contingencies). Consistent
        with the terms of the Stock Purchase Agreement, the transaction is expected
        to
        close by the end of the year, subject to required regulatory
        approvals.
  **NOTE
                  11.**
              **Segment
                  Information**
 
 The
        Majestic Star Casino, LLC, either directly or indirectly through wholly-owned
        subsidiaries, owns and operates three properties as follows: a riverboat
        casino
        located in Gary, Indiana; a casino in Black Hawk, Colorado and a casino and
        hotel located in Tunica, Mississippi (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 (in Tunica, Mississippi only), and food and beverage.
 
 The
        accounting policies of each business segment are the same as those described
        in
        the summary of significant accounting policies previously described in Note
        1 to
        the audited financial statements included in the Company’s Annual Report on Form
        10-K for the year ended December 31, 2004. There are minimal inter-segment
        sales.
  18
  **THE
        MAJESTIC STAR CASINO, LLC AND SUBSIDIARIES**
 **(A
        Wholly Owned Subsidiary of Barden Development, Inc.)**
 **NOTES
        TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)**
  A
          summary
          of the Properties' operations by business segment for the three- and nine-month
          periods ended September 30, 2005 and 2004 and a summary of the Properties’
          assets as of September 30, 2005 and December 31, 2004 are presented
          below:
 
 For
                  The Three Months
              For
                  The Nine MonthsEnded
                  September 30,
              Ended
                  September 30,2005
              
              2004
              
              2005
              
              2004Net
                  revenues:
              
              (in
                  thousands)Majestic
                  Star Casino
              
              $
              34,707
              
              $
              34,191
              
              $
              105,012
              
              $
              107,781Fitzgeralds
                  Tunica
              
              
              20,781
              
              
              21,030
              
              
              62,817
              
              
              63,763Fitzgeralds
                  Black Hawk
              
              
              9,249
              
              
              9,272
              
              
              26,823
              
              
              27,373Total
              
              $
              64,737
              
              $
              64,493
              
              $
              194,652
              
              $
              198,917Operating
                  income (loss):Majestic
                  Star Casino
              
              $
              3,950
              
              $
              3,542
              
              $
              13,516
              
              $
              11,603Fitzgeralds
                  Tunica
              
              
              2,403
              
              
              2,621
              
              
              8,495
              
              
              9,687Fitzgeralds
                  Black Hawk
              
              
              2,411
              
              
              2,926
              
              
              6,084
              
              
              7,769Corporate
                  (1)
              
              
              (1,368
              )
              
              (826
              )
              
              (6,526
              )
              
              (2,506
              )Majestic
                  Investor Holdings
              
              
              (64
              )
              
              (99
              )
              
              (219
              )
              
              (627
              )Total
              
              $
              7,332
              
              $
              8,164
              
              $
              21,350
              
              $
              25,926Segment
                  depreciation and amortization:Majestic
                  Star Casino
              
              $
              2,209
              
              $
              2,038
              
              $
              6,489
              
              $
              5,831Fitzgeralds
                  Tunica
              
              
              2,578
              
              
              2,258
              
              
              7,587
              
              
              6,493Fitzgeralds
                  Black Hawk
              
              
              565
              
              
              65
              
              
              2,525
              
              
              994Majestic
                  Investor Holdings
              
              
              69
              
              
              70
              
              
              208
              
              
              208Total
              
              $
              5,421
              
              $
              4,431
              
              $
              16,809
              
              $
              13,526Expenditure
                  for additions to long-lived assets:Majestic
                  Star Casino
              
              $
              1,723
              
              $
              630
              
              $
              4,061
              
              $
              26,086Fitzgeralds
                  Tunica
              
              
              1,349
              
              
              1,766
              
              
              3,996
              
              
              4,835Fitzgeralds
                  Black Hawk
              
              
              206
              
              
              419
              
              
              2,015
              
              
              1,055Total
              
              $
              3,278
              
              $
              2,815
              
              $
              10,072
              
              $
              31,976
 
 
 As
                  of
              
              As
                  ofSeptember
                  30,
              
              December
                  31,2005
              
              2004Segment
                  assets:
              
              (in
                  thousands)Majestic
                  Star Casino (2)
              
              $
              238,000
              
              $
              254,702Fitzgeralds
                  Tunica
              
              
              76,568
              
              
              80,452Fitzgeralds
                  Black Hawk
              
              
              30,846
              
              
              31,032Majestic
                  Investor Holdings
              
              
              3,026
              
              
              2,158Total
              
              
              348,440
              
              
              368,344Less:
                  Intercompany
              
              
              (105,680
              )
              
              (121,968
              )Total
              
              $
              242,760
              
              $
              246,376
 
 
 (1)
              Corporate
                  expenses reflect payroll, benefits, travel, Sarbanes Oxley compliance
                  charges, Fitzgeralds Black Hawk termination of sale charges, and
                  other
                  costs associated with our corporate staff and are not allocated
                  to the
                  properties.
 (2)
              The
                  assets of Majestic Star include intercompany receivables from Investor
                  Holdings, Fitzgeralds Tunica and Fitzgeralds Black Hawk totaling
                  $105.7
                  million at September 30, 2005. At December 31, 2004, the assets
                  of
                  Majestic Star include intercompany receivables from Investor Holdings,
                  Fitzgeralds Tunica and Fitzgeralds Black Hawk of $122.0 million.
                  Intercompany receivables are eliminated in
                  consolidation.
  19
  **THE
        MAJESTIC STAR CASINO, LLC AND SUBSIDIARIES**
 **(A
        Wholly Owned Subsidiary of Barden Development, Inc.)**
 **NOTES
        TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)**
 
 
 **NOTE
                  1****2.**
              **SUPPLEMENTAL
                  GUARANTOR FINANCIAL INFORMATION**
 
 Under
        the
        indenture governing the 91⁄2% senior secured notes and the Loan and Security
        Agreement for the $80.0 million credit facility, Investor Holdings, Fitzgeralds
        Tunica and Fitzgeralds Black Hawk are guarantor subsidiaries.
 
 Our
        supplemental guarantor financial information contains financial information
        for
        The Majestic Star Casino, LLC, The Majestic Star Casino Capital Corp (a
        co-issuer of the 9 1⁄2% senior secured notes but an entity with no operations),
        the guarantor subsidiaries and the eliminating entries necessary to consolidate
        such entities.
  20
  **THE
        MAJESTIC STAR CASINO, LLC AND SUBSIDIARIES**
 **(A
        Wholly Owned Subsidiary of Barden Development, Inc.)**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)**
 
 **NOTE
                  12.**
              **SUPPLEMENTAL
                  GUARANTOR FINANCIAL INFORMATION
                  (CONTINUED)**
 
 **CONDENSED
        CONSOLIDATING BALANCE SHEETS**
 **As
        of September 30, 2005**
 **(unaudited)**
 The
                  Majestic
              
              The
                  MajesticStar
                  Casino,
              
              Star
                  Casino
              
              Guarantor
              
              Eliminating
              
              
              
              TotalLLC
              
              Capital
                  Corp.
              
              Subsidiaries
              
              Entries
              
              
              
              ConsolidatedASSETSCurrent
                  assets:Cash
                  and cash equivalents
              
              $
              7,039,155
              
              $
              -
              
              $
              10,498,352
              
              $
              -
              
              
              
              $
              17,537,507Restricted
                  cash
              
              
              900,000
              
              
              -
              
              
              1,250,000
              
              
              -
              
              
              
              
              2,150,000Accounts
                  receivable, net
              
              
              1,335,228
              
              
              -
              
              
              699,075
              
              
              -
              
              
              
              
              2,034,303Inventories
              
              
              60,306
              
              
              -
              
              
              591,909
              
              
              -
              
              
              
              
              652,215Prepaid
                  expenses and deposits
              
              
              1,743,738
              
              
              -
              
              
              607,578
              
              
              -
              
              
              
              
              2,351,316Receivable
                  from affiliate
              
              
              217,806
              
              
              -
              
              
              26,540
              
              
              (70,147
              )
              
              
              
              174,199Total
                  current assets
              
              
              11,296,233
              
              
              -
              
              
              13,673,454
              
              
              (70,147
              )
              (a)
              
              
              24,899,540Property,
                  equipment and improvements, net
              
              
              76,605,121
              
              
              -
              
              
              83,072,866
              
              
              -
              
              
              
              
              159,677,987Intangible
                  assets, net
              
              
              -
              
              
              -
              
              
              6,860,496
              
              
              -
              
              
              
              
              6,860,496Goodwill
              
              
              -
              
              
              -
              
              
              5,922,398
              
              
              -
              
              
              
              
              5,922,398Other
                  assets:Deferred
                  financing costs, net
              
              
              4,141,983
              
              
              -
              
              
              307,815
              
              
              -
              
              
              
              
              4,449,798Deferred
                  financing and transaction costsrelated
                  to the acquisition of Trump Indiana
              
              
              851,179
              
              
              -
              
              
              -
              
              
              -
              
              
              
              
              851,179Note
                  receivable - affiliate
              
              
              4,453,331
              
              
              -
              
              
              -
              
              
              -
              
              
              
              
              4,453,331Investment
                  in Buffington HarborRiverboat,
                  LLC
              
              
              25,687,995
              
              
              -
              
              
              -
              
              
              -
              
              
              
              
              25,687,995Long
                  term receivable - related party
              
              
              105,609,816
              
              
              -
              
              
              -
              
              
              (105,609,816
              )
              (a)
              
              
              -Other
                  assets
              
              
              9,353,899
              
              
              -
              
              
              603,124
              
              
              -
              
              
              
              
              9,957,023Total
                  other assets
              
              
              150,098,203
              
              
              -
              
              
              910,939
              
              
              (105,609,816
              )
              
              
              
              45,399,326Total
                  assets
              
              $
              237,999,557
              
              $
              -
              
              $
              110,440,153
              
              $
              (105,679,963
              )
              
              
              $
              242,759,747LIABILITIES
                  AND MEMBER'S DEFICITCurrent
                  liabilities:Accounts
                  payable
              
              $
              1,354,133
              
              $
              -
              
              $
              1,036,556
              
              $
              -
              
              
              
              $
              2,390,689Payable
                  to related party
              
              
              13,037
              
              
              -
              
              
              57,110
              
              
              (70,147
              )
              (a)
              
              
              -Accrued
                  liabilities:Payroll
                  and related
              
              
              2,770,011
              
              
              -
              
              
              3,778,320
              
              
              -
              
              
              
              
              6,548,331Interest
              
              
              11,645,764
              
              
              -
              
              
              632,758
              
              
              -
              
              
              
              
              12,278,522Property
                  and franchise taxes
              
              
              4,645,217
              
              
              -
              
              
              587,911
              
              
              -
              
              
              
              
              5,233,128Other
                  accrued liabilities
              
              
              5,118,748
              
              
              -
              
              
              5,525,051
              
              
              -
              
              
              
              
              10,643,799Total
                  current liabilities
              
              
              25,546,910
              
              
              -
              
              
              11,617,706
              
              
              (70,147
              )
              
              
              
              37,094,469Investment
                  in subsidiaries
              
              
              22,782,425
              
              
              -
              
              
              -
              
              
              (22,782,425
              )
              (b)
              
              
              -Due
                  to related parties
              
              
              -
              
              
              -
              
              
              105,609,816
              
              
              (105,609,816
              )
              (a)
              
              
              -Long-term
                  debt, net of current maturities
              
              
              299,005,285
              
              
              260,000,000
              
              
              15,995,056
              
              
              (260,000,000
              )
              (c)
              
              
              315,000,341Total
                  liabilities
              
              
              347,334,620
              
              
              260,000,000
              
              
              133,222,578
              
              
              (388,462,388
              )
              
              
              
              352,094,810Member's
                  deficit
              
              
              (109,335,063
              )
              
              (260,000,000
              )
              
              (22,782,425
              )
              
              282,782,425
              
              (b)
                  (c)
              
              
              (109,335,063
              )Total
                  liabilities and member's deficit
              
              $
              237,999,557
              
              $
              -
              
              $
              110,440,153
              
              $
              (105,679,963
              )
              
              
              $
              242,759,747
 
 
 (a)
              To
                  eliminate intercompany receivables and
                  payables.
 (b)
              To
                  eliminate intercompany accounts and investment in
                  subsidiaries.
 (c)
              As
                  more fully described in Note 7 - Long-Term Debt, The Majestic Star
                  Casino
                  Capital Corp. is a co-obligor of the 9 1⁄2% 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.
  21
  **THE
        MAJESTIC STAR CASINO, LLC AND SUBSIDIARIES**
 **(A
        Wholly Owned Subsidiary of Barden Development, Inc.)**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)**
 
 **NOTE
                  12.**
              **SUPPLEMENTAL
                  GUARANTOR FINANCIAL INFORMATION
                  (CONTINUED)**
 
 **CONDENSED
        CONSOLIDATING BALANCE SHEETS**
 **As
        of December 31, 2004**
 **(unaudited)**
 The
                  Majestic
              
              The
                  MajesticStar
                  Casino,
              
              Star
                  Casino
              
              Guarantor
              
              Eliminating
              
              
              
              TotalLLC
              
              Capital
                  Corp.
              
              Subsidiaries
              
              Entries
              
              
              
              ConsolidatedASSETSCurrent
                  assets:Cash
                  and cash equivalents
              
              $
              8,433,545
              
              $
              -
              
              $
              5,893,907
              
              $
              -
              
              
              
              $
              14,327,452Restricted
                  cash
              
              
              900,000
              
              
              -
              
              
              1,640,008
              
              
              -
              
              
              
              
              2,540,008Accounts
                  receivable, net
              
              
              1,329,576
              
              
              -
              
              
              735,405
              
              
              -
              
              
              
              
              2,064,981Inventories
              
              
              92,303
              
              
              -
              
              
              428,182
              
              
              -
              
              
              
              
              520,485Prepaid
                  expenses and deposits
              
              
              1,575,936
              
              
              -
              
              
              636,460
              
              
              -
              
              
              
              
              2,212,396Receivable
                  from affiliate
              
              
              775,722
              
              
              -
              
              
              21,799
              
              
              (82,305
              )
              (a)
              
              
              715,216Assets
                  held for sale
              
              
              -
              
              
              -
              
              
              30,683,526
              
              
              -
              
              
              
              
              30,683,526Total
                  current assets
              
              
              13,107,082
              
              
              -
              
              
              40,039,287
              
              
              (82,305
              )
              
              
              
              53,064,064Property,
                  equipment and improvements, net
              
              
              78,679,302
              
              
              -
              
              
              63,501,914
              
              
              -
              
              
              
              
              142,181,216Intangible
                  assets, net
              
              
              -
              
              
              -
              
              
              5,229,904
              
              
              -
              
              
              
              
              5,229,904Goodwill
              
              
              -
              
              
              -
              
              
              3,997,904
              
              
              -
              
              
              
              
              3,997,904Other
                  assets:Deferred
                  financing costs, net
              
              
              4,947,983
              
              
              -
              
              
              413,740
              
              
              -
              
              
              
              
              5,361,723Investment
                  in Buffington HarborRiverboat,
                  LLC
              
              
              27,432,270
              
              
              -
              
              
              -
              
              
              -
              
              
              
              
              27,432,270Long
                  term receivable - related party
              
              
              121,884,816
              
              
              -
              
              
              -
              
              
              (121,884,816
              )
              (a)
              
              
              -Other
                  assets
              
              
              8,650,694
              
              
              -
              
              
              458,689
              
              
              -
              
              
              
              
              9,109,383Total
                  other assets
              
              
              162,915,763
              
              
              -
              
              
              872,429
              
              
              (121,884,816
              )
              
              
              
              41,903,376Total
                  assets
              
              $
              254,702,147
              
              $
              -
              
              $
              113,641,438
              
              $
              (121,967,121
              )
              
              
              $
              246,376,464LIABILITIES
                  AND MEMBER'S DEFICITCurrent
                  liabilities:Accounts
                  payable
              
              $
              940,307
              
              $
              -
              
              $
              811,223
              
              $
              -
              
              
              
              $
              1,751,530Payable
                  to related party
              
              
              -
              
              
              -
              
              
              82,305
              
              
              (82,305
              )
              (a)
              
              
              -Accrued
                  liabilities:Payroll
                  and related
              
              
              3,216,179
              
              
              -
              
              
              3,086,986
              
              
              -
              
              
              
              
              6,303,165Interest
              
              
              5,365,530
              
              
              -
              
              
              158,189
              
              
              -
              
              
              
              
              5,523,719Property
                  and franchise taxes
              
              
              4,811,880
              
              
              -
              
              
              517,292
              
              
              -
              
              
              
              
              5,329,172Other
                  accrued liabilities
              
              
              6,040,223
              
              
              -
              
              
              4,256,371
              
              
              -
              
              
              
              
              10,296,594Liabilities
                  related to assets held for sale
              
              
              -
              
              
              -
              
              
              2,713,847
              
              
              -
              
              
              
              
              2,713,847Total
                  current liabilities
              
              
              20,374,119
              
              
              -
              
              
              11,626,213
              
              
              (82,305
              )
              
              
              
              31,918,027Investment
                  in subsidiaries
              
              
              35,762,551
              
              
              -
              
              
              -
              
              
              (35,762,551
              )
              (b)
              
              
              -Due
                  to related parties
              
              
              -
              
              
              -
              
              
              121,884,816
              
              
              (121,884,816
              )
              (a)
              
              
              -Long-term
                  debt, net of current maturities
              
              
              300,965,000
              
              
              260,000,000
              
              
              15,892,960
              
              
              (260,000,000
              )
              (c)
              
              
              316,857,960Total
                  liabilities
              
              
              357,101,670
              
              
              260,000,000
              
              
              149,403,989
              
              
              (417,729,672
              )
              
              
              
              348,775,987Member's
                  deficit
              
              
              (102,399,523
              )
              
              (260,000,000
              )
              
              (35,762,551
              )
              
              295,762,551
              
              (b)
                  (c)
              
              
              (102,399,523
              )Total
                  liabilities and member's deficit
              
              $
              254,702,147
              
              $
              -
              
              $
              113,641,438
              
              $
              (121,967,121
              )
              
              
              $
              246,376,464
 
 (a)
              To
                  eliminate intercompany receivables and
                  payables.
 (b)
              To
                  eliminate intercompany accounts and investment in
                  subsidiaries.
 (c)
              As
                  more fully described in Note 7 - Long-Term Debt, The Majestic Star
                  Casino
                  Capital Corp. is a co-obligor of the 9 1⁄2% 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.
  22
  **THE
        MAJESTIC STAR CASINO, LLC AND SUBSIDIARIES**
 **(A
        Wholly Owned Subsidiary of Barden Development, Inc.)**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)**
 
 **NOTE
                  12.**
              **SUPPLEMENTAL
                  GUARANTOR FINANCIAL INFORMATION
                  (CONTINUED)**
 
 **CONDENSED
        CONSOLIDATING STATEMENT OF OPERATIONS**
 **For
        the Three Months Ended September 30, 2005**
 **(unaudited)**
 
 The
                  Majestic
              
              The
                  MajesticStar
                  Casino,
              
              Star
                  Casino
              
              Guarantor
              
              Eliminating
              
              
              
              TotalLLC
              
              Capital
                  Corp.
              
              Subsidiaries
              
              Entries
              
              
              
              ConsolidatedOPERATING
                  REVENUES:Casino
              
              $
              37,704,116
              
              $
              -
              
              $
              31,782,721
              
              $
              -
              
              
              
              $
              69,486,837Rooms
              
              
              -
              
              
              -
              
              
              2,004,744
              
              
              -
              
              
              
              
              2,004,744Food
                  and beverage
              
              
              438,194
              
              
              -
              
              
              3,123,769
              
              
              -
              
              
              
              
              3,561,963Other
              
              
              933,613
              
              
              -
              
              
              433,191
              
              
              -
              
              
              
              
              1,366,804Gross
                  revenues
              
              
              39,075,923
              
              
              -
              
              
              37,344,425
              
              
              -
              
              
              
              
              76,420,348Less
                  promotional allowances
              
              
              4,369,136
              
              
              -
              
              
              7,314,389
              
              
              -
              
              
              
              
              11,683,525Net
                  operating revenues
              
              
              34,706,787
              
              
              -
              
              
              30,030,036
              
              
              -
              
              
              
              
              64,736,823OPERATING
                  COSTS AND EXPENSES:Casino
              
              
              7,241,329
              
              
              -
              
              
              9,641,093
              
              
              -
              
              
              
              
              16,882,422Rooms
              
              
              -
              
              
              -
              
              
              448,211
              
              
              -
              
              
              
              
              448,211Food
                  and beverage
              
              
              508,159
              
              
              -
              
              
              960,410
              
              
              -
              
              
              
              
              1,468,569Other
              
              
              -
              
              
              -
              
              
              259,099
              
              
              -
              
              
              
              
              259,099Gaming
                  taxes
              
              
              10,835,296
              
              
              -
              
              
              4,189,768
              
              
              -
              
              
              
              
              15,025,064Advertising
                  and promotion
              
              
              1,964,929
              
              
              -
              
              
              1,986,443
              
              
              -
              
              
              
              
              3,951,372General
                  and administrative
              
              
              6,255,406
              
              
              -
              
              
              4,560,256
              
              
              -
              
              
              
              
              10,815,662Corporate
                  expense
              
              
              1,367,628
              
              
              -
              
              
              -
              
              
              -
              
              
              
              
              1,367,628Economic
                  incentive tax - City of Gary
              
              
              1,131,164
              
              
              -
              
              
              -
              
              
              -
              
              
              
              
              1,131,164Depreciation
                  and amortization
              
              
              2,208,724
              
              
              -
              
              
              3,212,225
              
              
              -
              
              
              
              
              5,420,949Loss
                  on investment in BuffingtonHarbor
                  Riverboats, LLC
              
              
              611,448
              
              
              -
              
              
              -
              
              
              -
              
              
              
              
              611,448Loss
                  on disposal of assets
              
              
              -
              
              
              -
              
              
              23,378
              
              
              -
              
              
              
              
              23,378Total
                  operating costs and expenses
              
              
              32,124,083
              
              
              -
              
              
              25,280,883
              
              
              -
              
              
              
              
              57,404,966Operating
                  income
              
              
              2,582,704
              
              
              -
              
              
              4,749,153
              
              
              -
              
              
              
              
              7,331,857OTHER
                  INCOME (EXPENSE):Interest
                  income
              
              
              67,295
              
              
              -
              
              
              15,452
              
              
              -
              
              
              
              
              82,747Interest
                  expense
              
              
              (6,999,859
              )
              
              -
              
              
              (474,614
              )
              
              -
              
              
              
              
              (7,474,473
              )Other
                  non-operating expense
              
              
              (37,191
              )
              
              -
              
              
              -
              
              
              -
              
              
              
              
              (37,191
              )Equity
                  in net income of subsidiaries
              
              
              4,289,991
              
              
              -
              
              
              -
              
              
              (4,289,991
              )
              (a)
              
              
              -Total
                  other expense
              
              
              (2,679,764
              )
              
              -
              
              
              (459,162
              )
              
              (4,289,991
              )
              
              
              
              (7,428,917
              )Net
                  (loss) income
              
              $
              (97,060
              )
              $
              -
              
              $
              4,289,991
              
              $
              (4,289,991
              )
              
              
              $
              (97,060
              )
 
 (a)
              To
                  eliminate equity in net income of
                  subsidiaries.
  23
  **THE
        MAJESTIC STAR CASINO, LLC AND SUBSIDIARIES**
 **(A
        Wholly Owned Subsidiary of Barden Development, Inc.)**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)**
 
 **NOTE
                  12.**
              **SUPPLEMENTAL
                  GUARANTOR FINANCIAL INFORMATION
                  (CONTINUED)**
 
 **CONDENSED
        CONSOLIDATING STATEMENT OF OPERATIONS**
 **For
        the Three Months Ended September 30, 2004**
 **(unaudited)**
 
 The
                  Majestic
              
              The
                  MajesticStar
                  Casino,
              
              Star
                  Casino
              
              Guarantor
              
              Eliminating
              
              
              
              TotalLLC
              
              Capital
                  Corp.
              
              Subsidiaries
              
              Entries
              
              
              
              ConsolidatedOPERATING
                  REVENUES:Casino
              
              
              36,159,528
              
              $
              -
              
              
              31,897,779
              
              $
              -
              
              
              
              $
              68,057,307Rooms
              
              
              -
              
              
              -
              
              
              2,026,708
              
              
              -
              
              
              
              
              2,026,708Food
                  and beverage
              
              
              453,296
              
              
              -
              
              
              3,181,614
              
              
              -
              
              
              
              
              3,634,910Other
              
              
              795,877
              
              
              -
              
              
              420,020
              
              
              -
              
              
              
              
              1,215,897Gross
                  revenues
              
              
              37,408,701
              
              
              -
              
              
              37,526,121
              
              
              -
              
              
              
              
              74,934,822Less
                  promotional allowances
              
              
              3,217,992
              
              
              -
              
              
              7,223,809
              
              
              -
              
              
              
              
              10,441,801Net
                  operating revenues
              
              
              34,190,709
              
              
              -
              
              
              30,302,312
              
              
              -
              
              
              
              
              64,493,021OPERATING
                  COSTS AND EXPENSES:Casino
              
              
              7,085,399
              
              
              -
              
              
              10,264,125
              
              
              -
              
              
              
              
              17,349,524Rooms
              
              
              -
              
              
              -
              
              
              449,177
              
              
              -
              
              
              
              
              449,177Food
                  and beverage
              
              
              509,771
              
              
              -
              
              
              1,209,458
              
              
              -
              
              
              
              
              1,719,229Other
              
              
              526,100
              
              
              -
              
              
              255,759
              
              
              -
              
              
              
              
              781,859Gaming
                  taxes
              
              
              10,399,342
              
              
              -
              
              
              4,174,114
              
              
              -
              
              
              
              
              14,573,456Advertising
                  and promotion
              
              
              2,379,789
              
              
              -
              
              
              1,930,024
              
              
              -
              
              
              
              
              4,309,813General
                  and administrative
              
              
              6,007,515
              
              
              -
              
              
              4,191,863
              
              
              -
              
              
              
              
              10,199,378Corporate
                  expense
              
              
              825,766
              
              
              -
              
              
              -
              
              
              -
              
              
              
              
              825,766Economic
                  incentive tax - City of Gary
              
              
              1,087,049
              
              
              -
              
              
              -
              
              
              -
              
              
              
              
              1,087,049Depreciation
                  and amortization
              
              
              2,038,075
              
              
              -
              
              
              2,392,515
              
              
              -
              
              
              
              
              4,430,590Loss
                  on investment in BuffingtonHarbor
                  Riverboats, LLC
              
              
              616,058
              
              
              -
              
              
              -
              
              
              -
              
              
              
              
              616,058Gain
                  on disposal of assets
              
              
              (800
              )
              
              -
              
              
              (12,265
              )
              
              -
              
              
              
              
              (13,065
              )Total
                  operating costs and expenses
              
              
              31,474,064
              
              
              -
              
              
              24,854,770
              
              
              -
              
              
              
              
              56,328,834Operating
                  income
              
              
              2,716,645
              
              
              -
              
              
              5,447,542
              
              
              -
              
              
              
              
              8,164,187OTHER
                  INCOME (EXPENSE):Interest
                  income
              
              
              10,107
              
              
              -
              
              
              7,755
              
              
              -
              
              
              
              
              17,862Interest
                  expense
              
              
              (6,642,646
              )
              
              -
              
              
              (474,567
              )
              
              -
              
              
              
              
              (7,117,213
              )Other
                  non-operating expense
              
              
              (44,656
              )
              
              -
              
              
              -
              
              
              -
              
              
              
              
              (44,656
              )Equity
                  in net income of subsidiaries
              
              
              4,980,730
              
              
              -
              
              
              -
              
              
              (4,980,730
              )
              (a)
              
              
              -Total
                  other expense
              
              
              (1,696,465
              )
              
              -
              
              
              (466,812
              )
              
              (4,980,730
              )
              
              
              
              (7,144,007
              )Net
                  income
              
              $
              1,020,180
              
              $
              -
              
              $
              4,980,730
              
              $
              (4,980,730
              )
              
              
              $
              1,020,180
 
 
 (a)
              To
                  eliminate equity in net income of
                  subsidiaries.
  24
  **THE
        MAJESTIC STAR CASINO, LLC AND SUBSIDIARIES**
 **(A
        Wholly Owned Subsidiary of Barden Development, Inc.)**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)**
 
 **NOTE
                  12.**
              **SUPPLEMENTAL
                  GUARANTOR FINANCIAL INFORMATION
                  (CONTINUED)**
 
 **CONDENSED
        CONSOLIDATING STATEMENT OF OPERATIONS**
 **For
        the Nine Months Ended September 30, 2005**
 **(unaudited)**
 
 The
                  Majestic
              
              The
                  MajesticStar
                  Casino,
              
              Star
                  Casino
              
              Guarantor
              
              Eliminating
              
              
              
              TotalLLC
              
              Capital
                  Corp.
              
              Subsidiaries
              
              Entries
              
              
              
              ConsolidatedOPERATING
                  REVENUES:Casino
              
              $
              113,843,473
              
              $
              -
              
              $
              95,001,974
              
              $
              -
              
              
              
              $
              208,845,447Rooms
              
              
              -
              
              
              -
              
              
              5,716,417
              
              
              -
              
              
              
              
              5,716,417Food
                  and beverage
              
              
              1,298,191
              
              
              -
              
              
              9,234,148
              
              
              -
              
              
              
              
              10,532,339Other
              
              
              2,552,643
              
              
              -
              
              
              1,264,638
              
              
              -
              
              
              
              
              3,817,281Gross
                  revenues
              
              
              117,694,307
              
              
              -
              
              
              111,217,177
              
              
              -
              
              
              
              
              228,911,484Less
                  promotional allowances
              
              
              12,682,535
              
              
              -
              
              
              21,577,035
              
              
              -
              
              
              
              
              34,259,570Net
                  operating revenues
              
              
              105,011,772
              
              
              -
              
              
              89,640,142
              
              
              -
              
              
              
              
              194,651,914OPERATING
                  COSTS AND EXPENSES:Casino
              
              
              21,142,605
              
              
              -
              
              
              29,245,442
              
              
              -
              
              
              
              
              50,388,047Rooms
              
              
              -
              
              
              -
              
              
              1,273,264
              
              
              -
              
              
              
              
              1,273,264Food
                  and beverage
              
              
              1,484,998
              
              
              -
              
              
              2,949,414
              
              
              -
              
              
              
              
              4,434,412Other
              
              
              -
              
              
              -
              
              
              760,976
              
              
              -
              
              
              
              
              760,976Gaming
                  taxes
              
              
              32,679,749
              
              
              -
              
              
              12,395,508
              
              
              -
              
              
              
              
              45,075,257Advertising
                  and promotion
              
              
              5,672,518
              
              
              -
              
              
              5,673,782
              
              
              -
              
              
              
              
              11,346,300General
                  and administrative
              
              
              18,783,859
              
              
              -
              
              
              12,604,539
              
              
              -
              
              
              
              
              31,388,398Corporate
                  expense
              
              
              6,525,812
              
              
              -
              
              
              -
              
              
              -
              
              
              
              
              6,525,812Economic
                  incentive tax - City of Gary
              
              
              3,419,136
              
              
              -
              
              
              -
              
              
              -
              
              
              
              
              3,419,136Depreciation
                  and amortization
              
              
              6,488,653
              
              
              -
              
              
              10,319,964
              
              
              -
              
              
              
              
              16,808,617Loss
                  on investment in BuffingtonHarbor
                  Riverboats, LLC
              
              
              1,820,646
              
              
              -
              
              
              -
              
              
              -
              
              
              
              
              1,820,646Loss
                  on disposal of assets
              
              
              3,644
              
              
              -
              
              
              57,709
              
              
              -
              
              
              
              
              61,353Total
                  operating costs and expenses
              
              
              98,021,620
              
              
              -
              
              
              75,280,598
              
              
              -
              
              
              
              
              173,302,218Operating
                  income
              
              
              6,990,152
              
              
              -
              
              
              14,359,544
              
              
              -
              
              
              
              
              21,349,696OTHER
                  INCOME (EXPENSE):Interest
                  income
              
              
              137,025
              
              
              -
              
              
              44,338
              
              
              -
              
              
              
              
              181,363Interest
                  expense
              
              
              (20,730,746
              )
              
              -
              
              
              (1,423,751
              )
              
              -
              
              
              
              
              (22,154,497
              )Other
                  non-operating expense
              
              
              (115,860
              )
              
              -
              
              
              -
              
              
              -
              
              
              
              
              (115,860
              )Equity
                  in net income of subsidiaries
              
              
              12,980,131
              
              
              -
              
              
              -
              
              
              (12,980,131
              )
              (a)
              
              
              -Total
                  other expense
              
              
              (7,729,450
              )
              
              -
              
              
              (1,379,413
              )
              
              (12,980,131
              )
              
              
              
              (22,088,994
              )Net
                  (loss) income
              
              $
              (739,298
              )
              $
              -
              
              $
              12,980,131
              
              $
              (12,980,131
              )
              
              
              $
              (739,298
              )
 
 (a)
              To
                  eliminate equity in net income of
                  subsidiaries.
  25
  **THE
        MAJESTIC STAR CASINO, LLC AND SUBSIDIARIES**
 **(A
        Wholly Owned Subsidiary of Barden Development, Inc.)**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)**
 
 **NOTE
                  12.**
              **SUPPLEMENTAL
                  GUARANTOR FINANCIAL INFORMATION
                  (CONTINUED)**
 
 **CONDENSED
        CONSOLIDATING STATEMENT OF OPERATIONS**
 **For
        the Nine Months Ended September 30, 2004**
 **(unaudited)**
 
 The
                  Majestic
              
              The
                  MajesticStar
                  Casino,
              
              Star
                  Casino
              
              Guarantor
              
              Eliminating
              
              
              
              TotalLLC
              
              Capital
                  Corp.
              
              Subsidiaries
              
              Entries
              
              
              
              ConsolidatedOPERATING
                  REVENUES:Casino
              
              $
              114,063,831
              
              $
              -
              
              $
              95,645,265
              
              $
              -
              
              
              
              $
              209,709,096Rooms
              
              
              -
              
              
              -
              
              
              5,820,214
              
              
              -
              
              
              
              
              5,820,214Food
                  and beverage
              
              
              1,391,537
              
              
              -
              
              
              8,712,546
              
              
              -
              
              
              
              
              10,104,083Other
              
              
              2,137,763
              
              
              -
              
              
              1,293,014
              
              
              -
              
              
              
              
              3,430,777Gross
                  revenues
              
              
              117,593,131
              
              
              -
              
              
              111,471,039
              
              
              -
              
              
              
              
              229,064,170Less
                  promotional allowances
              
              
              9,812,188
              
              
              -
              
              
              20,334,699
              
              
              -
              
              
              
              
              30,146,887Net
                  operating revenues
              
              
              107,780,943
              
              
              -
              
              
              91,136,340
              
              
              -
              
              
              
              
              198,917,283OPERATING
                  COSTS AND EXPENSES:Casino
              
              
              22,142,910
              
              
              -
              
              
              30,989,613
              
              
              -
              
              
              
              
              53,132,523Rooms
              
              
              -
              
              
              -
              
              
              1,381,473
              
              
              -
              
              
              
              
              1,381,473Food
                  and beverage
              
              
              1,571,671
              
              
              -
              
              
              2,981,421
              
              
              -
              
              
              
              
              4,553,092Other
              
              
              591,746
              
              
              -
              
              
              755,197
              
              
              -
              
              
              
              
              1,346,943Gaming
                  taxes
              
              
              32,609,587
              
              
              -
              
              
              12,475,407
              
              
              -
              
              
              
              
              45,084,994Advertising
                  and promotion
              
              
              6,787,231
              
              
              -
              
              
              5,454,879
              
              
              -
              
              
              
              
              12,242,110General
                  and administrative
              
              
              21,368,930
              
              
              -
              
              
              12,564,829
              
              
              -
              
              
              
              
              33,933,759Corporate
                  expense
              
              
              2,506,052
              
              
              -
              
              
              -
              
              
              -
              
              
              
              
              2,506,052Economic
                  incentive tax - City of Gary
              
              
              3,423,286
              
              
              -
              
              
              -
              
              
              -
              
              
              
              
              3,423,286Depreciation
                  and amortization
              
              
              5,830,605
              
              
              -
              
              
              7,695,315
              
              
              -
              
              
              
              
              13,525,920Loss
                  on investment in BuffingtonHarbor
                  Riverboats, LLC
              
              
              1,854,406
              
              
              -
              
              
              -
              
              
              -
              
              
              
              
              1,854,406(Gain)
                  loss on disposal of assets
              
              
              (2,462
              )
              
              -
              
              
              8,754
              
              
              -
              
              
              
              
              6,292Total
                  operating costs and expenses
              
              
              98,683,962
              
              
              -
              
              
              74,306,888
              
              
              -
              
              
              
              
              172,990,850Operating
                  income
              
              
              9,096,981
              
              
              -
              
              
              16,829,452
              
              
              -
              
              
              
              
              25,926,433OTHER
                  INCOME (EXPENSE):Interest
                  income
              
              
              14,642
              
              
              -
              
              
              13,623
              
              
              -
              
              
              
              
              28,265Interest
                  expense
              
              
              (19,947,795
              )
              
              -
              
              
              (1,423,703
              )
              
              -
              
              
              
              
              (21,371,498
              )Other
                  non-operating expense
              
              
              (168,504
              )
              
              -
              
              
              -
              
              
              -
              
              
              
              
              (168,504
              )Equity
                  in net income of subsidiaries
              
              
              15,419,372
              
              
              -
              
              
              -
              
              
              (15,419,372
              )
              (a)
              
              
              -Total
                  other expense
              
              
              (4,682,285
              )
              
              -
              
              
              (1,410,080
              )
              
              (15,419,372
              )
              
              
              
              (21,511,737
              )Net
                  income
              
              $
              4,414,696
              
              $
              -
              
              $
              15,419,372
              
              $
              (15,419,372
              )
              
              
              $
              4,414,696
 
 (a) To
        eliminate equity in net income of subsidiaries.
  26
  
 **THE
        MAJESTIC STAR CASINO, LLC AND SUBSIDIARIES**
 **(A
        Wholly Owned Subsidiary of Barden Development, Inc.)**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)**
 
 **NOTE
                  12.**
              **SUPPLEMENTAL
                  GUARANTOR FINANCIAL INFORMATION
                  (CONTINUED)**
 
 **CONDENSED
        CONSOLIDATING STATEMENT OF CASH FLOWS**
 **For
        the Nine Months Ended September 30, 2005**
 **(unaudited)**
 
 The
                  Majestic
              
              The
                  MajesticStar
                  Casino,
              
              Star
                  Casino
              
              Guarantor
              
              Eliminating
              
              TotalLLC
              
              Capital
                  Corp.
              
              Subsidiaries
              
              Entries
              
              ConsolidatedNET
                  CASH (USED IN) PROVIDED BYOPERATING
                  ACTIVITIES:
              
              $
              (851,319
              )
              $
              -
              
              $
              24,082,577
              
              $
              -
              
              $
              23,231,258CASH
                  FLOWS FROM INVESTINGACTIVITIES:Decrease
                  in restricted cash
              
              
              -
              
              
              -
              
              
              390,008
              
              
              -
              
              
              390,008Acquisition
                  of property and equipment
              
              
              (4,061,012
              )
              
              -
              
              
              (6,011,317
              )
              
              -
              
              
              (10,072,329
              )Increase
                  in prepaid leases and deposits
              
              
              (71,400
              )
              
              -
              
              
              -
              
              
              -
              
              
              (71,400
              )Investment
                  in Buffington Harbor Riverboats, L.L.C.
              
              
              (76,371
              )
              
              -
              
              
              -
              
              
              -
              
              
              (76,371
              )Proceeds
                  from disposal of assets
              
              
              -
              
              
              -
              
              
              23,900
              
              
              -
              
              
              23,900Net
                  cash used in investing activities
              
              
              (4,208,783
              )
              
              -
              
              
              (5,597,409
              )
              
              -
              
              
              (9,806,192
              )CASH
                  FLOWS FROM FINANCINGACTIVITIES:Proceeds
                  from line of credit
              
              
              23,389,581
              
              
              -
              
              
              -
              
              
              -
              
              
              23,389,581Repayment
                  of line of credit
              
              
              (25,349,296
              )
              
              -
              
              
              -
              
              
              -
              
              
              (25,349,296
              )Advances
                  on revolving credit facility with affiliate
              
              
              (4,453,331
              )
              
              -
              
              
              -
              
              
              -
              
              
              (4,453,331
              )Cash
                  received from (advanced to)related
                  parties
              
              
              16,275,000
              
              
              -
              
              
              (16,275,000
              )
              
              -
              
              
              -Distribution
                  to Barden Development, Inc.
              
              
              (6,196,242
              )
              
              -
              
              
              -
              
              
              -
              
              
              (6,196,242
              )Net
                  cash provided by (used in) financingactivities
              
              
              3,665,712
              
              
              -
              
              
              (16,275,000
              )
              
              -
              
              
              (12,609,288
              )Net
                  increase in cash and cash equivalents
              
              
              (1,394,390
              )
              
              -
              
              
              2,210,168
              
              
              -
              
              
              815,778Cash
                  and cash equivalents, beginningof
                  period
              
              
              8,433,545
              
              
              -
              
              
              5,893,907
              
              
              -
              
              
              14,327,452Cash
                  previously classified as held for sale
              
              
              -
              
              
              -
              
              
              2,394,277
              
              
              -
              
              
              2,394,277Cash
                  and cash equivalents, end of period
              
              $
              7,039,155
              
              $
              -
              
              $
              10,498,352
              
              $
              -
              
              $
              17,537,507
  27
  **THE
        MAJESTIC STAR CASINO, LLC AND SUBSIDIARIES**
 **(A
        Wholly Owned Subsidiary of Barden Development, Inc.)**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)**
 
 **NOTE
                  12.**
              **SUPPLEMENTAL
                  GUARANTOR FINANCIAL INFORMATION
                  (CONTINUED)**
 
 **CONDENSED
        CONSOLIDATING STATEMENT OF CASH FLOWS**
 **For
        the Nine Months Ended September 30, 2004**
 **(unaudited)**
 
 The
                  Majestic
              
              The
                  MajesticStar
                  Casino,
              
              Star
                  Casino
              
              Guarantor
              
              Eliminating
              
              TotalLLC
              
              Capital
                  Corp.
              
              Subsidiaries
              
              Entries
              
              ConsolidatedNET
                  CASH (USED IN) PROVIDED BYOPERATING
                  ACTIVITIES:
              
              $
              (493,434
              )
              $
              -
              
              $
              22,963,425
              
              $
              -
              
              $
              22,469,991CASH
                  FLOWS FROM INVESTINGACTIVITIES:Increase
                  in restricted cash
              
              
              -
              
              
              -
              
              
              (390,008
              )
              
              -
              
              
              (390,008
              )Acquisition
                  of property and equipment
              
              
              (26,085,418
              )
              
              -
              
              
              (5,890,592
              )
              
              -
              
              
              (31,976,010
              )Decrease
                  in prepaid leases and deposits
              
              
              10,683
              
              
              -
              
              
              -
              
              
              -
              
              
              10,683Investment
                  in Buffington Harbor Riverboats, LLC
              
              
              (71,606
              )
              
              -
              
              
              -
              
              
              -
              
              
              (71,606
              )Proceeds
                  from disposal of equipment
              
              
              168,212
              
              
              -
              
              
              81,161
              
              
              -
              
              
              249,373Net
                  cash used in investing activities
              
              
              (25,978,129
              )
              
              -
              
              
              (6,199,439
              )
              
              -
              
              
              (32,177,568
              )CASH
                  FLOWS FROM FINANCINGACTIVITIES:Issuance
                  costs for the 9 1/2% senior secured notes
              
              
              (229,507
              )
              
              -
              
              
              -
              
              
              -
              
              
              (229,507
              )Issuance
                  cost for the $80.0 million secured credit facility
              
              
              (58,652
              )
              
              -
              
              
              -
              
              
              -
              
              
              (58,652
              )Proceeds
                  from line of credit
              
              
              32,901,293
              
              
              -
              
              
              -
              
              
              -
              
              
              32,901,293Repayment
                  of line of credit
              
              
              (23,244,786
              )
              
              -
              
              
              -
              
              
              -
              
              
              (23,244,786
              )Cash
                  received from (paid to) related parties
              
              
              19,193,611
              
              
              -
              
              
              (19,060,611
              )
              
              -
              
              
              133,000Advances
                  to affiliate - net
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -Distribution
                  to Barden Development, Inc.
              
              
              (3,943,307
              )
              
              -
              
              
              -
              
              
              -
              
              
              (3,943,307
              )Net
                  cash provided by (used in) financing activities
              
              
              24,618,652
              
              
              -
              
              
              (19,060,611
              )
              
              -
              
              
              5,558,041Net
                  decrease in cash and cash equivalents
              
              
              (1,852,911
              )
              
              -
              
              
              (2,296,625
              )
              
              -
              
              
              (4,149,536
              )Cash
                  related to discontinued operations
              
              
              -
              
              
              -
              
              
              (2,324,826
              )
              
              -
              
              
              (2,324,826
              )Cash
                  and cash equivalents, beginning of period
              
              
              10,929,430
              
              
              -
              
              
              11,128,586
              
              
              -
              
              
              22,058,016Cash
                  and cash equivalents, end of period
              
              $
              9,076,519
              
              $
              -
              
              $
              6,507,135
              
              $
              -
              
              $
              15,583,654
  28
  **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 heading "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.
 
 Specific
        factors that might cause actual results to differ from our expectations,
        or may
        cause us to modify our plans and objectives, include, but are not limited
        to:
 
 -
              the
                  availability and adequacy of our cash flow to meet our requirements,
                  including payment of amounts due under the $80.0 million credit
                  facility,
                  the 11.653% notes and the 9 1⁄2%
                  notes;
 
 -
              changes
                  in our financial condition that may cause us to not be in compliance
                  with
                  the covenants contained within the indenture governing the 9 1⁄2% notes or
                  the loan agreement governing the $80.0 million credit facility,
                  and thus
                  causing us to be in default with the trustee for the 9 1⁄2% notes and the
                  lenders to the $80.0 million credit facility, which may permit
                  acceleration on the debt obligations
                  outstanding;
 
 -
              risk
                  that we complete the acquisition of Trump Indiana, Inc. ("Trump
                  Indiana") but do not realize the anticipated benefits of
                  the
                  acquisition including expected cost reductions or if the customer
                  base of
                  the casino operated by Trump Indiana is negatively impacted by
                  its loss of
                  affiliation with other Trump
                  casinos
 
 -
              changes
                  or developments in laws, regulations or taxes in the casino and
                  gaming
                  industry including increases or new taxes imposed on gaming revenues,
                  gaming devices and admission taxes;
  -
              unfavorable
                  outcome to litigation in Black Hawk, Colorado related to the matter
                  City
                  of Black Hawk v. Barden Colorado Gaming, LLC in which the Company
                  has to
                  pay a $499 per day penalty dating back to June 1, 2005, and reconstruct
                  a
                  partially demolished building on the property, which such reconstruction
                  is estimated to cost between $13.0 million and $16.0
                  million.
  -
              increased
                  competition in existing markets or the opening of new gaming
                  jurisdictions;
 
 -
              the
                  inability to fund capital improvements and development needs from
                  existing
                  operations, available credit, or new
                  financing;
 
 -
              our
                  failure to obtain, delays in obtaining or the loss of any licenses,
                  permits or approvals, including gaming and liquor licenses, or
                  the
                  limitation or conditioning of any such licenses, permits or approvals,
                  or
                  our failure to obtain an unconditional renewal of any such licenses,
                  permits or approvals on a timely
                  basis;
 
 -
              adverse
                  determinations of issues related to disputed taxes, particularly
                  in
                  Indiana, as evidenced by the requirement that deductions previously
                  taken
                  for taxes paid on gross gaming receipts are disallowed on our member’s
                  Indiana state income tax return, and the charge taken in the three-month
                  period ended March 31, 2004 for retroactive real property
                  taxes;
 
 -
              other
                  adverse conditions, such as adverse economic conditions in the
                  company’s
                  markets, changes in general customer confidence or spending, increased
                  tax
                  burdens on our customers negatively impacting their discretionary
                  spending
                  in our casinos, increased fuel and transportation costs, or travel
                  concerns that may adversely affect the economy in general and/or
                  the
                  casino and gaming industry in
                  particular;
 
 -
              risk
                  that we do not consummate the planned acquisition of Trump
                  Indiana;
  29
  
 
 -
              failure
                  to maintain favorable relationships with employees of the Company
                  including the timely negotiation of fair and economically prudent
                  labor
                  agreements covering employees subject to collective bargaining
                  agreements;
 
 -
              risk
                  of our Joint Venture Partner, Trump Indiana, not making its lease
                  payments
                  when due in connection with the parking facility in Gary, Indiana
                  or
                  failing to fund the Joint Venture;
 
 -
              the
                  disruption to our casino operations due to acts of nature or God;
 
 -
              the
                  inability to retain management personnel who are important to our
                  operations and potential delays in identifying and employing candidates
                  to
                  fill vacated positions due to a lack of qualified
                  candidates;
 
 -
              factors
                  relating to the current state of world affairs and any further
                  acts of
                  terrorism or any other destabilizing events in the United States
                  or
                  elsewhere; and
 
 -
              other
                  factors discussed under “Factors that May Affect Future Results” or
                  elsewhere in this report that may be disclosed from time to time
                  in
                  filings we make with the SEC or
                  otherwise.
 
 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 section. In light
        of
        these risks, uncertainties and assumptions, the forward-looking events discussed
        in this report might not occur.
 
 The
        following discussion should be read in conjunction with, and is qualified
        in its
        entirety by, our financial statements, including the notes thereto.
  OVERVIEW
 
 The
        Company
 
 The
        Majestic Star Casino, LLC and its subsidiaries (collectively, the "Company"),
        operate a riverboat gaming facility located in Gary, Indiana ("Majestic Star")
        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 receives
        reimbursement of expenses for services provided to Barden Nevada Gaming,
        LLC
        ("Barden Nevada" or "Fitzgeralds Las Vegas").
 
 On
        November 3, 2005, the Company entered into a Stock Purchase Agreement (the
        “Stock Purchase Agreement”) with Trump Entertainment Resorts Holdings, L.P.
        (“Trump Holdings”) for the purchase by the Company of 100% of the stock of Trump
        Indiana. Trump Indiana owns and operates a casino vessel and hotel at Buffington
        Harbor in Gary, Indiana. The Company will pay a purchase price of $253.0
        million, less (i) 50% of the amount of long term debt and capitalized lease
        obligations and other non-current liabilities of Buffington Harbor Riverboats,
        LLC (“BHR”) and Buffington Harbor Parking Associates, LLC (“BHPA”) as of the
        Closing Date, (ii) the amount of any long term debt, capitalized lease
        obligations and other non-current liabilities of Trump Indiana as of the
        Closing
        Date, (iii) the $2.0 million Riverboat Owner’s License transfer fee required
        under Indiana law, (iv) the severance obligations to certain employees to
        the
        extent not satisfied by Trump Indiana prior to the closing, (v) a
        certain
        portion of commitment fees payable for financing the
        acquisition,
        up to a certain limitation, (vi) certain amounts that Trump Indiana
        owes
        the City of Gary pursuant to its development agreement with the City of Gary
        and
        (vii) other adjustments for working capital and cash. Upon executing
        the
        Stock Purchase Agreement, the Company paid Trump Holdings a $5.0 million
        deposit, which will be credited against the purchase price at closing, and
        is
        refundable to the Company only if Trump Holdings should fail to close under
        certain circumstances. The Company currently owns a casino vessel adjacent
        to
        Trump Indiana’s casino vessel, and through a joint venture with Trump Indiana,
        owns and operates BHR, which manages all ancillary operations at Buffington
        Harbor (see Note 6 - Investment in Buffington Harbor Riverboats, LLC).
        BHR
        will become a wholly owned subsidiary of the Company upon acquisition of
        Trump
        Indiana. Trump Indiana and BDI, jointly own the parking garage located at
        Buffington Harbor (see Note 8 - Commitments and Contingencies). Consistent
        with
        the terms of the Stock Purchase Agreement, the transaction is expected to
        close
        by the end of the year, subject to required regulatory
        approvals.
  30
  
 RESULTS
        OF OPERATIONS
 
 ***Key
        operating revenue measurements***
  At
        our
        casino properties, casino revenues are the combination of our win at slot
        machines and tables games and are typically called slot revenues (for slot
        machine win) and table games revenues (for table games win). Slot machine
        revenues and table games revenues are normally described with two principal
        components (1) slot machine handle or coin-in, which comprises the total
        dollar
        volume wagered at the slot machines and slot machine win percentage, which
        is
        the amount the casino won from customers divided by the amounts wagered by
        customers at slot machines (handle or coin-in) and (2) table games drop,
        which
        represents the sum of markers issued (credit instruments) less markers paid
        at
        the tables, plus cash, foreign chips and other cash equivalents, and free
        bet
        coupons deposited in the table drop box and table games hold percentage,
        which is the amount of drop, plus the closing table games inventory (e.g.
        the
        amount of chips, tokens and coin used to operate our table games) and transfer
        of chips, tokens and coins to our casino cashier area (credits), less the
        beginning table games inventory and transfers of chips, tokens and coins
        to our
        table games (fills), divided by table games drop.
 
 Explanation
        of Key Financial Statement Captions
  ***Gross
        revenues***
  Our
        gross
        revenues are derived primarily from the following four sources:
  •
              
              casino
                  revenues, which include revenues from slot machines and table games;
  •
              
              food
                  and beverage revenues;
  •
              
              hotel
                  revenues; and
  •
              
              retail,
                  entertainment and other revenues, which include commissions.
  Our
          largest component of revenues is casino revenues, which comprised 90.9%
          and
          90.8% of our consolidated gross revenues in the three-month periods ended
          September 30, 2005 and 2004, and 91.2% and 91.6% of our consolidated gross
          revenues in the nine-month periods ended September 30, 2005 and 2004. Casino
          revenue is recognized as the amounts won from our customers at slot machines
          and
          table games less amounts lost to our casino customers from these same games.
          Revenues from slot machines are the largest component of our gaming revenues.
          Slot revenues, also referred to as slot win, represent all amounts wagered
          at
          the slot machines reduced by coin, tokens, currency, credits or TITO tickets
          paid to our customers either directly from the slot machine or by our casino
          personnel.
  Other
        commonly used terms in the discussion of revenues from slot machines include
        progressive slot machines, progressive jackpots, slot handle, slot coin-in
        and
        slot win percentage. Progressive slot machines retain a portion of each amount
        wagered and aggregate these amounts with similar amounts from other slot
        machines in order to create one-time winnings that are substantially larger
        than
        those paid in the ordinary course of play. We refer to such aggregated amounts
        as progressive jackpots. Wide-area progressive jackpot amounts are paid by
        a
        third party vendor and we remit a weekly payment to the vendor based on a
        percentage of the slot coin in for each wide-area progressive slot machine.
        We
        accrue in-house progressive jackpot amounts until paid, and when paid are
        deducted from slot revenues.
  Commonly
        used terms in the discussion of revenues from table games include table games
        revenues, table games drop and table games hold percentage. Table games revenues
        represents the closing table games inventory plus table games drop and credit
        slips for coins, chips or tokens returned to the casino cashier, less opening
        table games
        inventory, free bet coupons and chips, tokens and coins transferred to our
        tables games. Refer to the discussion above for definition of tables games
        drop
        and table games hold percentage.
  Revenues
        from food and beverages, hotel, retail, entertainment events and other services
        are recognized at the time the service is performed.
  31
  
 
 Consolidated
        Results: Three-Month Period Ended September 30, 2005
 
 The
        Company’s net revenues during the third quarter of 2005 were $64.7 million, an
        increase of $0.2 million or 0.4% from the same period in 2004. Contributing
        to
        the increase in net revenues was an increase in casino revenues, the primary
        revenue source for the Company, by $1.4 million or 2.1% to $69.5 million.
        Promotional allowances, which are netted against all the Company’s revenues
        (e.g. casino, rooms, food and beverage, and other) in computing net revenues,
        increased by $1.2 million or 11.9% to $11.7 million. The Company continues
        to
        spend more in promotional allowances in order to remain competitive in the
        markets in which it competes.
 
 The
        Company had a net loss of $0.1 million during the third quarter of 2005 compared
        to net income of $1.0 million for the same period in 2004. Contributing to
        the
        decrease in net income from the previous year quarter was $0.4 million related
        to preparation for Sarbanes-Oxley 404 compliance and a $1.0 million increase
        in
        depreciation expense resulting from capital acquisitions and the cessation
        of
        depreciation and amortization at Fitzgeralds Black Hawk for the majority
        of the
        third quarter last year when its assets were re-characterized as held for
        sale
        (See Note 3 to the Consolidated Financial Statements - Mutual Termination
        of
        Sale of Fitzgeralds Black Hawk, and our discussion under Consolidated Results:
        Nine- Month Period Ended September 30, 2005).
 
 Impacting
        our results for the quarter were higher gas and energy prices in our markets,
        which negatively impact travel to our casinos and the gaming budgets of our
        customers, the negative impact of the hurricanes, particularly at our
        Fitzgeralds Tunica property, which is located in the southeastern United
        States,
        and the closure of the main highway from Denver to Black Hawk for over two
        months during the quarter.
 
 Consolidated
        Results: Nine-Month Period Ended September 30, 2005
 
 The
        Company’s net revenues were $194.7 million, compared to $198.9 million last
        year, a decrease of $4.2 million, or 2.1%. A decline in casino revenues of
        0.4%
        to $208.8 million was offset by a 4.2% increase in food and beverage revenues,
        to $10.5 million, and an 11.3% increase in other revenues, to $3.8 million.
        A
        $4.1 million, or 13.6%, increase in promotional allowances is the primary
        cause
        of the decline in net revenues. The Company has increased its promotional
        allowances to remain competitive in its markets.
 
 The
        Company had a net loss of $0.7 million for the nine months ended September
        30,
        2005 compared to net income of $4.4 million for the same period last year.
        The
        Company’s net loss was impacted by the decline in net revenues discussed
        previously, charges recognized in the second quarter of this year that were
        related to the termination of the sale of Fitzgeralds Black Hawk (see Note
        3 to
        the Consolidated Financial Statements - Mutual Termination of the Sale of
        Fitzgeralds Black Hawk and our discussion below) and $0.8 million in preparation
        costs for Sarbanes-Oxley 404 compliance. Included in net income in the 2004
        period is a $2.2 million charge related to retroactive 2002 and 2003 real
        property taxes at Majestic Star.
 
 On
        April
        14, 2005, Barden Colorado and Legends Gaming, LLC (“Legends”) mutually agreed to
        terminate the Asset Purchase Agreement dated July 12, 2004, as amended (the
        “Purchase Agreement”), pursuant to which Barden Colorado had agreed to sell and
        Legends had agreed to purchase substantially all of the assets of the
        Fitzgeralds-brand casino located in Black Hawk, Colorado (see Note 3 to the
        Consolidated Financial Statements - Mutual Termination of the Sale of
        Fitzgeralds Black Hawk).
 
 In
        connection with the termination of the Purchase Agreement, the earnest money
        deposit originally placed into escrow by Legends at the time of execution
        of the
        Purchase Agreement was returned to Legends. In addition, the Company paid
        Legends approximately $2.7 million, consisting of approximately $0.7 million
        in
        reimbursement of certain costs, which were incurred in re-routing a storm
        sewer
        pipe below grade and certain related transaction costs, which the parties
        had
        agreed to share equally together with $2.0 million as a termination fee.
        The
        Company took a charge in the second quarter of 2005 for the payment of the
        termination fee and its portion of the shared transaction costs and certain
        other transaction expenses. The charge was approximately $2.3 million and
        is
        included in corporate expenses.
 
 Additionally,
        the Company took a charge of approximately $1.5 million in the second quarter
        of
        2005 for the depreciation and amortization expense that was not recorded
        while
        Barden Colorado was held for sale during the period July 12, 2004 (the date
        of
        the Purchase Agreement) to April 14, 2005 in accordance with accounting
        principles generally accepted in the United States of America.
  32
  Events
        impacting our financial performance over the past nine months, included the
        hurricanes in the southeast, road closure to the main highway leading into
        Black
        Hawk, enhanced marketing and promotional efforts by competitors in all our
        markets, higher fuel and energy prices in our markets, and major construction
        work that has caused significant back-ups and delays on main roadways to
        our
        Majestic Star property.
 
 At
        September 30, 2005, the Company had $17.5 million of cash, compared to $16.7
        million, including the cash of Fitzgeralds Black Hawk which was categorized
        as
        assets held for sale on the balance sheet at December 31, 2004. The Company
        had
        $41.0 million of available borrowing capacity under its $80.0 million credit
        facility at September 30, 2005.
 
 Total
        debt outstanding at September 30, 2005 was $315.0 million compared to $316.9
        million at December 31, 2004. Total debt outstanding at September 30, 2005
        consisted of $260.0 million of 9 1⁄2% senior secured notes (“the 9 1⁄2%
        notes”), $16.0 million (net of original issue discount) of 11.653% notes (“the
        11.653% notes”) and $39.0 million drawn on the Company’s $80.0 million credit
        facility.
 
 Through
        the first nine months of 2005, the Company purchased $10.1 million of property,
        plant and equipment. The most significant purchases have been for slot machines,
        installation of a new slot player tracking and marketing system at Fitzgeralds
        Black Hawk and costs incurred in re-routing a storm sewer pipe below grade
        at
        Fitzgeralds Black Hawk.
 
 Majestic
        Star (property operations only)
 
 Net
        revenues were $34.7 million for the three-month period ended September 30,
        2005,
        an increase of $0.5 million, or 1.5%, over the same three-month period in
        2004.
        Net revenues increased due to higher casino revenues of $1.5 million, which
        were
        offset by increased promotional allowances of $1.2 million. The increase
        in
        promotion allowances led to Majestic Star’s increase in casino revenue in
        contrast to the Northwest Indiana market as a whole for which casino revenues
        were down 0.9% in the third quarter 2005 from the same quarter last year.
 
 Net
        loss
        was $3.0 million during the three-month period ended September 30, 2005,
        compared to a net loss of $3.1 million for the same period in 2004. During
        the
        current quarter, operating expenses at the property were essentially flat
        with
        the prior year quarter. Interest expense was up $0.4 million over the same
        quarter last year. Higher interest expense is the result of generally higher
        debt levels and interest rates on the Company’s credit facility in the current
        quarter from the same quarter last year.
 
 Net
        revenues were $105.0 million for the nine-month period ended September 30,
        2005,
        a decrease of $2.8 million or 2.6% over the same period in the prior year.
        The
        decrease in net revenues resulted almost entirely from an increase in
        promotional allowances. Greater promotional expenditures were in response
        to the
        marketing and promotional efforts of our competitors.
 
 Net
        loss
        for the nine-month period ended September 30, 2005 was $7.2 million, compared
        to
        a net loss of $8.5 million for the nine months ended September 30, 2004.
        Included in Majestic Star’s net loss in the nine months ended September 30, 2004
        is a $2.2 million charge for retroactive real property taxes. Adjusting for
        the
        retroactive real property tax charge, Majestic Star’s net loss would have been
        $6.3 million for the nine months ended September 30, 2004. While net revenues
        have declined by $2.8 million, Majestic Star’s operating costs are down
        approximately $2.5 million from the same nine-month period last year, exclusive
        of the prior year’s retroactive property tax charge. Property management has
        made operating cost reduction a priority. Contributing to Majestic Star’s net
        loss during the nine-month period ended September 30, 2005 is $20.7 million
        of
        interest expense as substantially all of the Company’s $315.0 million of debt
        now is issued by Majestic Star and then lent to its affiliates as non-interest
        bearing advances. Majestic Star incurred interest expense of $19.9 million
        in
        the nine-month period ended September 30, 2004.
  33
  
 Fitzgeralds
        Tunica (property operations only)
 
 Net
        revenues declined $0.2 million, or 1.2%, to $20.8 million for the three-month
        period ended September 30, 2005. Casino revenues were $21.9 million for the
        three-month period ended September 30, 2005, a decrease of $0.1 million or
        0.5%
        over the same quarter last year. Net revenues were $62.8 million for the
        nine-month period ended September 30, 2005, a decrease of $1.0 million or
        1.5%
        over the same period in the prior year. Casino revenues were $66.2 million
        for
        the nine-month period ended September 30, 2005, a decrease of $0.3 million
        or
        0.4% from the same 2004 period. Flat market conditions have impacted our
        net
        revenues and casino revenues. As reported by the Mississippi Tax Commission,
        gross gaming revenues in Mississippi river counties were down 3.4% and 1.9%,
        respectively, in the three- and nine- month periods ended September 30, 2005
        from the same periods in 2004.
 
 Net
        income for the three- and nine-month periods ended September 30, 2005 was
        $2.4
        million and $8.5 million, respectively. This compares to net income of $2.6
        million and $9.7 million for the three- and nine-month periods ended September
        30, 2004. Our net income for both the three- and nine-month periods ended
        September 30, 2005 was negatively impacted by our lower net revenues and
        increased depreciation expense due to capital expenditures for casino expansion,
        the implementation of a new slot player tracking and marketing system, new
        slot
        machines and conversion of existing slot machines to TITO.
 
 Fitzgeralds
        Black Hawk (property operations only)
 
 In
        the
        three-month period ended September 30, 2005, net revenues of $9.2 million
        and
        casino revenues of $9.9 million were essentially flat with net revenues and
        casino revenues in the same three-month period last year. Net income for
        the
        third quarter of 2005 million declined $0.5 million to $2.4 million from
        the
        prior year period. The decrease in net income resulted from the cessation
        of
        depreciation and amortization expense during a substantial portion of the
        third
        quarter of 2004, when the assets of Fitzgeralds Black Hawk were re-characterized
        as held for sale. A full quarter of depreciation is reflected in the third
        quarter of 2005 as a result of the termination to sell substantially all
        the
        assets of Fitzgeralds Black Hawk in April of this year.
 
 Net
        revenues were $26.8 million for the nine-month period ended September 30,
        2005
        and $27.4 million for the same period in 2004. This decrease is the result
        of a
        reduction of casino revenues at Fitzgeralds Black Hawk to $28.8 million for
        the
        nine-month periods ended September 30, 2005 from $29.2 million in the same
        period in 2004. Net income for the nine-month period ended September 30,
        2005
        was $6.1 million. This compares to net income of $7.8 million for the nine-month
        period ended September 30, 2004. Our lower net income is the result of lower
        net
        revenues, as discussed previously, and catch up depreciation and amortization
        from the April 2005 termination of the agreement to sell substantially all
        the
        assets of Fitzgeralds Black Hawk.
 
 The
        following table sets forth information derived from the Company's statements
        of
        operations expressed as a percentage of gross operating revenues.
  34
  
 
 CONSOLIDATED
        STATEMENTS OF OPERATIONS - PERCENTAGE OF GROSS OPERATING REVENUES
 
 For
                  The
              
              For
                  TheThree
                  Months Ended
              
              Nine
                  Months EndedSeptember
                  30,
              
              September
                  30,2005
              
              2004
              
              2005
              
              2004OPERATING
                  REVENUES:Casino
              
              
              90.9
              %
              
              90.8
              %
              
              91.2
              %
              
              91.6
              %Rooms
              
              
              2.6
              %
              
              2.7
              %
              
              2.5
              %
              
              2.5
              %Food
                  and beverage
              
              
              4.7
              %
              
              4.9
              %
              
              4.6
              %
              
              4.4
              %Other
              
              
              1.8
              %
              
              1.6
              %
              
              1.7
              %
              
              1.5
              %Gross
                  operating revenues
              
              
              100.0
              %
              
              100.0
              %
              
              100.0
              %
              
              100.0
              %Less
                  promotional allowances
              
              
              15.3
              %
              
              13.9
              %
              
              15.0
              %
              
              13.2
              %Net
                  operating revenues
              
              
              84.7
              %
              
              86.1
              %
              
              85.0
              %
              
              86.8
              %OPERATING
                  COSTS AND EXPENSES:Casino
              
              
              22.1
              %
              
              23.2
              %
              
              22.0
              %
              
              23.2
              %Rooms
              
              
              0.6
              %
              
              0.6
              %
              
              0.6
              %
              
              0.6
              %Food
                  and beverage
              
              
              1.9
              %
              
              2.3
              %
              
              1.9
              %
              
              2.0
              %Other
              
              
              0.3
              %
              
              1.0
              %
              
              0.3
              %
              
              0.6
              %Gaming
                  taxes
              
              
              19.7
              %
              
              19.4
              %
              
              19.7
              %
              
              19.7
              %Advertising
                  and promotion
              
              
              5.2
              %
              
              5.8
              %
              
              5.0
              %
              
              5.3
              %General
                  and administrative (1)
              
              
              14.1
              %
              
              13.6
              %
              
              13.7
              %
              
              14.8
              %Corporate
                  expenses (2)
              
              
              1.8
              %
              
              1.1
              %
              
              2.9
              %
              
              1.1
              %Economic
                  incentive tax - City of Gary
              
              
              1.5
              %
              
              1.5
              %
              
              1.5
              %
              
              1.5
              %Depreciation
                  and amortization (3)
              
              
              7.1
              %
              
              5.9
              %
              
              7.3
              %
              
              5.9
              %Loss
                  on investment in the BHR joint venture
              
              
              0.8
              %
              
              0.8
              %
              
              0.8
              %
              
              0.8
              %Loss
                  (gain) on sale of assets
              
              
              0.0
              %
              
              0.0
              %
              
              0.0
              %
              
              0.0
              %Total
                  operating costs and expenses
              
              
              75.1
              %
              
              75.2
              %
              
              75.7
              %
              
              75.5
              %Operating
                  income
              
              
              9.6
              %
              
              10.9
              %
              
              9.3
              %
              
              11.3
              %OTHER
                  INCOME (EXPENSES):Interest
                  income
              
              
              0.1
              %
              
              0.0
              %
              
              0.1
              %
              
              0.0
              %Interest
                  expense
              
              
              -9.8
              %
              
              -9.5
              %
              
              -9.7
              %
              
              -9.3
              %Other
                  non-operating expense
              
              
              0.0
              %
              
              0.0
              %
              
              0.0
              %
              
              -0.1
              %Total
                  other expenses
              
              
              -9.7
              %
              
              -9.5
              %
              
              -9.6
              %
              
              -9.4
              %Net
                  (loss) income
              
              
              -0.1
              %
              
              1.4
              %
              
              -0.3
              %
              
              1.9
              %
 
 (1)
              General
                  and administrative expenses for the nine months ended September
                  30, 2004
                  include a $2.2 million retroactive property tax
                  charge.
 (2)
              Corporate
                  expenses for the nine months ended September 30, 2005 include a
                  $2.3
                  million charge related to the mutual termination of the sale of
                  Fitzgeralds Black Hawk.
 (3)
              The
                  Company took a charge of approximately $1.5 million in the second
                  quarter
                  of 2005 for depreciation and amortization expense that was not
                  recorded
                  while Fitzgeralds Black Hawk was held for sale during the period
                  July 12,
                  2004 (the date of the Purchase Agreement) to April 14, 2005 (the
                  date the
                  Purchase Agreement was terminated).  The corresponding catch-up
                  depreciation and amortization in the nine months ended September
                  30, 2005
                  is $0.9 million (for the period July 12, 2004 through December
                  31,
                  2004).
  35
  The
        following table provides certain selected financial information from our
        consolidated statements of operations.
 
 Consolidated
 
 For
                  The
              
              
              
              
              For
                  TheThree
                  Months Ended
              
              Percentage
              
              
              Nine
                  Months Ended
              
              PercentageSeptember
                  30,
              
              Increase
              
              
              September
                  30,
              
              Increase2005
              
              2004
              
              (Decrease)
              
              
              2005
              
              2004
              
              (Decrease)(in
                  millions)
              
              
              
              
              (in
                  millions)Casino
                  revenues
              
              $
              69.5
              
              $
              68.1
              
              
              2.1
              %
              
              $
              208.8
              
              $
              209.7
              
              
              -0.4
              %Room
                  revenues
              
              
              2.0
              
              
              2.0
              
              
              -1.1
              %
              
              
              5.7
              
              
              5.8
              
              
              -1.8
              %Food
                  and beverage revenues
              
              
              3.6
              
              
              3.6
              
              
              -2.0
              %
              
              
              10.5
              
              
              10.1
              
              
              4.2
              %Other
                  revenues
              
              
              1.3
              
              
              1.2
              
              
              12.4
              %
              
              
              3.8
              
              
              3.4
              
              
              11.3
              %Gross
                  operating revenues
              
              
              76.4
              
              
              74.9
              
              
              2.0
              %
              
              
              228.8
              
              
              229.0
              
              
              -0.1
              %Less
                  promotional allowances
              
              
              11.7
              
              
              10.4
              
              
              11.9
              %
              
              
              34.2
              
              
              30.1
              
              
              13.6
              %Net
                  operating revenues
              
              
              64.7
              
              
              64.5
              
              
              0.4
              %
              
              
              194.6
              
              
              198.9
              
              
              -2.1
              %Operating
                  expenses
              
              
              57.4
              
              
              56.3
              
              
              1.9
              %
              
              
              173.3
              
              
              173.0
              
              
              0.2
              %Operating
                  income
              
              
              7.3
              
              
              8.2
              
              
              -10.2
              %
              
              
              21.3
              
              
              25.9
              
              
              -17.7
              %Other
                  income (expense)
              
              
              (7.4
              )
              
              (7.2
              )
              
              4.0
              %
              
              
              (22.0
              )
              
              (21.5
              )
              
              2.7
              %Net
                  (loss) income
              
              $
              (0.1
              )
              $
              1.0
              
              
              -109.5
              %
              
              $
              (0.7
              )
              $
              4.4
              
              
              -116.7
              %
 
 
 The
        following tables provide certain selected segment financial information for
        each
        of the Majestic Star, Fitzgeralds Tunica, and Fitzgeralds Black Hawk, as
        well as
        Majestic Investor Holdings (an intermediate holding company that owns
        Fitzgeralds Tunica and Fitzgeralds Black Hawk). All amounts are shown before
        corporate overhead. Percentage increase (decrease) calculations are derived
        using the whole numbers rather than the rounded numbers.
 
 Majestic
        Star
 
 For
                  The
              
              
              
              
              For
                  TheThree
                  Months Ended
              
              Percentage
              
              
              Nine
                  Months Ended
              
              PercentageSeptember
                  30,
              
              Increase
              
              
              September
                  30,
              
              Increase2005
              
              2004
              
              (Decrease)
              
              
              2005
              
              2004
              
              (Decrease)(in
                  millions)
              
              
              
              
              (in
                  millions)Casino
                  revenues
              
              $
              37.7
              
              $
              36.2
              
              
              4.3
              %
              
              $
              113.8
              
              $
              114.1
              
              
              -0.2
              %Room
                  revenues
              
              
              -
              
              
              -
              
              
              0.0
              %
              
              
              -
              
              
              -
              
              
              0.0
              %Food
                  and beverage revenues
              
              
              0.5
              
              
              0.4
              
              
              -3.3
              %
              
              
              1.3
              
              
              1.4
              
              
              -6.7
              %Other
                  revenues
              
              
              0.9
              
              
              0.8
              
              
              17.3
              %
              
              
              2.6
              
              
              2.1
              
              
              19.4
              %Gross
                  operating revenues
              
              
              39.1
              
              
              37.4
              
              
              4.5
              %
              
              
              117.7
              
              
              117.6
              
              
              0.1
              %Less
                  promotional allowances
              
              
              4.4
              
              
              3.2
              
              
              35.8
              %
              
              
              12.7
              
              
              9.8
              
              
              29.3
              %Net
                  operating revenues
              
              
              34.7
              
              
              34.2
              
              
              1.5
              %
              
              
              105.0
              
              
              107.8
              
              
              -2.6
              %Operating
                  expenses
              
              
              30.7
              
              
              30.7
              
              
              0.4
              %
              
              
              91.5
              
              
              96.2
              
              
              -4.9
              %Operating
                  income
              
              
              4.0
              
              
              3.5
              
              
              11.5
              %
              
              
              13.5
              
              
              11.6
              
              
              16.5
              %Other
                  income (expense)
              
              
              (7.0
              )
              
              (6.6
              )
              
              4.4
              %
              
              
              (20.7
              )
              
              (20.1
              )
              
              3.0
              %Net
                  loss
              
              $
              (3.0
              )
              $
              (3.1
              )
              
              -3.7
              %
              
              $
              (7.2
              )
              $
              (8.5
              )
              
              -15.4
              %
  36
  Fitzgeralds
        Tunica
 
 For
                  The
              
              
              
              
              For
                  TheThree
                  Months Ended
              
              Percentage
              
              
              Nine
                  Months Ended
              
              PercentageSeptember
                  30,
              
              Increase
              
              
              September
                  30,
              
              Increase2005
              
              2004
              
              (Decrease)
              
              
              2005
              
              2004
              
              (Decrease)(in
                  millions)
              
              
              
              
              (in
                  millions)Casino
                  revenues
              
              $
              21.9
              
              $
              22.0
              
              
              -0.5
              %
              
              $
              66.2
              
              $
              66.4
              
              
              -0.4
              %Room
                  revenues
              
              
              2.0
              
              
              2.0
              
              
              -1.1
              %
              
              
              5.7
              
              
              5.8
              
              
              -1.8
              %Food
                  and beverage revenues
              
              
              2.5
              
              
              2.6
              
              
              -1.5
              %
              
              
              7.5
              
              
              7.0
              
              
              7.3
              %Other
                  revenues
              
              
              0.4
              
              
              0.3
              
              
              11.2
              %
              
              
              1.0
              
              
              1.0
              
              
              -1.9
              %Gross
                  operating revenues
              
              
              26.8
              
              
              26.9
              
              
              -0.5
              %
              
              
              80.4
              
              
              80.2
              
              
              0.2
              %Less
                  promotional allowances
              
              
              6.0
              
              
              5.9
              
              
              2.0
              %
              
              
              17.6
              
              
              16.4
              
              
              6.6
              %Net
                  operating revenues
              
              
              20.8
              
              
              21.0
              
              
              -1.2
              %
              
              
              62.8
              
              
              63.8
              
              
              -1.5
              %Operating
                  expenses
              
              
              18.4
              
              
              18.4
              
              
              -0.2
              %
              
              
              54.3
              
              
              54.1
              
              
              0.5
              %Operating
                  income
              
              
              2.4
              
              
              2.6
              
              
              -8.3
              %
              
              
              8.5
              
              
              9.7
              
              
              -12.3
              %Other
                  income (expense)
              
              
              0.0
              
              
              0.0
              
              
              255.7
              %
              
              
              0.0
              
              
              0.0
              
              
              250.4
              %Net
                  income
              
              $
              2.4
              
              $
              2.6
              
              
              -8.0
              %
              
              $
              8.5
              
              $
              9.7
              
              
              -12.1
              %
 
 
 
 Fitzgeralds
        Black Hawk
 
 For
                  The
              
              
              
              
              For
                  TheThree
                  Months Ended
              
              Percentage
              
              
              Nine
                  Months Ended
              
              PercentageSeptember
                  30,
              
              Increase
              
              
              September
                  30,
              
              Increase2005
              
              2004
              
              (Decrease)
              
              
              2005
              
              2004
              
              (Decrease)(in
                  millions)
              
              
              
              
              (in
                  millions)Casino
                  revenues
              
              $
              9.9
              
              $
              9.9
              
              
              -0.1
              %
              
              $
              28.8
              
              $
              29.2
              
              
              -1.3
              %Room
                  revenues
              
              
              -
              
              
              -
              
              
              0.0
              %
              
              
              -
              
              
              -
              
              
              0.0
              %Food
                  and beverage revenues
              
              
              0.6
              
              
              0.6
              
              
              -3.3
              %
              
              
              1.7
              
              
              1.7
              
              
              0.4
              %Other
                  revenues
              
              
              0.1
              
              
              0.1
              
              
              -17.0
              %
              
              
              0.3
              
              
              0.3
              
              
              -3.2
              %Gross
                  operating revenues
              
              
              10.6
              
              
              10.6
              
              
              -0.5
              %
              
              
              30.8
              
              
              31.2
              
              
              -1.3
              %Less
                  promotional allowances
              
              
              1.3
              
              
              1.3
              
              
              -1.9
              %
              
              
              4.0
              
              
              3.8
              
              
              4.0
              %Net
                  operating revenues
              
              
              9.3
              
              
              9.3
              
              
              -0.2
              %
              
              
              26.8
              
              
              27.4
              
              
              -2.0
              %Operating
                  expenses
              
              
              6.9
              
              
              6.4
              
              
              7.8
              %
              
              
              20.7
              
              
              19.6
              
              
              5.8
              %Operating
                  income
              
              
              2.4
              
              
              2.9
              
              
              -17.6
              %
              
              
              6.1
              
              
              7.8
              
              
              -21.7
              %Other
                  income (expense)
              
              
              (0.0
              )
              
              0.0
              
              
              -101.1
              %
              
              
              (0.0
              )
              
              0.0
              
              
              -101.1
              %Net
                  income
              
              $
              2.4
              
              $
              2.9
              
              
              -17.7
              %
              
              $
              6.1
              
              $
              7.8
              
              
              -21.7
              %
  37
  Majestic
        Investor Holdings
 
 For
                  The
              
              
              
              
              For
                  TheThree
                  Months Ended
              
              Percentage
              
              
              Nine
                  Months Ended
              
              PercentageSeptember
                  30,
              
              Increase
              
              
              September
                  30,
              
              Increase2005
              
              2004
              
              (Decrease)
              
              
              2005
              
              2004
              
              (Decrease)(in
                  millions)
              
              
              
              
              (in
                  millions)Casino
                  revenues
              
              $
              -
              
              $
              -
              
              
              -
              
              
              $
              -
              
              $
              -
              
              
              -Room
                  revenues
              
              
              -
              
              
              -
              
              
              -
              
              
              
              -
              
              
              -
              
              
              -Food
                  and beverage revenues
              
              
              -
              
              
              -
              
              
              -
              
              
              
              -
              
              
              -
              
              
              -Other
                  revenues
              
              
              -
              
              
              -
              
              
              -
              
              
              
              -
              
              
              -
              
              
              -Gross
                  operating revenues
              
              
              -
              
              
              -
              
              
              -
              
              
              
              -
              
              
              -
              
              
              -Less
                  promotional allowances
              
              
              -
              
              
              -
              
              
              -
              
              
              
              -
              
              
              -
              
              
              -Net
                  operating revenues
              
              
              -
              
              
              -
              
              
              -
              
              
              
              -
              
              
              -
              
              
              -Operating
                  expenses
              
              
              0.0
              
              
              0.1
              
              
              -35.0
              %
              
              
              0.2
              
              
              0.6
              
              
              -65.1
              %Operating
                  loss
              
              
              0.0
              
              
              (0.1
              )
              
              -35.0
              %
              
              
              (0.2
              )
              
              (0.6
              )
              
              -65.1
              %Other
                  income (expense)
              
              
              (0.5
              )
              
              (0.5
              )
              
              -0.8
              %
              
              
              (1.4
              )
              
              (1.4
              )
              
              -1.1
              %Net
                  loss
              
              $
              (0.5
              )
              $
              (0.6
              )
              
              -6.7
              %
              
              $
              (1.6
              )
              $
              (2.0
              )
              
              -20.6
              %
 
 
 The
        following tables reflect selected financial information as a percentage of
        consolidated gross operating revenues at Majestic Star, Fitzgeralds Tunica,
        Fitzgeralds Black Hawk and Majestic Investor Holdings. All percentage
        calculations are shown before corporate overhead.
 
 Majestic
        Star
 
 For
                  The
              
              For
                  TheThree
                  Months Ended
              
              Nine
                  Months EndedSeptember
                  30,
              
              September
                  30,2005
              
              2004
              
              2005
              
              2004Casino
                  revenues
              
              
              49.3
              %
              
              48.3
              %
              
              49.7
              %
              
              49.8
              %Room
                  revenues
              
              
              0.0
              %
              
              0.0
              %
              
              0.0
              %
              
              0.0
              %Food
                  and beverage revenues
              
              
              0.6
              %
              
              0.6
              %
              
              0.6
              %
              
              0.6
              %Other
                  revenues
              
              
              1.2
              %
              
              1.1
              %
              
              1.1
              %
              
              0.9
              %Gross
                  operating revenues
              
              
              51.1
              %
              
              50.0
              %
              
              51.4
              %
              
              51.3
              %Less
                  promotional allowances
              
              
              5.7
              %
              
              4.3
              %
              
              5.5
              %
              
              4.3
              %Net
                  operating revenues
              
              
              45.4
              %
              
              45.7
              %
              
              45.9
              %
              
              47.0
              %Operating
                  expenses
              
              
              40.2
              %
              
              40.9
              %
              
              40.0
              %
              
              42.0
              %Operating
                  income
              
              
              5.2
              %
              
              4.8
              %
              
              5.9
              %
              
              5.0
              %Other
                  income (expense)
              
              
              -9.1
              %
              
              -8.9
              %
              
              -9.0
              %
              
              -8.8
              %Net
                  loss
              
              
              -3.9
              %
              
              -4.1
              %
              
              -3.1
              %
              
              -3.8
              %
  38
  Fitzgeralds
        Tunica
 
 For
                  The
              
              For
                  TheThree
                  Months Ended
              
              Nine
                  Months EndedSeptember
                  30,
              
              September
                  30,2005
              
              2004
              
              2005
              
              2004Casino
                  revenues
              
              
              28.6
              %
              
              29.4
              %
              
              28.9
              %
              
              29.0
              %Room
                  revenues
              
              
              2.6
              %
              
              2.7
              %
              
              2.5
              %
              
              2.5
              %Food
                  and beverage revenues
              
              
              3.3
              %
              
              3.4
              %
              
              3.3
              %
              
              3.1
              %Other
                  revenues
              
              
              0.4
              %
              
              0.4
              %
              
              0.4
              %
              
              0.4
              %Gross
                  operating revenues
              
              
              34.9
              %
              
              35.9
              %
              
              35.1
              %
              
              35.0
              %Less
                  promotional allowances
              
              
              7.8
              %
              
              7.8
              %
              
              7.7
              %
              
              7.2
              %Net
                  operating revenues
              
              
              27.1
              %
              
              28.1
              %
              
              27.4
              %
              
              27.8
              %Operating
                  expenses
              
              
              24.0
              %
              
              24.6
              %
              
              23.7
              %
              
              23.6
              %Operating
                  income
              
              
              3.1
              %
              
              3.5
              %
              
              3.7
              %
              
              4.2
              %Other
                  income (expense)
              
              
              0.0
              %
              
              0.0
              %
              
              0.0
              %
              
              0.0
              %Net
                  income
              
              
              3.1
              %
              
              3.5
              %
              
              3.7
              %
              
              4.2
              %
 
 
 
 Fitzgeralds
        Black Hawk
 
 For
                  The
              
              For
                  TheThree
                  Months Ended
              
              Nine
                  Months EndedSeptember
                  30,
              
              September
                  30,2005
              
              2004
              
              2005
              
              2004Casino
                  revenues
              
              
              12.9
              %
              
              13.2
              %
              
              12.6
              %
              
              12.8
              %Room
                  revenues
              
              
              0.0
              %
              
              0.0
              %
              
              0.0
              %
              
              0.0
              %Food
                  and beverage revenues
              
              
              0.8
              %
              
              0.8
              %
              
              0.7
              %
              
              0.7
              %Other
                  revenues
              
              
              0.1
              %
              
              0.2
              %
              
              0.1
              %
              
              0.1
              %Gross
                  operating revenues
              
              
              13.8
              %
              
              14.2
              %
              
              13.4
              %
              
              13.6
              %Less
                  promotional allowances
              
              
              1.7
              %
              
              1.8
              %
              
              1.8
              %
              
              1.7
              %Net
                  operating revenues
              
              
              12.1
              %
              
              12.4
              %
              
              11.6
              %
              
              11.9
              %Operating
                  expenses
              
              
              8.9
              %
              
              8.5
              %
              
              9.1
              %
              
              8.6
              %Operating
                  income
              
              
              3.2
              %
              
              3.9
              %
              
              2.5
              %
              
              3.3
              %Other
                  income (expense)
              
              
              0.0
              %
              
              0.0
              %
              
              0.0
              %
              
              0.0
              %Net
                  loss
              
              
              3.2
              %
              
              3.9
              %
              
              2.5
              %
              
              3.3
              %
  39
  Majestic
        Investor Holdings
 
 For
                  The
              
              For
                  TheThree
                  Months Ended
              
              Nine
                  Months EndedSeptember
                  30,
              
              September
                  30,2005
              
              2004
              
              2005
              
              2004Casino
                  revenues
              
              
              -
              
              
              -
              
              
              -
              
              
              -Room
                  revenues
              
              
              -
              
              
              -
              
              
              -
              
              
              -Food
                  and beverage revenues
              
              
              -
              
              
              -
              
              
              -
              
              
              -Other
                  revenues
              
              
              -
              
              
              -
              
              
              -
              
              
              -Gross
                  operating revenues
              
              
              -
              
              
              -
              
              
              -
              
              
              -Less
                  promotional allowances
              
              
              -
              
              
              -
              
              
              -
              
              
              -Net
                  operating revenues
              
              
              -
              
              
              -
              
              
              -
              
              
              -Operating
                  expenses
              
              
              0.1
              %
              
              0.1
              %
              
              0.1
              %
              
              0.3
              %Operating
                  loss
              
              
              -0.1
              %
              
              -0.1
              %
              
              -0.1
              %
              
              -0.3
              %Other
                  expenses
              
              
              -0.6
              %
              
              -0.7
              %
              
              -0.6
              %
              
              -0.6
              %Net
                  loss
              
              
              -0.7
              %
              
              -0.8
              %
              
              -0.7
              %
              
              -0.9
              %
 
 
 
 THIRD
        QUARTER 2005 COMPARED TO THIRD QUARTER 2004
 
 Consolidated
        gross operating revenues for the third quarter of 2005 increased $1.5 million,
        or 2.0%, from consolidated gross operating revenues recorded in the third
        quarter of 2004. Majestic Star contributed substantially all of the increase
        in
        consolidated gross operating revenues primarily as a result of an increase
        in
        its casino revenues. Consolidated casino revenues, which comprise 90.9% of
        consolidated gross revenues, increased $1.4 million, or 2.1%, to $69.5 million.
        Majestic Star, accounting for $1.5 million of the increase in consolidated
        casino revenues, benefited from an increase in slot win percentage
        of 9.3%.
        Additionally, Majestic Star achieved a 4.7% increase in table games hold
        percentage. These increases, however, were offset by declines in slot coin-in
        of
        1.6% and table games drop of 15.3%. Gross operating revenues at Fitzgeralds
        Tunica and Fitzgeralds Black Hawk for the third quarter of 2005 were flat
        as
        compared to the third quarter of 2004.
 
 Consolidated
        promotional allowances increased $1.3 million, or 11.9%. Majestic Star’s
        promotional allowances increased $1.2 million, or 35.8%, as the property
        was
        more aggressive with its cash based promotional activities in order to address
        the marketing efforts of its competitors and increase visits to the property.
        At
        Fitzgeralds Tunica and Fitzgeralds Black Hawk promotional allowances were
        essentially flat with the prior year quarter .
 
 Total
        consolidated operating expenses increased $1.1 million, or 1.9%, due primarily
        to increases of $0.5 million, or 3.1%, in gaming tax expense, $0.5 million,
        or
        65.6%, in corporate expenses, $0.6 million, or 6.0%, in general and
        administrative expense and $1.0 million, or 22.4%, in depreciation and
        amortization expenses, offset by decreases of $0.5 million, or 2.7%, in casino
        expenses, $0.5 million, or 66.9%, in other expenses and $0.4 million, or
        8.3%,
        in advertising and promotional expenses.
 
 Fitzgeralds
        Tunica and Fitzgeralds Black Hawk contributed $0.6 million and $0.1 million,
        respectively, of our decrease in consolidated casino expenses, offset by
        a $0.2
        million increase at Majestic Star. Fitzgeralds Tunica’s declines are
        attributable to lower costs associated with wide area progressive participations
        and lower payroll and payroll related expenses. Majestic
        Star’s increase was attributable to its increased casino revenues.
 
 Consolidated
        advertising and promotion expenses are down $0.4 million due to lower costs
        at
        Majestic Star resulting from the reduction of advertising on
        television, radio and print media.
 
 The
        increase in consolidated gaming taxes is primarily attributable to a $0.4
        million increase at Majestic Star. The increase in gaming taxes is a direct
        result of increased gaming revenues.
  40
  
 
 General
        and administrative expenses increased $0.6 million due to increases at Majestic
        Star of $0.2 million and at Fitzgeralds Tunica of $0.4 million. Majestic
        Star’s increase in general and administrative expenses resulted from increases
        in property taxes and insurance premium expense, while
        the
        increase at Fitzgeralds Tunica was attributable to increases in payroll and
        payroll related expenses and increases in legal expenses.
 
 Corporate
        expenses increased $0.5 million. The increase is primarily attributed to
        $0.4
        million of costs associated with the Company’s Sarbanes-Oxley 404 compliance
        project.
 
 Consolidated
        depreciation and amortization expense increased by $1.0 million to $5.4 million.
        The increases at Fitzgeralds Tunica, Fitzgeralds Black Hawk and Majestic
        Star
        were $0.3 million, $0.5 and $0.2 million, respectively. The increases at
        Fitzgeralds Tunica and Majestic Star resulted from capital expenditures made
        during the fourth quarter of 2004 and the first nine months of 2005. The
        increase at Fitzgeralds Black Hawk during the third quarter of 2005 was because
        there was no depreciation and amortization taken at Fitzgeralds Black Hawk
        during the third quarter of 2004, while it was held for sale.
 
 Consolidated
        other expense increased by $0.3 million to $7.4 million. The main component
        of
        consolidated other expense is interest expense, which increased $0.4 million
        due
        to a greater principal amount outstanding on the Company’s $80.0 million credit
        facility and higher interest rates associated with the $80.0 million credit
        facility. At September 30, 2005 and September 30, 2004, the Company had $39.0
        million and $35.6 million, respectively, outstanding on the credit facility.
        In
        addition during the past quarter, the Company’s interest rate on borrowings
        ranged between 6.72% and 7.50%, while
        in
        the same quarter last year, the interest rate on borrowings ranged between
        4.61%
        and 5.29%.
 
 NINE
        MONTHS ENDED SEPTEMBER 30, 2005 COMPARED TO NINE MONTHS ENDED SEPTEMBER 30,
        2004
 
 Consolidated
        gross operating revenues for the nine months ended September 30, 2005 decreased
        $0.2 million, or 0.1%, from consolidated gross operating revenues recorded
        in
        the nine months ended September 30, 2004. Fitzgeralds Black Hawk’s gross
        operating revenues declined by $0.4 million, while Fitzgeralds Tunica’s gross
        operating revenues increased $0.2 million. The decrease in consolidated gross
        operating revenues resulted from a decrease in consolidated casino revenues,
        which comprise 91.2% of consolidated gross revenues. Consolidated casino
        revenues decreased $0.9 million, or 0.4%, to $208.8 million during the first
        nine months of 2005 as compared to the same period in 2004. The decrease
        in
        consolidated gaming revenues resulted from a combined properties’ decline in
        table game drop of 7.7% and slot coin-in of 2.4%, offset by an increase in
        slot win percentage of 3.2%. At Fitzgeralds Tunica, higher gross revenues
        are the result of higher food and beverage revenues, as the property has
        enhanced its promotions of food and beverage products served through its
        bars
        and restaurants. Gross operating revenues for the nine months ended September
        30, 2005 was flat as compared to the same nine-month period in
        2004.
 
 Consolidated
        promotional allowances increased $4.1 million, or 13.6%, primarily due to
        increases in casino related promotional cash activities at both Majestic
        Star
        and Fitzgeralds Tunica, and higher levels of complimentaries at Fitzgeralds
        Tunica. These expenses were incurred to increase customer visits and revenues,
        and to remain competitive in the Chicagoland and Tunica markets. Majestic
        Star’s
        promotional allowances increased $2.9 million, or 29.3%, from the nine months
        ended September 30, 2004, which is directly related to significant increases
        in
        cash based promotions. Promotional allowances at Fitzgeralds Tunica increased
        $1.2 million, or 6.6%, in the nine months ended September 30, 2005 as a result
        of increased promotional allowances from providing complimentary products
        and
        services to its customers and from promotional cash activities.
 
 Total
        consolidated operating expenses increased $0.3 million, or 0.2%, due primarily
        to increases in corporate expenses of $4.0 million and depreciation and
        amortization of $3.3 million, offset by decreases in casino expenses of $2.7
        million, rooms expense of $0.1 million, food and beverage expense of $0.1
        million, other expense of $0.6 million, advertising and promotion expenses
        of
        $0.9 million and general and administrative expenses of $2.5
        million.
  41
  
 Consolidated
        casino expenses were $50.4 million in the nine months ended September 30,
        2005,
        a decrease of $2.7 million, or 5.2%, from the nine months ended September
        30,
        2004. Majestic Star experienced a $1.0 million decline in casino expense
        due to
        lower payroll and payroll related expenses, which have resulted from
        management’s continued focus on reducing costs.  Fitzgeralds
        Tunica’s casino expense declined $1.2 million due to reductions in wide area
        network progressive slot expenses, payroll and payroll related expenses and
        progressive jackpot expense. Fitzgeralds Back Hawk casino expenses declined
        $0.5
        million due to a decrease in progressive slot expense and lower casino
        volumes.
 
 Other
        expense decreased $0.6 million, or 43.5%, to $0.8 million in the nine months
        ended September 30, 2005 from the nine months ended September 30, 2004, because
        there have been no events at the Festival Park at Buffington Harbor in 2005.
        During the nine months ended September 30, 2004, numerous events occurred
        at the
        facility, which resulted in net expenses to Majestic Star of almost $0.6
        million.
 
 Consolidated
        advertising and promotional expenses declined $0.9 million, or 7.3%, to $11.3
        million. The most significant decline came at Majestic Star, where advertising
        and promotional expenses were down $1.1 million. The reduction is due to
        reduced
        advertising on television, radio, and print media.
 
 Consolidated
        general and administrative expenses decreased $2.5 million, or 7.5%, to $31.4
        million in the nine months ended September 30, 2005 from the nine month period
        ended September 30, 2004. Majestic Star accounted for $2.6 million of the
        reduction.  The
        most
        significant item affecting Majestic Star’s general and administrative expense
        was a $2.2 million charge for retroactive real property taxes for the years
        2002
        and 2003 taken in the first quarter of 2004. There was not a similar charge
        in
        2005.  Majestic
        Star also incurred lower berthing fee expenses of $0.6 million related to
        the
        operations of BHR, $0.3 million in lower insurance and claim costs, offset
        by
        increases in property taxes of $0.2 million and professional fees of $0.1
        million. General and administrative expenses at Majestic Investor Holdings
        for
        the first nine months of 2005 decreased $0.4 million from 2004. In the first
        quarter of 2004 the Company posted an accrual of $0.4 million to reserve
        for a
        judgment in a lawsuit against Fitzgeralds Tunica pertaining to certain events
        relating to the acquisition of Fitzgeralds Tunica from its former owner.
        Fitzgeralds Tunica’s general and administrative expense increased $0.4 million
        as a result of increases in payroll and payroll related expenses, insurance
        premiums and professional fees.
 
 Corporate
        expenses increased $4.0 million, or 160.4%, to $6.5 million. The increase
        is
        primarily attributed to the $2.3 million charge resulting from the mutual
        termination of the sale of Fitzgeralds Black Hawk, $0.8 million of costs
        associated with the Company’s Sarbanes-Oxley 404 compliance project, $0.5
        million in other professional fees, an increase of $0.2 million in payroll
        and
        payroll related expense and $0.2 million of costs incurred when the Company
        evaluated certain casino investment opportunities.
 
 Consolidated
        depreciation and amortization expense increased by $3.3 million to $16.8
        million. $1.5 million of the increase resulted from catch-up depreciation
        and
        amortization charges at Fitzgeralds Black Hawk. Fitzgeralds Tunica and Majestic
        Star recognized increases of $1.1 million and $0.7 million, respectively.
        The
        increases at Fitzgeralds Tunica and Majestic Star result from capital
        expenditures made at both properties during the fourth quarter of 2004 and
        the
        first nine months of 2005. The increase at Fitzgeralds Black Hawk during
        the
        nine-month period ended 2005 resulted from the cessation of depreciation
        and
        amortization from the period July 12, 2004 to April 14, 2005, while it was
        held
        for sale.
 
 Consolidated
        other expense increased by $0.6 million to $22.1 million. The main component
        of
        consolidated other expense is interest expense, which increased $0.8 million
        due
        to generally greater principal outstanding on the Company’s $80.0 million credit
        facility this year versus last year, and higher interest rates associated
        with
        the $80.0 million credit facility. The Company’s interest rate on borrowings
        ranged between 5.65% and 7.50%, while in
        the same nine-month period last year, the interest rate on borrowings ranged
        between 4.37% and 5.29%.
 
 LIQUIDITY
        AND CAPITAL RESOURCES
 
 To
        date,
        we have financed our operations with internal cash flows from our operations
        and
        borrowings under our $80.0 million credit facility. Over the course of the
        year,
        we generate significant cash flows from operating activities.  For
        the
        nine months ended September 30, 2005 and 2004, we reported cash flows from
        operating activities totaling $23.2 million and $22.5 million, respectively.
        We
        use our cash flows to meet our financial obligations, which consist principally
        of financing the daily operations of our casinos, servicing our debt, funding
        capital improvements and projects, and making distributions to BDI under
        the
        Manager Agreement and permitted tax distributions under the indenture.
  42
  
 
 At
        September 30, 2005, $39.0 million was outstanding under the $80.0 million
        credit
        facility. The Company had unrestricted cash and cash equivalents of $17.5
        million at September 30, 2005, compared to $16.7 million at December 31,
        2004
        (inclusive of cash at Fitzgeralds Black Hawk, whose assets were held for
        sale at
        December 31, 2004). For the nine months ended September 30, 2005, the Company
        spent $10.1 million primarily for slot machines and TITO implementation at
        all
        of its properties, various remodel projects, principally at Majestic Star,
        and a
        new slot player tracking and marketing system and costs associated with burying
        a storm sewer pipe below grade, both at Fitzgeralds Black Hawk. For the nine
        months ended September 30, 2004, the Company spent $32.0 million for the
        purchase of 170 acres of property adjacent to Majestic Star and the Buffington
        Harbor facility, the construction of a new administration building at Majestic
        Star, the installation of new slot player tracking and marketing software
        at
        Fitzgeralds Tunica, a partial expansion and remodel of our casino floor at
        Fitzgeralds Tunica, gaming and related equipment at all of our properties,
        and
        stabilization of a rock wall adjacent to the parking garage at Fitzgeralds
        Black
        Hawk. The Company intends to make additional capital expenditures up to the
        $12.0 million limit as identified in the capital expenditure covenant contained
        within the $80.0 million credit facility.  This
        amount will be primarily directed toward purchasing new slot machines and
        integrating slot machines with TITO at all of our properties, and limited
        remodeling projects at Majestic Star and Fitzgeralds Tunica. We believe that
        TITO technology will lead to greater efficiency on our casino floor, thus
        providing cost savings and longer slot machine playing times by our customers
        without interruptions, which should enhance the guest experience and our
        casino
        revenues.
 
 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 $80.0 million credit facility, the 11.653% notes, the 9 1⁄2% notes,
        payments to BHR, and lease payments to BHPA. The majority of principal payments
        on our senior debt are not due until October 2010. However, the Company will
        be
        required to pay $16.3 million still outstanding on the 11.653% notes, plus
        accrued interest thereon, and any amounts outstanding on the $80.0 million
        credit facility, plus accrued interest thereon, in 2007. No assurance can
        be
        given that our operating cash flows or proceeds from additional financings,
        if
        available, will be sufficient for such purposes.
 
 As
        previously discussed, on November 3, 2005, the Company entered into a definitive
        agreement to acquire all the stock of Trump Indiana, net of any debt and
        other
        long term obligations of Trump Indiana and assumed by the Company, for $253.0
        million. The Company anticipates that this acquisition will be financed with
        additional debt. The indenture governing the 9 1⁄2% notes has specific
        requirements for incurrence of additional debt. Until the time that the Company
        markets the transaction to potential investors, it is uncertain how much
        debt
        the Company will be able to issue on a senior secured basis, if the Company
        will
        need to issue debt on an unsecured basis and whether non-recourse debt will
        need
        to be issued outside the Company. In addition, it is currently unknown what
        interest rates will be associated with the debt and whether the debt will
        need
        to be sold at a discount. While the Company is hopeful that a reasonable
        debt
        structure can be achieved to finance the acquisition of Trump Indiana, there
        is
        no guarantee that the debt structure will be favorable to the Company. In
        addition, as the Company continues to evaluate other potential opportunities
        to
        expand its existing casinos and to pursue other growth opportunities, the
        Company may not have sufficient funds to finance such strategic projects
        under
        existing debt agreements. Should the Company identify an asset, business
        acquisition or expansion opportunity, there is no guarantee that any additional
        financing needed by the Company will be available on acceptable terms or
        at all
        in order to allow for the investment in such opportunities.
  43
  
 
 On
        July
        14, 2005, the City of Black Hawk delivered a Notice of Abatement to Fitzgeralds
        Black Hawk. The notice required that Fitzgeralds Black Hawk remove the iron
        beams supporting the walls of the historic Masonic building on our property.
        Previously, the building was partially demolished in anticipation of
        encapsulating the remaining portions into a casino expansion and two of the
        walls of the structure remained in place supported by iron beams. The partial
        demolition permit of the Masonic building walls expired on June 1, 2005 and
        the
        City of Black Hawk has notified us that they want the iron beams removed
        and the
        Masonic building reconstructed. In addition, the Company has under option
        land
        behind Fitzgeralds Black Hawk that can be used for additional expansion.
        The
        City of Black Hawk has notified the Company that the option has terminated.
        The
        Company has filed a compliant against the City of Black Hawk seeking a court
        order declaring that the option remains valid until September of 2006. If
        the
        option is declared valid through September of 2006 and the Company exercises
        its
        option, the land would cost approximately $1.5 million (See Note 8
        to the
        Consolidated Financial Statements - Commitments and Contingencies and Part
        II,
        Other Information, Item 1 - Legal Proceedings). The Company expects the casino
        expansion to cost approximately $24.0 million, including the reconstruction
        of
        the Masonic building and the purchase of associated gaming equipment and
        other
        furniture and fixtures. The cost to reconstruct the Masonic building, without
        engaging in the full casino expansion is anticipated to cost between $13.0
        million and $16.0 million.  There is
        no guarantee that the Company will be able to move forward with acquiring
        the
        optioned property, reconstructing the Masonic building or completing the
        full
        casino expansion that would meet the City of Black Hawk’s desired timetable, or
        that the acquisition of the optioned property, reconstructing the Masonic
        building or expanding the casino will be economically viable for the Company.
        In
        addition, the Company, pursuant to the covenants contained within its $80.0
        million credit facility, is prohibited from making capital expenditures in
        excess of $12.0 million in any calendar year ($9.0 million in 2007). In order
        to
        move forward with reconstructing the Masonic building or engaging in the
        full
        casino expansion, the Company would need to amend the current capital
        expenditure covenants. There is no guarantee that the banking syndication
        group
        to the $80.0 million credit would provide for such an amendment. 
        In
        addition, the November 10, 2005 verified complaint (see Note 8 to
        the
        Consolidated Financial Statements - Contingent Liabilities and
        Part
        II, Other Information, Item 1 - Legal Proceedings) seeks an assessment of
        a
        penalty in the amount of $499 for each day of the violation, beginning
        on
        June 1, 2005.  Through November 14, 2005, the Company's potential
        liability
        for the penalty is $0.1 million.  It will be necessary for the Company
        to
        use cash from operations or advances from the $80.0 million credit facility
        to
        pay the penalty if the court rules in favor of the City of Black Hawk on
        this
        item of the verified complaint.
 
 The
        ultimate resolution of the assessments by the Indiana Department of State
        Revenue against the Company and the Company’s member and parent, BDI, in the
        amount of $3.9 million, plus penalties and interest (as more fully described
        in
        the Company’s December 31, 2004 annual report on Form 10-K) could have a
        material impact on the Company’s liquidity in the period that the taxes are
        paid, if any, and to the extent that the Company uses such liquidity to make
        distributions to its member for tax purposes. In addition, in April 2005,
        the
        Company made distributions to its member of $2.3 million for 2004 state income
        tax liabilities and 2005 estimated state tax liabilities. The Company
        anticipates that it will make future distributions to fund its member’s tax
        liabilities.
  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 indenture governing the 9 1⁄2% 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
        March
        17, 2005, the Company entered into Amendment Number Two to the Loan and Security
        Agreement (“Amendment Two”) with the lenders to the $80.0 million credit
        facility. Amendment Two clarifies that the Company’s 2004 purchase of 170 acres
        of land located adjacent to the Buffington Harbor gaming complex is not a
        “Capital Expenditure” under the Loan and Security Agreement nor is it subject to
        the fiscal year Capital Expenditure limitations set forth in the Loan and
        Security Agreement. Amendment Two is effective as of March 1, 2005.
 
 On
        August
        10, 2005, the Company entered into Amendment Number Three to the Loan and
        Security Agreement (“Amendment Three”). Amendment Three modifies the definition
        of EBITDA such that the Company can add back to EBITDA the termination charge
        of
        $2.3 million related to the sale of Fitzgeralds Black Hawk. (See Note 3 -
        Mutual
        Termination of Sale of Fitzgeralds Black Hawk).  In
        addition, the Company also amended the quarterly interest coverage ratio
        covenant contained in the Loan and Security Agreement, starting with the
        third
        quarter of 2005 through the fourth quarter of 2006. These amendments are
        effective as of June 15, 2005.
 
 As
        of
        September 30, 2005, the Company had $41.0 million available on its $80.0
        million
        credit facility.
 
  44
  
 CONTRACTUAL
        COMMITMENTS
 
 The
        following table summarizes our obligations and commitments to make future
        payments under certain contracts, including long-term debt obligations, which
        include our $80.0 million credit facility at September 30, 2005. 
        The table
        lists contractual commitments for the period October 1, 2005
        through
        December 31, 2005, for the calendar years 2006 through 2009 and for the periods
        thereafter.
 Payments
                  Due By YearContractual
                  Obligations
              
              October
                  1, 2005 to December 31, 2005
              
              2006
              
              2007
              
              2008
              
              2009
              
              Thereafter
              
              
              TotalLong-Term
                  Debt
              
              $
              -
              
              $
              -
              
              $
              16,290,000
              
              $
              -
              
              $
              -
              
              $
              260,000,000
              
              $
              276,290,000Credit
                  Facility
              
              
              -
              
              
              -
              
              
              39,005,285
              
              
              -
              
              
              -
              
              
              -
              
              
              39,005,285Operating
                  Leases (1)
              
              
              969,958
              
              
              3,742,941
              
              
              3,576,452
              
              
              3,409,963
              
              
              3,243,474
              
              
              3,723,279
              
              
              18,666,067Interest
                  onLong-Term
                  Debt (2)
              
              
              13,299,137
              
              
              26,598,274
              
              
              26,440,084
              
              
              24,700,000
              
              
              24,700,000
              
              
              21,612,500
              
              
              137,349,995Credit
                  Facility (3)
              
              
              754,081
              
              
              2,950,750
              
              
              2,295,028
              
              
              -
              
              
              -
              
              
              -
              
              
              5,999,859Total
              
              $
              15,023,176
              
              $
              33,291,965
              
              $
              87,606,849
              
              $
              28,109,963
              
              $
              27,943,474
              
              $
              285,335,779
              
              $
              477,311,206
 
 
 (1)
                The
                    Majestic Star Casino, LLC and Trump Indiana have each entered
                    into
                    parallel operating lease agreements with BHPA. Each of the lease
                    agreements call for The Majestic Star Casino, LLC and Trump Indiana
                    to
                    make monthly lease payments. However, each party is entitled
                    to a credit
                    of 50% of such payment if the other party makes its monthly payment.
                    In
                    the above Contractual Commitments schedule the BHPA operating
                    lease is
                    shown net of the 50% credit. If The Majestic Star Casino, LLC
                    acquires
                    Trump Indiana then, pursuant to the operating lease agreement,
                    The
                    Majestic Star Casino, LLC will be obligated for the full amount
                    of the
                    debt related to the parking garage and payments made toward servicing
                    the
                    debt will be characterized as payments of principal and interest
                    in the
                    financial records of The Majestic Star Casino,
                    LLC.
 (2)
                  The
                    Company will pay $13.3 million of interest on its long-term debt
                    in the
                    three-month period ended December 31, 2005.  At September
                    30, 2005,
                    $12.2 million of interest on long-term debt had been accrued
                    for by the
                    Company.
 (3)
                  Variable
                    rate of 7.6% is based on the current three-month LIBOR rate at
                    September
                    30, 2005 plus the current applicable margin of 3.50% associated
                    with the
                    Company's LIBOR based loans.
 
  On
        March
        26, 1996, the City of Gary and Majestic Star entered into a development
        agreement, which requires Majestic Star to pay the City an economic incentive
        equal to 3% of Majestic Star’s adjusted gross receipts, as defined by the
        Riverboat Gambling Act. In the three- and nine-month periods ended September
        30,
        2005 and 2004, Majestic Star paid $1.1 million and $3.4 million, respectively,
        to the City of Gary in economic incentive taxes.
 
 RECENT
        ACCOUNTING PRONOUNCEMENTS
 
 In
        November 2004, the Financial Accounting Standards Board issued Statement
        of
        Financial Accounting Standards No. 151, “Inventory Costs-an amendment of ARB No.
        43, Chapter 4” (“SFAS 151”). SFAS 151 amends ARB No. 43, Chapter 4, “Inventory
        Pricing,” to clarify the accounting for abnormal amounts of idle facility
        expense, freight, handling costs, and wasted material (spoilage). SFAS 151
        is
        effective for financial statements for fiscal years beginning after June
        15,
        2005. The Company does not anticipate that adoption of SFAS 151 will have
        a
        material impact on its financial position, results of operations or its cash
        flows.
 
 In
        December 2004, the Financial Accounting Standards Board issued Statement
        of
        Financial Accounting Standards No. 153, “Exchanges of Nonmonetary Assets-an
        amendment of APB Opinion No. 29” (“SFAS 153”). SFAS 153 amends APB Opinion No.
        29, “Accounting for Nonmonetary Transactions,” to eliminate the exception for
        nonmonetary exchanges of similar productive assets and replaces it with a
        general exception for exchanges of nonmonetary assets that do not have
        commercial substance (i.e., if the future cash flows of the entity are expected
        to change significantly as a result of the exchange). SFAS 153 is effective
        for
        financial statements for fiscal years beginning after June 15, 2005. The
        Company
        does not anticipate that adoption of SFAS 153 will have a material impact
        on its
        financial position, results of operations or its cash flows.
 
 In
        May
        2005, the Financial Accounting Standards Board issued Statement of Financial
        Accounting Standards No. 154, “Accounting Changes and Error Corrections-a
        replacement of APB No. 20 and FASB Statement No. 3” (“SFAS 154”). SFAS 154
        replaces APB No. 20, “Accounting Changes” and FASB Statement No. 3, “Reporting
        Accounting Changes in Interim Financial Statements” and changes the requirements
        for the accounting for and reporting of a change in accounting principle.
        SFAS
        154 is effective for accounting changes and corrections of errors made in
        fiscal
        years beginning after December 15, 2005. The Company does not anticipate
        that
        adoption of SFAS 151 will have a material impact on its financial position,
        results of operations or its cash flows.
  45
  **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,
        2004.
 
 **Item
        4.**
 **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.
 
 There
        have been no changes in the Company's internal controls during the quarter
        ended
        September 30, 2005 that have materially affected, or are reasonably likely
        to
        materially affect the Company's financial reporting.
  46
  **Part
        II**
 **OTHER
        INFORMATION**
 
 **Item
                  1.**
              **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  claims, to be routine litigation incidental to the Company’s
        business. Except as described below, 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.
 
 In
        July
        2004, a former employee of The Majestic Star Casino, LLC filed a collective
        action against the Company and the motor vessel Majestic Star to collect
        overtime wages which plaintiff alleges were not paid in violation of the
        Fair
        Labor Standards Act. On September 6, 2005, the Company and the plaintiffs
        entered into a Release and Settlement Agreement pursuant to which the Company
        paid the plaintiffs $13,000 in exchange for a full and final release of all
        claims arising out of plaintiffs’ employment with the Company. The parties
        executed a Joint Stipulation of Dismissal and filed the same on September
        15,
        2005.
 
 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. The plaintiffs
        claim
        the defendants made a joint decision to refuse to advertise on the plaintiffs’
        website. The plaintiffs are seeking treble, compensatory and punitive damages
        totaling approximately $33.0 million, plus interest and attorney’s fees. Each of
        the casino defendants, including Barden Mississippi, has filed counterclaims
        against the plaintiffs alleging, among other claims, trademark infringement.
        The
        plaintiffs’ antitrust and common law tort claims against the Tunica County
        Tourism Commission have been dismissed. The casino defendants have filed
        a
        motion for summary judgment on each of the claims alleged against them and
        the
        plaintiffs have filed a motion for summary judgment with respect to each
        of the
        casino defendants’ counterclaims. Both motions are currently pending before the
        court. The parties have agreed to postpone the mediation that was previously
        scheduled for October 6 and
        7, 2005
        to a date not yet determined. The trial date for this matter is currently
        set
        for August 28, 2006. The Company intends to vigorously defend against the
        lawsuit; however, it is too early to determine the outcome and the effect,
        if
        any, on the Company’s financial position and results of operations. The Company
        has established an accrual of $65,000 related to this litigation.
 
 MAJESTIC
        STAR SALES AND USE TAX ASSESSMENT
 
 In
        October 2005, the Department assessed Majestic Star for unpaid sales and
        uses
        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
        sales and 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. Subsequent to the assessment, Majestic
        Star’s management met with a representative of the Department to discuss the
        audit findings. Majestic Star has accrued $0.2 million at September 30, 2005
        based on what it believes to be its liability. 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,
                  and
 2.
              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.
  47
  
 
 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. At 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 the time Majestic Star established
        the receivable for sales taxes paid during the period 2001 through July 2003.
        Majestic Star also filed a claim for refund with the Department for the taxes
        paid. That claim is currently outstanding. Majestic Star believes that it
        has no
        liability for prepared food for human consumption based on the Hyatt decision
        (see Note 6-Investment in Buffington Harbor Riverboats, LLC for a discussion
        of
        Hyatt). In addition, Majestic Star believes it only has a liability for sales
        tax on the cost, and not retail value, of merchandise and other products
        provided to its customers at no charge. Majestic Star is pursing its dispute
        with the Department.
 FITZGERALDS
          BLACK HAWK LITIGATION
  On
          July
          14, 2005, the City of Black Hawk delivered a Notice of Abatement to Fitzgeralds
          Black Hawk. The notice alleged that a partially demolished historic structure
          owned by Fitzgeralds Black Hawk (the “Masonic Building”) constituted a public
          nuisance, and ordered that Fitzgeralds Black Hawk make substantial progress
          within seven (7) days to abate the nuisance by rebuilding the Masonic Building.
          Previously, the Masonic Building was partially demolished to preserve the
          façade
          and southwest wall by shoring, and in anticipation of encapsulating the
          remaining portions into a casino expansion. Two of the walls of the structure
          now remain in place supported by iron shoring beams.
  In
          response to the Notice of Abatement, we proposed to the City of Black Hawk
          a
          four-phased proposal to address the Masonic Building and casino expansion,
          with
          later phases being contingent upon obtaining financing. Under the proposal’s
          phase-one, which was not contingent on financing, the iron shoring beams
          on the
          outside of the façade and wall would have been moved to the inside to
          immediately improve the Masonic Building’s appearance, and casino expansion
          would be initiated by installation of caissons in the Building’s interior
          footprint, **** at
          an
          estimated cost of between $0.4 million and $0.5 million. While City of
          Black
          Hawk officials initially encouraged the submission of this phase-one proposal,
          it was rejected by Black Hawk’s City Council at its meeting on August 24, 2005.
 
 At
          that
          meeting, the City Council instead demanded that we use the funds available
          for
          phase-one construction, to exercise our option to purchase nearby vacant
          land
          owned by the City of Black Hawk. In response, Fitzgeralds Black Hawk proposed
          to
          exercise its option as requested, but to address financing constraints
          by making
          payments over three years. The City of Black Hawk rejected this offer,
          and by
          letter of October 3, 2005 instead notified us that it had unilaterally
          terminated our option, and would immediately entertain other offers to
          purchase
          the vacant land. Accordingly, on October 6, 2005, we filed a Complaint
          in the
          District Court for Jefferson County, Colorado, styled *Barden
          Colorado Gaming, LLC v. City of Black Hawk of Black Hawk* ,
          seeking
          a declaration that the option remains valid until September of 2006. Acquiring
          the vacant land under option would cost the Company approximately $1.5
          million.
 
 On
          November 10, 2005, Fitzgeralds Black Hawk was served with a Verified Complaint
          in an action styled *City
          of Black Hawk of Black Hawk v. Barden Colorado Gaming LLC* .
          The
          Verified Complaint, which has been filed in the Municipal Court for the
          City of
          Black Hawk, asserts that Fitzgeralds Black Hawk maintains a partially demolished
          historic building which constitutes a public nuisance. At this time, the
          City of
          Black Hawk seeks a finding that the structure violates the Municipal Code,
          an
          injunction prohibiting Fitzgeralds Black Hawk from keeping the alleged
          nuisance,
          an injunction directing Fitzgeralds Black Hawk to rebuild the historic
          structure, and assessment of a penalty in the amount of $499 for each day
          of the
          alleged violation, beginning on June 1, 2005. Fitzgeralds Black Hawk’ answer is
          due, and a hearing will be held, on December 21, 2005.  Fitzgeralds
          Black Hawk is currently evaluating the facts and applicable law as it relates
          to
          this case and thus it is too early to determine the likely outcome. Fitzgeralds
          Black Hawk expects the casino expansion to cost approximately $24.0 million,
          including the re-construction of the Masonic Building and the purchase
          of
          associated gaming equipment and other furniture and fixtures. The cost
          to
          re-construct the Masonic Building, without engaging in the full casino
          expansion, is anticipated to cost between $13.0 million and $16.0
          million.
 
  48
  **Item
                  6.**
              **Exhibits**
 
 (a)
              The
                  following exhibits are filed as part of this
                  report:
 Exhibit
                  No.
              Description
                  of Document
 
 10.1*
              Amendment
                  Number Three to Loan and Security Agreement dated as of June 15,
                  2005 by
                  and among The Majestic Star Casino, LLC, certain subsidiary signatories
                  thereto, the lender signatories thereto and Wells Fargo Foothill,
                  Inc., as
                  agent.
 
 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**
              Certification
                  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 registrant’s Form 8-K filed on August 12,
        2005.
 **
        Filed
        herewith.
 
  49
  **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:
                  November 14, 2005THE
                  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)
  S-1
  EXHIBIT
        INDEX
 
 10.1*
              Amendment
                  Number Three to Loan and Security Agreement dated as of June 15,
                  2005 by
                  and among The Majestic Star Casino, LLC, certain subsidiary signatories
                  thereto, the lender signatories thereto and Wells Fargo Foothill,
                  Inc., as
                  agent.
 
 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**
              Certification
                  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 registrant’s Form 8-K filed on August 12,
        2005.
 **
        Filed
        herewith.