**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 MARCH 31, 2006**
 
 or
  ̈
              **TRANSITION
                  REPORT PURSUANT TO SECTION 13 OR 15(d) **OF
                  THE SECURITIES EXCHANGE ACT OF
                  1934******For
                    the transition period from ______________ to
                    ______________**
 
 Commission
        file number: **333-06489**
 
 **Indiana**
              
              **THE
                  MAJESTIC STAR CASINO, LLC**
              
              **43-1664986****Indiana**
              
              **THE
                  MAJESTIC STAR CASINO CAPITAL CORP.**
              
              **35-2100872**(State
                  or other jurisdiction of incorporation or organization)
              
              (Exact
                  name of registrant as specified in its charter)
              
              (I.R.S.
                  Employer Identification No.)
 
 **301
        FREMONT STREET**
 **LAS
        VEGAS, NEVADA 89101**
 **(702)
        388 - 2224**
 (Address
        of principal executive offices, including zip code, and telephone number,
        including area code)
 
 Indicate
        by check mark whether the registrant (1) has filed all reports required to
        be
        filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
        the
        preceding 12 months (or for such shorter period that the registrant was required
        to file such reports), and (2) has been subject to filing requirements for
        the
        past 90 days.
 
 Yes
              x
              No
               ̈
 
 Indicate
        by check mark whether the registrant is a large accelerated filer, an
        accelerated filer, or a non-accelerated filer. See definition of “accelerated
        filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check
        one):
 
 Large
                  accelerated filer
               ̈
              Accelerated
                  filer
               ̈
              Non-accelerated
                  filer
              x
 
 Indicate
        by check mark whether the registrant is a shell company (as defined in Rule
        12b-2 of the Exchange Act).
 
 Yes
               ̈
              No
              x
 
 As
        of
        March 31, 2006, 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 Majestic Holdco, LLC)**
 
 **Index**
 
 PART
                  I
              FINANCIAL
                  INFORMATION
              Page
                  No.Item
                  1.
              Financial
                  Statements.Condensed
                  Consolidated Balance Sheets as of March 31, 2006 and December 31,
                  2005
                  (unaudited)
              1Condensed
                  Consolidated Statements of Operations for the three months ended
                  March 31,
                  2006 and 2005 (unaudited)
              2Condensed
                  Consolidated Statements of Changes in Member’s Deficit for the three
                  months ended March 31, 2006 and the year ended December 31, 2005
                  (unaudited)
              3Condensed
                  Consolidated Statements of Cash Flows for the three months ended
                  March 31,
                  2006 and 2005 (unaudited)
              4Notes
                  to the Condensed Consolidated Financial Statements (unaudited)
              6Item
                  2.
              Management’s
                  Discussion and Analysis of Financial Condition and Results of
                  Operations.
              31Item
                  3.
              Quantitative
                  and Qualitative Disclosures About Market Risk.
              44Item
                  4.
              Controls
                  and Procedures.
              44PART
                  II
              OTHER
                  INFORMATIONItem
                  1.
              Legal
                  Proceedings.
              46Item
                  1A.
              Risk
                  Factors.
              46Item
                  6.
              Exhibits.
              47SIGNATURES
              S-1
 
  i
  **PART
        I**   **FINANCIAL
        INFORMATION**
 **Item
        1.**   **Financial
        Statements.**
 **THE
        MAJESTIC STAR CASINO, LLC AND SUBSIDIARIES**
 **(A
        Wholly Owned Subsidiary of Majestic Holdco, LLC)**
 CONDENSED
        CONSOLIDATED BALANCE SHEETS
 (unaudited)
 March
                  31,
              
              December
                  31,2006
              
              2005ASSETSCurrent
                  assets:Cash
                  and cash equivalents
              
              $
              24,496,619
              
              $
              32,368,249Restricted
                  cash
              
              
              3,326,881
              
              
              3,190,000Accounts
                  receivable, less allowance for doubtful accounts of $736,008
                  and$668,575
                  as of March 31, 2006, and December 31, 2005, respectively
              
              
              4,209,636
              
              
              4,599,414Inventories
              
              
              793,135
              
              
              787,881Prepaid
                  expenses and deposits
              
              
              8,337,753
              
              
              2,433,601Receivable
                  from affiliate
              
              
              305,319
              
              
              169,011Other
                  current assets
              
              
              38,450
              
              
              137,914Total
                  current assets
              
              
              41,507,793
              
              
              43,686,070Property,
                  equipment and improvements, net
              
              
              273,892,396
              
              
              278,132,483Intangible
                  assets, net
              
              
              127,989,878
              
              
              128,854,668Goodwill
              
              
              48,075,479
              
              
              47,250,794Other
                  assets:Deferred
                  financing costs, net of accumulated amortizationof
                  $3,293,443 and $2,529,369 as of March 31, 2006, andDecember
                  31, 2005, respectively
              
              
              14,823,594
              
              
              15,263,897Deferred
                  financing costs, pushed down from Majestic Holdco, net ofaccumulated
                  amortization of $142,965 and $19,519 as ofMarch
                  31, 2006, and December 31, 2005, respectively
              
              
              2,798,046
              
              
              2,804,227Other
                  assets
              
              
              2,148,972
              
              
              1,966,693Total
                  other assets
              
              
              19,770,612
              
              
              20,034,817Total
                  assets
              
              $
              511,236,158
              
              $
              517,958,832LIABILITIES
                  AND MEMBER'S DEFICITCurrent
                  liabilities:Accounts
                  payable
              
              $
              2,890,858
              
              $
              3,559,207Short-term
                  note payable
              
              
              -
              
              
              984,590Current
                  portion of long-term debt
              
              
              167,820
              
              
              174,447Accrued
                  liabilities:Payroll
                  and related
              
              
              10,883,441
              
              
              9,266,247Interest
              
              
              18,717,566
              
              
              7,216,379Property
                  and franchise taxes
              
              
              7,572,143
              
              
              8,415,639Other
                  accrued liabilities
              
              
              13,957,734
              
              
              16,456,976Total
                  current liabilities
              
              
              54,189,562
              
              
              46,073,485Long-term
                  debt, net of current maturities
              
              
              528,841,387
              
              
              547,403,183Long-term
                  debt pushed down from Majestic Holdco, net of discount of
                  $16,833,051as
                  of March 31, 2006, and $18,203,665 as of December 31, 2005,
                  respectively
              
              
              46,666,949
              
              
              45,296,335Total
                  liabilities
              
              
              629,697,898
              
              
              638,773,003Member's
                  deficit
              
              
              (118,461,740
              )
              
              (120,814,171
              )Total
                  liabilities and member's deficit
              
              $
              511,236,158
              
              $
              517,958,832
 The
        accompanying notes are an integral part of these condensed consolidated
        financial statements.
  1
  **THE
        MAJESTIC STAR CASINO, LLC AND SUBSIDIARIES**
 **(A
        Wholly Owned Subsidiary of Majestic Holdco, LLC)**
 CONDENSED
        CONSOLIDATED STATEMENTS OF OPERATIONS
 (unaudited)
 
 For
                  The Three Months EndedMarch
                  31,2006
              
              2005OPERATING
                  REVENUES:Casino
              
              $
              103,885,491
              
              $
              71,082,647Rooms
              
              
              2,764,392
              
              
              1,794,104Food
                  and beverage
              
              
              4,355,076
              
              
              3,510,376Other
              
              
              1,748,010
              
              
              1,057,730Gross
                  revenues
              
              
              112,752,969
              
              
              77,444,857Less
                  promotional allowances
              
              
              12,834,835
              
              
              10,589,797Net
                  operating revenues
              
              
              99,918,134
              
              
              66,855,060OPERATING
                  COSTS AND EXPENSES:Casino
              
              
              22,930,677
              
              
              17,292,879Rooms
              
              
              1,184,204
              
              
              383,945Food
                  and beverage
              
              
              2,116,372
              
              
              1,501,341Other
              
              
              258,065
              
              
              259,478Gaming
                  taxes
              
              
              24,423,328
              
              
              15,298,189Advertising
                  and promotion
              
              
              4,150,145
              
              
              3,493,500General
                  and administrative
              
              
              15,028,535
              
              
              10,406,497Corporate
                  expense
              
              
              1,817,704
              
              
              1,197,070Economic
                  incentive tax - City of Gary
              
              
              1,806,989
              
              
              1,163,362Depreciation
                  and amortization
              
              
              7,772,749
              
              
              4,635,935Loss
                  on investment in Buffington HarborRiverboats,
                  LLC
              
              
              -
              
              
              605,698(Gain)
                  loss on disposal of assets
              
              
              (14,990
              )
              
              140Total
                  operating costs and expenses
              
              
              81,473,778
              
              
              56,238,034Operating
                  income
              
              
              18,444,356
              
              
              10,617,026OTHER
                  INCOME (EXPENSE):Interest
                  income
              
              
              136,067
              
              
              12,202Interest
                  expense
              
              
              (13,313,889
              )
              
              (7,236,375
              )Interest
                  expense - debt pushed down from Majestic Holdco
              
              
              (1,494,358
              )
              
              -Other
                  non-operating expense
              
              
              (27,248
              )
              
              (36,954
              )Total
                  other expense
              
              
              (14,699,428
              )
              
              (7,261,127
              )Net
                  income
              
              $
              3,744,928
              
              $
              3,355,899
 
 The
        accompanying notes are an integral part of these condensed consolidated
        financial statements.
  2
  **THE
        MAJESTIC STAR CASINO, LLC AND SUBSIDIARIES**
 **(A
        Wholly Owned Subsidiary of Majestic Holdco, LLC)**
 CONDENSED
        CONSOLIDATED STATEMENTS OF CHANGES IN MEMBER’S DEFICIT
 For
        the
        Three Months Ended March 31, 2006 and the Year Ended December 31,
        2005
 (unaudited)
 
 Member's
                  DeficitBalance,
                  December 31, 2004
              
              $
              (102,399,523
              )Net
                  loss
              
              
              (5,301,690
              )Contribution
                  of Deficit in BHPA from Affiliate
              
              
              (6,351,134
              )Distributions
                  to Barden Development, Inc.
              
              
              (6,761,824
              )Balance,
                  December 31, 2005
              
              $
              (120,814,171
              )Net
                  income
              
              
              3,744,928Distribution
                  to Barden Development, Inc.
              
              
              (1,392,497
              )Balance,
                  March 31, 2006
              
              $
              (118,461,740
              )
 
 The
        accompanying notes are an integral part of these condensed consolidated
        financial statements.
  3
  **THE
        MAJESTIC STAR CASINO, LLC AND SUBSIDIARIES**
 **(A
        Wholly Owned Subsidiary of Majestic Holdco, LLC)**
 CONDENSED
        CONSOLIDATED STATEMENTS OF CASH FLOWS
 (unaudited)
 
 For
                  The Three Months EndedMarch
                  31,2006
              
              2005CASH
                  FLOWS FROM OPERATING ACTIVITIES:Net
                  income
              
              $
              3,744,928
              
              $
              3,355,899Adjustments
                  to reconcile net income to net cashprovided
                  by operating activities:Depreciation
              
              
              6,907,959
              
              
              4,076,951Amortization
              
              
              864,790
              
              
              558,984Amortization
                  of deferred financing costs
              
              
              784,899
              
              
              -Amortization
                  of bond discount on 12 1/2% senior discount notes anddeferred
                  financing costs pushed down from Majestic Holdco
              
              
              1,494,358
              
              
              -Loss
                  on investment in Buffington Harbor Riverboats, LLC
              
              
              -
              
              
              605,698Loss
                  (gain) on disposal of assets
              
              
              (14,990
              )
              
              140Changes
                  in operating assets and liabilities, net of effects of
                  acquisition:Accounts
                  receivable, net
              
              
              389,778
              
              
              (13,886
              )Related
                  party payables
              
              
              (181,130
              )
              
              -Inventories
              
              
              (5,254
              )
              
              39,590Prepaid
                  expenses and deposits
              
              
              (5,904,150
              )
              
              (1,601,993
              )Other
                  assets
              
              
              (82,815
              )
              
              (581,309
              )Accounts
                  payable
              
              
              223,032
              
              
              127,665Accrued
                  payroll and other expenses
              
              
              1,172,896
              
              
              539,812Accrued
                  interest
              
              
              11,501,772
              
              
              6,633,766Other
                  accrued liabilities
              
              
              (4,514,800
              )
              
              599,736Net
                  cash provided by operating activities
              
              
              16,381,273
              
              
              14,341,053CASH
                  FLOWS FROM INVESTING ACTIVITIES:Increase
                  in restricted cash
              
              
              (136,881
              )
              
              -Acquisition
                  of property and equipment
              
              
              (3,161,899
              )
              
              (3,147,585
              )Additional
                  acquisition costs related to Trump Indiana acquisition
              
              
              188,795
              
              
              -Decrease
                  in prepaid leases and deposits
              
              
              -
              
              
              2,000Proceeds
                  from disposal of equipment
              
              
              168,874
              
              
              -Net
                  cash used in investing activities
              
              $
              (2,941,111
              )
              $
              (3,145,585
              )
 
 The
        accompanying notes are an integral part of these condensed consolidated
        financial statements.
  4
  **THE
        MAJESTIC STAR CASINO, LLC AND SUBSIDIARIES**
 **(A
        Wholly Owned Subsidiary of Majestic Holdco, LLC)**
 CONDENSED
        CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
 (unaudited)
 
 
 For
                  The Three Months EndedMarch
                  31,2006
              
              2005CASH
                  FLOWS FROM FINANCING ACTIVITIES:Issuance
                  costs for the 9 1/2% senior secured notes
              
              $
              (48,239
              )
              $
              -Issuance
                  costs for the 9 3/4% senior notes
              
              
              (241,463
              )
              
              -Issuance
                  costs for 12 1/2% senior discounted notespushed
                  down from Majestic Holdco
              
              
              (76,580
              )
              
              -Proceeds
                  from line of credit
              
              
              1,269,560
              
              
              3,000,000Repayment
                  of line of credit
              
              
              (19,800,000
              )
              
              (8,000,000
              )Advances
                  to affiliates - net
              
              
              -
              
              
              (2,871,634
              )Repayment
                  of debt
              
              
              (1,022,573
              )
              
              -Distributions
                  to Barden Development, Inc.
              
              
              (1,392,497
              )
              
              (1,153,493
              )Net
                  cash used in financing activities
              
              
              (21,311,792
              )
              
              (9,025,127
              )Net
                  (decrease) increase in cash and cash equivalents
              
              
              (7,871,630
              )
              
              2,170,341Cash
                  and cash equivalents, beginning of period
              
              
              32,368,249
              
              
              16,721,729Cash
                  and cash equivalents, end of period
              
              $
              24,496,619
              
              $
              18,892,070For
                  The Three Months Ended
                March
                  31,2006
              
              
              2005Supplemental
                  disclosure of cash flow information and non-cash investingand
                  financing activities:INTEREST
                  PAID:Line
                  of credit
              
              $
              1,164,709
              
              $
              602,610City
                  of Black Hawk - note payable
              
              
              15,410
              
              
              -Other
              
              
              6,131
              
              
              -Total
              
              $
              1,186,250
              
              $
              602,610NON-CASH
                  INVESTING AND FINANCING ACTIVITIES:Capital
                  assets acquired from incurring accounts payable and accrued
                  liabilities
              
              $
              240,048
              
              $
              989,493Deferred
                  financing and transaction costs related to the Trump
                  acquisitionincluded
                  in accrued liabilities
              
              
              129,058
              
              
              -Severance
                  costs included in goodwill and accrued payroll
              
              
              444,298
              
              
              -Total
              
              $
              813,404
              
              $
              989,493
 
 
 The
        accompanying notes are an integral part of these condensed consolidated
        financial statements.
  5
 **THE
              MAJESTIC STAR CASINO, LLC AND SUBSIDIARIES**
 **(A
              Wholly Owned Subsidiary of Majestic Holdco, LLC)**
 **NOTES
              TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **(unaudited)**
 **NOTE
        1. ORGANIZATION**
 
 The
        Majestic Star Casino, LLC (the “Company”) is a wholly owned subsidiary of
        Majestic Holdco, LLC (“Majestic Holdco”) which is a wholly owned subsidiary of
        Barden Development, Inc. (“BDI”). The Company was formed on December 8,
        1993 as an Indiana limited liability company to provide gaming and related
        entertainment to the public. The Company commenced gaming operations in the
        City
        of Gary at Buffington Harbor, located in Lake County, Indiana on June 7,
        1996.
 
 The
        Company is a multi-jurisdictional gaming company with operations in three
        states
        - Indiana, Mississippi and Colorado. The Company owns and operates two riverboat
        gaming facilities located in Gary, Indiana (“Majestic Star” and “Majestic Star
        II”, together the “Majestic Properties”). As of December 21, 2005, the
        Company also owns 100% of Buffington Harbor Riverboats, L.L.C. (“BHR”), that had
        previously been a 50% joint venture with Trump Indiana, Inc. (“Trump Indiana”).
        See Note 4 - Trump Indiana Acquisition. Also, as part of the Trump Indiana
        Acquisition, the Company acquired 50% of Buffington Harbor Parking Associates,
        LLC (“BHPA”) and through an affiliate of the Company, the other 50% interest in
        BHPA was contributed to the Company.
 
 The
        Company also owns other subsidiaries that operate the following
“Fitzgeralds-brand” casino properties during the periods presented in the
        accompanying consolidated financial statements:
 
 ·
            A
                casino-hotel located in Tunica County, Mississippi (“Fitzgeralds
                Tunica”). 
 ·
            A
                casino located in Black Hawk, Colorado (“Fitzgeralds Black Hawk”). On
                July 12, 2004, the Company entered into an agreement to sell
                substantially all of the net assets of Fitzgeralds Black Hawk, which
                sale
                was subsequently terminated as of April 14, 2005. The financial
                information for Fitzgeralds Black Hawk has been presented as continuing
                operations for all periods presented in the accompanying statements
                of
                operations. See Note 2 - Basis of
                Presentation. 
 The
        Company also has the following subsidiaries, which were formed for the purpose
        of facilitating financing transactions:
 
 ·
            The
                Majestic Star Casino Capital Corp. (“MSCC”) is a co-obligor with the
                Company for the $300.0 million 9 1⁄2% senior secured notes (the “Senior
                Secured Notes”) due 2010. MSCC has no assets or operations. See Note 8 -
                Long Term Debt. 
 ·
            Majestic
                Star Casino Capital Corp. II (“MSCC II”) is a co-obligor with the
                Company for the $200.0 million 9 3⁄4% senior notes (the “Senior Notes”)
                due 2011. MSCC II has no assets or operations. See Note 8 - Long
                Term
                Debt. 
 Following
        the completion of the defeasance of the remaining Majestic Investor Holdings,
        LLC (“Investor Holdings”) 11.653% notes (“Investor Notes”) on March 6, 2006, we
        terminated the existence of Majestic Investor Capital Corp (an entity created
        to
        facilitate the issuance of the Investor Notes). We also merged Majestic
        Investor, LLC and Investor Holdings into The Majestic Star Casino, LLC on
        March
        21, 2006 and March 22, 2006, respectively, thus making Barden Mississippi,
        LLC
        and Barden Colorado, LLC direct subsidiaries of The Majestic Star Casino,
        LLC.
 
 Except
        where otherwise noted, the words “we,” “us,” “our,” and similar terms, as well
        as the “Company,” refer to The Majestic Star Casino, LLC and all of its direct
        and indirect subsidiaries.
  6
 **THE
              MAJESTIC STAR CASINO, LLC AND SUBSIDIARIES**
 **(A
              Wholly Owned Subsidiary of Majestic Holdco, LLC)**
 **NOTES
              TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
              (CONTINUED)**
 **(unaudited)**
  **NOTE
        2. BASIS OF PRESENTATION**
 
 The
        accompanying consolidated financial statements are unaudited. All inter-company
        transactions and balances have been eliminated. Investments in affiliates
        in
        which the Company has the ability to exercise significant influence, but
        not
        control, are accounted for by the equity method. These financial statements
        have
        been prepared in accordance with accounting principles generally accepted
        in the
        United States of America, or “GAAP” for interim financial information and with
        the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly,
        certain information and footnote disclosures normally included in financial
        statements have been condensed or omitted. The preparation of financial
        statements in conformity with GAAP requires management to make estimates
        and
        assumptions that affect the reported amounts of assets and liabilities and
        disclosure of contingent assets and liabilities at the date of the financial
        statements and the reported amounts of revenues and expenses during the
        reporting period. 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.
 
 In
        the
        opinion of management, all adjustments (which include normal recurring
        adjustments) considered necessary for a fair statement of the results for
        the
        interim periods have been made. The results for the three months ended
        March 31, 2006 are not necessarily indicative of results to be expected for
        the full fiscal year. The financial statements should be read in conjunction
        with the financial statements and notes thereto included in The Majestic
        Star
        Casino, LLC’s Annual Report on Form 10-K for the year ended December 31,
        2005.
 
 PUSH
        DOWN
        OF DISCOUNT NOTES FROM MAJESTIC HOLDCO - The Company’s consolidated balance
        sheet as of March 31, 2006 and December 31, 2005 includes the $46.7
        million and $45.3 million, respectively, of Discount Notes, net of discount,
        issued by Majestic Holdco in connection with the Trump Indiana Acquisition
        in
        December 2005 (see Note 4). The Discount Notes are solely the obligation
        of
        Majestic Holdco and Majestic Holdco, Inc. (the co-issuer with Majestic Holdco)
        and are unsecured. Neither the Company nor any of its direct or indirect
        subsidiaries guarantees the Discount Notes nor are the equity or assets of
        the
        Company or its direct or indirect subsidiaries security for the Discount
        Notes.
        Further, the Indentures governing the Senior Notes and the Senior Secured
        Notes
        and the loan and security agreement which governs our Senior Secured Credit
        Facility preclude distributions by the Company to Majestic Holdco unless
        certain
        financial tests are met. In addition to the push down of the Discount Notes,
        the
        Company is also reflecting $2.8 million of Discount Notes issuance costs,
        net of
        amortization, on its consolidated balance sheets as of March 31, 2006 and
        December 31, 2005, and amortization of issuance costs of $124,000 and
        interest expense of $1.4 million on its consolidated statement of operations
        for
        the quarter ended March 31, 2006. A likely scenario for the repayment of
        these Discount Notes is from cash flows of the Company or a refinancing of
        the
        Company’s indebtedness, together with the indebtedness of Majestic Holdco. The
        Discount Notes have been “pushed-down” to the Company pursuant to the guidelines
        of SEC Staff Accounting Bulletin Topic 5(J).
 
 TERMINATED
        SALE OF FITZGERALDS BLACK HAWK - On July 12, 2004, the Company entered into
        an agreement to sell substantially all of the assets subject to certain
        liabilities of Fitzgeralds Black Hawk. On April 14, 2005, 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. Because the Purchase Agreement was
        mutually terminated in April 2005, the financial information of Fitzgeralds
        Black Hawk has been reclassified to be presented as continuing operations.
        During the period the property was considered as held for sale, no depreciation
        or amortization expense was recognized on any of the assets. When the sale
        was
        terminated, in April 2005, the depreciation and amortization of the assets
        was
        caught up as if the sale had not been contemplated.
 
 PURCHASE
        OF TRUMP INDIANA, INC. - On December 21, 2005, the Company completed the
        stock purchase of Trump Indiana, which included Trump Indiana’s 50% interests in
        BHR and BHPA. (See Note 4 - Trump Indiana Acquisition.)
  7
 THE
            MAJESTIC STAR CASINO, LLC AND
            SUBSIDIARIES **(A
              Wholly Owned Subsidiary of Majestic Holdco, LLC)**
 **NOTES
              TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
              (CONTINUED)**
 **(unaudited)**
  PROMOTIONAL
        ALLOWANCES - Cash incentives related to gaming play are recorded as a reduction
        of gross revenues. Such amounts totaled $8.0 million and $6.6 million for
        the
        quarters ended March 31, 2006, and 2005, respectively. In addition, the
        retail value of accommodations, food and beverage, and other services furnished
        to hotel/casino guests without charge is included in gross revenue and then
        deducted as promotional allowances. The estimated departmental cost of providing
        such promotional allowances is included primarily in casino expenses as
        follows:
 
 For
                  The Three Months Ended March 31,2006
              
              2005Rooms
              
              $
              588,356
              
              $
              608,693Food
                  and Beverage
              
              
              2,569,654
              
              
              2,249,667Other
              
              
              116,866
              
              
              112,800Total
              
              $
              3,274,876
              
              $
              2,971,160
 
 The
        following schedule lists total cash incentives and the retail cost of hotel,
        food, beverage, and other, which comprise the total promotional
        allowances.
 
 For
                  The Three Months Ended March 31,2006
              
              2005Cash
                  based promotional activities
              
              $
              6,162,999
              
              $
              5,266,399Slot
                  club and other
              
              
              1,795,855
              
              
              1,295,040Retail
                  cost of rooms, food, beverage and other
              
              
              4,875,981
              
              
              4,028,358Total
              
              $
              12,834,835
              
              $
              10,589,797
 
 **NOTE
        3. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS**
 
 The
        Company has or will be required to adopt the following accounting policies
        resulting from the following newly issued standards.
 
 
 ·
            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 adopted SFAS 151 without any material
                impact on the Company’s financial position, results of operations or cash
                flows. 
 ·
            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 Statement,” 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 adopted SFAS 154 without any material
                impact on the Company’s financial position, results of operations or cash
                flows. 
 
  8
 THE
            MAJESTIC STAR CASINO, LLC AND
            SUBSIDIARIES **(A
              Wholly Owned Subsidiary of Majestic Holdco, LLC)**
 **NOTES
              TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
              (CONTINUED)**
 **(unaudited)**
  **NOTE
        4. TRUMP INDIANA ACQUISITION**
 
 On
        December 21, 2005, the Company acquired Trump Indiana (subsequently renamed
        Majestic Star II) pursuant to a Stock Purchase Agreement (“SPA”) dated
        November 3, 2005 with Trump Entertainment Resorts Holdings, L.P. (“TERH”)
        for a purchase price of $253.0 million, subject to certain specified
        adjustments. Trump Indiana owned and operated a riverboat casino and land-based
        hotel adjacent to Majestic Star. As a result of the stock purchase, we acquired
        Trump Indiana’s 50% interest in our joint venture, BHR, which owns and operates
        the land-based pavilion and docking facility. The Company also acquired Trump
        Indiana’s 50% interest in BHPA, a joint venture with an affiliate of ours (which
        contributed its interest in BHPA at closing of the Trump Indiana acquisition)
        which owns and operates the parking garage.
 
 The
        Company’s consolidated statement of operations for the quarter ended
        March 31, 2006 includes results for Majestic Star II, BHR and BHPA.
        Prior to the purchase, the operations for BHR were accounted for under the
        equity method of accounting as an investment in a joint venture. Also, prior
        to
        December 21, 2005, the Company was a lessee of the parking garage owned and
        operated by BHPA. With the acquisition of Trump Indiana and contribution
        of our
        affiliate’s equity interest in BHPA, the lease was terminated and we recognized
        all of the operating expenses of BHPA during the quarter ended March 31,
        2006.
 
 The
        acquisition of Trump Indiana is being accounted for under the purchase method
        of
        accounting. In order to assist the Company in assigning values to the assets
        acquired and liabilities assumed, the Company engaged a third party to assist
        with the valuation of the significant identifiable intangible assets acquired,
        as well as the other tangible assets acquired and certain liabilities assumed.
        The third party valuation report is still in draft form. In addition, the
        Company is working with TERH on finalizing the working capital adjustment
        to the
        purchase price. Since the purchase price allocation is still in process,
        the
        valuation of intangible and tangible assets, and liabilities assumed is subject
        to refinement. Changes to the allocation of the purchase price may also affect
        goodwill. The Company has up to one year from the acquisition date to finalize
        the valuation of intangible and tangible assets, and assumed liabilities.
 
 Since
        December 31, 2005, goodwill had been adjusted as follows:
 
 Goodwill
                  as of December 31, 2005
              
              $
              41,328,396Severance
                  payments
              
              
              1,127,063Other
              
              
              (302,378
              )Goodwill
                  as of March 31, 2006
              
              $
              42,153,081
 
 
 Prior
        to
        the Trump Indiana acquisition, the Company had identified approximately $14.4
        million of costs that would be eliminated as part of our acquisition plan.
        In
        the first quarter of 2006, the Company began laying off employees to execute
        on
        this plan. In conjunction with the layoffs, the Company incurred severance
        and other compensation that was outside the normal compensation and bonuses
        payable to its laid off employees. The Company has capitalized severance
        and
        other compensation accrued or paid as goodwill pursuant to the guidance in
        EITF
        95-3.
 
 In
        the
        first quarter of 2006, the Company incurred additional costs related to the
        acquisition in the amount of $0.2 million. These additional costs are comprised
        principally of professional fees.
 
 
  9
 THE
            MAJESTIC STAR CASINO, LLC AND
            SUBSIDIARIES **(A
              Wholly Owned Subsidiary of Majestic Holdco, LLC)**
 **NOTES
              TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
              (CONTINUED)**
 **(unaudited)**
  **NOTE
        5. RESTRICTED CASH**
 
 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. Majestic Star
        II
        also has a self-insured worker’s compensation program which required a $1.0
        million letter of credit which is collateralized by a $1.0 million certificate
        of deposit. BHR also has a self-insured worker’s compensation program which
        required a $0.1 million letter of credit which is collateralized by a $0.1
        million certificate of deposit. Our certificates of deposit are recorded
        in
        Restricted Cash on the Company’s consolidated balance sheets.
 
 To
        secure
        payment of claims under the worker’s 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. This letter of credit
        is
        secured by a certificate of deposit. The letter of credit and certificate
        of
        deposit have been assigned to The Majestic Star Casino, LLC as a result of
        the
        merger of Investor Holdings into the Company.
 
 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.
 
 Our
        Majestic Star and Majestic Star II properties are each required to have a
        $1.0 million surety bond in place with the IGC. Majestic Star II’s surety
        bond is in place. Majestic Star’s surety bond has not been placed pending surety
        bond language from the IGC.
 
 
 **NOTE
        6. INTANGIBLE ASSETS**
 
 The
        gross
        carrying amount and accumulated amortization of the Company’s intangible assets,
        other than goodwill, as of March 31, 2006 and December 31, 2005 are as
        follows:
 
 As
                  of March 31, 2006
              
              Gross
                  Carrying
              
              Accumulated
              
              Net
                  Amount
              
              ExpectedAmount
              
              Amortization
              
              March
                  31, 2006
              
              LifeIntangible
                  assets:
              
              (in
                  thousands)Customer
                  relationship
              
              $
              24,540
              
              $
              (4,817
              )
              $
              19,723
              
              
              8
                  yrsTrade
                  name
              
              
              3,450
              
              
              (1,490
              )
              
              1,960
              
              
              10
                  yrsGaming
                  license
              
              
              105,700
              
              
              -
              
              
              105,700
              
              
              indefiniteRiverboat
                  excursion license
              
              
              700
              
              
              (93
              )
              
              607
              
              
              15
                  yrsTotal
                  intangible assets
              
              $
              134,390
              
              $
              (6,400
              )
              $
              127,990As
                  of December 31, 2005
              
              
              Gross
                  Carrying
              
              
              Accumulated
              
              
              Net
                  Amount
              
              
              ExpectedAmount
              
              
              Amortization
              
              
              December
                  31, 2005
              
              
              LifeIntangible
                  assets:
              
              (in
                  thousands)Customer
                  relationship
              
              $
              24,540
              
              $
              (4,050
              )
              $
              20,490
              
              
              8
                  yrsTrade
                  name
              
              
              3,450
              
              
              (1,403
              )
              
              2,047
              
              
              10
                  yrsGaming
                  license
              
              
              105,700
              
              
              -
              
              
              105,700
              
              
              indefiniteRiverboat
                  excursion license
              
              
              700
              
              
              (82
              )
              
              618
              
              
              15
                  yrsTotal
                  intangible assets
              
              $
              134,390
              
              $
              (5,535
              )
              $
              128,855
 
  10
 **THE
              MAJESTIC STAR CASINO, LLC AND SUBSIDIARIES**
 **(A
              Wholly Owned Subsidiary of Majestic Holdco, LLC)**
 **NOTES
              TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
              (CONTINUED)**
 **(unaudited)**
  In
        December 2005, the Company recorded intangible assets from the Trump Indiana
        Acquisition of $105.7 million relating to the value of the gaming license
        and
        $16.7 million for the value assigned to the customer database. The Company
        utilized an independent third-party valuation to assist with the preliminary
        allocation of the purchase price. (See Note 4).
 
 In
        accordance with SFAS 144, Fitzgeralds Black Hawk discontinued amortizing
        its
        intangible assets on July 12, 2004, the date of the sales agreement.
        Consequently, there had been no amortization of expense recorded on its
        intangible assets for the period July 12, 2004 to April 14, 2005 (the
        date the Fitzgeralds Black Hawk was no longer considered held for sale).
 
 Goodwill
        and indefinite-lived intangible assets are not amortized but are reviewed
        annually for impairment.
 
 **NOTE
        7. INVESTMENT IN BUFFINGTON HARBOR RIVERBOATS, L.L.C.**
 
 On
        October 31, 1995, the Company and Trump Indiana entered into the First
        Amended and Restated Operating Agreement of BHR for the purpose of acquiring
        and
        developing certain facilities for the gaming operations in the City of Gary
        (“BHR Property”). The Company and Trump Indiana each had a 50% non-controlling
        interest in BHR. Prior to December 21, 2005, the Company accounted for its
        interest in the joint venture under the equity method of accounting.
 
 BHR
        is
        responsible for the management, development and operation of the BHR Property.
        The Company and Trump Indiana had each entered into an agreement with BHR
        (the
“Berthing Agreement”) to use the BHR Property for their respective gaming
        operations and committed to pay the cash operating losses of BHR as additional
        berthing fees. All expenditures requiring a cash outlay by BHR were billed
        to
        Trump Indiana and the Company at cost. Accordingly, BHR recorded as expenses
        the
        cost of providing such services and recorded as other revenues the amounts
        billed to Trump Indiana and the Company.
 
 The
        Company paid to BHR approximately $1.3 million of berthing fees for the
        three-month period ended March 31, 2005. Such amounts were recorded in
        general and administrative expense in the consolidated statements of operations.
        On December 21, 2005, BHR became a wholly owned subsidiary and the Berthing
        Agreements between BHR and the Company and BHR and Trump Indiana were
        terminated.
 
 Majestic
        Star uses the food and beverage operations at BHR to provide its casino
        customers with complimentary meals, beverages and services. Late in 2003,
        two
        new restaurants opened at BHR. Passports-A World Class Buffet (“Passports”)
        replaced the existing buffet and Koko Taylor’s Blues Cafe (“Koko Taylor’s”)
        replaced the South Shore Grill. In addition, both Passports and Koko Taylor’s
        are run by a third party operator. The Company sends guests to these
        restaurants, and the other food and beverage operators at BHR and the
        proprietors of these businesses charge the Company for the meals served and
        the
        services provided. The Company paid approximately $0.9 million to these
        restaurants, other food and beverage operators and for valet services for
        the
        three-month period ended March 31, 2005. Food, beverage and valet costs are
        recorded in casino expense in the Company’s consolidated statements of
        operations. After the Company and Trump Indiana reimbursed BHR for all cash
        operational losses, the remaining net loss of BHR resulted from depreciation
        expense associated with the BHR property and was recorded as equity in loss
        of
        joint venture in the Company’s consolidated statements of operations. Such loss
        was approximately $0.6 million for the three-month period ended March 31,
        2005.
 
 The
        following represents selected financial information for BHR for the three-month
        period ended March 31, 2005 when the Company accounted for its 50% interest
        in
        BHR under the equity method:
 
  11
 THE
            MAJESTIC STAR CASINO, LLC AND
            SUBSIDIARIES **(A
              Wholly Owned Subsidiary of Majestic Holdco, LLC)**
 **NOTES
              TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
              (CONTINUED)**
 **(unaudited)**
  
 STATEMENT
                  OF OPERATIONS
              
              For
                  theThree
                  Months EndedMarch
                  31, 2005Gross
                  revenues
              
              $
              3,048,670Operating
                  loss
              
              $
              (1,211,340
              )Net
                  loss
              
              $
              (1,211,398
              )
 
 BHR
        Sales and Use Tax Assessments
  1998-2001
        Tax Years. In
        October 2002, the Indiana Department of Revenue (the “Department”) assessed BHR
        for unpaid use tax for 1998 and unpaid sales and use taxes for 1999 through
        2001
        in the total amount of $0.4 million, excluding interest. The assessments
        related
        to purchases of capital assets and supplies, vehicle leases and rental of
        other
        items of personal property, for which no sales tax was paid and no use tax
        was
        self-assessed. In addition, for the years 1999 through 2001, the Department
        assessed tax on BHR’s provision of food, provided on a complimentary basis, to
        the patrons and employees of BHR’s members, Majestic Star and Trump Indiana.
        Sales tax was assessed on BHR’s cost of the food, as measured by the members’
periodic reimbursements to BHR. BHR paid the use tax portion of the assessment
        and filed a protest of the proposed assessments of sales tax in December
        2002.
 
 BHR
        is
        disputing the assessment of sales tax on food provided at no charge, to the
        employees and patrons of Majestic Star and Trump Indiana, 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 provided 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) and should be treated as though the acts had been performed
        by
        BHR’s joint venture partners, Majestic Star and Trump Indiana.
 
 The
        Department conducted a hearing on the protest in August 2005 and in October
        2005, issued a ruling waiving penalties but upholding the proposed $0.4 million
        assessment. BHR filed a petition with the Indiana Tax Court in March 2006,
        protesting the Department’s ruling with regard to the 1999-2001 tax years. The
        Tax Court has scheduled a preliminary pre-trial conference in that case for
        May
        19, 2006.
  12
 **THE
              MAJESTIC STAR CASINO, LLC AND SUBSIDIARIES**
 **(A
              Wholly Owned Subsidiary of Majestic Holdco, LLC)**
 **NOTES
              TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
              (CONTINUED)**
 **(unaudited)**
  2002-2004
        Tax Years. In
        October 2005, the Department assessed BHR $0.3 million in sales and use taxes
        for the 2002 tax year, inclusive of interest and penalties, for many of the
        same
        sales tax and use tax items as were assessed for the earlier years. However,
        for
        2002, unlike prior years, the Department assessed sales tax on complimentary
        food provided to the patrons of Majestic Star and Trump Indiana based on
        the *retail* value of
        the items provided rather than on the *cost* of
        those
        items to BHR. BHR has not reserved for the assessment related to the prepared
        meals provided to the employees and patrons of Majestic Star and Trump Indiana.
        On November 15, 2005, BHR paid the use tax portion of the assessment for
        the 2002 tax year under Indiana’s tax amnesty program, thereby eliminating
        interest and penalties on the amount paid. The remaining amount outstanding
        of
        $0.2 million relates to the same issues as are faced by Majestic Star in
        its
        sales and use tax audits (see Note 9). BHR has protested the remainder of
        the
        assessments for 2002. The Department held a hearing on the 2002 tax year
        on
        April 7, 2006, and is expected to issue its ruling later this year. In
        March 2006, the Department provided BHR with preliminary audit reports
        indicating its intention to assess BHR $0.3 million sales and use tax exclusive
        of interest and penalties for tax years 2003 and 2004. No notice of proposed
        assessment has yet been received by BHR for those years. Should the Department
        maintain its position that sales taxes are due on the retail value of
        complimentary meals BHR provided to employees of Majestic Star and Trump
        Indiana, BHR’s estimated 2005 sales tax exposure for the complimentary meals
        will be $0.1 million. Pursuant to the terms of the SPA, TEHR is obligated
        to
        indemnify the Company for 50% of BHR’s pre-closing tax liabilities.
 
 
 **NOTE
        8. LONG-TERM DEBT**
 
 March 31,
                2006
              
              December 31,
                2005Long-term
                  debt outstanding is as follows:$300,000,000
                  of 9 1⁄2% senior secured notes
              
              $
              300,000,000
              
              $
              300,000,000$200,000,000
                  of 9 3⁄4% senior notes
              
              
              200,000,000
              
              
              200,000,000$80,000,000
                  senior secured credit facility
              
              
              28,681,906
              
              
              47,212,346Capitalized
                  leases and other debt
              
              
              327,301
              
              
              365,284Total
                  long-term debt
              
              
              529,009,207
              
              
              547,577,630Less
                  current maturities
              
              
              167,820
              
              
              174,447Total
                  long-term debt, net of current maturities
              
              $
              528,841,387
              
              $
              547,403,183
 
 
 **DEBT
        OFFERINGS AND RELATED TRANSACTIONS**
 
 On
        December 21, 2005, the Company issued $40.0 million of 9 1⁄2% Senior
        Secured Notes due 2010 (the “Additional Senior Secured Notes”) and $200.0
        million of 9 3⁄4% Senior Notes due 2011 (the “Senior Notes”). The Additional
        Senior Secured Notes have terms, guarantees and conditions that are
        substantially similar to the $260.0 million of 9 1⁄2% senior secured notes
        issued by the Company in October 2003 (together with the Additional Senior
        Secured Notes, the “Senior Secured Notes”). The Senior Notes are unsecured
        obligations of the Company, ranking equally with all existing and future
        senior
        unsecured obligations and senior to all of the Company’s existing and future
        subordinated indebtedness. However, as neither the Senior Notes nor the related
        guarantees are secured, they are effectively subordinated to all of the
        Company’s senior secured indebtedness, including the $300.0 million aggregate
        principal amount of the Senior Secured Notes and the Company’s $80.0 million
        senior secured credit facility (the “Senior Secured Credit Facility”), to the
        extent of the value of the assets securing such indebtedness.
  13
 THE
            MAJESTIC STAR CASINO, LLC AND
            SUBSIDIARIES **(A
              Wholly Owned Subsidiary of Majestic Holdco, LLC)**
 **NOTES
              TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
              (CONTINUED)**
 **(unaudited)**
  In
        addition, on December 21, 2005, the parent to the Company, Majestic Holdco,
        issued $63.5 million aggregate principal at maturity of 12 1⁄2% Senior
        Discount Notes (the "Discount Notes") due 2011. The net proceeds from the
        Discount Notes were contributed to the Company to assist in funding the
        transactions discussed above. The Discount Notes are not guaranteed by the
        Company. The Discount Notes are senior unsecured obligations of Majestic
        Holdco,
        ranking equally with all of its existing and future senior obligations and
        senior to all its future subordinated indebtedness. The Discount Notes are
        structurally subordinated to all of the Company’s indebtedness (including the
        Senior Notes, the Senior Secured Notes and the Senior Secured Credit Facility)
        and are effectively subordinated in respect of the capital stock of the Company
        pledged to secure the Company’s Senior Secured Credit Facility and the Senior
        Secured Notes. The indentures governing the Senior Notes and Senior Secured
        Notes restrict distributions from the Company to Majestic Holdco unless certain
        financial tests have been met. A likely scenario for the repayment of these
        Discount Notes is from cash flows of the Company or a refinancing of the
        Company’s indebtedness, together with the indebtedness of Majestic Holdco. The
        Discount Notes have been “pushed-down” to the Company pursuant to the guidelines
        of SEC Staff Accounting Bulletin Topic 5(J).
 
 **SENIOR
        SECURED NOTES**
 
 The
        Senior Secured Notes bear interest at a fixed annual rate of 9.5% payable
        on
        April 15 and October 15 of each year and have a maturity date of
        October 15, 2010. The Senior Secured Notes are guaranteed by all of our
        subsidiaries (other than Majestic Star Casino Capital Corp.).The Senior Secured
        Notes are secured by a pledge of substantially all of the Company’s and its
        subsidiaries’ current and future assets, other than certain excluded assets. The
        Senior Secured Notes are also collateralized by our equity interests held
        by
        Majestic Holdco and our equity interests in the subsidiary
        guarantors.
 
 The
        indenture governing the Senior Secured Notes (the “Senior Secured Notes
        Indenture”) 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 Senior Secured Notes, the Company will be required
        to
        offer to repurchase all of the outstanding Senior Secured Notes at a cash
        price
        equal to 101% of the principal amount thereof, plus accrued and unpaid interest
        to the date of repurchase.
 
 On
        or
        after October 15, 2007, the Senior Secured Notes may be redeemed at the
        redemption prices that start at 104.75% of their aggregate principal amount,
        plus accrued and unpaid interest to the date of redemption. In addition,
        prior
        to October 15, 2006, up to 35% of the original aggregate principal amount
        of the Senior Secured Notes may be redeemed at a redemption price of 109.500%,
        plus accrued and unpaid interest to the date of redemption with the net proceeds
        of certain equity offerings.
 
 **SENIOR
        NOTES**
 
 The
        Senior Notes bear interest at a fixed annual rate of 9.75% payable on April
        15
        and October 15 of each year and have a maturity date of January 15, 2011.
        The Senior Notes are guaranteed by all of our subsidiaries (other than Majestic
        Star Casino Capital Corp and Majestic Star Casino Capital Corp II). The
        Senior Notes are senior unsecured obligations of the Company, ranking equally
        with all of the Company’s and its subsidiaries’ existing and future subordinated
        indebtedness. The Senior Notes are effectively subordinated to the Senior
        Secured Notes and the Company’s Senior Secured Credit Facility.
 
 The
        indenture governing the Senior Notes (the “Senior Notes Indenture”) 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 Senior Notes Indenture,
        the Company will be required to offer to repurchase all of the outstanding
        Senior Notes at a cash price equal to 101% of the principal amount thereof,
        plus
        accrued and unpaid interest to the date of repurchase.
  14
 THE
            MAJESTIC STAR CASINO, LLC AND
            SUBSIDIARIES **(A
              Wholly Owned Subsidiary of Majestic Holdco, LLC)**
 **NOTES
              TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
              (CONTINUED)**
 **(unaudited)**
  On
        or
        after October 15, 2008, the Senior Notes may be redeemed at the redemption
        prices that start at 104.875% of their aggregate principal amount, plus accrued
        and unpaid interest to the date of redemption. Prior to October 15, 2008,
        up to 35% of the original aggregate principal amount of the Senior Notes
        may be
        redeemed at a redemption price of 109.750%, plus accrued and unpaid interest
        to
        the date of redemption with the net proceeds of certain equity
        offerings.
 
 **SENIOR
        SECURED CREDIT FACILITY**
 
 The
        Company has an $80.0 million Senior Secured Credit Facility, which is secured
        by
        all of the equity of the Company and its restricted subsidiaries and by its
        and
        its restricted subsidiaries’ current and future assets, other than certain
        excluded assets. The lien on the collateral securing the Senior Secured Credit
        Facility is senior to the lien on the collateral securing the Senior Secured
        Notes and the guarantees of the Senior Secured Notes. Borrowings under the
        Senior Secured Credit Facility bear interest at the Company’s choice of LIBOR
        plus a range of 2.50% to 3.00% or the agent bank’s base rate (which approximates
        the prime rate) plus a range of 0.00% to 0.50%. The range is determined based
        on
        Company’s EBITDA (as defined in the loan and security agreement governing the
        Senior Secured Credit Facility and amendments thereto). Full payment of any
        outstanding balance under the Senior Secured Credit Facility is due upon
        maturity of the agreement in April 2010. The Company’s Senior Secured Credit
        Facility contains customary conditions to borrowing and contains representations
        and warranties customary in other gaming-related financings. The loan and
        security agreement governing the Senior Secured Credit Facility contains
        certain
        financial covenants and restrictions, which among other things, restrict
        indebtedness, investments, distributions and mergers and requires the Company
        to
        maintain, as defined in the covenants (as amended), minimum EBITDA and interest
        coverage ratios, which increase periodically, and an annual limit on capital
        expenditures. At March 31, 2006 and December 31, 2005, the Company had
        available borrowing capacity under the Senior Secured Credit Facility of
        $51.3
        million and $32.8 million, respectively.
 
 The
        Company has entered into various amendments to the loan and security agreement
        governing the Senior Secured Credit Facility as listed in the Company’s Report
        on Form 10-K for the year ended December 31, 2005. In addition to those
        amendments, on April 13, 2006, the Company entered into Amendment Number
        Five (“Amendment Five”). Amendment Five modifies the interest coverage ratio
        financial covenant for the twelve month period ended March 31, 2006.
        Pursuant to Amendment Four, the Company was required to obtain an interest
        coverage ratio of 1.85:1.0. The interest coverage ratio has been amended
        to
        1.8:1.0. In addition, the definition of Consolidated Interest Expense was
        amended to exclude interest expense related to the pushdown of Majestic Holdco’s
        Discount Notes. The interest expense on Majestic Holdco’s Discount Notes is
        being pushed down to the Company pursuant to SEC Staff Accounting Bulletin,
        Topic 5(J). Majestic Holdco’s Discount Notes are not guaranteed by the Company
        or any of its direct or indirect subsidiaries and none of the Company’s or its
        direct or indirect subsidiaries’ equity or assets secure the Discount Notes of
        Majestic Holdco. As of March 31, 2006, the Company was in compliance with
        all of
        its debt covenants.
 
 **OTHER
        DEBT**
 
 The
        Company has various capital leases of approximately $0.3 million and other
        debt
        for equipment. The debt obligations are of a short duration.
 
 **DISCOUNT
        NOTES**
 
 The
        Discount Notes were issued on December 21, 2005, with Majestic Holdco
        receiving net proceeds of approximately $45.1 million. The Discount Notes
        pay
        interest, semiannually, on April 15 and October 15  at
        a rate
        of 12.5%, which is paid in kind to October 15, 2008. On April 15,
        2009, Majestic Holdco will be required to cash pay the interest on the Discount
        Notes. Since Majestic Holdco has no operations or the ability to generate
        cash
        flow internally, Majestic Holdco will look to the Company or BDI to fund
        its
        cash interest expense. The Company is precluded from making distributions
        to
        Majestic Holdco unless certain financial tests are met. The Discount Notes
        mature on October 15, 2011.
  15
 THE
            MAJESTIC STAR CASINO, LLC AND
            SUBSIDIARIES **(A
              Wholly Owned Subsidiary of Majestic Holdco, LLC)**
 **NOTES
              TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
              (CONTINUED)**
 **(unaudited)**
  **INTERCREDITOR
        AGREEMENT**
 
 The
        trustee under the Senior Secured Notes Indenture (as collateral agent) and
        Wells
        Fargo Foothill, Inc., the agent under the Senior Secured Credit Facility
        are
        parties to the intercreditor agreement which provides for the contractual
        subordination of the liens on the collateral securing the Senior Secured
        Notes
        (and the related guarantees) to the liens on the collateral securing the
        indebtedness under the Senior Secured Credit Facility.
 
 The
        intercreditor agreement, among other things, limits the trustee’s rights in an
        event of default under the Senior Secured Notes. Under the intercreditor
        agreement, if the Senior Secured Notes become due and payable prior to the
        stated maturity or are not paid in full at the stated maturity at a time
        during
        which there is indebtedness outstanding under the Senior Secured Credit
        Facility, the trustee will not have the right to foreclose upon the collateral
        unless and until the lenders under the Senior Secured Credit Facility fail
        to
        take steps to exercise remedies with respect to or in connection with the
        collateral within up to 190 days following notice to such lenders of the
        occurrence of an event of default under the Senior Secured Notes Indenture.
        In
        addition, the intercreditor agreement prevents the trustee and the holders
        of
        the Senior Secured Notes from pursuing certain remedies with respect to the
        collateral in an insolvency proceeding. The intercreditor agreement also
        provides that the net proceeds from the sale of the collateral will first
        be
        applied to repay indebtedness outstanding under the Senior Secured Credit
        Facility and thereafter to the holders of the Senior Secured Notes.
 
 
 **NOTE
        9. COMMITMENTS AND CONTINGENCIES**
 
 SHORT-TERM
        NOTE PAYABLE
 
 The
        Company entered into a note in the amount of $1.0 million with the City of
        Black
        Hawk in December 2005 as part of the financing of the Company’s acquisition of
        2.45 acres of vacant land from the City of Black Hawk. The Company paid the
        note
        in full on March 31, 2006, the due date. The note contained no stipulated
        interest rate. The Company imputed interest at 7.75%.
 
 LEGAL
        PROCEEDINGS
 
 Various
        legal proceedings are pending against the Company. Management considers all
        such
        pending proceedings, comprised primarily of personal injury and equal employment
        opportunity (EEO) claims, to be routine litigation incidental to the Company’s
        business. Except as described in our Report on Form 10-K for the year ended
        December 31, 2005, Management believes that the resolution of these
        proceedings will not individually, or in the aggregate, have a material effect
        on the Company’s financial condition, results of operations or cash flows. See
        our Report on Form 10-K for the year ended December 31, 2005 for a full
        description of our legal proceedings.
  16
 **THE
              MAJESTIC STAR CASINO, LLC AND SUBSIDIARIES**
 **(A
              Wholly Owned Subsidiary of Majestic Holdco, LLC)**
 **NOTES
              TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
              (CONTINUED)**
 **(unaudited)**
  TAX
        MATTERS
 
 Majestic
        Star Income Tax Protest The
        Company has been assessed $2.6 million, plus interest, for the fiscal year
        1996
        and the period January 1, 1998 through June 18, 2001, by the Department.
        On
        September 7, 2004, the Department assessed BDI, the Company’s ultimate parent
        and member, $1.3 million, plus penalties and interest for the remainder of
        2001
        and all of fiscal year 2002. The Department held a hearing on the 1996 through
        2002 tax years on April 7, 2006, and is expected to issue its ruling later
        this
        year. BDI's non-resident shareholder has been assessed $0.2 million, plus
        penalty and interest, for 2003. The assessments relate to deductions for
        payments of taxes on adjusted gross gaming revenues the Company’s member took in
        computing adjusted gross income for Indiana state income tax purposes. The
        Department has taken the position that the Company had an obligation to withhold
        and remit tax for the non-resident shareholder of its member. The Company,
        BDI
        and BDI's non-resident shareholder have timely filed protests for all tax
        years
        at issue and those protests are currently pending before the Legal Division
        of
        the Department. On April 19, 2004, the Indiana Tax Court ruled in a similar
        case
        involving another Indiana casino, Aztar Indiana Gaming Corporation (“Aztar”),
        that the gross wagering tax is a tax based on or measured by income and that
        it
        must be added back to the taxable income base for the purpose of determining
        adjusted gross income for Indiana tax purposes. On September 28, 2004, the
        Indiana Supreme Court denied Aztar’s request to review the Indiana Tax Court’s
        decision, and thus, the Indiana Tax Court’s opinion in the Aztar case is
        controlling precedent on the wagering tax add-back issue. No liability has
        been
        accrued by the Company relating to this matter.
 
 The
        Company’s indentures governing the Senior Secured Notes and the Senior Notes and
        the loan agreement related to the Senior Secured Credit Facility allow the
        Company to make distributions to BDI for tax purposes. Accordingly, should
        BDI
        ultimately be found liable for additional state income taxes to the State
        of
        Indiana, the Company would make distributions sufficient to pay the additional
        tax. Any payments would be recorded as distributions in Member’s Deficit. The
        Company does not intend to make any distributions for the years in which
        an
        assessment was received until it has fully evaluated its options with BDI.
        In
        April 2005, and again in April 2006, BDI’s non-resident shareholder paid Indiana
        state income tax for fiscal years 2004 and 2005 pursuant to the Indiana Tax
        Court’s decision in Aztar. BDI’s non-resident shareholder determined that the
        arguments to be made by the Company and BDI related to the assessed years
        were
        not applicable to fiscal years 2004 and 2005.
 
 Majestic
        Star Sales and Use Tax Assessments In
        October 2005, the Department assessed Majestic Star for unpaid sales and
        use
        taxes, with penalties and interest, for the period 2001 through 2004. The
        sales
        and use tax assessments, with penalties and interest, total $0.3 million.
        The
        use tax portions of the assessments relate to capital and operating supply
        purchases, and food, merchandise and other products provided to the guests
        of
        Majestic Star at no charge. On November 15, 2005, Majestic Star paid $0.2
        million under the State of Indiana amnesty program to eliminate all use tax
        and
        a portion of the sales tax assessment for the 2001 through 2004 tax years.
        All
        penalties and interest associated with such payments were waived in their
        entirety pursuant to Indiana law. The remaining $0.1 million of the assessment
        relates to:
 
 1.  The
        difference between sales tax on the full retail price of merchandise and
        other
        products provided to Majestic Star’s customers at no charge less sales tax on
        the cost of this merchandise and other products, 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. On November 15,
        2005,
        Majestic Star filed a protest of the proposed assessments protesting the
        sales
        tax assessments related to this period. The Department held a hearing on
        the
        2003 and 2004 tax years on April 7, 2006, and is expected to issue its ruling
        later this year.
  17
 **THE
              MAJESTIC STAR CASINO, LLC AND SUBSIDIARIES**
 **(A
              Wholly Owned Subsidiary of Majestic Holdco, LLC)**
 **NOTES
              TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
              (CONTINUED)**
 **(unaudited)**
  In
        addition, Majestic Star has a receivable on its balance sheet in the amount
        of
        $0.1 million related to the two items noted immediately above for the period
        2001 through July 2003. During this period of time, Majestic Star was remitting
        full sales tax on the retail value of complimentary food, merchandise and
        other
        products to the Department. In or around July 2003, the Department notified
        Majestic Star’s management that no sales tax should be paid on items provided on
        a complimentary basis to its customers. At that time Majestic Star established
        the receivable for sales taxes paid during the period 2001 through July 2003.
        In
        or around July 2003, Majestic Star also filed claims for refund with the
        Department in the total amount of $0.1 million for tax years 2001 and 2002
        and
        for the period January through July 2003, on food and other items provided
        to
        its customers on a complimentary basis. In December 2005, those refund claims
        were denied by the Department, and Majestic Star appealed those denials to
        the
        Indiana Tax Court on March 27, 2006. The Tax Court has scheduled a preliminary
        pre-trial conference in that case for May 19, 2006. Majestic Star believes
        that
        it has no sales or use tax liability for food for human consumption purchased
        by
        it and prepared for serving its customers on a complimentary basis based
        on the
        Hyatt decision. (See Note 7 - Investment in Buffington Harbor Riverboat,
        L.L.C.
        for a discussion of Hyatt.)
 
 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 are required to hold
        individual licenses. These 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.
  18
 THE
            MAJESTIC STAR CASINO, LLC AND
            SUBSIDIARIES **(A
              Wholly Owned Subsidiary of Majestic Holdco, LLC)**
 **NOTES
              TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
              (CONTINUED)**
 **(unaudited)**
  **NOTE
        10. RELATED PARTY TRANSACTIONS**
 
 TRANSACTIONS
        BY OR WITH AFFILIATES
 
 *Pushdown
        of Majestic Holdco Discount Notes.* The
        Company’s financial statements include the $63.5 million of Discount Notes, net
        of discount of $16.8 million, and $18.2 million as of March 31, 2006 and
        December 31, 2005, respectively, issued by Majestic Holdco in connection
        with
        the acquisition of Trump Indiana and other concurrent refinancing transactions.
        The Discount Notes are solely the obligation of Majestic Holdco and are
        unsecured. Neither the Company nor any of its direct or indirect subsidiaries
        guarantees the Discount Notes nor are the equity or assets of the Company
        or its
        direct or indirect subsidiaries security for the Discount Notes. Further,
        the
        Indentures governing the Senior Notes and the Senior Secured Notes and the
        loan
        and security agreement which governs our Senior Secured Credit Facility preclude
        distributions by the Company to Majestic Holdco unless certain financial
        tests
        are met. A likely scenario for the repayment of these Discount Notes is from
        cash flows of the Company or a refinancing of the Company’s indebtedness,
        together with the indebtedness of Majestic Holdco. The Discount Notes have
        been
“pushed-down” to the Company pursuant to the guidelines of SEC Staff Accounting
        Bulletin Topic 5(J).
 
 *Manager
        Agreement.* Distributions to BDI under the Manager Agreement, dated October 7, 2003,
        are governed and limited by the terms of the indentures governing the Notes
        and
        by the terms of the Senior Secured Credit Facility. The distributions for
        each
        fiscal quarter may not exceed 1% of the Company’s consolidated net operating
        revenue and 5% of the Company’s consolidated cash flow (as defined in the
        indenture governing the Senior Secured Notes and the Senior Secured Credit
        Facility) for the immediately preceding fiscal quarter.
 
 During
        the quarters ended March 31, 2006 and 2005, Majestic Star made
        distributions totaling $1.4 million and $1.2 million to BDI pursuant to the
        Manager Agreement.
 
 *BHPA
        Contribution.* On
        December 21, 2005, in conjunction with the closing of the Trump Indiana
        acquisition, Mr. Barden, through BDI, who owns all of the equity of AMB Parking,
        LLC (“AMB”), which owned a 50% joint venture interest in BHPA, contributed all
        of AMB’s interest in BHPA to the Company. Such contribution was made without
        payment of any consideration by the Company.
 
 *BHPA
        Rent Expense.* During
        the quarter ended March 31, 2005, the Company incurred rent expense payable
        to
        BHPA totaling $0.5 million. As of March 31, 2005, our accrued rent payable
        to BHPA was $1.6 million. As a result of our acquisition of Trump Indiana
        and
        the contribution of AMB Parking’s equity interest in BHPA to the Company, on
        December 21, 2005, BHPA became an indirect wholly owned subsidiary of the
        Company and the parking leases between BHPA and the Company and BHPA and
        Trump
        Indiana were terminated.
 
 *Barden
        Nevada Expense Sharing Agreement* .
        The
        Company has entered into an expense sharing agreement dated October 7, 2003
        with Barden Nevada. The expense sharing agreement provides for a fee from
        Barden
        Nevada to the Company in the amount of the greater of (i) $0.5 million per
        year,
        or (ii) the actual amount of certain specified expenses incurred by the Company
        in connection with providing services to Barden Nevada. These transactions
        are
        included in general and administrative expenses in the consolidated statements
        of operations. For the each of the quarters ended March 31, 2006 and 2005,
        the Company charged Barden Nevada $0.4 million pursuant to the expense sharing
        agreement.
 
 *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 Senior Secured Credit Facility. Interest is paid quarterly,
        in arrears. Any costs that are funded by the Company and not repaid by Barden
        Nevada within 30 days will be added to the principal amount outstanding.
        All
        amounts outstanding under the promissory note are due and payable on
        October 7, 2007 along with the accrued and unpaid interest. As of
        March 31, 2006, the principal balance of the promissory note was
        $0.
  19
 THE
            MAJESTIC STAR CASINO, LLC AND
            SUBSIDIARIES **(A
              Wholly Owned Subsidiary of Majestic Holdco, LLC)**
 **NOTES
              TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
              (CONTINUED)**
 **(unaudited)**
  **NOTE
        11. SEGMENT INFORMATION**
 
 The
        Majestic Star Casino, LLC, either directly or indirectly through wholly owned
        subsidiaries, owns and operates four casino properties as follows: two riverboat
        casinos and a hotel located in Gary, Indiana; a casino and hotel located
        in
        Tunica, Mississippi; and a casino located in Black Hawk, Colorado (collectively,
        the “Properties”).
 
 The
        Company identifies its business in three segments based on geographic location.
        The Properties, in each of their segments, market primarily to middle-income
        guests. The major products offered in each segment are as follows: casino,
        hotel
        rooms (at the Majestic Properties and Fitzgeralds Tunica), and food and
        beverage.
 
 The
        accounting policies of each business segment are the same as those described
        in
        the summary of significant accounting policies in our Report on Form 10-K
        for
        the year ended December 31, 2005. There are minimal inter-segment
        sales.
 
 A
        summary
        of the Properties’ operations by business segment for the quarters ended
        March 31, 2006 and 2005 and a summary of the Properties’ assets and
        goodwill as of March 31, 2006 and December 31, 2005 are presented
        below:
 
  20
 **THE
              MAJESTIC STAR CASINO, LLC AND SUBSIDIARIES**
 **(A
              Wholly Owned Subsidiary of Majestic Holdco, LLC)**
 **NOTES
              TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
              (CONTINUED)**
 **(unaudited)**
  
 
 For
                  The Three Months EndedMarch
                  31,2006
              
              2005(in
                  thousands)Net
                  revenues:Majestic
                  Star
              
              $
              35,108
              
              $
              36,176Majestic
                  Star Casino II
              
              
              34,284
              
              
              -Buffington
                  Harbor Riverboats
              
              
              119
              
              
              -Buffington
                  Harbor Parking Associates
              
              
              -
              
              
              -Total
                  Majestic Properties
              
              
              69,511
              
              
              36,176Fitzgeralds
                  Tunica
              
              
              21,733
              
              
              21,516Fitzgeralds
                  Black Hawk
              
              
              8,674
              
              
              9,163Total
              
              $
              99,918
              
              $
              66,855Operating
                  income (loss):Majestic
                  Star
              
              $
              9,248
              
              $
              5,628Majestic
                  Star Casino II
              
              
              9,519
              
              
              -Buffington
                  Harbor Riverboats
              
              
              (3,541
              )
              
              -Buffington
                  Harbor Parking Associates
              
              
              (361
              )
              
              -Total
                  Majestic Properties
              
              
              14,865
              
              
              5,628Fitzgeralds
                  Tunica
              
              
              3,679
              
              
              3,305Fitzgeralds
                  Black Hawk
              
              
              1,742
              
              
              2,971Corporate
                  (1)
              
              
              (1,842
              )
              
              (1,217
              )Majestic
                  Investor Holdings (2)
              
              
              -
              
              
              (70
              )Total
              
              $
              18,444
              
              $
              10,617Segment
                  depreciation and amortization:Majestic
                  Star
              
              $
              1,871
              
              $
              2,071Majestic
                  Star Casino II
              
              
              2,092
              
              
              -Buffington
                  Harbor Riverboats
              
              
              920
              
              
              -Buffington
                  Harbor Parking Associates
              
              
              144
              
              
              -Total
                  Majestic Properties
              
              
              5,027
              
              
              2,071Fitzgeralds
                  Tunica
              
              
              2,146
              
              
              2,476Fitzgeralds
                  Black Hawk
              
              
              576
              
              
              -Corporate
                  (1)
              
              
              24
              
              
              20Majestic
                  Investor Holdings (2)
              
              
              -
              
              
              69Total
              
              $
              7,773
              
              $
              4,636Expenditure
                  for additions to long-lived assets:Majestic
                  Star
              
              $
              2,077
              
              $
              891Majestic
                  Star Casino II
              
              
              76
              
              
              -Buffington
                  Harbor Riverboats
              
              
              13
              
              
              -Fitzgeralds
                  Tunica
              
              
              502
              
              
              1,850Fitzgeralds
                  Black Hawk
              
              
              489
              
              
              407Corporate
                  (1)
              
              
              5
              
              
              -Total
              
              $
              3,162
              
              $
              3,148
  21
 THE
            MAJESTIC STAR CASINO, LLC AND
            SUBSIDIARIES **(A
              Wholly Owned Subsidiary of Majestic Holdco, LLC)**
 **NOTES
              TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
              (CONTINUED)**
 **(unaudited)**
  
 As
                  of
              
              As
                  ofMarch
                  31,
              
              December
                  31,2006
              
              2005(in
                  thousands)Segment
                  assets:Majestic
                  Star (3)
              
              $
              117,469
              
              $
              243,475Majestic
                  Star Casino II
              
              
              225,598
              
              
              229,246Buffington
                  Harbor Riverboats
              
              
              53,015
              
              
              53,751Buffington
                  Harbor Parking Associates
              
              
              22,002
              
              
              21,592Fitzgeralds
                  Tunica
              
              
              73,704
              
              
              75,406Fitzgeralds
                  Black Hawk
              
              
              37,338
              
              
              31,688Corporate
                  (3)
              
              
              381,254
              
              
              289,353Majestic
                  Investor Holdings (2)
              
              
              -
              
              
              1,896Total
              
              
              910,380
              
              
              946,407Less:
                  Intercompany
              
              
              (399,144
              )
              
              (428,448
              )Total
              
              $
              511,236
              
              $
              517,959GoodwillMajestic
                  Star Casino II
              
              $
              42,153
              
              $
              41,328Fitzgeralds
                  Tunica
              
              
              3,998
              
              
              3,998Fitzgeralds
                  Black Hawk
              
              
              1,925
              
              
              1,925Total
              
              $
              48,076
              
              $
              47,251
 
 
 (1)  Corporate
        expenses reflect payroll, benefits, travel and other costs associated with
        our
        corporate staff and are not allocated to the properties.
 
 (2)  Majestic
        Investor Holdings was merged into the Company on March 22, 2006.
 
 (3)  The
        combined assets of Majestic Star and Corporate include intercompany receivables
        from Majestic Star II, Fitzgeralds Tunica, BHR, BHPA, and Fitzgeralds Black
        Hawk totaling approximately $399.1 million at March 31, 2006. At
        December 31, 2005, the combined assets of Majestic Star include
        intercompany receivables from Investor Holdings, Fitzgeralds Tunica and
        Fitzgeralds Black Hawk of $428.4 million. Intercompany receivables are
        eliminated in consolidation.
 
 
 **NOTE
        12. SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION**
 
 The
        Majestic Star Casino, LLC is the co-issuer of $300.0 million of Senior Secured
        Notes and $200.0 million of Senior Notes. Under the indentures governing
        the
        Senior Secured Notes, the Senior Notes and the loan and security agreement
        for
        the Senior Secured Credit Facility, Majestic Star II, Fitzgeralds Tunica,
        Fitzgeralds Black Hawk, BHR and BHPA are guarantor subsidiaries of the $300.0
        million of Senior Secured Notes.
 
 Our
        supplemental guarantor financial information contains financial information
        for
        The Majestic Star Casino, LLC, The Majestic Star Casino Capital Corp (co-issuer
        of the Senior Secured Notes but an entity with no operations), the guarantor
        subsidiaries and the eliminating entries necessary to consolidate such
        entities.
 
 
  22
 **THE
              MAJESTIC STAR CASINO, LLC AND SUBSIDIARIES**
 **(A
              Wholly Owned Subsidiary of Majestic Holdco, LLC)**
 **NOTES
              TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
              (CONTINUED)**
 **(unaudited)**
 NOTE
        12.
        SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION (CONTINUED)
  CONDENSED
        CONSOLIDATING BALANCE SHEET
 As
        of
        March 31, 2006
 
 The
                  Majestic
              
              The
                  MajesticStar
                  Casino,
              
              Star
                  Casino
              
              Guarantor
              
              Eliminating
              
              
              
              TotalLLC
              
              Capital
                  Corp.
              
              Subsidiaries
              
              Entries
              
              
              
              ConsolidatedASSETSCurrent
                  assets:Cash
                  and cash equivalents
              
              $
              11,036,241
              
              $
              -
              
              $
              13,460,378
              
              $
              -
              
              
              
              
              $
              24,496,619Restricted
                  cash
              
              
              2,166,881
              
              
              -
              
              
              1,160,000
              
              
              -
              
              
              
              
              
              3,326,881Accounts
                  receivable, net
              
              
              1,184,161
              
              
              -
              
              
              3,025,475
              
              
              -
              
              
              
              
              
              4,209,636Inventories
              
              
              61,168
              
              
              -
              
              
              731,967
              
              
              -
              
              
              
              
              
              793,135Prepaid
                  expenses and deposits
              
              
              2,451,956
              
              
              -
              
              
              5,885,797
              
              
              -
              
              
              
              
              
              8,337,753Receivable
                  from affiliate
              
              
              642,988
              
              
              -
              
              
              4,537,110
              
              
              (4,874,779
              )
              
              (a
              )
              
              305,319Investment
                  in subsidiaries
              
              
              89,927,510
              
              
              -
              
              
              -
              
              
              (89,927,510
              )
              
              (b
              )
              
              -Other
                  current assets
              
              
              -
              
              
              -
              
              
              38,450
              
              
              -
              
              
              
              
              
              38,450Total
                  current assets
              
              
              107,470,905
              
              
              -
              
              
              28,839,177
              
              
              (94,802,289
              )
              
              
              
              
              41,507,793Property,
                  equipment and improvements, net
              
              
              75,137,621
              
              
              -
              
              
              198,754,775
              
              
              -
              
              
              
              
              
              273,892,396Intangible
                  assets, net
              
              
              -
              
              
              -
              
              
              127,989,878
              
              
              -
              
              
              
              
              
              127,989,878Goodwill
              
              
              -
              
              
              -
              
              
              48,075,479
              
              
              -
              
              
              
              
              
              48,075,479Other
                  assets:Deferred
                  financing and transaction costsrelated
                  to the acquisition of Trump Indiana
              
              
              14,823,594
              
              
              -
              
              
              -
              
              
              -
              
              
              
              
              
              14,823,594Deferred
                  financing and transaction costspushed
                  down from Majestic Holdco (1)
              
              
              2,798,046
              
              
              -
              
              
              -
              
              
              -
              
              
              
              
              
              2,798,046Long
                  term receivable - related party
              
              
              298,084,202
              
              
              -
              
              
              6,257,546
              
              
              (304,341,748
              )
              
              (a
              )
              
              -Other
                  assets
              
              
              408,421
              
              
              -
              
              
              1,740,551
              
              
              -
              
              
              
              
              
              2,148,972Total
                  other assets
              
              
              316,114,263
              
              
              -
              
              
              7,998,097
              
              
              (304,341,748
              )
              
              
              
              
              19,770,612Total
                  assets
              
              $
              498,722,789
              
              $
              -
              
              $
              411,657,406
              
              $
              (399,144,037
              )
              
              
              
              $
              511,236,158LIABILITIES
                  AND MEMBER'S DEFICITCurrent
                  liabilities:Accounts
                  payable
              
              $
              1,031,594
              
              $
              -
              
              $
              1,859,264
              
              $
              -
              
              
              
              
              $
              2,890,858Current
                  portion of long-term debt
              
              
              -
              
              
              -
              
              
              167,820
              
              
              -
              
              
              
              
              
              167,820Payable
                  to related party
              
              
              4,537,061
              
              
              -
              
              
              337,718
              
              
              (4,874,779
              )
              
              (a
              )
              
              -Accrued
                  liabilities:Payroll
                  and related
              
              
              3,841,853
              
              
              -
              
              
              7,041,588
              
              
              -
              
              
              
              
              
              10,883,441Interest
              
              
              18,717,566
              
              
              -
              
              
              -
              
              
              -
              
              
              
              
              
              18,717,566Property
                  and franchise taxes
              
              
              3,146,894
              
              
              -
              
              
              4,425,249
              
              
              -
              
              
              
              
              
              7,572,143Other
                  accrued liabilities
              
              
              4,303,160
              
              
              -
              
              
              9,654,574
              
              
              -
              
              
              
              
              
              13,957,734Total
                  current liabilities
              
              
              35,578,128
              
              
              -
              
              
              23,486,213
              
              
              (4,874,779
              )
              
              
              
              
              54,189,562Due
                  to related parties
              
              
              6,257,546
              
              
              -
              
              
              298,084,202
              
              
              (304,341,748
              )
              
              (a
              )
              
              -Long-term
                  debt, net of current maturities
              
              
              528,681,906
              
              
              300,000,000
              
              
              159,481
              
              
              (300,000,000
              )
              
              (c
              )
              
              528,841,387Long-term
                  debt pushed down from Majestic Holdco (2)
              
              
              46,666,949
              
              
              -
              
              
              -
              
              
              -
              
              
              
              
              
              46,666,949Total
                  liabilities
              
              
              617,184,529
              
              
              300,000,000
              
              
              321,729,896
              
              
              (609,216,527
              )
              
              
              
              
              629,697,898Member's
                  (deficit) equity
              
              
              (118,461,740
              )
              
              (300,000,000
              )
              
              89,927,510
              
              
              210,072,490
              
              
              (b)
                  (c
              )
              
              (118,461,740
              )Total
                  liabilities and member's (deficit) equity
              
              $
              498,722,789
              
              $
              -
              
              $
              411,657,406
              
              $
              (399,144,037
              )
              
              
              
              $
              511,236,158
 
  23
 **THE
              MAJESTIC STAR CASINO, LLC AND SUBSIDIARIES**
 **(A
              Wholly Owned Subsidiary of Majestic Holdco, LLC)**
 **NOTES
              TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
              (CONTINUED)**
 **(unaudited)**
 NOTE 12. SUPPLEMENTAL
        GUARANTOR FINANCIAL INFORMATION (CONTINUED)
  CONDENSED
        CONSOLIDATING BALANCE SHEET (CONTINUED)
 As
        of
        March 31, 2006
 
 
 (a)
            To
                eliminate intercompany receivable and
                payables. 
 (b)
            To
                eliminate intercompany accounts and investment in
                subsidiaries. 
 (c)
            As
                more fully described in Note 8. Long-Term Debt, the Majestic Star
                Casino
                Capital Corp. is a co-obligor of the Senior Secured Notes issued
                by the
                Company. Accordingly, such indebtedness has been presented as an
                obligation of both the issuer and the co-obligor in the above balance
                sheets. 
 (1)
            Reflects
                the pushdown of deferred financing costs related to the issuance
                of the
                Discount Notes of Majestic Holdco, net of amortization, pursuant
                to SEC
                Staff Accounting Bulletin Topic 5(J). 
 (2)
            Reflects
                the pushdown of Majestic Holdco’s Discount Notes pursuant to SEC Staff
                Accounting Bulletin Topic 5(J). 
 
  24
 THE
            MAJESTIC STAR CASINO, LLC AND
            SUBSIDIARIES **(A
              Wholly Owned Subsidiary of Majestic Holdco, LLC)**
 **NOTES
              TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
              (CONTINUED)**
 **(unaudited)**
 NOTE 12. SUPPLEMENTAL
        GUARANTOR FINANCIAL INFORMATION (CONTINUED)
  CONDENSED
        CONSOLIDATING BALANCE SHEET
 As
        of
        December 31, 2005
 
 
 The
                  Majestic
              
              The
                  MajesticStar
                  Casino,
              
              Star
                  Casino
              
              Guarantor
              
              Eliminating
              
              
              
              TotalLLC
              
              Capital
                  Corp.
              
              Subsidiaries
              
              Entries
              
              
              
              ConsolidatedASSETSCurrent
                  assets:Cash
                  and cash equivalents
              
              $
              7,085,458
              
              $
              -
              
              $
              25,282,791
              
              $
              -
              
              
              
              
              $
              32,368,249Restricted
                  cash
              
              
              900,000
              
              
              -
              
              
              2,290,000
              
              
              -
              
              
              
              
              
              3,190,000Accounts
                  receivable, net
              
              
              1,528,727
              
              
              -
              
              
              3,070,687
              
              
              -
              
              
              
              
              
              4,599,414Inventories
              
              
              60,476
              
              
              -
              
              
              727,405
              
              
              -
              
              
              
              
              
              787,881Prepaid
                  expenses and deposits
              
              
              918,195
              
              
              -
              
              
              1,515,406
              
              
              -
              
              
              
              
              
              2,433,601Receivable
                  from affiliate
              
              
              9,851,352
              
              
              -
              
              
              -
              
              
              (9,682,341
              )
              
              (a
              )
              
              169,011Other
                  current assets
              
              
              -
              
              
              -
              
              
              137,914
              
              
              -
              
              
              
              
              
              137,914Total
                  current assets
              
              
              20,344,208
              
              
              -
              
              
              33,024,203
              
              
              (9,682,341
              )
              
              
              
              
              43,686,070Property,
                  equipment and improvements, net
              
              
              75,421,809
              
              
              -
              
              
              202,710,674
              
              
              -
              
              
              
              
              
              278,132,483Intangible
                  assets, net
              
              
              -
              
              
              -
              
              
              128,854,668
              
              
              -
              
              
              
              
              
              128,854,668Goodwill
              
              
              -
              
              
              -
              
              
              47,250,794
              
              
              -
              
              
              
              
              
              47,250,794Other
                  assets:Deferred
                  financing and transaction costrelated
                  to the acquisition of Trump Indiana
              
              
              15,263,897
              
              
              -
              
              
              -
              
              
              -
              
              
              
              
              
              15,263,897Deferred
                  financing and transaction costpushed
                  down from Majestic Holdco (1)
              
              
              2,804,227
              
              
              -
              
              
              -
              
              
              -
              
              
              
              
              
              2,804,227Long
                  term receivable - related party
              
              
              418,765,178
              
              
              -
              
              
              -
              
              
              (418,765,178
              )
              
              (a
              )
              
              -Other
                  assets
              
              
              228,363
              
              
              -
              
              
              1,738,330
              
              
              -
              
              
              
              
              
              1,966,693Total
                  other assets
              
              
              437,061,665
              
              
              -
              
              
              1,738,330
              
              
              (418,765,178
              )
              
              
              
              
              20,034,817Total
                  assets
              
              $
              532,827,682
              
              $
              -
              
              $
              413,578,669
              
              $
              (428,447,519
              )
              
              
              
              $
              517,958,832LIABILITIES
                  AND MEMBER'S DEFICITCurrent
                  liabilities:Accounts
                  payable
              
              $
              1,775,675
              
              $
              -
              
              $
              1,783,532
              
              $
              -
              
              
              
              
              $
              3,559,207Note
                  payable
              
              
              -
              
              
              -
              
              
              984,590
              
              
              -
              
              
              
              
              
              984,590Current
                  portion of long-term debt
              
              
              -
              
              
              -
              
              
              174,447
              
              
              -
              
              
              
              
              
              174,447Payable
                  to related party
              
              
              714,240
              
              
              -
              
              
              8,968,101
              
              
              (9,682,341
              )
              
              (a
              )
              
              -Accrued
                  liabilities:Payroll
                  and related
              
              
              3,095,817
              
              
              -
              
              
              6,170,430
              
              
              -
              
              
              
              
              
              9,266,247Interest
              
              
              7,215,793
              
              
              -
              
              
              586
              
              
              -
              
              
              
              
              
              7,216,379Property
                  and franchise taxes
              
              
              3,763,331
              
              
              -
              
              
              4,652,308
              
              
              -
              
              
              
              
              
              8,415,639Other
                  accrued liabilities
              
              
              5,465,515
              
              
              -
              
              
              10,991,461
              
              
              -
              
              
              
              
              
              16,456,976Total
                  current liabilities
              
              
              22,030,371
              
              
              -
              
              
              33,725,455
              
              
              (9,682,341
              )
              
              
              
              
              46,073,485Investment
                  in subsidiaries
              
              
              23,381,935
              
              
              -
              
              
              -
              
              
              (23,381,935
              )
              
              (b
              )
              
              -Due
                  to related parties
              
              
              15,720,866
              
              
              -
              
              
              403,044,312
              
              
              (418,765,178
              )
              
              (a
              )
              
              -Long-term
                  debt, net of current maturities
              
              
              547,212,346
              
              
              300,000,000
              
              
              190,837
              
              
              (300,000,000
              )
              
              (c
              )
              
              547,403,183Long-term
                  debt pushed down from Majestic Holdco (2)
              
              
              45,296,335
              
              
              -
              
              
              -
              
              
              -
              
              
              
              
              
              45,296,335Total
                  liabilities
              
              
              653,641,853
              
              
              300,000,000
              
              
              436,960,604
              
              
              (751,829,454
              )
              
              
              
              
              638,773,003Member's
                  deficit
              
              
              (120,814,171
              )
              
              (300,000,000
              )
              
              (23,381,935
              )
              
              323,381,935
              
              
              (b)
                  (c
              )
              
              (120,814,171
              )Total
                  liabilities and member's deficit
              
              $
              532,827,682
              
              $
              -
              
              $
              413,578,669
              
              $
              (428,447,519
              )
              
              
              
              $
              517,958,832
 
  25
 **THE
              MAJESTIC STAR CASINO, LLC AND SUBSIDIARIES**
 **(A
              Wholly Owned Subsidiary of Majestic Holdco, LLC)**
 **NOTES
              TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
              (CONTINUED)**
 **(unaudited)**
 NOTE 12. SUPPLEMENTAL
        GUARANTOR FINANCIAL INFORMATION (CONTINUED)
  
 CONDENSED
        CONSOLIDATING BALANCE SHEET (CONTINUED)
 As
        of
        December 31, 2005
 
 
 (a)
            To
                eliminate intercompany receivable and
                payables. 
 (b)
            To
                eliminate intercompany accounts and investment in
                subsidiaries. 
 (c)
            As
                more fully described in Note 8, Long-Term Debt, the Majestic Star
                Casino
                Capital Corp. is a co-obligor of the Senior Secured Notes issued
                by the
                Company. Accordingly, such indebtedness has been presented as an
                obligation of both the issuer and the co-obligor in the above balance
                sheets. 
 (1)
            Reflects
                the pushdown of deferred financing costs related to the issuance
                of the
                Discount Notes of Majestic Holdco, net of amortization, pursuant
                to SEC
                Staff Accounting Bulletin Topic 5(J). 
 (2)
            Reflects
                the pushdown of Majestic Holdco’s Discount Notes pursuant to SEC Staff
                Accounting Bulletin Topic 5(J). 
 
 
  26
 **THE
              MAJESTIC STAR CASINO, LLC AND SUBSIDIARIES**
 **(A
              Wholly Owned Subsidiary of Majestic Holdco, LLC)**
 **NOTES
              TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
              (CONTINUED)**
 **(unaudited)**
 NOTE 12. SUPPLEMENTAL
        GUARANTOR FINANCIAL INFORMATION (CONTINUED)
  CONDENSED
        CONSOLIDATING STATEMENT OF OPERATIONS
 For
        the
        Three Months Ended March 31, 2006
 
 
 The
                  Majestic
              
              The
                  MajesticStar
                  Casino,
              
              Star
                  Casino
              
              Guarantor
              
              Eliminating
              
              
              
              TotalLLC
              
              Capital
                  Corp.
              
              Subsidiaries
              
              Entries
              
              
              
              ConsolidatedOPERATING
                  REVENUES:Casino
              
              $
              36,449,145
              
              $
              -
              
              $
              67,436,346
              
              $
              -
              
              
              
              
              $
              103,885,491Rooms
              
              
              -
              
              
              -
              
              
              2,764,392
              
              
              -
              
              
              
              
              
              2,764,392Food
                  and beverage
              
              
              502,154
              
              
              -
              
              
              3,852,922
              
              
              -
              
              
              
              
              
              4,355,076Other
              
              
              684,398
              
              
              -
              
              
              1,063,612
              
              
              -
              
              
              
              
              
              1,748,010Gross
                  revenues
              
              
              37,635,697
              
              
              -
              
              
              75,117,272
              
              
              -
              
              
              
              
              
              112,752,969Less
                  promotional allowances
              
              
              2,527,220
              
              
              -
              
              
              10,307,615
              
              
              -
              
              
              
              
              
              12,834,835Net
                  operating revenues
              
              
              35,108,477
              
              
              -
              
              
              64,809,657
              
              
              -
              
              
              
              
              
              99,918,134OPERATING
                  COSTS AND EXPENSES:Casino
              
              
              6,336,859
              
              
              -
              
              
              16,593,818
              
              
              -
              
              
              
              
              
              22,930,677Rooms
              
              
              -
              
              
              -
              
              
              1,184,204
              
              
              -
              
              
              
              
              
              1,184,204Food
                  and beverage
              
              
              509,162
              
              
              -
              
              
              1,607,210
              
              
              -
              
              
              
              
              
              2,116,372Other
              
              
              173
              
              
              -
              
              
              257,892
              
              
              -
              
              
              
              
              
              258,065Gaming
                  taxes
              
              
              10,401,865
              
              
              -
              
              
              14,021,463
              
              
              -
              
              
              
              
              
              24,423,328Advertising
                  and promotion
              
              
              1,385,138
              
              
              -
              
              
              2,765,007
              
              
              -
              
              
              
              
              
              4,150,145General
                  and administrative
              
              
              4,438,775
              
              
              -
              
              
              10,589,760
              
              
              -
              
              
              
              
              
              15,028,535Corporate
                  expense
              
              
              1,817,704
              
              
              -
              
              
              -
              
              
              -
              
              
              
              
              
              1,817,704Economic
                  incentive tax - City of Gary
              
              
              920,732
              
              
              -
              
              
              886,257
              
              
              -
              
              
              
              
              
              1,806,989Depreciation
                  and amortization
              
              
              1,894,304
              
              
              -
              
              
              5,878,445
              
              
              -
              
              
              
              
              
              7,772,749Gain
                  on disposal of assets
              
              
              (2,727
              )
              
              -
              
              
              (12,263
              )
              
              -
              
              
              
              
              
              (14,990
              )Total
                  operating costs and expenses
              
              
              27,701,985
              
              
              -
              
              
              53,771,793
              
              
              -
              
              
              
              
              
              81,473,778Operating
                  income
              
              
              7,406,492
              
              
              -
              
              
              11,037,864
              
              
              -
              
              
              
              
              
              18,444,356OTHER
                  INCOME (EXPENSE):Interest
                  income
              
              
              74,620
              
              
              -
              
              
              61,447
              
              
              -
              
              
              
              
              
              136,067Interest
                  expense
              
              
              (13,451,786
              )
              
              -
              
              
              137,897
              
              
              -
              
              
              
              
              
              (13,313,889
              )Interest
                  expense - debt pushed downfrom
                  Majestic Holdco (1) (2)
              
              
              (1,494,358
              )
              
              -
              
              
              -
              
              
              -
              
              
              
              
              
              (1,494,358
              )Other
                  non-operating expense
              
              
              (27,248
              )
              
              -
              
              
              -
              
              
              -
              
              
              
              
              
              (27,248
              )Equity
                  in net income of subsidiaries
              
              
              11,237,208
              
              
              -
              
              
              -
              
              
              (11,237,208
              )
              
              (a
              )
              
              -Total
                  other expense
              
              
              (3,661,564
              )
              
              -
              
              
              199,344
              
              
              (11,237,208
              )
              
              
              
              
              (14,699,428
              )Net
                  income
              
              $
              3,744,928
              
              $
              -
              
              $
              11,237,208
              
              $
              (11,237,208
              )
              
              
              
              $
              3,744,928
 
 (a)
            To
                eliminate equity in net income of
                subsidiaries. 
 (1)
            Includes amortization
                of deferred financing costs related to the issuance of Majestic Holdco’s
                Discount Notes pursuant to SEC Staff Accounting Bulletin Topic
                5(J). 
 (2)
            Includes interest
                expense on Majestic Holdco’s Discount Notes pursuant to SEC Staff
                Accounting Bulletin Topic 5(J).  27
 **THE
              MAJESTIC STAR CASINO, LLC AND SUBSIDIARIES**
 **(A
              Wholly Owned Subsidiary of Majestic Holdco, LLC)**
 **NOTES
              TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
              (CONTINUED)**
 **(unaudited)**
 NOTE 12. SUPPLEMENTAL
        GUARANTOR FINANCIAL INFORMATION (CONTINUED)
  CONDENSED
        CONSOLIDATING STATEMENT OF OPERATIONS
 For
        the
        Three Months Ended March 31, 2005
 
 
 The
                  Majestic
              
              The
                  MajesticStar
                  Casino,
              
              Star
                  Casino
              
              Guarantor
              
              Eliminating
              
              TotalLLC
              
              Capital
                  Corp.
              
              Subsidiaries
              
              Entries
                  (a)
              
              ConsolidatedOPERATING
                  REVENUES:Casino
              
              $
              38,697,169
              
              $
              -
              
              $
              32,385,478
              
              $
              -
              
              $
              71,082,647Rooms
              
              
              -
              
              
              -
              
              
              1,794,104
              
              
              -
              
              
              1,794,104Food
                  and beverage
              
              
              442,523
              
              
              -
              
              
              3,067,853
              
              
              -
              
              
              3,510,376Other
              
              
              665,118
              
              
              -
              
              
              392,612
              
              
              -
              
              
              1,057,730Gross
                  revenues
              
              
              39,804,810
              
              
              -
              
              
              37,640,047
              
              
              -
              
              
              77,444,857Less
                  promotional allowances
              
              
              3,629,072
              
              
              -
              
              
              6,960,725
              
              
              -
              
              
              10,589,797Net
                  operating revenues
              
              
              36,175,738
              
              
              -
              
              
              30,679,322
              
              
              -
              
              
              66,855,060OPERATING
                  COSTS AND EXPENSES:Casino
              
              
              7,131,087
              
              
              -
              
              
              10,161,792
              
              
              -
              
              
              17,292,879Rooms
              
              
              -
              
              
              -
              
              
              383,945
              
              
              -
              
              
              383,945Food
                  and beverage
              
              
              512,287
              
              
              -
              
              
              989,054
              
              
              -
              
              
              1,501,341Other
              
              
              -
              
              
              -
              
              
              259,478
              
              
              -
              
              
              259,478Gaming
                  taxes
              
              
              11,070,263
              
              
              -
              
              
              4,227,926
              
              
              -
              
              
              15,298,189Advertising
                  and promotion
              
              
              1,724,678
              
              
              -
              
              
              1,768,822
              
              
              -
              
              
              3,493,500General
                  and administrative
              
              
              6,270,029
              
              
              -
              
              
              4,136,468
              
              
              -
              
              
              10,406,497Corporate
                  expense
              
              
              1,197,070
              
              
              -
              
              
              -
              
              
              -
              
              
              1,197,070Economic
                  incentive tax - City of Gary
              
              
              1,163,362
              
              
              -
              
              
              -
              
              
              -
              
              
              1,163,362Depreciation
                  and amortization
              
              
              2,090,447
              
              
              -
              
              
              2,545,488
              
              
              -
              
              
              4,635,935Loss
                  on investment in BuffingtonHarbor
                  Riverboats, LLC
              
              
              605,698
              
              
              -
              
              
              -
              
              
              -
              
              
              605,698Loss
                  on disposal of assets
              
              
              -
              
              
              -
              
              
              140
              
              
              -
              
              
              140Total
                  operating costs and expenses
              
              
              31,764,921
              
              
              -
              
              
              24,473,113
              
              
              -
              
              
              56,238,034Operating
                  income
              
              
              4,410,817
              
              
              -
              
              
              6,206,209
              
              
              -
              
              
              10,617,026OTHER
                  INCOME (EXPENSE):Interest
                  income
              
              
              4,968
              
              
              -
              
              
              7,234
              
              
              -
              
              
              12,202Interest
                  expense
              
              
              (6,761,807
              )
              
              -
              
              
              (474,568
              )
              
              -
              
              
              (7,236,375
              )Other
                  non-operating expense
              
              
              (36,954
              )
              
              -
              
              
              -
              
              
              -
              
              
              (36,954
              )Equity
                  in net income of subsidiaries
              
              
              5,738,875
              
              
              -
              
              
              -
              
              
              (5,738,875
              )
              
              -Total
                  other expense
              
              
              (1,054,918
              )
              
              -
              
              
              (467,334
              )
              
              (5,738,875
              )
              
              (7,261,127
              )Net
                  income
              
              $
              3,355,899
              
              $
              -
              
              $
              5,738,875
              
              $
              (5,738,875
              )
              $
              3,355,899
 
 (a)
            To
                eliminate equity in net income of
                subsidiaries. 
  28
 THE
            MAJESTIC STAR CASINO, LLC AND
            SUBSIDIARIES **(A
              Wholly Owned Subsidiary of Majestic Holdco, LLC)**
 **NOTES
              TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
              (CONTINUED)**
 **(unaudited)**
 NOTE 12. SUPPLEMENTAL
        GUARANTOR FINANCIAL INFORMATION (CONTINUED)
  
 CONDENSED
        CONSOLIDATING STATEMENT OF CASH FLOWS
 For
        the
        Three Months Ended March 31, 2006
 
 
 The
                  Majestic
              
              The
                  MajesticStar
                  Casino,
              
              Star
                  Casino
              
              Guarantor
              
              Eliminating
              
              TotalLLC
              
              Capital
                  Corp.
              
              Subsidiaries
              
              Entries
              
              ConsolidatedNET
                  CASH PROVIDED BY (USED IN)OPERATING
                  ACTIVITIES: (1)
              
              $
              18,754,085
              
              $
              -
              
              $
              (2,372,812
              )
              $
              -
              
              $
              16,381,273CASH
                  FLOWS FROM INVESTING ACTIVITIES:Increase
                  in restricted cash
              
              
              (16,881
              )
              
              -
              
              
              (120,000
              )
              
              -
              
              
              (136,881
              )Additional
                  acquisition costs related toTrump
                  Indiana acquisition
              
              
              -
              
              
              -
              
              
              188,795
              
              
              -
              
              
              188,795Acquisition
                  of property and equipment
              
              
              (2,081,598
              )
              
              -
              
              
              (1,080,301
              )
              
              -
              
              
              (3,161,899
              )Merger
                  of Majestic Investor Holdings into Majestic Star
              
              
              600,328
              
              
              -
              
              
              (600,328
              )
              
              -
              
              
              -Proceeds
                  from disposal of assets
              
              
              134,068
              
              
              -
              
              
              34,806
              
              
              -
              
              
              168,874Net
                  cash used in investing activities
              
              
              (1,364,083
              )
              
              -
              
              
              (1,577,028
              )
              
              -
              
              
              (2,941,111
              )CASH
                  FLOWS FROM FINANCING ACTIVITIES:Issuance
                  costs for the 9 1/2% senior secured notes
              
              
              (48,239
              )
              
              -
              
              
              -
              
              
              -
              
              
              (48,239
              )Issuance
                  costs for the 9 3/4% senior notes
              
              
              (241,463
              )
              
              -
              
              
              -
              
              
              -
              
              
              (241,463
              )Issuance
                  costs for the 12 1/2% senior discount notespushed
                  down from Majestic Holdco (2)
              
              
              (76,580
              )
              
              -
              
              
              -
              
              
              -
              
              
              (76,580
              )Proceeds
                  from line of credit
              
              
              1,269,560
              
              
              -
              
              
              -
              
              
              -
              
              
              1,269,560Repayment
                  of line of credit
              
              
              (19,800,000
              )
              
              -
              
              
              -
              
              
              -
              
              
              (19,800,000
              )Repayment
                  of debt
              
              
              -
              
              
              -
              
              
              (1,022,573
              )
              
              -
              
              
              (1,022,573
              )Cash
                  advances from (to) affiliates
              
              
              6,850,000
              
              
              -
              
              
              (6,850,000
              )
              
              -
              
              
              -Distribution
                  to Barden Development, Inc.
              
              
              (1,392,497
              )
              
              -
              
              
              -
              
              
              -
              
              
              (1,392,497
              )Net
                  cash used in financing activities
              
              
              (13,439,219
              )
              
              -
              
              
              (7,872,573
              )
              
              -
              
              
              (21,311,792
              )Net
                  increase (decrease) in cash and cash equivalents
              
              
              3,950,783
              
              
              -
              
              
              (11,822,413
              )
              
              -
              
              
              (7,871,630
              )Cash
                  and cash equivalents, beginning of period
              
              
              7,085,458
              
              
              -
              
              
              25,282,791
              
              
              -
              
              
              32,368,249Cash
                  and cash equivalents, end of period
              
              $
              11,036,241
              
              $
              -
              
              $
              13,460,378
              
              $
              -
              
              $
              24,496,619
 
 (1)
            Includes
                amortization of deferred financing costs of $0.1 million and interest
                expense of $1.4 million related to the pushdown of Majestic Holdco’s
                Discount Notes pursuant to SEC Staff Accounting Bulletin Topic
                5(J). 
 (2)
            Reflects
                the pushdown of issuance costs of Majestic Holdco’s Discount Notes
                pursuant to SEC Staff Accounting Bulletin Topic
                5(J). 
  29
 THE
            MAJESTIC STAR CASINO, LLC AND
            SUBSIDIARIES **(A
              Wholly Owned Subsidiary of Majestic Holdco, LLC)**
 **NOTES
              TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
              (CONTINUED)**
 **(unaudited)**
 NOTE 12. SUPPLEMENTAL
        GUARANTOR FINANCIAL INFORMATION (CONTINUED)
  CONDENSED
        CONSOLIDATING STATEMENT OF CASH FLOWS
 For
        the
        Three Months Ended March 31, 2005
 
 
 The
                  Majestic
              
              The
                  MajesticStar
                  Casino,
              
              Star
                  Casino
              
              Guarantor
              
              Eliminating
              
              TotalLLC
              
              Capital
                  Corp.
              
              Subsidiaries
              
              Entries
              
              ConsolidatedNET
                  CASH PROVIDED BY OPERATING ACTIVITIES:
              
              $
              5,708,327
              
              $
              -
              
              $
              8,632,726
              
              $
              -
              
              $
              14,341,053CASH
                  FLOWS FROM INVESTING ACTIVITIES:Acquisition
                  of property and equipment
              
              
              (891,332
              )
              
              -
              
              
              (2,256,253
              )
              
              -
              
              
              (3,147,585
              )Decrease
                  in prepaid leases and deposits
              
              
              2,000
              
              
              -
              
              
              -
              
              
              -
              
              
              2,000Net
                  cash used in investing activities
              
              
              (889,332
              )
              
              -
              
              
              (2,256,253
              )
              
              -
              
              
              (3,145,585
              )CASH
                  FLOWS FROM FINANCING ACTIVITIES:Proceeds
                  from line of credit
              
              
              3,000,000
              
              
              -
              
              
              -
              
              
              -
              
              
              3,000,000Repayment
                  of line of credit
              
              
              (8,000,000
              )
              
              -
              
              
              -
              
              
              -
              
              
              (8,000,000
              )Advances
                  to affiliates - net
              
              
              (2,871,634
              )
              
              -
              
              
              -
              
              
              -
              
              
              (2,871,634
              )Cash
                  advances from (to) affiliates
              
              
              5,600,000
              
              
              -
              
              
              (5,600,000
              )
              
              -
              
              
              -Distribution
                  to Barden Development, Inc.
              
              
              (1,153,493
              )
              
              -
              
              
              -
              
              
              -
              
              
              (1,153,493
              )Net
                  cash used in financing activities
              
              
              (3,425,127
              )
              
              -
              
              
              (5,600,000
              )
              
              -
              
              
              (9,025,127
              )Net
                  increase in cash and cash equivalents
              
              
              1,393,868
              
              
              -
              
              
              776,473
              
              
              -
              
              
              2,170,341Cash
                  and cash equivalents, beginning of period
              
              
              8,433,545
              
              
              -
              
              
              8,288,184
              
              
              -
              
              
              16,721,729Cash
                  and cash equivalents, end of period
              
              $
              9,827,413
              
              $
              -
              
              $
              9,064,657
              
              $
              -
              
              $
              18,892,070
 
  30
  
 
 **ITEM
        2.**  **Management’s
        Discussion and Analysis of Financial Condition and Results of
        Operations.**
 
 
 STATEMENT
        ON FORWARD-LOOKING INFORMATION
 
 Throughout
        this report we make forward-looking statements. Forward-looking statements
        include the words “may,” “will,” “would,” “could,” “likely,” “estimate,”
“intend,” “plan,” “continue,” “believe,” “expect” or “anticipate” and other
        similar words and include all discussions about our acquisition and development
        plans. We do not guarantee that the transactions and events described in
        this
        report will happen as described or that any positive trends noted in this
        report
        will continue. The forward-looking statements contained in this report are
        generally located in the material set forth under the headings “Business,” and
“Management’s Discussion and Analysis of Financial Condition and Results of
        Operations,” but may be found in other locations as well. These forward-looking
        statements generally relate to our plans, objectives and expectations for
        future
        operations and are based upon management’s reasonable estimates of future
        results or trends. Although we believe that our plans and objectives reflected
        in or suggested by such forward-looking statements are reasonable, we may
        not
        achieve such plans or objectives. You should read this report completely
        and
        with the understanding that actual future results may be materially different
        from what we expect. We will not update forward-looking statements even though
        our situation may change in the future.
 
 In
        addition to the risk factors set forth in Item 1A. Risk Factors in the Company’s
        Annual Report on Form 10-K for the year ended December 31, 2005, and as
        updated in Part II, and elsewhere in this report, other 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:
 
 ·
            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; 
 ·
            other
                adverse conditions, such as changes in general customer confidence
                or
                spending, 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; 
 ·
            increased
                competition in the northwest Indiana, Colorado, and northwest Mississippi
                markets resulting from the newly completed and announced improvements
                to
                our competitor’s properties, which could substantially impact our
                operations; 
 ·
            seasonal
                influences that cause our casino operations to
                fluctuate; 
 ·
            other
                factors discussed elsewhere in this report or 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 report. In light of
        these
        risks, uncertainties and assumptions, the forward-looking events discussed
        in
        this report might not occur.
  31
  **OVERVIEW**
 
 ***The
        Company***
 
 The
        Majestic Star Casino, LLC and its subsidiaries (collectively, the “Company”),
        operate two riverboat gaming facilities located in Gary, Indiana (“Majestic
        Star” and “Majestic Star II”) and two Fitzgeralds brand casino-hotels located in
        Tunica County, Mississippi (“Barden Mississippi” or “Fitzgeralds Tunica”) and
        Black Hawk, Colorado (casino only) (“Barden Colorado” or “Fitzgeralds Black
        Hawk”). The Company has entered into an expense-sharing arrangement with Barden
        Nevada Gaming, LLC (“Barden Nevada” or “Fitzgeralds Las Vegas”) for support
        services. See Note 10 to the Consolidated Financial Statements.
 
 On
        December 21, 2005, the Company purchased the Majestic Star II (formerly
        known as Trump Indiana) from Trump Entertainment Resorts Holdings L.P. (“TERH”)
        for a purchase price of $253.0 million, subject to adjustments for certain
        obligations, cash on hand and working capital. As part of that purchase,
        the
        Company also acquired Trump Indiana’s 50% joint venture interest in Buffington
        Harbor Riverboats, L.L.C. (“BHR”) and in Buffington Harbor Parking Associates,
        L.L.C. (“BHPA”). An affiliate of the Company contributed its 50% interest in
        BHPA to the Company at the time of the closing on the Trump Indiana acquisition.
        As a result of these transactions, Majestic Star II, BHR and BHPA are now
        all
        wholly owned subsidiaries of the Company.
 
 Following
        the completion of the defeasance of the Majestic Investor Holdings 11.653%
        Notes
        (the “Investor Notes”), on March 6, 2006, we terminated the existence of
        Majestic Investor Capital Corp., a co-issuer of the Investor Notes. We also
        merged Majestic Investor, LLC and Majestic Investor Holdings, LLC into The
        Majestic Star Casino, LLC on March 21, 2006 and March 22, 2006,
        respectively.
 
 ***Discount
        Notes***
 
 A newly
        created entity and parent to the Company, Majestic Holdco, issued, in
        conjunction with its co-issuer, Majestic Holdco, Inc. $63.5 million of 12
        1/2%
        Senior Discount Notes due 2001 (the “Discount Notes”). The Company’s
        consolidated balance sheets as of March 31, 2006 and December 31, 2005
        and consolidated statement of operations and consolidated statement of cash
        flows for the three months ended March 31, 2006, include the pushdown of
        Discount Notes of $45.3 million at December 31, 2005 and $46.7 million at
        March 31, 2006, net of original issue discount, that were issued by
        Majestic Holdco, in connection with the financing for the Trump Indiana
        acquisition. Also being pushed down are financing costs of $2.8 million,
        net of
        amortization of $0.1 million, and interest expense of $1.4 million. A likely
        scenario for the repayment of these Discount Notes is from cash flows of
        the
        Company or a refinancing of the Company’s indebtedness, together with the
        indebtedness of Majestic Holdco. The Discount Notes have been “pushed-down” to
        the Company pursuant to the guidelines of SEC Staff Accounting Bulletin Topic
        5(J). The Discount Notes are solely the obligation of Majestic Holdco and
        its
        co-issuer, Majestic Holdco, Inc. and are unsecured. Neither the Company nor
        any
        of its direct or indirect subsidiaries guarantees the Discount Notes nor
        are the
        equity or assets of the Company or its subsidiaries security for the Discount
        Notes. Further, the Indentures governing the Senior Notes and the Senior
        Secured
        Notes and the loan and security agreement which governs our Senior Secured
        Credit Facility preclude distributions by the Company to Majestic Holdco
        unless
        certain financial tests are met.
  32
  **RESULTS
        OF OPERATIONS**
 
 ***Key
        operating revenue measurements***
 
 At
        our
        casino properties, casino revenues are the combination of our win at slot
        machines and table 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 (i.e. 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. 
 Our
        largest component of revenues is casino revenues, which comprised 92.1% and
        91.8% of our consolidated gross revenues in the three-month periods ended
        March
        31, 2006 and 2005, respectively. Casino revenues are 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.
  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
        represent 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 table games. Refer to the discussion above for definition of table
        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.
  33
  ***Trump
        Indiana Acquisition***
 
 On
        December 21, 2005, the Company completed its acquisition of Trump Indiana.
        During the first quarter of 2006, we spent a significant amount of time and
        effort to incorporate Trump Indiana, subsequently renamed Majestic Star II,
        into the Company. We anticipate that the integration strategy will result
        in a
        cost savings of approximately $14.4 million, which we identified during the
        due
        diligence that we performed before the acquisition. The integration strategy
        includes the re-branding of the Trump Indiana vessel and hotel as Majestic
        Star II, the integration of its computer systems and technologies, and the
        elimination of duplicative and unnecessary job positions. We identified
        approximately 500 positions that we determined were necessary to eliminate.
        By
        establishing a hiring freeze immediately after the acquisition, approximately
        200 positions were eliminated through natural attrition. Consequently, we
        were
        able to limit the number of layoffs to approximately 300. The layoffs resulted
        in us incurring approximately $1.1 million in severance costs, which were
        recorded as goodwill. Overall, the integration plan is substantially complete;
        however, there is still some continuing disruption to our guests while we
        continue to reconfigure the layout of the casino floors. The reconfiguration
        has
        taken longer than anticipated due to the required approvals from the Indiana
        gaming regulators , which must be received before we relocate, remove or
        add any
        games. We anticipate that the reconfiguration of the layout will be completed
        by
        the end of May or the beginning of June.
 
 As
        recently reported by the Indiana Gaming Commission, the casino revenues at
        our
        Majestic Star and Majestic Star II facilities declined 21.7% in April 2006
        from
        April 2005, when the operating entities were Majestic Star and Trump Indiana.
        For all of northwest Indiana, casino revenues declined 1.7% in April 2006
        from
        April 2005. Influences that we believe caused the decline include:
 
 ·
            The
                opening of a new casino and amenities at an existing
                competitor. 
 ·
            Disruption
                and challenges caused by the integration of Majestic Star and Majestic
                Star II, including changing the layout of our casino floors,
                eliminating  approximately 500 positions between Majestic Star,
                Majestic Star II and BHR, and combining and transitioning the Majestic
                Star, Majestic Star II and BHR management team and
                workforce. 
 ·
            A
                significant reduction in our direct mail and cash based promotional
                activities relative to what was incurred in the prior year by Majestic
                Star and Trump Indiana. 
 ·
            Greater
                levels of marketing and advertising from our
                competitors. 
 ·
            Continued
                construction to roads and highways accessing our Majestic Star and
                Majestic Star II properties. 
 ·
            Higher
                energy and fuel costs experienced by our customers that result in
                fewer
                trips to our Majestic Properties and less discretionary spending
                on
                gambling. 
 
 We
        are
        actively addressing those issues identified above that are within our
        control. Our immediate plans include:
 
 ·
            Enhancing
                our database marketing and mailing supplemental offers to our guests
                to
                drive incremental trips during non-peak
                periods. 
 ·
            Establishing
                new promotions that will drive visits to both Majestic Star and Majestic
                Star II. 
 ·
            Enhancing
                and targeting our advertising in radio, television and
                publications.  34
  
 ·
            Creating
                a feeling of difference between Majestic Star and Majestic Star II,
                so
                that we are offering our guests a choice between two casinos at one
                location. 
 ·
            Enhancing
                our bus programs from Chicago. 
 ·
            Improving
                our guest development and hosting
                programs. 
 ·
            Opening
                our non-smoking gaming floor to attract customers that seek a non-smoking
                environment. 
 ·
            Restructuring
                our complimentary program to make it easier for guests to access
                their
                hotel, food and beverage complimentaries. 
 ·
            Continuing
                the integration and training of our workforce with an emphasis on
                guest
                service.  ·
              Establishing
                  new employee incentive and reward
                  programs.
 We
        believe the programs listed above will enhance our revenues and cash flow;
        however, many of the programs listed above take time to implement and time
        to
        gain customer acceptance. Additionally, the Majestic Properties will continue
        to
        be subject to the enhanced marketing, promotions and amenities offered by
        our
        competitors. There is no guarantee that our immediate plans will improve
        our casino revenues and our cash flows in the near term or on a permanent
        basis.
 
  ***Overall
        Operating Results***
 
 The
        discussion of our consolidated financial results for the three months ended
        March 31, 2006 is inclusive of the operating results of Majestic Star II,
        along with the additional 50% interest of BHR and BHPA, from the date of
        acquisition. In addition, our financial results are inclusive of interest
        expense and amortization of financing costs related to the pushdown of the
        Discount Notes, as discussed previously, and are exclusive of severance pay
        paid
        in connection with the Indiana Trump acquisition as those costs have been
        recorded as goodwill.
 
 Consolidated
        gross operating revenues increased $35.3 million, or 45.6%, from $77.4 million
        in the three-month period ended March 31, 2005 to $112.8 million in the
        three-month period ended March 31, 2006. The increase is primarily due to
        the
        acquisition of Majestic Star II, which contributed $36.6 million to
        consolidated gross revenues in its first full quarter of operations. Fitzgeralds
        Tunica added $1.1 million to consolidated gross revenues due to improved
        casino
        revenue of $0.8 million, increased room revenue of $0.2 due to higher occupancy
        and room rates and increased food and beverage revenue of $0.1 million.
        Fitzgeralds Black Hawk had a decline in gross revenues of $0.4 million mostly
        due to decreased casino revenue. Majestic Star’s gross revenues declined $2.2
        million also due to a decrease in casino revenue.
 
 We
        had
        consolidated net income of $3.7 million during the three-month period ended
        March 31, 2006 compared to $3.4 million during the same period in 2005.
        Impacting net income in the first quarter of 2006, was the addition of Majestic
        Star II, BHR and BHPA to our operations. Also, having an impact was the
        additional interest expense and the amortization of financing costs incurred
        as
        a result of the Trump Indiana acquisition. Additionally affecting our net
        income
        in the three-month period ended March 31, 2005 was the
        cessation of depreciation and amortization expense at Fitzgeralds Black
        Hawk. On July 12, 2004, Fitzgeralds Black Hawk stopped depreciating and
        amortizing its fixed and intangible assets in conjunction with the sale of
        substantially all of its assets. Since the sale was terminated in April 2005,
        normal depreciation and amortization of $0.6 million was recorded in the
        first
        quarter of 2006.
  35
  An
        overview of the developments that affected our results during the three-month
        period ended March 31, 2006, or that may affect future results are listed
        below and discussed in greater detail in our discussion of operating
        results:
  ·
            Our
                consolidated casino revenues increased by $32.8 million, or 46.1%,
                to
                $103.9 million for the three-month period ended March 31, 2006, as
                compared to the same period last year. Consolidated casino revenues
                contributed 92.1% of our total consolidated gross revenues. Our increase
                in casino revenues is primarily due to the addition of Majestic
                Star II’s casino revenue totaling $34.7 million in the first quarter
                of 2006. Adding to the increase in consolidated casino revenue was
                a $0.8
                increase at Fitzgeralds Tunica resulting from increases in slot coin-in
                and slot win percentages of 1.4% and 2.7%, respectively. These increases
                in consolidating casino revenue were offset by declines in casino
                revenue
                at Majestic Star of $2.2 million and $0.4 million at Fitzgeralds
                Colorado.
                The decline at Majestic Star was due to a $1.4 million decrease in
                table
                games revenue caused by a 19.8% decline in drop and a 1.6% decline
                in win
                percentage, and a $0.8 million decline in slot revenue resulting
                from a
                decrease in slot coin-in of 8.2%, offset by a 6.3% improvement in
                win
                percentage. Fitzgeralds Black Hawk’s decline in casino revenues of $0.4
                million was mostly due to lower slot coin-in of 2.4% and slot win
                percentage of 1.1%. 
 ·
            Consolidated
                promotional allowances increased $2.2 million in 2006 from 2005.
                Consolidated promotional allowances include the retail value of hotel
                rooms (Fitzgeralds Tunica and the Majestic Properties only), food,
                beverage and merchandise provided to our casino customers at no charge.
                Consolidated promotional allowances also include cash based promotional
                activities, including those cash based activities related to our
                slot
                clubs and direct mail program. The increase in consolidated promotional
                allowances is attributable to the addition of Majestic Star II’s
                promotional allowances of $2.3 million, increased promotional allowances
                at Fitzgeralds Tunica and Fitzgeralds Black Hawk of $0.9 million
                and $0.1
                million, respectively, offset by a decline in promotional allowances
                of
                $1.1 million at Majestic Star. The increase at Fitzgeralds Tunica
                is due
                to our attempt to remain competitive in the Tunica market place.
                The
                decline at Majestic Star resulted from our decrease in promotional
                offers
                to our lower tiered, least profitable
                guests. 
 ·
            Consolidated
                casino expense increased $5.6 million, primarily due to the addition
                of
                Majestic Star II’s $6.5 million in casino expenses. This increase was
                offset by a $0.8 million decline in casino expense at Majestic Star
                resulting from lower revenue volumes and cost cutting measures put
                in
                place during the first quarter of 2006. 
 ·
            Consolidated
                general and administrative expense increased $4.6 million from the
                first
                quarter of 2005. The increase is mostly due to the additional general
                and
                administrative expense of Majestic Star II, BHR and
                BHPA. 
 ·
            Other
                than Majestic Star II’s addition of $10.6 million, consolidated
                gaming and incentive taxes declined by $0.8, which is primarily
                attributable to Majestic Star’s reduced casino revenue in the first
                quarter of 2006. 
 ·
            Corporate
                allocation expense increased $0.6 million in the first quarter of
                2006 due
                to increased payroll and professional fee expense.  36
  
 ·
            Consolidated
                depreciation and amortization expense, exclusive of Majestic Star II,
                BHR and BHPA, increased by $0.5 million primarily as a result of
                depreciation and amortization expense not being recorded in the first
                quarter of 2005 at Fitzgeralds Black Hawk since the Black Hawk assets
                were
                held for sale at that time. Since the sale was terminated in April of
                2005, we recorded depreciation and amortization expense of $0.6 million
                in
                the first quarter of 2006. 
 ·
            Interest
                expense increased $7.6 million during the first quarter of 2006,
                primarily
                due to the debt incurred to finance the acquisition of Trump Indiana
                (including $1.5 million attributable to the push-down of the Majestic
                Holdco debt). 
 ·
            Competition
                in our markets remains intense. The new casino and amenities at Boyd
                Gaming’s Blue Chip Casino have impacted our operations at the Majestic
                Properties. Recently, Harrah’s Entertainment announced plans for a $485.0
                million expansion project at its Horseshoe Casino in Hammond, Indiana.
                Various remodel and expansion projects have been recently completed
                by our
                competitors in the Black Hawk market, and there have been increased
                marketing activities. If the level of competition in the Black Hawk
                market
                continues to increase, our financial performance and cash flows may
                be
                negatively impacted. In addition, higher gas prices may be impacting
                the
                frequency of trips to all of our casinos and negatively
                impacting the discretionary gambling budgets of our customers. 
 ·
            In
                the first quarter of 2006, we spent approximately $3.2 million for
                the
                purchase of slot machines and TITO implementation, re-branding Trump
                Indiana to Majestic Star II and integration of our computer system
                with Trump Indiana. 
 ·
            We
                continue the implementation of TITO at our properties. As of
                March 31, 2006 we had 819, or 62.9%, of our slot machines at
                Fitzgeralds Tunica equipped with TITO and 282, or 47.1%, of our slot
                machines at Fitzgeralds Black Hawk equipped with TITO. At Majestic
                Star
                and Majestic Star II, all of our slot machines are TITO equipped. It
                is our goal to have 100% of our slot machines at all of our properties
                equipped with TITO by year end. 
 ·
            The
                Company announced that Kirk C. Saylor has joined the organization
                as its
                new Executive Vice President and Chief Operating Officer (COO). Mr.
                Saylor
                will play an integral role in developing the strategies for the continued
                growth and success of the Company. Mr. Saylor has over twenty years
                of
                experience, including key positions in both operations and finance
                in
                large, nationally recognized gaming
                companies. 
 ·
            A
                new management team is in place at Fitzgeralds Tunica. The new management
                team is implementing changes to the property to make it more competitive
                in the Tunica market. A new advertising program has recently been
                implemented. Management is also currently enhancing the property’s direct
                mail, guest development and hosting programs. Improvements have already
                been made to the food and beverage operation including the upgrading
                of
                our steakhouse, now known as Don B’s. Property management is attempting to
                upgrade the property in order to attract a higher level of rated
                play. As
                management proceeds with its improvement strategies, additional capital
                and operating costs may be necessary in the near term in order to
                generate
                greater revenues over the long term. 
 ·
            The
                expansion plans for Fitzgeralds Black Hawk are scheduled to begin
                in the
                third quarter of this year and should be completed 15 to 18 months
                later.
                This expansion will not only add more amenities for our guests, but
                will
                also increase the number of slot machines from approximately 600
                to
                approximately 1,000, which will all be
                TITO. 
 The
        following tables set forth information derived from the Company's statements
        of
        operations, balance sheets and statements of cash flows.
  37
  
 **Operating
        Results by Entity**
 (in
        thousands)
 For
                  The Three Months EndedMarch
                  31,2006
              
              2005Gross
                  revenues:Majestic
                  Star Casino
              
              
              
              
              $
              37,636
              
              $
              39,805Majestic
                  Star Casino II
              
              
              
              
              
              36,633
              
              
              -Buffington
                  Harbor Riverboats
              
              
              
              
              
              119
              
              
              -Total
                  Majestic Properties
              
              
              
              
              
              74,388
              
              
              39,805Fitzgeralds
                  Tunica
              
              
              
              
              
              28,297
              
              
              27,166Fitzgeralds
                  Black Hawk
              
              
              
              
              
              10,068
              
              
              10,474Total
              
              
              
              
              $
              112,753
              
              $
              77,445Net
                  revenues:Majestic
                  Star Casino
              
              
              
              
              $
              35,108
              
              $
              36,176Majestic
                  Star Casino II
              
              
              
              
              
              34,284
              
              
              -Buffington
                  Harbor Riverboats
              
              
              
              
              
              119
              
              
              -Total
                  Majestic Properties
              
              
              
              
              
              69,511
              
              
              36,176Fitzgeralds
                  Tunica
              
              
              
              
              
              21,733
              
              
              21,516Fitzgeralds
                  Black Hawk
              
              
              
              
              
              8,674
              
              
              9,163Total
              
              
              
              
              $
              99,918
              
              $
              66,855Casino
                  revenues:Majestic
                  Star Casino
              
              
              
              
              $
              36,449
              
              $
              38,697Majestic
                  Star Casino II
              
              
              
              
              
              34,680
              
              
              -Total
                  Majestic Properties
              
              
              
              
              
              71,129
              
              
              38,697Fitzgeralds
                  Tunica
              
              
              
              
              
              23,352
              
              
              22,585Fitzgeralds
                  Black Hawk
              
              
              
              
              
              9,404
              
              
              9,801Total
              
              
              
              
              $
              103,885
              
              $
              71,083Operating
                  income (loss):Majestic
                  Star Casino
              
              
              
              
              $
              9,248
              
              $
              5,628Majestic
                  Star Casino II
              
              
              
              
              
              9,519
              
              
              -Buffington
                  Harbor Riverboats
              
              
              
              
              
              (3,541
              )
              
              -Buffington
                  Harbor Parking Associates
              
              
              
              
              
              (361
              )
              
              -Total
                  Majestic Properties
              
              
              
              
              
              14,865
              
              
              5,628Fitzgeralds
                  Tunica
              
              
              
              
              
              3,679
              
              
              3,305Fitzgeralds
                  Black Hawk
              
              
              
              
              
              1,742
              
              
              2,971Corporate
                  (1)
              
              
              
              
              
              (1,842
              )
              
              (1,217
              )Majestic
                  Investor Holdings
              
              
              
              
              
              -
              
              
              (70
              )Total
              
              
              
              
              $
              18,444
              
              $
              10,617
  38
  **Operating
        Results by Entity (continued)**
 
 As
                  of March 31,2006
              
              2005(in
                  thousands)Operating
                  Margin (2)Majestic
                  Star Casino
              
              
              26.3
              %
              
              15.6
              %Majestic
                  Star Casino II
              
              
              27.8
              %
              
              n/aBuffington
                  Harbor Riverboats
              
              
              (2967.6
              )%
              
              n/aBuffington
                  Harbor Parking Associates
              
              
              n/a
              
              
              n/aTotal
                  Majestic Properties
              
              
              21.4
              %
              
              15.6
              %Fitzgeralds
                  Tunica
              
              
              16.9
              %
              
              15.4
              %Fitzgeralds
                  Black Hawk
              
              
              20.1
              %
              
              32.4
              %Corporate
              
              
              n/a
              
              
              n/aMajestic
                  Investor Holdings
              
              
              n/a
              
              
              n/aTotal
              
              
              18.5
              %
              
              15.9
              %As
                    of March 31,
              
              
              As
                  of December 31,2006
              
              
              2005(in
                  thousands)Segment
                  assets:Majestic
                  Star (3)
              
              $
              117,469
              
              $
              243,475Majestic
                  Star Casino II
              
              
              225,598
              
              
              229,246Buffington
                  Harbor Riverboats
              
              
              53,015
              
              
              53,751Buffington
                  Harbor Parking Associates
              
              
              22,002
              
              
              21,592Fitzgeralds
                  Tunica
              
              
              73,704
              
              
              75,406Fitzgeralds
                  Black Hawk
              
              
              37,338
              
              
              31,688Corporate
                  (3)
              
              
              381,254
              
              
              289,353Majestic
                  Investor Holdings
              
              
              -
              
              
              1,896Total
              
              
              910,380
              
              
              946,407Less:
                  Intercompany
              
              
              (399,144
              )
              
              (428,448
              )Total
              
              $
              511,236
              
              $
              517,959As
                  of March 31,2006
              
              
              2005(in
                  thousands)Expenditures
                  for additions to long-lived assets:Majestic
                  Star
              
              $
              2,077
              
              $
              891Majestic
                  Star Casino II
              
              
              76
              
              
              n/aBuffington
                  Harbor Riverboats
              
              
              13
              
              
              n/aFitzgeralds
                  Black Hawk
              
              
              489
              
              
              407Fitzgeralds
                  Tunica
              
              
              502
              
              
              1,850Corporate
              
              
              5
              
              
              -Total
              
              $
              3,162
              
              $
              3,148
 Notes:
 (1)
            Corporate
                expenses reflect payroll, benefits, travel and other costs associated
                with
                our corporate staff and are not allocated to the
                properties. (2)
            Operating
                margin is calculated by dividing operating income by net
                revenues. (3)
            The
                combined assets of Majestic Star and Corporate include inter-company
                receivables from Majestic Star II, Fitzgeralds Tunica, BHR, BHPA
                and
                Fitzgeralds Black Hawk totaling approximately $399.1 million at March
                31,
                2006 and $428.4 million at December 31, 2005. Intercompany receivables
                are
                eliminated in consolidation.  39
  FIRST
        QUARTER 2006 COMPARED TO FIRST QUARTER 2005
 
 Consolidated
        gross operating revenues for the first quarter of 2006 increased $35.3 million,
        or 45.6%, from consolidated gross operating revenues recorded in the first
        quarter of 2005. Majestic Star II contributed substantially all of the
        increase in consolidated gross operating revenues due to the inclusion of
        its
        operations in our first quarter 2006 consolidated results. Consolidated casino
        revenues, which comprise 92.1% of consolidated gross revenues, increased
        $32.8
        million, or 46.1%, to $103.9 million, again due to Majestic Star II’s
        contribution, which was $34.7 million. Majestic Star’s casino revenues declined
        $2.2 million primarily due to declines in slot coin in of 8.28% and table
        games
        drop of 19.8%, offset by an improvement in slot hold percentage of 6.3%.
        Gross
        operating revenues for the first quarter of 2006 at Fitzgeralds Tunica increased
        $1.1 million, or 4.2%, and at Fitzgeralds Black Hawk declined $0.4 million,
        or
        3.9%, as compared to the first quarter of 2005.
 
 Consolidated
        promotional allowances increased $2.2 million, or 21.2%. Majestic Star II
        contributed $2.3 million to the increased consolidated promotional allowances,
        while Majestic Star’s promotional allowances decreased $1.1 million, or 30.4%.
        At Fitzgeralds Tunica promotional allowances were $0.9 million higher in
        the
        first quarter of 2006 than in the prior year quarter, as the property was
        more
        aggressive in all promotional activities including cash, hotel, and food
        and
        beverage to remain competitive in the Tunica market.
 
 Total
        consolidated operating expenses increased $25.2 million, or 44.9%, resulting
        primarily from the addition of the operating expenses of Majestic Star II
        and fifty percent of the operating expenses of BHR and BHPA, which totaled
        $26.8
        million. Excluding the addition of Majestic Star II, BHR and BHPA, total
        consolidated operating expenses declined by $0.8 million in casino expenses,
        $0.8 million in gaming and incentive tax expense, $0.2 million in advertising
        and promotion expenses, $0.1 million in general and administrative expenses,
        offset by an increase of $0.6 million in corporate.
 
 Excluding
        the addition of $6.5 million to consolidated casino expenses from Majestic
        Star II, there was a $0.8 decrease in consolidated casino expenses due
        primarily to lower revenue volumes at Majestic Star and the cost savings
        efforts
        in place in connection with the acquisition.
 
 While
        consolidated advertising and promotion expenses are up $0.7 million as a
        result
        of the addition of Majestic Star II’s advertising and promotion expense,
        without Majestic Star II, there would have been a decline of $0.2 million
        in consolidated advertising and promotion expense due to cost cutting measures
        at Majestic Star resulting in lower payroll and other costs totaling $0.3
        million offset by a $0.1 million increase at Fitzgeralds Tunica.
 
 The
        increase in consolidated gaming and incentive taxes is primarily attributable
        to
        the addition of $10.6 million from Majestic Star II. The remaining properties
        had a decrease in gaming and incentive taxes of $0.8 million due to the net
        effect of a $0.9 million decrease at Majestic Star caused by lower casino
        revenues, offset by a $0.1 million increase at Fitzgeralds Tunica, which
        is a
        direct result of increased casino revenues.
 
 General
        and administrative expenses increased $4.6 million in the first quarter of
        2006
        as compared to the prior year quarter primarily due to the acquisition of
        Majestic Star II, BHR and BHPA. Also, adding $0.2 million to the increase
        was
        additional facilities payroll and other expenses at Fitzgeralds Tunica incurred
        to improve the appearance of the facilities.
 
 Corporate
        expenses increased $0.6 million. The increase is primarily attributed to
        increased payroll expenses and professional fees.
  40
  Consolidated
        depreciation and amortization expense increased by $3.1 million to $7.8 million.
        The addition of Majestic Star II, BHR and BHPA contributed $3.2 million of
        the
        increase. Fitzgeralds Black Hawk also contributed $0.6 million due to the
        cessation of depreciation and amortization at Fitzgeralds Black Hawk during
        the
        first quarter last year when its assets were held for sale. Fitzgeralds Tunica
        and Majestic Star had declines in depreciation and amortization expense of
        $0.3
        million and $0.2 million, respectively. The decline at Fitzgeralds Tunica
        is
        because certain of its assets have become fully depreciated. The decline
        at
        Majestic Star results from the transfer of the Company’s debt from Majestic Star
        to Corporate, thus eliminating the amortization of deferred loan costs at
        the
        property level.
  In
          the
          three-month period ended March 31, 2005, BHR was owned equally by Majestic
          Star and Trump Indiana with each entity accounting for its interest under
          the
          equity method. Expenses of BHR were reimbursed by the two members, with
          the
          exception of depreciation expense. For that reason, the Company reported
          a loss
          on investment in BHR of $0.6 million for the first quarter of 2005. With
          the
          acquisition of Trump Indiana on December 21, 2005, we now have full ownership
          of
          BHR as an entity and BHR’s first quarter results for 2006 are consolidated into
          our overall operating results.
 Consolidated
        other expense increased by $7.4 million to $14.7 million. The main component
        of
        consolidated other expense is interest expense, which increased $7.6 million
        due
        to higher levels of debt during the first quarter of 2006 due to the financing
        obtained to facilitate the acquisition of Trump Indiana. For the first quarter
        of 2006, the $40.0 million in additional Senior Secured Notes added $1.0
        million
        in additional interest. The $200.0 million in Senior Notes added $4.9 million
        in
        interest. The Discount Notes added $1.5 million in additional interest expense.
        At March 31, 2006 and March 31, 2005, the Company had $28.7 million
        and $36.0 million, respectively, outstanding on the credit facility. During
        the
        past quarter, the Company’s interest rate on borrowings ranged between 6.86% and
        8.0%, while in the same quarter last year, the interest rate on borrowings
        ranged between 5.63% and 6.34%.
 
 **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 (the “Senior Secured Credit
        Facility”). We generate substantial cash flows from operating activities. For
        the three months ended March 31, 2006 and 2005, we reported cash flows from
        operating activities of $16.4 million and $14.3 million, respectively. We
        use
        our cash flows to meet our financial obligations, which consist principally
        of
        financing our daily operations of our casinos, servicing our debt, funding
        capital improvements and projects, and making distributions to BDI under
        the
        manager agreement and for tax distributions.
 
 At
        March 31, 2006, $28.7 million was outstanding under the Senior Secured
        Credit Facility. The Company had unrestricted cash and cash equivalents of
        $24.5
        million at March 31, 2006. At December 31, 2005, the Company had
        unrestricted cash and cash equivalents of $32.4 million. In the first quarter
        of
        2006, the Company spent $3.2 million for the purchase of slot machines and
        TITO
        implementation, re-branding Trump Indiana to Majestic Star II and
        integration of our computer system with Trump Indiana. For the period ended
        March 31, 2005, the Company spent $3.1 million primarily for slot machines
        at
        Majestic Star, Fitzgeralds Tunica and Fitzgeralds Black Hawk and for a new
        slot
        player tracking and marketing system at Fitzgeralds Black Hawk.
  41
  With
        an
        estimated start date in the third quarter of 2006, the Fitzgeralds Black
        Hawk
        property will expand its facility by rebuilding the Masonic Building as a
        part
        of a major casino expansion. Management expects the casino expansion to cost
        approximately $25.0 million, including the re-construction of the Masonic
        Building and the purchase of associated gaming equipment and other furniture
        and
        fixtures. The building will be four stories with a gaming mezzanine and a
        food
        outlet. The construction is anticipated to be completed by October 2007 and
        will be financed with cash flow and borrowings under the Senior Secured Credit
        Facility. Fitzgeralds Black Hawk also intends to rebuild the Rohling Inn,
        another historical building on Fitzgeralds Black Hawk’s property. The
        re-building is necessary due to its partial collapse when a contractor for
        the
        City of Black Hawk was burying a storm sewer pipe on the property of Fitzgeralds
        Black Hawk, causing damage to the building. We are currently in discussion
        with
        the insurance company to determine the amount of the proceeds from the policy,
        but there is a risk of a short-fall to rebuild ranging from approximately
        $1.5
        million to $2.0 million. The Company anticipates subrogating the claim back
        to
        the City of Black Hawk and its contractor. However, there is no assurance
        that
        the Company will be successful with its claim. In the interim, the Company
        will
        need to advance the funds to cover any shortfall from insurance
        proceeds.
 
 The
        Company owns 240 acres that are available for future improvements at Buffington
        Harbor. However, the Company is precluded, by the Senior Secured Credit
        Facility, from making capital expenditures in excess of $20.0 million per
        year,
        (except for $7.5 million for TITO slot machines at Fitzgeralds Tunica and
        Fitzgeralds Black Hawk and the $25.0 million Fitzgeralds Black Hawk expansion).
        As a result of the Company's capital expenditure limitation, the Company
        may
        need to seek partners to provide financing for these improvements, receive
        a
        contribution from its member or amend the capital expenditure covenant contained
        within the Senior Secured Credit Facility. In addition, the Company acquired
        on
        December 31, 2005, 2.45 acres of land at its Fitzgeralds Black Hawk
        property. This land is available for development; however, obtaining capital
        to
        commence development is limited as previously explained.
 
 One
        of
        our goals in 2006 is to continue with the implementation of TITO on our slot
        product. As of March 31, 2006 we had 819, or 62.9%, of our slot machines at
        Fitzgeralds Tunica equipped with TITO and 282, or 47.1%, of our slot machines
        at
        Fitzgeralds Black Hawk equipped with TITO. At Majestic Star and Majestic
        Star
        II, all of our slot machines are TITO equipped. It is our goal to have 100%
        of
        our slot machines at all of our properties equipped with TITO by year
        end.
 
 Management
        believes that the Company's cash flow from operations and its current line
        of
        credit will be adequate to meet the Company's anticipated normal operating
        requirements for working capital, its planned capital expenditures and its
        significant contractual obligations with respect to amounts outstanding under
        the Senior Secured Credit Facility, the Senior Secured Notes and the Senior
        Notes and tax distributions and distributions under the manager agreement
        with
        BDI. The Company will be required to pay any amounts outstanding on the Senior
        Secured Credit Facility, plus accrued interest thereon, in 2010. In addition,
        beginning April 15, 2009, our parent will likely look to us to distribute
        cash
        to pay interest on the Discount Notes. Our ability to distribute cash to
        Majestic Holdco is limited unless certain financial tests are met. The Senior
        Secured Notes mature in October 2010 and the Senior Notes mature in January
        2011. No assurance can be given that our operating cash flows or proceeds
        from
        additional financings, if available, will be sufficient to pay those obligations
        at maturity.
 
 The
        indenture governing the Senior Secured Notes and the Senior Notes and the
        loan
        and security agreement for the Senior Secured Credit Facility allow for
        distributions to BDI to pay income taxes. The ultimate resolution of the
        assessments by the Indiana Department of Revenue against the Company and
        BDI, in
        the amount of $4.1 million, plus penalties and interest (as more fully described
        in Note 9 to the Financial Statements - Commitments and Contingencies) could
        have a material impact on the Company's liquidity in the period that the
        taxes
        are paid, if any, and to the extent that the Company uses such liquidity
        to make
        distributions to BDI for tax purposes.
  42
  The
        purchase of certain gaming facilities by larger more recognized brand names
        or
        the expansion of gaming in jurisdictions in which gambling is already legal
        or
        currently illegal could significantly increase competition for the Company
        and
        thereby require additional investment by the Company in its facilities, gaming
        devices and marketing efforts. If necessary, and to the extent permitted
        under
        the indentures governing the Senior Secured Notes and Senior Notes, the Company
        would seek additional financing through borrowings of debt or equity financing,
        subject to any governmental approvals. There can be no assurance that additional
        financing, if needed, will be available to the Company or that, if available,
        the financing will be on terms favorable to the Company. In addition, there
        is
        no assurance that the Company's estimate of its reasonably anticipated liquidity
        needs is accurate or that unforeseen events will not occur, resulting in
        the
        need to raise additional funds.
 
 On
        April 13, 2006, the Company entered into Amendment Number Five to the Loan
        and Security Agreement, as amended (“Amendment Five”). Amendment Five modifies
        the interest coverage ratio financial covenant, as defined in the Loan and
        Security Agreement, for the twelve month period ended March 31, 2006. As a
        result of Amendment Four, the Company was required to obtain an interest
        coverage ratio of 1.85:1.0. The interest coverage ratio has been amended
        to
        1.8:1.0. In addition, the definition of Consolidated Interest Expense was
        amended to exclude interest expense related to the pushdown of Majestic Holdco's
        Discount Notes. The interest expense on Majestic Holdco's Discount Notes
        is
        being pushed down to the Company pursuant to SEC Staff Accounting Bulletin,
        Topic 5(J). Majestic Holdco's Discount Notes are not guaranteed by the Company
        or any of its direct or indirect subsidiaries and none of the Company's or
        its
        direct or indirect subsidiaries equity or assets secure the Discount Notes
        of
        Majestic Holdco. As of March 31, 2006, the Company was in compliance with
        all of its debt covenants.
 
 As
        of
        March 31, 2006, the Company had $51.3 million available on its $80.0
        million credit facility.
  **CRITICAL
        ACCOUNTING POLICIES**
 
 Our
        consolidated financial statements are prepared in accordance with accounting
        principles generally accepted in the United States of America, which require
        our
        management to make estimates and assumptions about the effects of matters
        that
        are inherently uncertain. We have summarized our significant accounting policies
        in Note 2 to our consolidated financial statements contained in our Annual
        Report on Form 10-K for the year ended December 31, 2005 and in Note 2 to
        the interim financial statements as of March 31, 2006 as contained herein.
        Of our accounting policies, we believe the following may involve a higher
        degree
        of judgment and complexity.
 
 *Revenue
        Recognition* —
Casino
        revenue is the net win from gaming activities, which is the difference between
        the amount wagered by our gaming patrons and the amount paid out to our patrons
        as a result of those wagers. Hotel, food and beverage and other revenue are
        recognized at the time the related service is performed. We deduct from our
        gross revenues the retail value of hotel rooms, food, beverage and merchandise
        provided to our casino customers on a complimentary basis. We also deduct
        from
        our gross revenues the value of certain cash-based promotional activities,
        including cash earned by customers as part of our slot club programs and
        cash
        coupons mailed to our casino customers.
 
 *Goodwill
        and Other Intangible Assets* —
We
        regularly evaluate our acquired businesses for potential impairment indicators.
        Additionally, we adopted the provisions of SFAS 142, “Goodwill and Other
        Intangible Assets,” in January 2002, that require us to perform impairment
        testing at least annually. Our judgments regarding the existence of impairment
        indicators are based on, among other things, the regulatory, market status
        and
        operational performance of our acquired business. Future events could
        significantly impact our judgments and any resulting impairment loss could
        have
        a material adverse impact on our financial condition and results of
        operations.
 
 *Property
        and Equipment* —We
        depreciate our assets on a straight-line basis over their estimated useful
        lives. The estimate of the useful lives is based on the nature of the asset
        as
        well as our current operating strategy. Future events, such as property
        expansions, new competition and new regulations, could result in a change
        in the
        manner in which we are using certain assets requiring a change in the estimated
        useful lives of such assets. In assessing the recoverability of the carrying
        value of property and equipment, we must make assumptions regarding estimated
        future cash flows and other factors. If these estimates or the related
        assumptions change in the future, we may be required to record impairment
        charges for these assets.
  43
  *Casino
        Club Liability* —
All
        of
        our casinos offer programs whereby participants can accumulate points for
        casino
        wagering that can currently be redeemed for cash, lodging, food and beverages
        and merchandise. A liability is recorded for the estimate of unredeemed points
        based upon each property’s redemption history. Changes in the program, increases
        in membership and changes in the redemption patterns of the participants
        can
        impact this liability.
 
 *Self-Insurance* —
The
        Company maintains accruals for self-insured health and worker’s compensation
        programs, which are classified in payroll and related liabilities in the
        consolidated balance sheets. Management and consultants determine the estimates
        of these accruals by periodically evaluating the historical expenses and
        projected trends related to these accruals. Actual results may differ from
        those
        estimates.
 
 *Litigation,
        Claims and Assessments* —
We
        also
        utilize estimates for litigation, claims and assessments. These estimates
        are
        based upon our knowledge and experience about past and current events and
        also
        upon reasonable future events. Actual results may differ from those
        estimates.
 
 **RECENTLY
        ISSUED ACCOUNTING PRONOUNCEMENTS**
 
 The
        Company has or will be required to adopt the following accounting policies
        resulting from the following newly issued standards.
 
 ·
            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 adopted SFAS 151 without any material
                impact on the Company’s financial position, results of operations or cash
                flows. 
 ·
            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 Statement” 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 adopted SFAS 154 without any material
                impact on the Company’s financial position, results of operations or cash
                flows. 
 
 **Item
        3.**  **Quantitative
        and Qualitative Disclosures About Market Risk.**
 
 There
        have been no material changes from the information reported in the Company's
        Annual Report on Form 10-K for the fiscal year ended December 31,
        2005.
 
 
 **Item
        4.**  **Controls
        and Procedures.**
 
 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.
  44
  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
        March 31, 2006 that have materially affected, or are reasonably likely to
        materially affect the Company's financial reporting.
 
  45
  **PART
        II**  **OTHER
        INFORMATION**
 
 
 **Item
        1.**   **Legal
        Proceedings.**
 
 Information
        regarding Legal Proceedings appears in Part I - Item 3 of our Report on Form
        10-K for the fiscal year ended December 31, 2005. The following information
        is an update to those matters previously disclosed in our Report on Form
        10-K:
 
 Majestic
        Star Income Tax Protest - The
        Indiana Department of Revenue (“Department”) held a hearing on the 1996 through
        2002 tax years on April 7, 2006, and is expected to issue its ruling later
        this year. BDI's non-resident shareholder has been assessed $0.2 million,
        plus
        penalty and interest, for 2003.
 
 Majestic
        Star Sales and Use Tax Assessments - The
        Department held a hearing on the 2003 and 2004 tax years on April 7, 2006,
        and is expected to issue its ruling later this year. In regard to the matters
        for the period 2001 through July 2003, the Tax Court has scheduled a preliminary
        pre-trial conference in that case for May 19, 2006.
 
 BHR
        Sales and Use Tax Assessments
  1998-2001
        Tax Years. - The
        Tax Court has scheduled a preliminary pre-trial conference in that case for
        May 19, 2006.
 
 2002-2004
        Tax Years **-** The
        Department held a hearing on the 2002 tax year on April 7, 2006, and is
        expected to issue its ruling later this year.
 
 
 **Item
        1A.**  **Risk
        Factors.**
 
 Information
        regarding risk factors appears in Part I - Item IA of our Report on Form
        10-K
        for the fiscal year ended December 31, 2005. The following risk factors
        reflect certain material changes from the risks previously disclosed in our
        Report on Form 10-K:
 
 **Increased
        competition in Chicagoland market**
 
 On
        April 27, 2006, Harrah’s Entertainment announced plans for a $485 million
        renovation and expansion of its Horseshoe Casino in Hammond, Indiana that
        is
        tentatively scheduled to open in mid-2008. The facility is expected to more
        than
        double the size of their existing facility. While we cannot determine what
        effect this will have on our future operations in the Chicagoland market,
        it may
        have a significant impact on our how we operate our business to remain
        competitive.
 
 **We
        may not realize any of the anticipated benefits of the Majestic Star II
        acquisition**
 
 Most
        of
        the cost-savings strategies that were planned were put into effect during
        March
        2006. The implementation did cause disruption on the casino floor as the
        gaming
        area was reconfigured. The layoff of approximately 300 employees was also
        completed as we consolidated operations between the two facilities. We
        anticipate seeing the results of these strategies in the coming periods,
        although there can be no assurance that our strategies will meet our
        expectations.
 
 **Higher
        energy costs**
 
 Due
        to
        the recent increase in energy prices, there is a greater risk that our patrons
        will have less discretionary income due to higher fuels costs. Customers
        may
        also be less likely to travel or reduce the number of trips to our casinos.
 
  46
  **Black
        Hawk construction projects**
 
 If
        there
        is a shortfall in the insurance proceeds we expect to receive for the rebuilding
        of the Rohling Inn at Black Hawk, we will need to reallocate our capital
        expenditure budget to cover these costs in order to stay within our capital
        expenditures limitation in our loan covenants. This will limit our ability
        to
        implement our other planned expenditures at our properties.
 
 
 **Item
        6.**   **Exhibits.**
 
 (a)
              The
                  following exhibits are filed as part of this
                  report:
   Exhibit No.
              Description of
                Document31.1*
              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.
 
 *
        Filed
        herewith.
 
 
  47
  **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:
                  May 15, 2006THE
                  MAJESTIC STAR CASINO, LLC*/s/
                  Don H. Barden*Don
                  H. BardenChairman,
                  President and Chief Executive Officer(Principal
                  Executive Officer)*/s/
                  Jon S. Bennett*Jon
                  S. BennettVice
                  President and Chief Financial Officer(Principal
                  Financial and Accounting Officer)THE
                  MAJESTIC STAR CASINO CAPITAL CORP.*/s/
                  Don H. Barden*Don
                  H. BardenPresident
                  and Chief Executive Officer(Principal
                  Executive Officer)*/s/
                  Jon S. Bennett*Jon
                  S. BennettVice
                  President and Chief Financial Officer(Principal
                  Financial and Accounting Officer)
 S-1