##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


FORM 10-Q

|  |  |                                                                                        
|- |  | ---------------------------------------------------------------------------------------
|x |  | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

| |  |                                |              
| |  | ------------------------------ | -------------
| |  | For the quarterly period ended | June 30, 2003
| |  |                                |              

OR

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

| |  |                                                                  
| |  | -----------------------------------------------------------------
| |  | For the transition period from _______________ to _______________

|                       |         
|---------------------- | --------
|Commission file number | 333-0214
|                       |         

HORSESHOE GAMING HOLDING CORP.

(Exact name of registrant as specified in its charter)


|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Delaware                                                       |  | 88-0425131                          
|                                                              
|(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification No.)

|                                          |  |           
|----------------------------------------- |  | ----------
|9921 Covington Cross Drive, Las Vegas, NV |  | 89144-6835
|                                         
|(Address of principal executive office)   |  | (Zip Code)

(702) 932-7800

---

(Registrants telephone number, including area code)


18454 South West Creek Drive, Tinley Park, IL 60477

---

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


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

|    |   |  |    | 
|--- | - |  | -- | 
|Yes | X |  | No | 
|    |   |  |    | 

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act.).

|    |  |  |    |  
|--- |  |  | -- | -
|Yes |  |  | No | X
|    |  |  |    |  

As of August 12, 2003, the registrant had 13,330 shares of Class A Common Stock
and 9,779 of Class B Common Stock outstanding.





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TABLE OF CONTENTS



|                             |                                                                                               |                                                                                   |  |  |  |  |  | 
|---------------------------- | --------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------- |  |  |  |  |  | 
|PART I FINANCIAL INFORMATION
|                             | Item 1. FINANCIAL STATEMENTS                                                                 
|                             |                                                                                               | CONSOLIDATED CONDENSED BALANCE SHEETS                                            
|                             |                                                                                               | CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS                                  
|                             |                                                                                               | CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS ENDED JUNE 30,
|                             |                                                                                               | NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS                             
|                             | Item 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|                             | Item 3. Quantitative and Qualitative Disclosure About Market Risk                            
|                             | Item 4. Controls and Procedures                                                              
|PART II OTHER INFORMATION   
|                             | Item 1. Legal Proceedings                                                                    
|                             | Item 6. EXHIBITS AND REPORTS ON FORM 8-K                                                     
|SIGNATURE                   
|EXHIBIT INDEX               
|EXHIBIT 31.1                
|EXHIBIT 31.2                
|EXHIBIT 32.1                
|EXHIBIT 32.2                



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##### Table of Contents



HORSESHOE GAMING HOLDING CORP. AND SUBSIDIARIES
CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

|          |  |                                                                                       |    |                                                                                                           |    |  |   | 
|--------- |  | ------------------------------------------------------------------------------------- | -- | --------------------------------------------------------------------------------------------------------- | -- |  | - | 
|PART I    |  | FINANCIAL INFORMATION                                                                 |    |                                                                                                           |    | 
|Item 1.   |  | Financial Statements                                                                  |    |                                                                                                           |    | 
|          |  |                                                                                       |    | Consolidated Condensed Balance Sheets as of
June 30, 2003 and December 31, 2002                           |    |  | 3 | 
|          |  |                                                                                       |    | Consolidated Condensed Statements of Operations for the
three and six months ended June 30, 2003 and 2002 |    |  | 4 | 
|          |  |                                                                                       |    | Consolidated Condensed Statements of Cash Flows for the
six months ended June 30, 2003 and 2002           |    |  | 5 | 
|          |  |                                                                                       |    | Notes to Consolidated Condensed Financial Statements                                                      |    |  | 6 | 
|Item 2.   |  | Managements Discussion and Analysis of Financial Condition
and Results of Operations |    |                                                                                                           | 9  | 
|Item 3.   |  | Quantitative and Qualitative Disclosures About Market Risk                            |    |                                                                                                           | 16 | 
|Item 4.   |  | Controls and Procedures                                                               |    |                                                                                                           | 16 | 
|PART II   |  | OTHER INFORMATION                                                                     |    |                                                                                                           |    | 
|Item 1.   |  | Legal Proceedings                                                                     |    |                                                                                                           | 16 | 
|Item 6.   |  | Exhibits and Reports on Form 8-K                                                      |    |                                                                                                           | 17 | 
|SIGNATURE |  |                                                                                       | 18 |                                                                                                          

2



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##### Table of Contents












|        |  |                      
|------- |  | ---------------------
|PART I  |  | FINANCIAL INFORMATION
|Item 1. |  | FINANCIAL STATEMENTS 

HORSESHOE GAMING HOLDING CORP. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(unaudited)
(in thousands, except for share data)

|                                     |                                                                                                |                      |                                                                                                                                  |                             |         |          |         |              |         |         |         | 
|------------------------------------ | ---------------------------------------------------------------------------------------------- | -------------------- | -------------------------------------------------------------------------------------------------------------------------------- | --------------------------- | ------- | -------- | ------- | ------------ | ------- | ------- | ------- | 
|                                     |                                                                                                |                      |                                                                                                                                  |                             |         | June 30, |         | December 31,
|                                     |                                                                                                |                      |                                                                                                                                  |                             |         | 2003     |         | 2002        
|                                     |                                                                                                |                      |                                                                                                                                  |                             |         |          |         |             
|ASSETS                              
|Current assets                       |                                                                                                |                      |                                                                                                                                  |                             |         |          |         |             
|                                     | Cash and cash equivalents                                                                      |                      | $                                                                                                                                | 85,986                      |         |          | $       | 87,373       |        
|                                     | Restricted cash                                                                                |                      |                                                                                                                                  | 14,347                      |         |          |         | 14,286       |        
|                                     | Accounts receivable, net of allowance
for doubtful accounts of $6,819 and
$6,779, respectively |                      |                                                                                                                                  | 13,513                      |         |          |         | 12,555       |        
|                                     | Inventories                                                                                    |                      |                                                                                                                                  | 4,914                       |         |          |         | 5,418        |        
|                                     | Prepaid expenses and other                                                                     |                      |                                                                                                                                  | 12,775                      |         |          |         | 7,825        |        
|                                     |                                                                                                |                      |                                                                                                                                  |                             |         |          |         |             
|                                     |                                                                                                | Total current assets |                                                                                                                                  |                             | 131,535 |          |         |              | 127,457 |        
|                                     |                                                                                                |                      |                                                                                                                                  |                             |         |          |         |             
|                                     | Property and equipment, net                                                                    |                      |                                                                                                                                  | 471,157                     |         |          |         | 471,003      |        
|                                     | Goodwill                                                                                       |                      |                                                                                                                                  | 252,242                     |         |          |         | 252,242      |        
|                                     | Intangibles, net                                                                               |                      |                                                                                                                                  | 11,176                      |         |          |         | 12,970       |        
|                                     | Other, net                                                                                     |                      |                                                                                                                                  | 37,180                      |         |          |         | 37,887       |        
|                                     |                                                                                                |                      |                                                                                                                                  |                             |         |          |         |             
|                                     |                                                                                                | $                    | 903,290                                                                                                                          |                             |         | $        | 901,559 |             
|                                     |                                                                                                |                      |                                                                                                                                  |                             |         |          |         |             
|LIABILITIES AND STOCKHOLDERS EQUITY
|Current liabilities                  |                                                                                                |                      |                                                                                                                                  |                             |         |          |         |             
|                                     | Accounts payable                                                                               |                      | $                                                                                                                                | 8,856                       |         |          | $       | 8,860        |        
|                                     | Accrued expenses and other                                                                     |                      |                                                                                                                                  | 71,543                      |         |          |         | 99,492       |        
|                                     |                                                                                                |                      |                                                                                                                                  |                             |         |          |         |             
|                                     |                                                                                                |                      |                                                                                                                                  | Total current liabilities   |         |          | 80,399  |              |         |         | 108,352 | 
|                                     |                                                                                                |                      |                                                                                                                                  |                             |         |          |         |             
|Long-term liabilities                |                                                                                                |                      |                                                                                                                                  |                             |         |          |         |             
|                                     | Long-term debt                                                                                 |                      |                                                                                                                                  | 558,870                     |         |          |         | 556,773      |        
|                                     | Other long-term liabilities                                                                    |                      |                                                                                                                                  | 9,198                       |         |          |         | 6,923        |        
|                                     |                                                                                                |                      |                                                                                                                                  |                             |         |          |         |             
|                                     |                                                                                                |                      |                                                                                                                                  | Total long-term liabilities |         |          | 568,068 |              |         |         | 563,696 | 
|                                     |                                                                                                |                      |                                                                                                                                  |                             |         |          |         |             
|Commitments and contingencies        |                                                                                                |                      |                                                                                                                                  |                             |         |          |         |             
|                                     | Stockholders equity                                                                           |                      |                                                                                                                                  |                             |         |          |         |              |        
|                                     |                                                                                                |                      | Common stock, $.01 par value, 50,000 shares
authorized, 25,000 shares issued,
23,109 and 23,077 shares outstanding, respectively |                             |         |         |         |              |         |        |        
|                                     |                                                                                                |                      | Additional paid-in capital                                                                                                       |                             |         | 59,209   |         |              |         | 59,808  |        
|                                     |                                                                                                |                      | Retained earnings                                                                                                                |                             |         | 249,970  |         |              |         | 225,001 |        
|                                     |                                                                                                |                      |                                                                                                                                  |                             |         |          |         |             
|                                     |                                                                                                |                      | 309,179                                                                                                                          |                             |         |          | 284,809 |             
|                                     | Treasury stock, at cost, 1,891 and 1,923 shares, respectively                                  |                      |                                                                                                                                  | (54,356                     | )       |          |         | (55,298      | )      
|                                     |                                                                                                |                      |                                                                                                                                  |                             |         |          |         |             
|                                     |                                                                                                |                      |                                                                                                                                  | Total stockholders equity  |         |          | 254,823 |              |         |         | 229,511 | 
|                                     |                                                                                                |                      |                                                                                                                                  |                             |         |          |         |             
|                                     |                                                                                                | $                    | 903,290                                                                                                                          |                             |         | $        | 901,559 |             
|                                     |                                                                                                |                      |                                                                                                                                  |                             |         |          |         |             

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

3



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HORSESHOE GAMING HOLDING CORP. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(unaudited)
(in thousands)

|                       |                                  |                              |         |                             |         |                           |         |         |         |      |         |         |         |   |         |         |         |  
|---------------------- | -------------------------------- | ---------------------------- | ------- | --------------------------- | ------- | ------------------------- | ------- | ------- | ------- | ---- | ------- | ------- | ------- | - | ------- | ------- | ------- | -
|                       |                                  |                              |         | Three months ended June 30, |         | Six months ended June 30,
|                       |                                  |                              |         |                             |         |                          
|                       |                                  |                              |         | 2003                        |         | 2002                      |         | 2003    |         | 2002
|                       |                                  |                              |         |                             |         |                           |         |         |         |     
|Revenues               |                                  |                              |         |                             |         |                           |         |         |         |      |         |         |         |   |         |        
|                       | Casino                           |                              | $       | 212,362                     |         |                           | $       | 209,531 |         |      | $       | 427,583 |         |   | $       | 417,464 |        
|                       | Food and beverage                |                              |         | 20,229                      |         |                           |         | 19,717  |         |      |         | 40,656  |         |   |         | 40,247  |        
|                       | Hotel                            |                              |         | 7,598                       |         |                           |         | 7,321   |         |      |         | 15,018  |         |   |         | 14,457  |        
|                       | Retail and other                 |                              |         | 4,770                       |         |                           |         | 5,016   |         |      |         | 9,060   |         |   |         | 9,780   |        
|                       |                                  |                              |         |                             |         |                           |         |         |         |      |         |         |         |   |         |        
|                       |                                  |                              | 244,959 |                             |         |                           | 241,585 |         |         |      | 492,317 |         |         |   | 481,948 |        
|                       | Promotional allowances and other |                              |         | (38,966                     | )       |                           |         | (35,581 | )       |      |         | (76,223 | )       |   |         | (71,000 | )      
|                       |                                  |                              |         |                             |         |                           |         |         |         |      |         |         |         |   |         |        
|                       |                                  | Net revenues                 |         |                             | 205,993 |                           |         |         | 206,004 |      |         |         | 416,094 |   |         |         | 410,948 |  
|                       |                                  |                              |         |                             |         |                           |         |         |         |      |         |         |         |   |         |        
|Expenses               |                                  |                              |         |                             |         |                           |         |         |         |      |         |         |         |   |         |        
|                       | Casino                           |                              |         | 125,120                     |         |                           |         | 107,817 |         |      |         | 244,348 |         |   |         | 211,384 |        
|                       | Food and beverage                |                              |         | 6,256                       |         |                           |         | 6,242   |         |      |         | 12,517  |         |   |         | 12,144  |        
|                       | Hotel                            |                              |         | 488                         |         |                           |         | 601     |         |      |         | 983     |         |   |         | 1,222   |        
|                       | Retail and other                 |                              |         | 1,472                       |         |                           |         | 2,375   |         |      |         | 2,717   |         |   |         | 4,237   |        
|                       | General and administrative       |                              |         | 28,111                      |         |                           |         | 30,468  |         |      |         | 56,398  |         |   |         | 56,787  |        
|                       | Corporate expenses               |                              |         | 6,084                       |         |                           |         | 8,545   |         |      |         | 11,582  |         |   |         | 13,400  |        
|                       | Deferred compensation            |                              |         | (293                        | )       |                           |         | 4,645   |         |      |         | (492    | )       |   |         | 7,761   |        
|                       | Loss on early retirement of debt |                              |         |                            |         |                           |         | 9,683   |         |      |         |        |         |   |         | 9,683   |        
|                       | Net loss on disposal of assets   |                              |         | 1,157                       |         |                           |         | 2,566   |         |      |         | 1,228   |         |   |         | 3,860   |        
|                       | Depreciation and amortization    |                              |         | 13,394                      |         |                           |         | 13,893  |         |      |         | 26,773  |         |   |         | 27,786  |        
|                       |                                  |                              |         |                             |         |                           |         |         |         |      |         |         |         |   |         |        
|                       |                                  | Total expenses               |         |                             | 181,789 |                           |         |         | 186,835 |      |         |         | 356,054 |   |         |         | 348,264 |  
|                       |                                  |                              |         |                             |         |                           |         |         |         |      |         |         |         |   |         |        
|Operating income       |                                  |                              | 24,204  |                             |         |                           | 19,169  |         |         |      | 60,040  |         |         |   | 62,684  |        
|                       |                                  |                              |        
|Other income (expense) |                                  |                              |         |                             |         |                           |         |         |         |      |         |         |         |   |         |        
|                       | Interest expense                 |                              |         | (12,690                     | )       |                           |         | (17,584 | )       |      |         | (25,438 | )       |   |         | (35,263 | )      
|                       | Interest income                  |                              |         | 202                         |         |                           |         | 872     |         |      |         | 380     |         |   |         | 1,799   |        
|                       | Other, net                       |                              |         | 66                          |         |                           |         |        |         |      |         | 66      |         |   |         | (615    | )      
|                       |                                  |                              |         |                             |         |                           |         |         |         |      |         |         |         |   |         |        
|                       |                                  | Total other income (expense) |         |                             | (12,422 | )                         |         |         | (16,712 | )    |         |         | (24,992 | ) |         |         | (34,079 | )
|                       |                                  |                              |         |                             |         |                           |         |         |         |      |         |         |         |   |         |        
|Net income             |                                  | $                            | 11,782  |                             |         | $                         | 2,457   |         |         | $    | 35,048  |         |         | $ | 28,605  |        
|                       |                                  |                              |         |                             |         |                           |         |         |         |      |         |         |         |   |         |        

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

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HORSESHOE GAMING HOLDING CORP. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30,
(unaudited)
(in thousands)

|                                               |                                                                                   |                                                                     |                                           |         |         |         |          |          |         |          |  
|---------------------------------------------- | --------------------------------------------------------------------------------- | ------------------------------------------------------------------- | ----------------------------------------- | ------- | ------- | ------- | -------- | -------- | ------- | -------- | -
|                                               |                                                                                   |                                                                     |                                           |         | 2003    |         | 2002    
|                                               |                                                                                   |                                                                     |                                           |         |         |         |         
|Cash flows from operating activities           |                                                                                   |                                                                     |                                           |         |         |         |          |         
|                                               | Net income                                                                        |                                                                     | $                                         | 35,048  |         |         | $        | 28,605   |        
|                                               | Adjustments to reconcile net income to
net cash provided by operating activities: |                                                                     |                                           |         |         |         |          |          |        
|                                               |                                                                                   | Depreciation and amortization                                       |                                           |         | 26,773  |         |          |          | 27,786  |         
|                                               |                                                                                   | Amortization of debt discounts,
deferred finance charges and others |                                           |         | 1,356   |         |          |          | 1,561   |         
|                                               |                                                                                   | Extraordinary loss on early retirement of debt                      |                                           |         |        |         |          |          | 9,683   |         
|                                               |                                                                                   | Net loss on disposal of assets                                      |                                           |         | 1,228   |         |          |          | 3,860   |         
|                                               |                                                                                   | Provision for doubtful accounts                                     |                                           |         | 1,617   |         |          |          | 1,609   |         
|                                               |                                                                                   | Deferred compensation                                               |                                           |         | (492    | )       |          |          | 7,761   |         
|                                               |                                                                                   | Increase in restricted cash                                         |                                           |         | (61     | )       |          |          |        |         
|                                               |                                                                                   | Net change in current assets and current liabilities                |                                           |         | (20,626 | )       |          |          | (16,667 | )       
|                                               |                                                                                   |                                                                     |                                           |         |         |         |          |         
|                                               |                                                                                   |                                                                     | Net cash provided by operating activities |         |         | 44,843  |          |          |         | 64,198   |  
|                                               |                                                                                   |                                                                     |                                           |         |         |         |          |         
|Cash flows from investing activities           |                                                                                   |                                                                     |                                           |         |         |         |          |         
|                                               | Purchases of property and equipment                                               |                                                                     |                                           | (26,159 | )       |         |          | (18,488  | )      
|                                               | Proceeds from sale of property and equipment                                      |                                                                     |                                           | 268     |         |         |          | 205      |        
|                                               | Net increase in other assets                                                      |                                                                     |                                           | 93      |         |         |          | (3,715   | )      
|                                               |                                                                                   |                                                                     |                                           |         |         |         |          |         
|                                               |                                                                                   |                                                                     | Net cash used in investing activities     |         |         | (25,798 | )        |          |         | (21,998  | )
|                                               |                                                                                   |                                                                     |                                           |         |         |         |          |         
|Cash flows from financing activities           |                                                                                   |                                                                     |                                           |         |         |         |          |         
|                                               | Proceeds from long-term debt                                                      |                                                                     |                                           | 20,000  |         |         |          | 60,000   |        
|                                               | Repayments on long-term debt                                                      |                                                                     |                                           | (18,000 | )       |         |          | (206,031 | )      
|                                               | Exercise of stock options                                                         |                                                                     |                                           | 162     |         |         |          |         |        
|                                               | Payment of call premium to retire debt                                            |                                                                     |                                           |        |         |         |          | (7,457   | )      
|                                               | Capital dividends                                                                 |                                                                     |                                           | (22,594 | )       |         |          | (19,021  | )      
|                                               |                                                                                   |                                                                     |                                           |         |         |         |          |         
|                                               |                                                                                   |                                                                     | Net cash used in financing activities     |         |         | (20,432 | )        |          |         | (172,509 | )
|                                               |                                                                                   |                                                                     |                                           |         |         |         |          |         
|Net change in cash and cash equivalents        |                                                                                   |                                                                     | (1,387                                    | )       |         |         | (130,309 | )       
|                                               |                                                                                   |                                                                     |                                          
|Cash and cash equivalents, beginning of period |                                                                                   |                                                                     | 87,373                                    |         |         |         | 220,817  |         
|                                               |                                                                                   |                                                                     |                                           |         |         |         |          |         
|Cash and cash equivalents, end of period       |                                                                                   | $                                                                   | 85,986                                    |         |         | $       | 90,508   |         
|                                               |                                                                                   |                                                                     |                                           |         |         |         |          |         
|Supplemental cash flow disclosure              |                                                                                   |                                                                     |                                           |         |         |         |          |         
|                                               | Interest paid                                                                     |                                                                     | $                                         | 24,241  |         |         | $        | 35,721   |        

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

5



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##### Table of Contents






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

Note 1  Basis of Presentation

The accompanying unaudited consolidated condensed financial statements of
Horseshoe Gaming Holding Corp., a Delaware corporation, and its subsidiaries
(the Company) have been prepared pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information and note disclosures
normally included in annual financial statements prepared in accordance with
generally accepted accounting principles have been condensed or omitted
pursuant to those rules and regulations. It is suggested that these
consolidated condensed financial statements be read in conjunction with the
financial statements and the notes thereto included in the Companys Form 10-K
for the year ended December 31, 2002. In the opinion of management, all
adjustments (which include normal recurring adjustments) necessary to present
fairly the financial position, results of operations and cash flows of all
periods presented have been made. The results of operations for the six months
ended June 30, 2003, are not necessarily indicative of the operating results
for the full year. Certain reclassifications have been made to the financial
statements as previously presented to conform to current classifications.

Note 2  Recently Issued Accounting Pronouncements

In June 2001, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 143 Accounting for
Asset Retirement Obligations (SFAS 143). SFAS 143 requires the recognition
of legal obligations associated with the retirement of long-lived assets that
result from the acquisition, construction, development and/or the normal
operation of the long-lived asset, as well as the disclosure of certain
information related to asset retirement obligations. The Company adopted SFAS
143 in the first quarter of 2003. Adoption of SFAS 143 did not have a material
impact on the Companys results of operations or financial position.

In April 2002, the FASB issued SFAS No. 145 Rescission of FASB Statements
No. 4, 44, and 64, Amendments of FASB Statement No. 13, and Technical
Corrections (SFAS 145). SFAS 145 rescinds SFAS No. 4, Reporting Gains and
Losses from Extinguishment of Debt, and an amendment of that statement, SFAS
No. 64, Extinguishments of Debt Made to Satisfy Sinking-Fund Requirements.
SFAS 145 also rescinds SFAS No. 44, Accounting for Intangible Assets of Motor
Carriers. SFAS 145 amends SFAS No. 13, Accounting for Leases, to eliminate
an inconsistency between the required accounting for sale-leaseback
transactions and the required accounting for certain lease modifications that
have economic effects that are similar to sale-leaseback transactions. SFAS
145 also amends other existing authoritative pronouncements to make various
technical corrections, clarify meanings, or describe their applicability under
changed conditions. The provisions of this statement related to the
rescission of SFAS No. 4 are effective for fiscal years beginning after May 15,
2002. Extraordinary losses of $9.7 million recognized by the Company in the
three months ended June 30, 2002 have been reclassified within income from
operations to conform to the provisions of SFAS No. 145. The provisions of
this statement related to SFAS No. 13 are effective for financial statements
issued on or after May 15, 2002. The implementation of these remaining
provisions did not have a material effect on the Companys results of
operations or financial position.

In June 2002, the FASB issued SFAS No. 146, Accounting for Costs
Associated with Exit or Disposal Activities (SFAS 146). SFAS 146 generally
requires companies to recognize costs associated with exit or disposal
activities when they are incurred rather than at the date of a commitment to an
exit or disposal plan, as previously required under EITF Issue 94-3. Examples
of costs covered by the standard include lease termination costs and certain
employee severance costs that are associated with a restructuring, discontinued
operation, plant closing, or other exit or disposal activity. SFAS 146 is to

6



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##### Table of Contents



be applied prospectively to exit or disposal activities initiated after
December 31, 2002. The Company adopted SFAS 146 in the first quarter of 2003.
Adoption of SFAS 146 did not have a material impact on the Companys results of
operations or financial position.

In May 2003, the FASB issued SFAS No. 150, Accounting for Certain
Financial Instruments with Characteristics of Both Liabilities and Equity
(SFAS 150). SFAS 150, which aims to eliminate diversity in practice by
requiring that the following three types of freestanding financial
instruments be reported as liabilities by their issuers:



| |  |  | Mandatorily redeemable instruments (i.e. instruments
issued in the form of shares that unconditionally obligate the
issuer to redeem the shares for cash or by transferring other
assets).                                                                                                                                                                                                                                           
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | Forward purchase contracts, written put options, and
other financial instruments not in the form of shares that either
obligate or may obligate the issuer to repurchase its equity
shares and settle its obligations for cash or by transferring
other assets.                                                                                                                                                                      
|
| |  |  | Certain financial instruments that include an
obligation that (1) the issuer may or must settle by issuing a
variable number of its equity shares and (2) has a monetary
value at inception that (a) is fixed, (b) is tied to a market
index or other benchmark (something other than the fair value of
the issuers equity shares), or (c) varies inversely with the
fair value of the equity shares (e.g., a written put option).

The provisions of SFAS 150, which also include a number of new disclosure
requirements, are effective for (1) instruments entered into or modified after
May 31, 2003 and (2) pre-existing instruments as of the beginning of the first
interim period that commences after June 15, 2003. Adoption of SFAS 150 is not
expected to have a material impact on the Companys results of operations or
financial position.

Note 3  Intangible Assets, Net

As of June 30, 2003, the Company had the following intangible assets
recorded on its balance sheet (in thousands):

|                        |  |          |        |              |  |         |       |  |  |   |        | 
|----------------------- |  | -------- | ------ | ------------ |  | ------- | ----- |  |  | - | ------ | 
|                        |  | Gross    |        |              |  |         |       |  |  |  
|                        |  | Carrying |        | Accumulated  |  |         |       | 
|                        |  | Amount   |        | Amortization |  | Balance
|                        |  |          |        |              |  |        
|Deferred licensing fees |  | $        | 11,131 |              |  | $       | 3,366 |  |  | $ | 7,765  | 
|Other                   |  |          | 6,380  |              |  |         | 2,969 |  |  |   | 3,411  | 
|                        |  |          |        |              |  |         |       |  |  |   |        | 
|                        |  | $        | 17,511 |              |  | $       | 6,335 |  |  | $ | 11,176 | 
|                        |  |          |        |              |  |         |       |  |  |   |        | 

All of the Companys intangible assets are being amortized under the
provisions of SFAS No. 142, Goodwill and Other Intangible Assets.
Amortization expense on intangible assets for the three and six months ended
June 30, 2003 was $0.9 million and $2.2 million, respectively. Estimated
annual amortization expense on intangible assets for the years ending December
31, 2003, 2004, 2005, 2006 and 2007 is $2.8 million, $1.3 million, $0.8
million, $0.8 million and $0.8 million, respectively.

7



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##### Table of Contents



Note 4  Contingencies

The Company and its subsidiaries, from time to time, are party to legal
proceedings arising in the ordinary course of business. Except as discussed
below and in the Companys Form 10-K for the year ended December 31, 2002, the
Company is unaware of any legal proceedings which, even if the outcome were
unfavorable to the Company, would have a material adverse impact on either its
financial condition or results of operations.

On April 18, 2003, a lawsuit was filed in the Circuit Court of Tunica
County, Mississippi. The Plaintiffs are personal representatives of the estate
of three individuals who died following a car accident in Tunica County,
Mississippi. The personal representatives allege that the car accident was the
result of an individual driving while under the influence of alcohol and that
the driver was served the alcohol while at the Horseshoe Casino Tunica. Tunica
and the Company deny the allegations in the complaint and intend to vigorously
contest the matter.

8



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##### Table of Contents






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

The following discussion and analysis provides information which
management believes is relevant to an assessment and understanding of the
consolidated financial condition and results of operations of Horseshoe Gaming
Holding Corp. (the Company) and its subsidiaries. References to Bossier
City, Tunica, and Hammond (or Horseshoe Hammond) refer to the Companys wholly
owned subsidiaries in Bossier City, Louisiana; Tunica, Mississippi; and
Hammond, Indiana, respectively. This discussion should be read in conjunction
with the Companys consolidated condensed financial statements and notes
thereto.

This Quarterly Report on Form 10-Q contains certain forward looking
statements, express or implied, which are made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995 and, as
such, speak only as of the date made. The Company undertakes no obligation to
publicly update any forward-looking statements, whether as a result of new
information, future events or otherwise. These forward-looking statements
generally can be identified by phrases such as the Company or its management
believes, anticipates, expects, forecasts, estimates, foresees, or
the negative or other variations thereof or comparable terminology. In
particular, they include statements relating to, among other things, future
actions, new projects, strategies, future performance, the outcome of
contingencies such as legal proceedings and future financial results. These
forward-looking statements are based on the beliefs of management, as well as
assumptions made based on information currently available to management. The
reader is cautioned that forward-looking statements involve risks and
uncertainties, which could cause actual results or events to differ materially
from those expressed or implied therein, including, but not limited to risks
associated with substantial indebtedness, debt service and liquidity;
construction delays or disruption; risks of competition in the Companys
existing and future markets; failure to obtain or retain licenses or regulatory
approvals; and changes in gaming laws and regulations. Further information on
these and other applicable risks are included in the Companys filings with the
Securities and Exchange Commission.

9



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##### Table of Contents



Results of OperationsFinancial Highlights

|                                                   |                                  |   |                             |        |                       |   |               |        |   |  |    |      |     
|-------------------------------------------------- | -------------------------------- | - | --------------------------- | ------ | --------------------- | - | ------------- | ------ | - |  | -- | ---- | ----
|                                                   |                                  |   | Three months ended June 30, |        | % Increase/(Decrease)
|                                                   |                                  |   |                             |        |                      
|                                                   |                                  |   | 2003                        |        | 2002                  |   | 2003 vs. 2002
|                                                   |                                  |   |                             |        |                       |   |              
|                                                   |                                  |   | (dollars in thousands)      |        |                       |   |               |       
|Casino revenues                                    |                                  |   |                             |        |                       |   |               |        |   |  |    |     
|                                                   | Bossier City                     |   | $                           | 65,939 |                       |   | $             | 66,360 |   |  |    | -1   | %   
|                                                   | Tunica                           |   |                             | 60,319 |                       |   |               | 67,117 |   |  |    | -10  | %   
|                                                   | Hammond                          |   |                             | 86,104 |                       |   |               | 76,054 |   |  |    | 13   | %   
|                                                   |                                  |   |                             |        |                       |   |               |        |   |  |    |     
|                                                   |                                  | $ | 212,362                     |        |                       | $ | 209,531       |        |   |  | 1  | %   
|                                                   |                                  |   |                             |        |                       |   |               |        |   |  |    |     
|Net revenues                                       |                                  |   |                             |        |                       |   |               |        |   |  |    |     
|                                                   | Bossier City                     |   | $                           | 65,179 |                       |   | $             | 66,315 |   |  |    | -2   | %   
|                                                   | Tunica                           |   |                             | 57,299 |                       |   |               | 65,314 |   |  |    | -12  | %   
|                                                   | Hammond                          |   |                             | 83,515 |                       |   |               | 74,375 |   |  |    | 12   | %   
|                                                   |                                  |   |                             |        |                       |   |               |        |   |  |    |     
|                                                   |                                  | $ | 205,993                     |        |                       | $ | 206,004       |        |   |  | 0  | %   
|                                                   |                                  |   |                             |        |                       |   |               |        |   |  |    |     
|Operating income (loss)                            |                                  |   |                             |        |                       |   |               |        |   |  |    |     
|                                                   | Bossier City (a)                 |   | $                           | 10,560 |                       |   | $             | 11,333 |   |  |    | -7   | %   
|                                                   | Tunica (a)                       |   |                             | 11,761 |                       |   |               | 18,094 |   |  |    | -35  | %   
|                                                   | Hammond (a)                      |   |                             | 7,818  |                       |   |               | 12,675 |   |  |    | -38  | %   
|                                                   | Corporate expenses               |   |                             | (6,084 | )                     |   |               | (8,545 | ) |  |    | 29   | %   
|                                                   | Deferred compensation            |   |                             | 293    |                       |   |               | (4,645 | ) |  |    | (b   | )   
|                                                   | Loss on early retirement of debt |   |                             |       |                       |   |               | (9,683 | ) |  |    | (b   | )   
|                                                   | Other                            |   |                             | (144   | )                     |   |               | (60    | ) |  |    | -140 | %   
|                                                   |                                  |   |                             |        |                       |   |               |        |   |  |    |     
|                                                   |                                  | $ | 24,204                      |        |                       | $ | 19,169        |        |   |  | 26 | %   
|                                                   |                                  |   |                             |        |                       |   |               |        |   |  |    |     
|Other information                                  |                                  |   |                             |        |                       |   |               |        |   |  |    |     
|                                                   | Interest expense, net            |   | $                           | 12,488 |                       |   | $             | 16,712 |   |  |    | -25  | %   
|                                                   | Net income                       |   | $                           | 11,782 |                       |   | $             | 2,457  |   |  |    | 380  | %   
|                                                   |                                  |   |                            
|Operating margin (operating income/net revenue)(c) |                                  |   |                             |        |                       |   |               |        |   |  |    |     
|                                                   | Bossier City (a)                 |   |                             | 16     | %                     |   |               | 17     | % |  |    | -1   | pt. 
|                                                   | Tunica (a)                       |   |                             | 21     | %                     |   |               | 28     | % |  |    | -7   | pts.
|                                                   | Hammond (a)                      |   |                             | 9      | %                     |   |               | 17     | % |  |    | -8   | pts.
|                                                   | Consolidated                     |   |                             | 12     | %                     |   |               | 9      | % |  |    | 3    | pts.



|(a) |  | Before corporate allocations and deferred compensation.                                                                                 
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------
|   
|(b) |  | Not meaningful.                                                                                                                         
|   
|(c) |  | The % Increase/(Decrease) for operating margin represents the absolute
difference in percentage points (pts.) between the two periods.

10



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##### Table of Contents



Three months ended June 30, 2003 and 2002

Consolidated net revenues for the quarter ended June 30, 2003 were flat as
compared to the prior year period. Revenue improvements in Hammond as the
result of the conversion to dockside gaming in August 2002, were partially
offset by year-over-year revenue decreases experienced primarily in Tunica.
Tax increases in Hammond and Bossier City, along with the decrease in revenue
in Tunica, were the primary reasons that each of the three properties
experienced decreases in operating income in the second quarter of 2003.

Casino revenues in Bossier City decreased 1% in the second quarter of 2003
as compared to the prior year period while the Shreveport/Bossier City market
increased approximately 1% between the two periods. Contributing to the market
increase was the May 21, 2003 opening of approximately 900 slots at a nearby
horse racetrack facility. Excluding the results from this new facility, the
Shreveport/Bossier City market decreased approximately 3% during the second
quarter of 2003 as compared to the same period in the prior year. Increased
slot hold percentages in Bossier City in the quarter ended June 30, 2003 were
more than offset by reduced table game hold and decreases in slot and table
volumes as compared to the quarter ended June 30, 2002. Impacting operating
income and margins was an additional 1% increase in gaming tax over the prior
year. The gaming tax in Louisiana increased from 20.5% to 21.5% in April 2003.
In addition, Bossier City reserved an additional $0.4 million on a note
receivable in the quarter ended June 30, 2003.

Competitive struggles continued in Tunica in the second quarter of 2003.
While Tunica experienced an approximate 3% increase in coin-in during the
quarter ended June 30, 2003 as compared to the same quarter in the prior year,
their slot hold percentage dropped approximately .6 percentage points as
compared to the prior year period. Also contributing to the second quarter
2003 decrease was a 6% decrease in table drop, coupled with a 3.1 percentage
point decline in the table hold percentage as compared to the prior year.
Partially offsetting the revenue shortfalls in the second quarter of 2003 were
reductions in showroom entertainment, special events and employee benefits.

Casino revenues in Hammond increased 13% in the second quarter of 2003 as
compared to the same period in the prior year as a result of the August 2002
conversion to dockside gaming. While Hammond has experienced revenue increases
from dockside gaming, operating income and margins still fell significantly
short of prior year primarily due to the increase in state gaming taxes. In
addition to the higher effective tax rate that Hammond is now experiencing, an
additional $5.1 million in gaming taxes was recorded in the second quarter of
2003 as the result of a retroactive tax increase imposed by the Indiana
legislature during the quarter. Also, during the second quarter of 2003,
Hammond recorded $1.2 million in disposal costs related to assets being
replaced as a result of the expansion projects at that facility. This compares
to a $2.5 million charge in the second quarter of the prior year, primarily
related to the write-off of design and option fees on a site upon which the
Company no longer planned to utilize.

Corporate expenses decreased by $2.5 million in the second quarter of 2003
as compared to the prior year period. The prior year period includes a $2.3
million franchise tax accrual in the second quarter of 2002 related to a
Louisiana franchise tax audit. Generally, corporate expenses have decreased
year-over-year, with reductions in legal expenses, employee benefits, and
advertising; however, the second quarter of 2003 includes $1.9 million related
to the relocation of the corporate headquarters from Illinois to Nevada.

Deferred compensation decreased $4.9 million in the second quarter of 2003
as compared to the prior year period due primarily to a reduction in the
valuation used to calculate the value of vested stock appreciation rights.

11



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##### Table of Contents



Interest expense, net decreased 25% in the second quarter of 2003 as
compared to the prior year period due primarily to lower outstanding debt
balances during the 2003 quarter. In June 2002, the Company redeemed all of
its outstanding 9.375% Senior Subordinated Notes for $166.5 million, including
call premium. As a result of this redemption, the Company recorded a loss on
early retirement of debt of $9.7 million in the second quarter of 2002.

Results of OperationsFinancial Highlights

|                                                   |                                  |   |                           |         |                       |   |               |         |   |  |    |      |     
|-------------------------------------------------- | -------------------------------- | - | ------------------------- | ------- | --------------------- | - | ------------- | ------- | - |  | -- | ---- | ----
|                                                   |                                  |   | Six months ended June 30, |         | % Increase/(Decrease)
|                                                   |                                  |   |                           |         |                      
|                                                   |                                  |   | 2003                      |         | 2002                  |   | 2003 vs. 2002
|                                                   |                                  |   |                           |         |                       |   |              
|                                                   |                                  |   | (dollars in thousands)    |         |                       |   |              
|Casino revenues                                    |                                  |   |                           |         |                       |   |               |         |   |  |    |     
|                                                   | Bossier City                     |   | $                         | 129,513 |                       |   | $             | 130,467 |   |  |    | -1   | %   
|                                                   | Tunica                           |   |                           | 124,473 |                       |   |               | 136,620 |   |  |    | -9   | %   
|                                                   | Hammond                          |   |                           | 173,597 |                       |   |               | 150,377 |   |  |    | 15   | %   
|                                                   |                                  |   |                           |         |                       |   |               |         |   |  |    |     
|                                                   |                                  | $ | 427,583                   |         |                       | $ | 417,464       |         |   |  | 2  | %   
|                                                   |                                  |   |                           |         |                       |   |               |         |   |  |    |     
|Net revenues                                       |                                  |   |                           |         |                       |   |               |         |   |  |    |     
|                                                   | Bossier City                     |   | $                         | 128,677 |                       |   | $             | 130,695 |   |  |    | -2   | %   
|                                                   | Tunica                           |   |                           | 118,748 |                       |   |               | 132,691 |   |  |    | -11  | %   
|                                                   | Hammond                          |   |                           | 168,669 |                       |   |               | 147,562 |   |  |    | 14   | %   
|                                                   |                                  |   |                           |         |                       |   |               |         |   |  |    |     
|                                                   |                                  | $ | 416,094                   |         |                       | $ | 410,948       |         |   |  | 1  | %   
|                                                   |                                  |   |                           |         |                       |   |               |         |   |  |    |     
|Operating income (loss)                            |                                  |   |                           |         |                       |   |               |         |   |  |    |     
|                                                   | Bossier City (a)                 |   | $                         | 21,177  |                       |   | $             | 22,303  |   |  |    | -5   | %   
|                                                   | Tunica (a)                       |   |                           | 27,039  |                       |   |               | 41,587  |   |  |    | -35  | %   
|                                                   | Hammond (a)                      |   |                           | 23,002  |                       |   |               | 29,459  |   |  |    | -22  | %   
|                                                   | Corporate expenses               |   |                           | (11,582 | )                     |   |               | (13,400 | ) |  |    | 14   | %   
|                                                   | Deferred compensation            |   |                           | 492     |                       |   |               | (7,761  | ) |  |    | (b   | )   
|                                                   | Loss on early retirement of debt |   |                           |        |                       |   |               | (9,683  | ) |  |    | (b   | )   
|                                                   | Other                            |   |                           | (88     | )                     |   |               | 179     |   |  |    | -149 | %   
|                                                   |                                  |   |                           |         |                       |   |               |         |   |  |    |     
|                                                   |                                  | $ | 60,040                    |         |                       | $ | 62,684        |         |   |  | -4 | %   
|                                                   |                                  |   |                           |         |                       |   |               |         |   |  |    |     
|Other information                                  |                                  |   |                           |         |                       |   |               |         |   |  |    |     
|                                                   | Interest expense, net            |   | $                         | 25,058  |                       |   | $             | 33,464  |   |  |    | -25  | %   
|                                                   | Net income                       |   | $                         | 35,048  |                       |   | $             | 28,605  |   |  |    | 23   | %   
|                                                   |                                  |  
|Operating margin (operating income/net revenue)(c) |                                  |   |                           |         |                       |   |               |         |   |  |    |     
|                                                   | Bossier City (a)                 |   |                           | 16      | %                     |   |               | 17      | % |  |    | -1   | pt. 
|                                                   | Tunica (a)                       |   |                           | 23      | %                     |   |               | 31      | % |  |    | -8   | pts.
|                                                   | Hammond (a)                      |   |                           | 14      | %                     |   |               | 20      | % |  |    | -6   | pts.
|                                                   | Consolidated                     |   |                           | 14      | %                     |   |               | 15      | % |  |    | -1   | pt. 



|(a) |  | Before corporate allocations and deferred compensation.                                                                                 
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------
|   
|(b) |  | Not meaningful.                                                                                                                         
|   
|(c) |  | The % Increase/(Decrease) for operating margin represents the absolute
difference in percentage points (pts.) between the two periods.

12



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##### Table of Contents



Six months ended June 30, 2003 and 2002

Consolidated net revenues for the six months ended June 30, 2003 increased
1% as compared to the prior year period. Revenue improvements in Hammond as
the result of the conversion to dockside gaming in August 2002, were partially
offset by year-over-year revenue decreases experienced primarily in Tunica.
Tax increases in Bossier City and Hammond, along with decreases in revenue in
Tunica, were the primary reasons that each of the three properties experienced
decreases in operating income in the first half of 2003.

Casino revenues in Bossier City decreased 1% in the six months ended June
30, 2003 as compared to the prior year period while the Shreveport/Bossier City
market also decreased approximately 1% between the two periods. Contributing
to the market results was the May 21, 2003 opening of approximately 900 slots
at a nearby horse racetrack facility. Excluding the results from this new
facility, the Shreveport/Bossier City market decreased approximately 3% during
the first half of 2003 as compared to the same period in the prior year.
Increased slot and table hold percentages in Bossier City in the six months
ended June 30, 2003 were more than offset by decreases in slot and table
volumes as compared to the six months ended June 30, 2002. Impacting operating
income and margins was an additional 1% increase in gaming tax over the prior
year. The gaming tax in Louisiana increased from 19.5% to 20.5% in April 2002
and from 20.5% to 21.5% in April 2003. In addition, Bossier City reserved an
additional $0.4 million on a note receivable in the six months ended June 30,
2003.

Results in Tunica during the six months ended June 30, 2003 were impacted
by competitive pressures in the market. While Tunicas coin-in was flat during
the six months ended June 30, 2003 as compared to the prior year, their slot
hold percentage dropped approximately .5 percentage points as compared to the
prior year period. Also contributing to the 2003 decrease was a 6% decrease in
table drop, coupled with a 1.4 percentage point decrease in the table hold
percentage as compared to the prior year. Partially offsetting the revenue
shortfalls in the six months ended June 30, 2003 were reductions in showroom
entertainment, special events and employee benefits.

Casino revenues in Hammond increased 15% in the six months ended June 30,
2003 as compared to the same period in the prior year as a result of the August
2002 conversion to dockside gaming. While Hammond has experienced revenue
increases from dockside gaming, operating income and margins still fell
significantly short of prior year primarily due to the increase in state gaming
taxes. In addition to the higher effective tax rate that Hammond is now
experiencing, an additional $5.1 million in gaming taxes was recorded in the
six months ended June 30, 2003 as the result of retroactive tax increase
imposed by the Indiana legislature during the period. Also, during the first
six months of 2003, Hammond recorded $1.2 million in disposal costs related to
assets being replaced as a result of the expansion projects at that facility.
This compares to a $2.9 million charge in the six months ended June 30, 2002,
primarily related to the write-off of design and option fees on a site upon
which the Company no longer planned to utilize.

Corporate expenses decreased by $1.8 million in the six months ended June
30, 2003 as compared to the prior year period. The prior year period includes
a $2.3 million franchise tax accrual in the six months ended June 30, 2002
related to a Louisiana franchise tax audit. During the six months ended June
30, 2003, $1.9 million was recorded related to the relocation of the corporate
headquarters from Illinois to Nevada.

Deferred compensation decreased $8.3 million in the six months ended June
30, 2003 as compared to the prior year period due primarily to a reduction in
the valuation used to calculate the value of vested stock appreciation rights.

13



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##### Table of Contents



Interest expense, net decreased 25% in the first six months of 2003 as
compared to the prior year period due primarily to lower outstanding debt
balances during the 2003 period. In June 2002, the Company redeemed all of
its outstanding 9.375% Senior Subordinated Notes for $166.5 million, including
call premium. As a result of this redemption, the Company recorded a loss on
early retirement of debt of $9.7 million in the six months ended June 30, 2002.

Liquidity and Capital Resources

As of June 30, 2003, the Company had cash and cash equivalents of $86.0
million. During the first six months of 2003, cash provided by operating
activities was $44.8 million, net cash used in investing activities was $25.8
million and net cash used in financing activities was $20.4 million.

As of August 1, 2003, there was $10.0 million outstanding on the Companys
$150.0 million Credit Facility. The Credit Facility is permanently reduced by
$28.1 million on December 31, 2003 and $40.6 million per quarter beginning
March 31, 2004. The Company is currently evaluating its alternatives regarding
the Credit Facility and its other outstanding debt. The Company has no off
balance sheet financing.

Horseshoe Hammond is currently undergoing an expansion of its facility.
This expansion includes the construction of a $50.0 million parking garage plus
a $15.7 million interim expansion. The interim expansion includes enhancements
to the boat and pavilion, including the addition of approximately 400 slot
machines. As of July 31, 2003, approximately $10.8 million has been expended
related to these projects. The interim expansion is expected to be completed
in the third quarter of 2003, while the parking garage is expected to be
completed in early 2004. Other than normal, routine maintenance capital
expenditures, no other material capital expenditures are currently planned in
Bossier City or Tunica during the next twelve months.

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

Contingencies

The Company and its subsidiaries, from time to time, are party to legal
proceedings arising in the ordinary course of business. Except as discussed
below and in the Companys Form 10-K for the year ended December 31, 2002, the
Company is unaware of any legal proceedings which, even if the outcome were
unfavorable to the Company, would have a material adverse impact on either its
financial condition or results of operations.

On April 18, 2003, a lawsuit was filed in the Circuit Court of Tunica
County, Mississippi. The Plaintiffs are personal representatives of the estate
of three individuals who died following a car accident in Tunica County,
Mississippi. The personal representatives allege that the car accident was the
result of an individual driving while under the influence of alcohol and that
the driver was served the alcohol while at the Horseshoe Casino Tunica. Tunica
and the Company deny the allegations in the complaint and intend to vigorously
contest the matter.

14



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##### Table of Contents



Recently Issued Accounting Pronouncements

In June 2001, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 143 Accounting for
Asset Retirement Obligations (SFAS 143). SFAS 143 requires the recognition
of legal obligations associated with the retirement of long-lived assets that
result from the acquisition, construction, development and/or the normal
operation of the long-lived asset, as well as the disclosure of certain
information related to asset retirement obligations. The Company adopted SFAS
143 in the first quarter of 2003. Adoption of SFAS 143 did not have a material
impact on the Companys results of operations or financial position.

In April 2002, the FASB issued SFAS No. 145 Rescission of FASB Statements
No. 4, 44, and 64, Amendments of FASB Statement No. 13, and Technical
Corrections (SFAS 145). SFAS 145 rescinds SFAS No. 4, Reporting Gains and
Losses from Extinguishment of Debt, and an amendment of that statement, SFAS
No. 64, Extinguishments of Debt Made to Satisfy Sinking-Fund Requirements.
SFAS 145 also rescinds SFAS No. 44, Accounting for Intangible Assets of Motor
Carriers. SFAS 145 amends SFAS No. 13, Accounting for Leases, to eliminate
an inconsistency between the required accounting for sale-leaseback
transactions and the required accounting for certain lease modifications that
have economic effects that are similar to sale-leaseback transactions. SFAS
145 also amends other existing authoritative pronouncements to make various
technical corrections, clarify meanings, or describe their applicability under
changed conditions. The provisions of this statement related to the
rescission of SFAS No. 4 are effective for fiscal years beginning after May 15,
2002. Extraordinary losses of $9.7 million recognized by the Company in the
three months ended June 30, 2002 have been reclassified within income from
operations to conform to the provisions of SFAS No. 145. The provisions of
this statement related to SFAS No. 13 are effective for financial statements
issued on or after May 15, 2002. The implementation of these remaining
provisions did not have a material effect on the Companys results of
operations or financial position.

In June 2002, the FASB issued SFAS No. 146, Accounting for Costs
Associated with Exit or Disposal Activities (SFAS 146). SFAS 146 generally
requires companies to recognize costs associated with exit or disposal
activities when they are incurred rather than at the date of a commitment to an
exit or disposal plan, as previously required under EITF Issue 94-3. Examples
of costs covered by the standard include lease termination costs and certain
employee severance costs that are associated with a restructuring, discontinued
operation, plant closing, or other exit or disposal activity. SFAS 146 is to
be applied prospectively to exit or disposal activities initiated after
December 31, 2002. The Company adopted SFAS 146 in the first quarter of 2003.
Adoption of SFAS 146 did not have a material impact on the Companys results of
operations or financial position.

In May 2003, the FASB issued SFAS No. 150, Accounting for Certain
Financial Instruments with Characteristics of Both Liabilities and Equity
(SFAS 150). SFAS 150, which aims to eliminate diversity in practice by
requiring that the following three types of freestanding financial
instruments be reported as liabilities by their issuers:



| |  |  | Mandatorily redeemable instruments (i.e. instruments
issued in the form of shares that unconditionally obligate the
issuer to redeem the shares for cash or by transferring other
assets).                                                                     
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | Forward purchase contracts, written put options, and
other financial instruments not in the form of shares that either
obligate or may obligate the issuer to repurchase its equity
shares and settle its obligations for cash or by transferring
other assets.

15



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##### Table of Contents





| |  |  | Certain financial instruments that include an obligation that (1)
the issuer may or must settle by issuing a variable number of its
equity shares and (2) has a monetary value at inception that (a)
is fixed, (b) is tied to a market index or other benchmark
(something other than the fair value of the issuers equity
shares), or (c) varies inversely with the fair value of the equity
shares (e.g., a written put option).
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The provisions of SFAS 150, which also include a number of new disclosure
requirements, are effective for (1) instruments entered into or modified after
May 31, 2003 and (2) pre-existing instruments as of the beginning of the first
interim period that commences after June 15, 2003. Adoption of SFAS 150 is not
expected to have a material impact on the Companys results of operations or
financial position.




|        |  |                                                          
|------- |  | ---------------------------------------------------------
|Item 3. |  | Quantitative and Qualitative Disclosure About Market Risk

As of June 30, 2003 there were no material changes to the information
presented in Item 7A of the Companys Annual Report on Form 10-K for the fiscal
year ended December 31, 2002.




|        |  |                        
|------- |  | -----------------------
|Item 4. |  | Controls and Procedures

The Company maintains disclosure controls and procedures that are designed
to ensure that information required to be disclosed in the Companys Exchange
Act reports is recorded, processed, summarized and reported within the time
periods specified in the Securities and Exchange Commissions rules and forms,
and that such information is accumulated and communicated to the Companys
management, including its 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
recognizes that any controls and procedures, no matter how well designed and
operated, can provide only reasonable assurance of achieving the desired
control objectives, and management necessarily is required to apply its
judgment in evaluating the cost-benefit relationship of possible controls and
procedures.

Within 90 days prior to the date of this report, the Company carried out
an evaluation, under the supervision and with the participation of the
Companys management, including the Companys Chief Executive Officer and Chief
Financial Officer, of the effectiveness of the Companys disclosure controls
and procedures. Based on the foregoing, the Companys Chief Executive Officer
and Chief Financial Officer concluded that the Companys disclosure controls
and procedures were effective.

There have been no significant changes in the Companys internal controls
or in other factors that could significantly affect the internal controls
subsequent to the date the Company completed its evaluation.







|        |  |                  
|------- |  | -----------------
|PART II |  | OTHER INFORMATION
|       
|Item 1. |  | Legal Proceedings

On April 18, 2003, a lawsuit was filed in the Circuit Court of Tunica
County, Mississippi. The Plaintiffs are personal representatives of the estate
of three individuals who died following a car accident in Tunica County,
Mississippi. The personal representatives allege that the car accident was the
result of an individual driving while under the influence of alcohol and that
the driver was served the alcohol while at the Horseshoe Casino Tunica. Tunica
and the Company deny the allegations in the complaint and intend to vigorously
contest the matter.

16



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##### Table of Contents






|        |  |                                 
|------- |  | --------------------------------
|Item 6. |  | EXHIBITS AND REPORTS ON FORM 8-K

|         |  |                                                                                                                                                                                 |  |  |  | 
|-------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  |  |  | 
|Exhibit  |  |                                                                                                                                                                                 |  |  |  | 
|Number   |  | Description                                                                                                                                                                     |  |  |  | 
|         |  |                                                                                                                                                                                 |  |  |  | 
|3.1 (a)  |  | Certificate of Incorporation of Horseshoe Gaming Holding Corp.                                                                                                                 
|        
|3.2 (a)  |  | By-laws of Horseshoe Gaming Holding Corp.                                                                                                                                      
|        
|31.1 (b) |  | Certification of Jack B. Binion, Chief Executive Officer, as
adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.                                                
|        
|31.2 (b) |  | Certification of Kirk C. Saylor, Chief Financial Officer, as
adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.                                                
|        
|32.1 (b) |  | Certification of Jack B. Binion, Chief Executive Officer,
pursuant to 18 United States Code Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|        
|32.2 (b) |  | Certification of Kirk C. Saylor, Chief Financial Officer,
pursuant to 18 United States Code Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.



---

|(a) |  | Filed as an Exhibit to Horseshoe Gaming Holding Corp.s Form
S-4 Registration Statement filed on June 15, 1999.
|--- |  | ---------------------------------------------------------------------------------------------------------------
|   
|(b) |  | Included herein.                                                                                               

Reports on Form 8-K filed during the quarter: None

17



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##### Table of Contents






SIGNATURE

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

|                      |                                                       |                                             
|--------------------- | ----------------------------------------------------- | --------------------------------------------
|                      | HORSESHOE GAMING HOLDING CORP.
a Delaware corporation
|                     
|Date: August 12, 2003 |                                                       |                                             
|                     
|                      | By:                                                   | /s/ Kirk C. Saylor                          
|                      |                                                       |                                             
|                      |                                                       | Kirk C. Saylor                              
|                      |                                                       | Chief Financial Officer and Treasurer       
|                      |                                                       | (Principal Financial and Accounting Officer)

18



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EXHIBIT INDEX

|         |  |                                                                                                                                                                                 |  |  |  | 
|-------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  |  |  | 
|Exhibit  |  |                                                                                                                                                                                 |  |  |  | 
|Number   |  | Description                                                                                                                                                                     |  |  |  | 
|         |  |                                                                                                                                                                                 |  |  |  | 
|3.1 (a)  |  | Certificate of Incorporation of Horseshoe Gaming Holding Corp.                                                                                                                 
|        
|3.2 (a)  |  | By-laws of Horseshoe Gaming Holding Corp.                                                                                                                                      
|        
|31.1 (b) |  | Certification of Jack B. Binion, Chief Executive Officer, as
adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.                                                
|        
|31.2 (b) |  | Certification of Kirk C. Saylor, Chief Financial Officer, as
adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.                                                
|        
|32.1 (b) |  | Certification of Jack B. Binion, Chief Executive Officer,
pursuant to 18 United States Code Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|        
|32.2 (b) |  | Certification of Kirk C. Saylor, Chief Financial Officer,
pursuant to 18 United States Code Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

---

|    |  |                                                                                                                
|--- |  | ---------------------------------------------------------------------------------------------------------------
|(a) |  | Filed as an Exhibit to Horseshoe
Gaming Holding Corp.s Form S-4 Registration Statement filed on
June 15, 1999.
|   
|(b) |  | Included herein.