##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.

FORM 10-Q

|  |  |                                                                                              
|- |  | ---------------------------------------------------------------------------------------------
|x |  | QUARTERLY REPORT FILED PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
| 
|  |  | For the quarterly period ended March 31, 2002                                                

OR

|  |  |                                                                                         
|- |  | ----------------------------------------------------------------------------------------
|o |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
| 
|  |  | For the transition period from_________________to_________________                      

Commission file number 333-0214

HORSESHOE GAMING HOLDING CORP.

---

(Exact name of registrant as specified in its charter)


|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Delaware                                                       |  | 88-0425131                          
|                                                               |  |                                     
|(State or other jurisdiction
of incorporation or organization) |  | (I.R.S. Employer Identification No.)
|                                                              
|18454 South West Creek Drive, Tinley Park, IL                  |  | 60477                               
|                                                               |  |                                     
|(Address of principal executive office)                        |  | (ZIP CODE)                          

(708) 429-8300

---

(Registrants telephone number, including area code)




---

(Former name, former address and former fiscal year, if changed since last report)


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

Yes   [X]     No [   ]





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TABLE OF CONTENTS



|                             |                                                                                               |                                                      |  |  |  |  |  | 
|---------------------------- | --------------------------------------------------------------------------------------------- | ---------------------------------------------------- |  |  |  |  |  | 
|PART I FINANCIAL INFORMATION
|                             | Item 1. FINANCIAL STATEMENTS                                                                 
|                             |                                                                                               | CONSOLIDATED CONDENSED BALANCE SHEETS               
|                             |                                                                                               | CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS     
|                             |                                                                                               | CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS     
|                             |                                                                                               | NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
|                             | Item 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|                             | Item 3. Quantitative and Qualitative Disclosure About Market Risk                            
|PART II OTHER INFORMATION   
|                             | Item 6. EXHIBITS AND REPORTS ON FORM 8-K                                                     
|SIGNATURE                   
|EXHIBIT 10.1                
|EXHIBIT 10.2                
|EXHIBIT 10.3                
|EXHIBIT 10.4                



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##### Table of Contents



HORSESHOE GAMING HOLDING CORP. AND SUBSIDIARIES
CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

|          |  |                                                                                                    |  |     
|--------- |  | -------------------------------------------------------------------------------------------------- |  | ----
|INDEX     |  |                                                                                                    |  | PAGE
|          |  |                                                                                                    |  |     
|PART I    |  | FINANCIAL INFORMATION                                                                              |  |     
|Item 1.   |  | Financial Statements                                                                               |  |     
|          |  | Consolidated Condensed Balance Sheets as of
March 31, 2002 and December 31, 2001                   |  | 3   
|          |  | Consolidated Condensed Statements of Operations for the
three months ended March 31, 2002 and 2001 |  | 4   
|          |  | Consolidated Condensed Statements of Cash Flows for the
three months ended March 31, 2002 and 2001 |  | 5   
|          |  | Notes to Consolidated Condensed Financial Statements                                               |  | 6   
|Item 2.   |  | Managements Discussion and Analysis of Financial Condition
and Results of Operations              |  | 7   
|Item 3.   |  | Quantitative and Qualitative Disclosures About Market Risk                                         |  | 10  
|PART II   |  | OTHER INFORMATION                                                                                  |  |     
|Item 6.   |  | Exhibits and Reports on Form 8-K                                                                   |  | 11  
|SIGNATURE |  | 12                                                                                                

2



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##### Table of Contents






PART I FINANCIAL INFORMATION




Item 1. FINANCIAL STATEMENTS




HORSESHOE GAMING HOLDING CORP. AND SUBSIDIARIES

CONSOLIDATED CONDENSED BALANCE SHEETS(in thousands, except for share data)

|                                     |                                                                                                         |                             |           |             |         |              |           |         |         | 
|------------------------------------ | ------------------------------------------------------------------------------------------------------- | --------------------------- | --------- | ----------- | ------- | ------------ | --------- | ------- | ------- | 
|                                     |                                                                                                         |                             |           | March 31,   |         | December 31,
|                                     |                                                                                                         |                             |           | 2002        |         | 2001        
|                                     |                                                                                                         |                             |           |             |         |             
|                                     |                                                                                                         |                             |           | (unaudited) |         |              |           |        
|ASSETS                              
|Current assets                       |                                                                                                         |                             |           |             |         |              |           |        
|                                     | Cash and cash equivalents                                                                               |                             | $         | 252,457     |         |              | $         | 220,817 |        
|                                     | Restricted cash                                                                                         |                             |           | 14,107      |         |              |           | 14,059  |        
|                                     | Accounts receivable, net of allowance for doubtful
accounts of $10,426 and $13,160, respectively        |                             |           | 13,952      |         |              |           | 13,516  |        
|                                     | Inventories                                                                                             |                             |           | 4,624       |         |              |           | 5,031   |        
|                                     | Prepaid expenses and other                                                                              |                             |           | 15,918      |         |              |           | 12,152  |        
|                                     |                                                                                                         |                             |           |             |         |              |           |        
|                                     |                                                                                                         | Total current assets        |           |             | 301,058 |              |           |         | 265,575 | 
|                                     |                                                                                                         |                             |           |             |         |              |           |        
|Property and equipment, net          |                                                                                                         |                             | 478,654   |             |         |              | 482,379   |        
|Goodwill, net                        |                                                                                                         |                             | 254,413   |             |         |              | 254,413   |        
|Other, net                           |                                                                                                         |                             | 58,269    |             |         |              | 54,892    |        
|                                     |                                                                                                         |                             |           |             |         |              |           |        
|                                     |                                                                                                         | $                           | 1,092,394 |             |         | $            | 1,057,259 |        
|                                     |                                                                                                         |                             |           |             |         |              |           |        
|LIABILITIES AND STOCKHOLDERS EQUITY
|Current liabilities                  |                                                                                                         |                             |           |             |         |              |           |        
|                                     | Current maturities of long-term debt                                                                    |                             | $         | 7,215       |         |              | $         | 9,823   |        
|                                     | Accounts payable                                                                                        |                             |           | 7,471       |         |              |           | 13,426  |        
|                                     | Accrued expenses and other                                                                              |                             |           | 111,734     |         |              |           | 81,428  |        
|                                     |                                                                                                         |                             |           |             |         |              |           |        
|                                     |                                                                                                         | Total current liabilities   |           |             | 126,420 |              |           |         | 104,677 | 
|                                     |                                                                                                         |                             |           |             |         |              |           |        
|Long-term liabilities                |                                                                                                         |                             |           |             |         |              |           |        
|                                     | Long-term debt, less current maturities                                                                 |                             |           | 729,750     |         |              |           | 729,698 |        
|                                     | Other long-term liabilities                                                                             |                             |           | 9,702       |         |              |           | 10,699  |        
|                                     |                                                                                                         |                             |           |             |         |              |           |        
|                                     |                                                                                                         | Total long-term liabilities |           |             | 739,452 |              |           |         | 740,397 | 
|                                     |                                                                                                         |                             |           |             |         |              |           |        
|Commitments and contingencies        |                                                                                                         |                             |           |             |         |              |           |        
|Stockholders equity                 |                                                                                                         |                             |           |             |         |              |           |        
|                                     | Common stock, $.01 par value, 50,000 shares authorized, 25,000
shares issued, 23,145 shares outstanding |                             |           |            |         |              |           |        |        
|                                     | Additional paid-in capital                                                                              |                             |           | 59,808      |         |              |           | 59,808  |        
|                                     | Retained earnings                                                                                       |                             |           | 219,499     |         |              |           | 205,162 |        
|                                     |                                                                                                         |                             |           |             |         |              |           |        
|                                     |                                                                                                         |                             | 279,307   |             |         |              | 264,970   |        
|                                     | Treasury stock, at cost, 1,855 shares                                                                   |                             |           | (52,785     | )       |              |           | (52,785 | )      
|                                     |                                                                                                         |                             |           |             |         |              |           |        
|                                     |                                                                                                         | Total stockholders equity  |           |             | 226,522 |              |           |         | 212,185 | 
|                                     |                                                                                                         |                             |           |             |         |              |           |        
|                                     |                                                                                                         | $                           | 1,092,394 |             |         | $            | 1,057,259 |        
|                                     |                                                                                                         |                             |           |             |         |              |           |        

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

3



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HORSESHOE GAMING HOLDING CORP. AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS

FOR THE THREE MONTHS ENDED MARCH 31

(unaudited)
(in thousands)

|                       |                                       |                              |         |         |         |      |         |         |         |  
|---------------------- | ------------------------------------- | ---------------------------- | ------- | ------- | ------- | ---- | ------- | ------- | ------- | -
|                       |                                       |                              |         | 2002    |         | 2001
|                       |                                       |                              |         |         |         |     
|Revenues               |                                       |                              |         |         |         |      |         |        
|                       | Casino                                |                              | $       | 207,933 |         |      | $       | 259,143 |        
|                       | Food and beverage                     |                              |         | 20,530  |         |      |         | 24,126  |        
|                       | Hotel                                 |                              |         | 7,136   |         |      |         | 7,512   |        
|                       | Retail and other                      |                              |         | 4,764   |         |      |         | 5,374   |        
|                       |                                       |                              |         |         |         |      |         |        
|                       |                                       |                              | 240,363 |         |         |      | 296,155 |        
|                       | Promotional allowances and other      |                              |         | (28,545 | )       |      |         | (32,683 | )      
|                       |                                       |                              |         |         |         |      |         |        
|                       |                                       | Net revenues                 |         |         | 211,818 |      |         |         | 263,472 |  
|                       |                                       |                              |         |         |         |      |         |        
|Expenses               |                                       |                              |         |         |         |      |         |        
|                       | Casino                                |                              |         | 110,441 |         |      |         | 144,899 |        
|                       | Food and beverage                     |                              |         | 5,902   |         |      |         | 7,725   |        
|                       | Hotel                                 |                              |         | 621     |         |      |         | 796     |        
|                       | Retail and other                      |                              |         | 1,862   |         |      |         | 1,616   |        
|                       | General and administrative            |                              |         | 26,319  |         |      |         | 33,576  |        
|                       | Corporate expenses                    |                              |         | 4,855   |         |      |         | 6,534   |        
|                       | Deferred compensation                 |                              |         | 3,116   |         |      |         | 418     |        
|                       | Preopening expenses                   |                              |         |        |         |      |         | 891     |        
|                       | Net (gain) loss on disposal of assets |                              |         | 1,294   |         |      |         | (59     | )      
|                       | Depreciation and amortization         |                              |         | 13,893  |         |      |         | 18,517  |        
|                       |                                       |                              |         |         |         |      |         |        
|                       |                                       | Total expenses               |         |         | 168,303 |      |         |         | 214,913 |  
|                       |                                       |                              |         |         |         |      |         |        
|Operating income       |                                       |                              | 43,515  |         |         |      | 48,559  |        
|Other income (expense) |                                       |                              |         |         |         |      |         |        
|                       | Interest expense                      |                              |         | (17,679 | )       |      |         | (24,155 | )      
|                       | Interest income                       |                              |         | 927     |         |      |         | 483     |        
|                       | Other, net                            |                              |         | (615    | )       |      |         | 450     |        
|                       |                                       |                              |         |         |         |      |         |        
|                       |                                       | Total other income (expense) |         |         | (17,367 | )    |         |         | (23,222 | )
|                       |                                       |                              |         |         |         |      |         |        
|Net income             |                                       | $                            | 26,148  |         |         | $    | 25,337  |        
|                       |                                       |                              |         |         |         |      |         |        

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

4



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HORSESHOE GAMING HOLDING CORP. AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

FOR THE THREE MONTHS ENDED MARCH 31

(unaudited)
(in thousands)

|                                               |                                                                                   |   |                                                                    |                                           |   |        |         |         |   |        |         |  
|---------------------------------------------- | --------------------------------------------------------------------------------- | - | ------------------------------------------------------------------ | ----------------------------------------- | - | ------ | ------- | ------- | - | ------ | ------- | -
|                                               |                                                                                   |   |                                                                    |                                           |   | 2002   |         | 2001   
|                                               |                                                                                   |   |                                                                    |                                           |   |        |         |        
|Cash flows from operating activities           |                                                                                   |   |                                                                    |                                           |   |        |         |        
|                                               | Net income                                                                        |   | $                                                                  | 26,148                                    |   |        | $       | 25,337  |  
|                                               | Adjustments to reconcile net income to
net cash provided by operating activities: |   |                                                                    |                                           |   |        |         |         |  
|                                               |                                                                                   |   | Depreciation and amortization                                      |                                           |   | 13,893 |         |         |   | 18,517 |        
|                                               |                                                                                   |   | Net (gain) loss on disposal of assets                              |                                           |   | 1,294  |         |         |   | (59    | )      
|                                               |                                                                                   |   | Amortization of debt discounts,
deferred finance charges and other |                                           |   | 789    |         |         |   | 1,119  |        
|                                               |                                                                                   |   | Provision for doubtful accounts                                    |                                           |   | 825    |         |         |   | 1,491  |        
|                                               |                                                                                   |   | Deferred compensation                                              |                                           |   | 3,116  |         |         |   | 418    |        
|                                               |                                                                                   |   | Net change in current assets and current liabilities               |                                           |   | (527   | )       |         |   | 13,234 |        
|                                               |                                                                                   |   |                                                                    |                                           |   |        |         |        
|                                               |                                                                                   |   |                                                                    | Net cash provided by operating activities |   |        | 45,538  |         |   |        | 60,057  |  
|                                               |                                                                                   |   |                                                                    |                                           |   |        |         |        
|Cash flows from investing activities           |                                                                                   |   |                                                                    |                                           |   |        |         |        
|                                               | Purchases of property and equipment                                               |   |                                                                    | (10,369                                   | ) |        |         | (13,664 | )
|                                               | Proceeds from sale of property and equipment                                      |   |                                                                    | 90                                        |   |        |         | 53      |  
|                                               | Net increase in other assets                                                      |   |                                                                    | (1,011                                    | ) |        |         | (414    | )
|                                               |                                                                                   |   |                                                                    |                                           |   |        |         |        
|                                               |                                                                                   |   |                                                                    | Net cash used in investing activities     |   |        | (11,290 | )       |   |        | (14,025 | )
|                                               |                                                                                   |   |                                                                    |                                           |   |        |         |        
|Cash flows from financing activities           |                                                                                   |   |                                                                    |                                           |   |        |         |        
|                                               | Proceeds from long-term debt                                                      |   |                                                                    |                                          |   |        |         | 5,000   |  
|                                               | Repayments on long-term debt                                                      |   |                                                                    | (2,608                                    | ) |        |         | (47,117 | )
|                                               | Capital dividends                                                                 |   |                                                                    |                                          |   |        |         | (505    | )
|                                               |                                                                                   |   |                                                                    |                                           |   |        |         |        
|                                               |                                                                                   |   |                                                                    | Net cash used in financing activities     |   |        | (2,608  | )       |   |        | (42,622 | )
|                                               |                                                                                   |   |                                                                    |                                           |   |        |         |        
|Net change in cash and cash equivalents        |                                                                                   |   | 31,640                                                             |                                           |   |        | 3,410   |        
|Cash and cash equivalents, beginning of period |                                                                                   |   | 220,817                                                            |                                           |   |        | 78,133  |        
|                                               |                                                                                   |   |                                                                    |                                           |   |        |         |        
|Cash and cash equivalents, end of period       |                                                                                   | $ | 252,457                                                            |                                           |   | $      | 81,543  |        
|                                               |                                                                                   |   |                                                                    |                                           |   |        |         |        
|Supplemental cash flow disclosure              |                                                                                   |   |                                                                    |                                           |   |        |         |        
|                                               | Interest paid                                                                     |   | $                                                                  | 735                                       |   |        | $       | 5,652   |  
|                                               | Accrued capital dividends                                                         |   | $                                                                  | 11,811                                    |   |        | $       | 12,487  |  

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

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HORSESHOE GAMING HOLDING CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)

Note 1  Basis of Presentation

The accompanying unaudited consolidated condensed financial statements of
Horseshoe Gaming Holding Corp., a Delaware corporation, and its subsidiaries
(the Company) have been prepared pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information and note disclosures
normally included in annual financial statements prepared in accordance with
generally accepted accounting principles have been condensed or omitted
pursuant to those rules and regulations. It is suggested that these
consolidated condensed financial statements be read in conjunction with the
financial statements and the notes thereto included in the Companys Form 10-K
for the year ended December 31, 2001. In the opinion of management, all
adjustments (which include normal recurring adjustments) necessary to present
fairly the financial position, results of operations and cash flows of all
periods presented have been made. The results of operations for the three
months ended March 31, 2002, are not necessarily indicative of the operating
results for the full year. Certain reclassifications have been made to the
financial statements as previously presented to conform to current
classifications.

Note 2  Goodwill and Other Intangible Assets

On January 1, 2002 the Company adopted Statements of Financial Accounting
Standards No. 142 Goodwill and Other Intangible Assets (SFAS 142). This
pronouncement changed the accounting for goodwill and intangible assets. SFAS
142 states that goodwill and indefinite-lived intangible assets are no longer
amortized but are reviewed for impairment annually (or more frequently if
impairment indicators arise). Separable intangible assets that are not deemed
to have an indefinite life continue to be amortized over their useful lives.

Included in the first quarter of 2001 in the accompanying Consolidated
Condensed Statements of Operations is approximately $3.8 million of
amortization on goodwill and intangibles. In addition, the Company has
concluded its initial impairment tests required pursuant to SFAS 142 and has
determined that no impairment charge is required.

Note 3  Deferred Compensation

The Company recorded deferred compensation of $3.1 million and $418,000
for the three months ended March 31, 2002 and 2001, respectively, related to
the appreciation of vested stock appreciation rights in the Horseshoe Gaming
Holding Corp. Equity Incentive Plan.

Note 4  Contingencies

The Company and its subsidiaries, during the normal course of operating
its business, become engaged in various litigation and other legal disputes.
In the opinion of the Companys management, the ultimate disposition of such
disputes will not have a material impact on the Companys operations.

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|        |  |                                                                                      
|------- |  | -------------------------------------------------------------------------------------
|Item 2. |  | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis provides information which
management believes is relevant to an assessment and understanding of the
consolidated financial condition and results of operations of Horseshoe Gaming
Holding Corp. (the Company) and its subsidiaries. The discussion should be
read in conjunction with the Companys consolidated condensed financial
statements and notes thereto.

This Quarterly Report on Form 10-Q contains certain forward looking
statements within the meaning of the Private Securities Litigation Reform Act
of 1995, which generally can be identified by the use of such terms such as
may, expect, anticipate, believe, continue, or similar variations or
the negative thereof. These forward looking statements are subject to certain
risks and uncertainties, such as risks associated with substantial
indebtedness, debt service and liquidity; risks of competition in the Companys
existing and future markets; failure to obtain or retain licenses or regulatory
approvals; changes in gaming laws and regulations; and other factors discussed
in the Companys Annual Report on Form 10-K for the year ended December 31,
2001, which could cause actual results to differ materially.

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Results of OperationsFinancial Highlights

|                                                   |  |                         |         |   |                              |   |                       |   |               |   |     |   |      |   | 
|-------------------------------------------------- |  | ----------------------- | ------- | - | ---------------------------- | - | --------------------- | - | ------------- | - | --- | - | ---- | - | 
|                                                   |  |                         |         |   | Three Months ended March 31, |   | % Increase/(Decrease)
|                                                   |  |                         |         |   |                              |   |                      
|                                                   |  |                         |         |   | 2002                         |   | 2001                  |   | 2002 vs. 2001
|                                                   |  |                         |         |   |                              |   |                       |   |              
|                                                   |  |                         |         |   | (dollars in thousands)       |   |                       |   |              
|Casino revenues                                    |  |                         |         |   |                              |   |                       |   |               |   |     |  
|                                                   |  | Bossier City            |         | $ | 64,107                       |   |                       | $ | 60,913        |   |     |   | 5    | %
|                                                   |  | Tunica                  |         |   | 69,503                       |   |                       |   | 65,882        |   |     |   | 5    | %
|                                                   |  | Hammond                 |         |   | 74,323                       |   |                       |   | 66,392        |   |     |   | 12   | %
|                                                   |  | Joliet (a)              |         |   |                             |   |                       |   | 65,956        |   |     |   | (b   | )
|                                                   |  |                         |         |   |                              |   |                       |   |               |   |     |  
|                                                   |  | $                       | 207,933 |   |                              | $ | 259,143               |   |               |   | -20 | %
|                                                   |  |                         |         |   |                              |   |                       |   |               |   |     |  
|Net revenues                                       |  |                         |         |   |                              |   |                       |   |               |   |     |  
|                                                   |  | Bossier City            |         | $ | 66,535                       |   |                       | $ | 63,029        |   |     |   | 6    | %
|                                                   |  | Tunica                  |         |   | 68,677                       |   |                       |   | 65,344        |   |     |   | 5    | %
|                                                   |  | Hammond                 |         |   | 76,606                       |   |                       |   | 67,483        |   |     |   | 14   | %
|                                                   |  | Joliet (a)              |         |   |                             |   |                       |   | 67,616        |   |     |   | (b   | )
|                                                   |  |                         |         |   |                              |   |                       |   |               |   |     |  
|                                                   |  | $                       | 211,818 |   |                              | $ | 263,472               |   |               |   | -20 | %
|                                                   |  |                         |         |   |                              |   |                       |   |               |   |     |  
|Operating income (loss)                            |  |                         |         |   |                              |   |                       |   |               |   |     |  
|                                                   |  | Bossier City (c)        |         | $ | 10,970                       |   |                       | $ | 7,970         |   |     |   | 38   | %
|                                                   |  | Tunica (c)              |         |   | 23,493                       |   |                       |   | 20,295        |   |     |   | 16   | %
|                                                   |  | Hammond (c)             |         |   | 16,784                       |   |                       |   | 8,797         |   |     |   | 91   | %
|                                                   |  | Joliet (a) (c)          |        |   |                              |   | 19,411                |   |               |   | (b  | )
|                                                   |  | Corporate expenses      |         |   | (4,855                       | ) |                       |   | (6,534        | ) |     |   | -26  | %
|                                                   |  | Preopening expenses (d) |         |   |                             |   |                       |   | (891          | ) |     |   | (b   | )
|                                                   |  | Deferred compensation   |         |   | (3,116                       | ) |                       |   | (418          | ) |     |   | (b   | )
|                                                   |  | Other                   |         |   | 239                          |   |                       |   | (71           | ) |     |   | (b   | )
|                                                   |  |                         |         |   |                              |   |                       |   |               |   |     |  
|                                                   |  | $                       | 43,515  |   |                              | $ | 48,559                |   |               |   | -10 | %
|                                                   |  |                         |         |   |                              |   |                       |   |               |   |     |  
|Other information                                  |  |                         |         |   |                              |   |                       |   |               |   |     |  
|                                                   |  | Interest expense, net   |         | $ | 16,752                       |   |                       | $ | 23,672        |   |     |   | -29  | %
|                                                   |  | Net income              |         | $ | 26,148                       |   |                       | $ | 25,337        |   |     |   | 3    | %
|Operating margin (operating
income/net revenue)(e) |  |                         |         |   |                              |   |                       |   |               |   |     |  
|                                                   |  | Bossier City (c)        |         |   | 16                           | % |                       |   | 13            | % |     | 3 | pts.
|                                                   |  | Tunica (c)              |         |   | 34                           | % |                       |   | 31            | % |     | 3 | pts.
|                                                   |  | Hammond (c)             |         |   | 22                           | % |                       |   | 13            | % |     | 9 | pts.
|                                                   |  | Joliet (c)              |         |   |                             | % |                       |   | 29            | % |     |   | (b   | )
|                                                   |  | Consolidated            |         |   | 21                           | % |                       |   | 18            | % |     | 3 | pts.



---

|(a) |  | Joliet was sold on July 31, 2001.                                                                                                       
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------
|   
|   
|   
|   
|(b) |  | Not meaningful.                                                                                                                         
|   
|   
|   
|   
|(c) |  | Before corporate allocations and other non-recurring items.                                                                             
|   
|   
|   
|   
|(d) |  | Includes advertising and production costs of $68,000.                                                                                   
|   
|   
|   
|   
|(e) |  | The % Increase/(Decrease) for operating margin represents the absolute
difference in percentage points (pts.) between the two periods.

8



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##### Table of Contents



Three months ended March 31, 2002 and 2001

Due to the sale of Joliet in July 2001, the Company experienced a
consolidated 20% decline in net revenues in the first quarter of 2002 versus
2001. Same-store net revenues at the three remaining properties increased a
combined 8% when compared to the March 31, 2001 quarter. Excluding the effects
of the January 1, 2002 adoption of Statements of Financial Accounting Standards
No. 142 Goodwill and Other Intangible Assets (SFAS 142), as further
discussed below, the Company generated first quarter 2002 increases in
operating income and operating margins at its Bossier City, Tunica and Hammond
properties as a result of net revenue increases.

With the adoption of SFAS 142, the Company ceased amortization on most
intangibles, including goodwill, on January 1, 2002. Such amortization expense
totaled approximately $3.8 million in the first quarter 2001. Excluding
amortization expense in the prior year period, operating income increased 31%,
15% and 52% in Bossier City, Tunica and Hammond, respectively, in the first
quarter of 2002 as compared to the prior year quarter. In addition, operating
margins in the first quarter of 2002 were 16%, 34% and 22% for Bossier City,
Tunica and Hammond, respectively, as compared to operating margins of 13%, 31%
and 16%, respectively, in the 2001 period when calculated on a comparable
basis.

First quarter 2002 operating income in Tunica include approximately $1.9
million in positive adjustments related to favorable resolutions on various tax
matters.

Corporate expenses decreased 26% in the first quarter of 2002, due
primarily to (i) the elimination of expense relating to the monthly consulting
payments with the former owners of Joliet as a result of the sale, (ii) a
reduction in life insurance on a key executive and (iii) a reduction in legal
expenses due to completion of the sale of the Joliet property.

Deferred compensation increased $2.7 million in the first quarter of 2002
due to additional appreciation on vested stock appreciation rights.

Interest expense decreased 27% in the first quarter of 2002 as compared to
the prior year period due to lower outstanding debt balances during the 2002
quarter.

Liquidity and Capital Resources

As of March 31, 2002, the Company had cash and cash equivalents of $252.5
million. During the first quarter of 2002, cash provided by operating
activities was $45.5 million, net cash used in investing activities was $11.3
million and net cash used in financing activities was $2.6 million.

The first call date on the Companys 9.375% Senior Subordinated Notes is
June 15, 2002. The Company is currently evaluating whether or not to call the
bonds on that date. If the Company calls the bonds in June 2002, the cash
required, including the call premium, would be approximately $166.5 million.
Cash flow from operations, existing cash balances and amounts available on the
Credit Facility would be sufficient to cover this expenditure.

The Company believes that the Companys cash and cash equivalents, cash
from operations and $150.0 million in available borrowing capacity will be
adequate to meet the Companys debt service obligations and capital expenditure
commitments for the next twelve months.

9



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##### Table of Contents



Contingencies

The Company and its subsidiaries, during the normal course of operating
its business, become engaged in various litigation and other legal disputes.
In the opinion of the Companys management, the ultimate disposition of such
disputes will not have a material impact on the Companys operations.




Item 3. Quantitative and Qualitative Disclosure About Market Risk

As of March 31, 2002 there were no material changes to the information
incorporated by reference in Item 7A of the Companys Annual Report on Form
10-K for the fiscal year ended December 31, 2001.

10



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##### Table of Contents






PART II OTHER INFORMATION




Item 6. EXHIBITS AND REPORTS ON FORM 8-K

|         |  |                                                                                                                 |  |  |  | 
|-------- |  | --------------------------------------------------------------------------------------------------------------- |  |  |  | 
|Exhibit  |  |                                                                                                                 |  |  |  | 
|Number   |  | Description                                                                                                     |  |  |  | 
|         |  |                                                                                                                 |  |  |  | 
|3.1 (a)  |  | Certificate of Incorporation of Horseshoe Gaming Holding Corp.                                                  |  |  |  | 
|3.2 (a)  |  | By-laws of Horseshoe Gaming Holding Corp.                                                                       |  |  |  | 
|10.1 (b) |  | Fourth Amendment to the Hammond Riverboat Gaming Project
Development Agreement, dated as of October 26, 2001.   |  |  |  | 
|10.2 (b) |  | Horseshoe Gaming Holding Corp. Executive Supplemental Medical
Plan, effective January 1, 2002.                  |  |  |  | 
|10.3 (b) |  | First Amendment to the Horseshoe Gaming Holding Corp. Equity
Incentive Plan.                                    |  |  |  | 
|10.4 (b) |  | Second Amendment to the Horseshoe Gaming Holding Corp. Equity
Incentive Plan.                                   |  |  |  | 
|        
|         |  |                                                                                                                 |  |  |  | 
|(a)      |  | Filed as an Exhibit to Horseshoe Gaming Holding Corp.s Form
S-4 Registration Statement filed on June 15, 1999. |  |  |  | 
|(b)      |  | Included herein.                                                                                                |  |  |  | 

Reports on Form 8-K filed during the quarter:

None.

11



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##### Table of Contents






SIGNATURE

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.

|                  |                                                                                                   |                   
|----------------- | ------------------------------------------------------------------------------------------------- | ------------------
|                  | HORSESHOE GAMING HOLDING CORP.
a Delaware corporation                                            
|                 
|Date: May 7, 2002
|                  | By:                                                                                               | /s/ Kirk C. Saylor
|                  |                                                                                                  
|                  | Kirk C. Saylor
Chief Financial Officer and Treasurer
(Principal Financial and Accounting Officer)

12



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##### Table of Contents



EXHIBIT INDEX

|         |  |                                                                                                                 |  |  |  | 
|-------- |  | --------------------------------------------------------------------------------------------------------------- |  |  |  | 
|Exhibit  |  |                                                                                                                 |  |  |  | 
|Number   |  | Description                                                                                                     |  |  |  | 
|         |  |                                                                                                                 |  |  |  | 
|3.1 (a)  |  | Certificate of Incorporation of Horseshoe Gaming Holding Corp.                                                  |  |  |  | 
|3.2 (a)  |  | By-laws of Horseshoe Gaming Holding Corp.                                                                       |  |  |  | 
|10.1 (b) |  | Fourth Amendment to the Hammond Riverboat Gaming Project
Development Agreement, dated as of October 26, 2001.   |  |  |  | 
|10.2 (b) |  | Horseshoe Gaming Holding Corp. Executive Supplemental Medical
Plan, effective January 1, 2002.                  |  |  |  | 
|10.3 (b) |  | First Amendment to the Horseshoe Gaming Holding Corp. Equity
Incentive Plan.                                    |  |  |  | 
|10.4 (b) |  | Second Amendment to the Horseshoe Gaming Holding Corp. Equity
Incentive Plan.                                   |  |  |  | 
|        
|         |  |                                                                                                                 |  |  |  | 
|(a)      |  | Filed as an Exhibit to Horseshoe Gaming Holding Corp.s Form
S-4 Registration Statement filed on June 15, 1999. |  |  |  | 
|(b)      |  | Included herein.                                                                                                |  |  |  |