10-K 1 a2041833z10-k.txt 10-K -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 FORM 10-K FOR ANNUAL AND TRANSITION REPORTS PURSUANT TO SECTIONS 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

ALADDIN GAMING ENTERPRISES, INC. (Exact name of registrant as specified in its charter) Nevada 88-0379695 (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 3667 Las Vegas Boulevard South, Las Vegas, 89109 Nevada (Address of principal executive offices) (Zip Code)

(702) 785-5555 (Registrant's telephone number, including area code) Securities registered pursuant to section 12(b) of the Act: None Securities registered pursuant to section 12(g) of the Act: None 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 if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. / / Not applicable. Indicate the number of shares outstanding of each of the registrants' classes of common stock as of March 16, 2001: Class A Common Stock, no par value, 2,000,000 shares authorized, 1,107,500 issued and Class B Common Stock, non-voting, no par value, 8,000,000 shares authorized, 2,215,000 issued. DOCUMENTS INCORPORATED BY REFERENCE Not applicable. -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- PART I ITEM 1. BUSINESS GENERAL Aladdin Gaming Enterprises, Inc., a Nevada corporation ("Gaming Enterprises"), has no other business or activity other than its investment in Aladdin Gaming Holdings, LLC ("Gaming Holdings") and Gaming Enterprises' sole material asset is 25% of the common membership interests of Gaming Holdings ("Holdings Common Membership Interests"). Gaming Holdings is a holding company, the material assets of which are 100% of the outstanding common membership interests and 100% of the outstanding Series A preferred interests of Aladdin Gaming, LLC ("Gaming"). Aladdin Capital Corp. ("Capital") is a wholly-owned subsidiary of Gaming Holdings and was incorporated solely for the purpose of serving as a co-issuer of the Gaming Holdings 13 1/2% Senior Discount Notes ("Notes"). Capital does not have any material operations or assets and has no revenues. Aladdin Holdings, LLC, a Delaware limited liability company ("AHL"), indirectly holds a majority interest in Gaming Holdings. The members of AHL are the Trust Under Article Sixth u/w/o Sigmund Sommer ("Sommer Trust"), which holds a 95% interest in AHL, and GW Vegas, LLC, a Nevada limited liability company, a wholly owned subsidiary of the Trust Company of the West, which holds a 5% interest in AHL. As of December 31, 2000, Holdings Common Membership Interests were held 39.953125% by London Clubs Nevada Inc ("LCNI"), a subsidiary of London Clubs International plc ("London Clubs"); 31.859375% by Sommer Enterprises, LLC, a Nevada limited liability company ("Sommer Enterprises"), which is a subsidiary of AHL; 25.0% by Gaming Enterprises, which is a subsidiary of Sommer Enterprises; 3.0% by GAI, LLC, a Nevada limited liability company, which is owned by Richard J. Goeglein, the President and Chief Executive Officer of Gaming Holdings; and 0.1875% by Jose Rueda, a former executive of Gaming Holdings. Except where the context otherwise requires, Gaming Holdings and its subsidiaries are collectively referred to herein as "Company." Much of the following information relates to Gaming Holdings and its subsidiaries and is included due to the relative significance of Gaming Holdings to Gaming Enterprises. NARRATIVE DESCRIPTION OF BUSINESS ALADDIN. The operations of the Company have been primarily limited to the design, development, construction and, as of August 18, 2000, the operation of a new Aladdin Resort & Casino ("Aladdin"). The Aladdin is the centerpiece of an approximately 35-acre world-class resort, casino and entertainment complex ("Complex") located at the center of Las Vegas Boulevard ("Las Vegas Strip"). The Aladdin includes a hotel which has 2,567 rooms ("Hotel"), comprised of deluxe guestrooms, resort guestrooms, suites, luxury rooms and mega suites. In addition, the Hotel provides an outdoor swimming pool complex and will contain an approximately 32,000 square foot spa, which is currently being constructed, and will be operated, by a subsidiary of Steiner Leisure Limited pursuant to a fifteen year lease with an option to renew for an additional five years. Construction of the spa is expected to be completed in the Fourth Quarter, 2001. The Aladdin has six restaurants, one of which is leased to an unrelated third party, which together offer a wide range of dining selections. Food service facilities at the Aladdin include a buffet, P.F. Chang's, a contemporary Asian restaurant, and a 24-hour casual dining facility. Additionally, on the main casino floor, Aladdin operates a Starbucks Coffee franchise, subject to a license agreement with Starbucks Corporation. The Aladdin's mezzanine level offers views of the main casino floor and the Las Vegas Strip 1 and features an Italian restaurant, a steakhouse, and a fine dining restaurant located within The London Club at Aladdin. The Aladdin's casino ("Casino") main gaming area contains approximately 2,300 slot machines, 68 table games, keno and a race and sports book facility. Included on a separate level of the Casino is an approximately 15,000 square foot luxurious gaming section ("The London Club at Aladdin") that contains approximately 30 high denomination table games and approximately 85 high denomination slot machines. See "London Clubs." The Aladdin also includes on the mezzanine level of the main building over 90,000 square feet of convention, conference, trade show and reception facilities, including a 37,000-square foot main ballroom, 12,000 square feet of pre-function space and 41,000 square feet of breakout space in 15 separate rooms. THE COMPLEX. The Complex, which has been designed to promote casino traffic and to provide customers with a wide variety of entertainment alternatives, is comprised of: (i) the Aladdin; (ii) a themed entertainment shopping mall with approximately 496,000 square feet of retail space ("Desert Passage"); (iii) the renovated 7,000 seat Theater for the Performing Arts ("Theater"); and (iv) an approximately 4,800 space car parking facility ("Carpark" and, together with the Desert Passage, hereinafter, "Mall Project"). The Mall Project is separately owned in part by an affiliate of the Sommer Trust. The Aladdin has space designated on the mezzanine level for a 1,200-seat production showroom. The Company has been in negotiations with a third party to lease the space, build out the theater and operate and manage the showroom and an associated nightclub. There can be no assurances that the Company will reach a definitive agreement for the development and operation of such space. The Company has evaluated its options in connection with an approximately 5-acre parcel of land, which the Company owns adjacent to the Complex, which options included: (a) seeking a joint venture partner and financing for a second hotel casino; or (b) selling the parcel to a third party. On March 13, 2001, Gaming entered into a non-binding agreement in principle to sell the parcel to an unrelated third party, which sale proceeds would be used to reduce Gaming's indebtedness under the Bank Credit Facility. There can be no assurance that Gaming and the third party can reach a definitive purchase and sale agreement for the parcel. The theming of the Aladdin and the Desert Passage has been designed to create an environment based upon the Legends of the 1001 Arabian Nights, including the tales of Aladdin, Ali Baba and the 40 Thieves, Sinbad and other legendary stories woven around ancient wealth and wonders. The Aladdin theme is crafted through the interior and exterior architecture of the Complex. The Aladdin's exterior is a highly articulated streetscape and exterior facade that evokes the Legends of the 1001 Arabian Nights. The interior of the Aladdin utilizes rich colors, textures and design, enhancing the fantasy of a mystical, romantic time and place. A significant feature of the Desert Passage is the themed area known as the "Lost City," which is a re-creation of an ancient mystical mountain city and houses a variety of specialty shops and restaurants underneath a 85-foot high ceiling. DESERT PASSAGE. Aladdin Bazaar Holdings, LLC ("Bazaar Holdings"), which is owned 99% by an affiliate of the Sommer Trust, and TrizecHahn Bazaar Centers, Inc. ("THB"), a subsidiary of TrizecHahn Centers, Inc. ("TrizecHahn"), have entered into a joint venture agreement and formed Aladdin Bazaar, LLC ("Bazaar") to develop, construct, own and operate the Desert Passage. The Desert Passage contains approximately 496,000 square feet of retail space, including an array of high-fashion specialty stores, exotic boutiques, theme restaurants, cafes, and other entertainment offerings. The Desert Passage is directly connected to the Casino and began operations on August 17, 2000. LONDON CLUBS. London Clubs, a multi-national casino operator, owns through LCNI approximately 40% of the outstanding Holdings Common Membership Interests, and various preferred interests of Gaming Holdings. The Sommer Trust and its affiliates agreed that they will cause Sommer Enterprises and 2 Gaming Enterprises to vote their Holdings Common Membership Interests so that (taking into account Holdings Common Membership Interests held by London Clubs or its affiliates) London Clubs controls fifty percent of the voting power of Gaming Holdings. London Clubs has extensive experience in the international marketing of casinos to premium players and maintains a strong presence in the United Kingdom and the Middle East. In addition to its equity ownership of Gaming Holdings, London Clubs, through its subsidiary LCNI, acts as marketing consultant to The London Club at Aladdin, the luxurious 30,000 square foot area, which includes 15,000 square feet of gaming area, located on the mezzanine level of the Casino and caters to the needs of the premium-play guest. The Company believes that The London Club at Aladdin is the first of its kind in the United States which is based on the European concept of luxurious, full service gaming areas for premium players. The London Club at Aladdin Hotel guests are escorted through a private entrance to a dedicated registration lobby and then taken via a private elevator to the Hotel's premium suites. Once there, the 24-hour butler and concierge cater to The London Club at Aladdin guest. In the elegantly appointed The London Club at Aladdin, the customer may dine in the 100-seat exclusive restaurant, which offers fine cuisine from around the world. London Clubs operates six casinos in London, one near Johannesburg, South Africa, two in Egypt and one in Lebanon. In addition, London Clubs has two new casinos in the course of development in the United Kingdom and a further casino development in Freeport, Grand Bahamas. Each of London Clubs' casinos offers its own individual style, but with comparable internationally recognized standards of service. London Clubs has established substantial goodwill and customer loyalty from high-end customers in the United Kingdom, Europe, Asia and the Middle East. In addition, London Clubs is an experienced service provider to high-end gaming customers and brings a wealth of knowledge to the Aladdin in building and maintaining relationships with and customer loyalty from such clientele. London Clubs also provides the Company with superb promotional opportunities, not only by word of mouth through its network of contacts, but also through international sporting sponsorships and its international print publications, which are distributed to members worldwide utilizing London Clubs' substantial database of premium clientele. STRATEGY As a result of the Aladdin's initial financial performance from its opening and during the Fourth Quarter of 2000, which performance did not achieve the Company's expectations, the Company undertook a review of the operating strategy for its slot, hotel and marketing efforts. The Casino's slot operations were restructured by improving the slot product quality, reconfiguring of the slot floor layout, developing a "mid-limit" slot room and lounge and aggressively competing in the video poker market. These efforts were made all with a goal to compete aggressively in the Las Vegas Strip slot market as well as to maximize slot revenue. The Company further examined its Hotel customer mix from the opening of the Aladdin and determined that, on a annual basis, it would target the Hotel's occupancy with 25% casino customers, 25% convention groups, 25% leisure travelers and 25% "free and independent" travelers. The Company believes that such hotel customer mix should maximize utilization of the Hotel consistent with the goal of maximization of profitability. Lastly, the Company has reviewed its marketing efforts and has recently hired several new executives to focus the Aladdin's advertising/marketing generally and the Casino marketing in particular. For the Aladdin, the strategy is to market the Aladdin as a hip, fun, new, must-see property and to bolster the Aladdin's presence for those visitors already in Las Vegas. The Casino marketing efforts will center around expansion of the casino customer data base, the utilization of such data base and the development of casino events tailored to increase Casino customer visitations. 3 CONSTRUCTION BUDGET AND SCHEDULE The development of the Aladdin commenced during the first quarter of 1998 and the Aladdin opened to the public on August 18, 2000. The Company is currently auditing the various construction contracts and finalizing payments to the contractors. The total construction and pre-opening budget for the Aladdin was $1.02 billion. As of March 15, 2001, there were approximately 475 mechanic's liens recorded against the Complex totaling approximately $68.8 million of which amount approximately 400 mechanic's liens totaling approximately $35.8 million related to the Desert Passage. Pursuant to the agreements between Gaming and Bazaar, Bazaar indemnifies Gaming for such liens and has an obligation to cause such liens to be removed or released and discharged. The Company has put Bazaar on notice of these obligations. As to the liens related to the Aladdin, the Company (from the remaining proceeds of the Bank Credit Facility) and Fluor Daniel, the Design/Builder of the Aladdin, are finalizing payments to those contractors to which there is no dispute on the amount owed, which will result in a material reduction of the Aladdin-related liens. As to the Aladdin-related liens that will remain after such payments, the Company believes that these liens and claims are, in general, disputed by Gaming, unsubstantiated, without merit, overstated and/or duplicative. COMPETITION The hotel casino industry is highly competitive. Hotel casinos located on or near the Las Vegas Strip ("Strip Hotels") compete with other Strip Hotels and with other major hotel casinos in downtown Las Vegas. Aladdin competes with a large number of hotel casinos in the Las Vegas area, with many of the competitors being subsidiaries or divisions of large public companies that may have greater financial or other resources than the Company; however, no major expansions on the Las Vegas Strip have commenced or are expected to commence within the next twelve months. Competitors of the Aladdin include themed resorts on the Las Vegas Strip such as Bellagio, Mandalay Bay Resort, Mirage, Caesars Palace, Treasure Island Hotel and Casino, Bally's Casino Resort, Monte Carlo Resort & Casino, Luxor Hotel and Casino, Paris Casino Resort and Venetian Hotel Casino. Several other Las Vegas resort casinos have announced future expansions or new hotel casinos. The hotel casino operations of the Company also compete, to some extent, with other hotel casino facilities in Nevada, Atlantic City and worldwide and with the state lotteries. In addition, certain states have recently legalized, and others may or are likely to legalize, casino gaming in specific areas. The passage of the Indian Gaming Regulatory Act in 1988 has led to increases in American Indian gaming operations. The Company expects many competitors to enter such new jurisdictions that authorize gaming. Some of these competitors may have greater financial and other resources than the Company. The Company believes that the legalization of large-scale land-based casino gaming in or near certain major metropolitan areas, particularly in California, from which the Company attracts customers, could have an adverse effect on the Las Vegas market. Such proliferation of gaming activities could significantly and adversely affect the business of the Company. The Desert Passage competes with retail malls in or near Las Vegas, including the Fashion Show Mall, the Forum Shops at Caesars Palace, the Canal Shoppes at the Venetian Hotel Casino and retailers in theme-oriented resorts, all of which may attract consumers away from the Desert Passage and the Complex. EMPLOYEES As of March 12, 2001, the Company had approximately 3,100 full-time equivalent employees. 4 SERVICE MARKS The Company owns four federally registered trademarks utilizing "Aladdin" for use in connection with casinos and casino entertainment services and hotel and restaurant services (collectively, "Marks") and has various other trademark applications pending. The Company has filed the appropriate documentation with the United States Patent and Trademark Office to ensure the validity of its Marks through the period of time the Aladdin is under construction. A lien on the Marks was granted to the Bank Lenders on February 26, 1998. REGULATION AND LICENSING The ownership and operation of casino gaming facilities in the state of Nevada are subject to: (i) the Nevada Gaming Control Act and the regulations promulgated thereunder (collectively, "Nevada Act"); and (ii) various local regulations (collectively, "Gaming Approvals"). The operation of the Casino by the Company are subject to the licensing and regulatory control of the Nevada Gaming Commission ("Nevada Commission"), the Nevada State Gaming Control Board ("Nevada Board"), and the Clark County Liquor and Gaming Licensing Board ("CCLGLB"). The Nevada Commission, the Nevada Board, and the CCLGLB are collectively referred to as the "Nevada Gaming Authorities." The laws, regulations and supervisory procedures of the Nevada Gaming Authorities are based upon declarations of public policy that are concerned with, among other things: (i) the prevention of unsavory or unsuitable persons from having a direct or indirect involvement with gaming at any time or in any capacity; (ii) the establishment and maintenance of responsible accounting practices and procedures; (iii) the maintenance of effective controls over the financial practices of licensees, including the establishment of minimum procedures for internal fiscal affairs and the safeguarding of assets and revenues, providing reliable record keeping and requiring the filing of periodic reports with the Nevada Gaming Authorities; (iv) the prevention of cheating and fraudulent practices; and (v) providing a source of state and local revenues through taxation and licensing fees. Any change in such laws, regulations and procedures could have a material adverse effect on the proposed gaming operations of the Aladdin and the financial condition and results of operations of Aladdin Gaming, LLC, which is defined for this section only as "Company." As operator and manager of the Aladdin, the Company conducts nonrestricted gaming operations at the Casino and is licensed by the Nevada Gaming Authorities. A nonrestricted gaming license permits the holder to operate sixteen or more slot machines, or any number of slot machines with at least one table game. The gaming license requires the periodic payment of fees and is not be transferable. No person is able to become a member of, or receive any percentage of the profits of, the Company without first obtaining Gaming Approvals. In connection with the registration and licensing of Gaming Holdings as a holding company and a member, each direct and indirect owner of Gaming Holdings, including, but not limited to, Gaming Enterprises, London Clubs, LCNI, London Clubs Holdings, Ltd. (a wholly-owned subsidiary of London Clubs and the holding company for LCNI), AHL, the Sommer Trust, Sommer Enterprises, GAI and their respective owners (collectively, "Aladdin Owners") obtained from the Nevada Gaming Authorities the applicable Gaming Approvals. Capital is subject to being called forward for a finding of suitability as a co-issuer of the Notes in the discretion of the Nevada Gaming Authorities. Gaming Holdings is a "publicly traded corporation" as that term is defined in the Nevada Act. If the Company issues an initial public offering of equity it will also become a "publicly traded corporation" ("IPO Entity") as that term is defined in the Nevada Act. In order for a company that is a publicly traded corporation to receive a gaming license, the Nevada Commission must exempt the company from a regulatory provision in the Nevada Act which makes publicly traded corporations ineligible to apply for or hold a gaming license. However, the Nevada Commission has exempted companies from this provision in the past and has granted gaming licenses to publicly traded corporations. If the Company becomes an IPO Entity, the Company intends to apply for an exemption from this eligibility requirement ("Exemption"). In connection with licensing and receipt of the Exemption, Gaming Holdings, London Clubs, Enterprises and the Company will each also be required to be registered by the Nevada Commission as a publicly traded corporation ("Registered Company"). The following regulatory requirements will be applicable to the Company, Gaming Holdings and the Aladdin owners (collectively, "Aladdin Owners"). 5 As a Registered Company and an entity licensed by the Nevada Gaming Authorities ("Company Licensee"), the Company is required to periodically submit detailed financial information and operating reports to the Nevada Commission and furnish any other information that the Nevada Commission may require. No person may become a member of, or receive any percentage of profits from, a Company Licensee without first obtaining licenses and approvals from the Nevada Gaming Authorities. The Nevada Gaming Authorities may investigate any individual who has a material relationship to, or material involvement with, the Company, Gaming Holdings and the Aladdin Owners to determine whether such individual is suitable or should be licensed as a business associate of a Company Licensee. Officers, managers and certain key employees of the Company and Gaming Holdings must file applications with the Nevada Gaming Authorities and will be required to be licensed or found suitable by the Nevada Gaming Authorities in connection with the Company's application. The Nevada Gaming Authorities may deny an application for licensing or a finding of suitability for any cause they deem reasonable. A finding of suitability is comparable to licensing, and both require submission of detailed personal and financial information followed by a thorough investigation. The entity with whom the applicant is employed or for whom the applicant serves, must pay all the costs of the investigation. Changes in licensed positions must be reported to the Nevada Gaming Authorities, and in addition to their authority to deny an application for a finding of suitability or licensure, the Nevada Gaming Authorities have jurisdiction to disapprove a change in a Company position. If the Nevada Gaming Authorities were to find an officer, manager or key employee of the Company or Gaming Holdings unsuitable for licensing or to continue having a relationship with the Company or Gaming Holdings, the Company or Gaming Holdings, as the case may be, would have to sever all relationships with such person. In addition, the Nevada Commission may require the Company or Gaming Holdings, as the case may be, to terminate the employment of any person who refuses to file appropriate applications. Determinations of suitability or of questions pertaining to licensing are not subject to judicial review in Nevada. The Company is required to submit detailed financial and operating reports to the Nevada Commission. Substantially all material loans, leases, sales of securities and similar financing transactions by the Company will be required to be reported to or approved by the Nevada Commission. If it were determined that the Nevada Act was violated by the Company or Gaming Holdings, the Gaming Approvals they hold could be limited, conditioned, suspended or revoked, subject to compliance with certain statutory and regulatory procedures. In addition, the Company, Gaming Holdings and the persons involved could be subject to substantial fines for each separate violation of the Nevada Act at the discretion of the Nevada Commission. Further, a supervisor could be appointed by the Nevada Commission to operate the Aladdin and, under certain circumstances, earnings generated during the supervisor's appointment (except for the reasonable rental value of the Aladdin) could be forfeited to the state of Nevada. Limitation, conditioning or suspension of any Gaming Approval or license or the appointment of a supervisor could (and revocation of any Gaming Approval would) materially adversely affect the gaming operations of the Aladdin and the financial position and results of operations of the Company and the Issuers. Any beneficial holder of a Registered Company's voting or non-voting securities (including warrants exercisable into such securities) regardless of the number of shares owned, may be required to file an application, be investigated, and have its suitability as a beneficial holder of the Registered Company's securities determined if the Nevada Commission has reason to believe that such ownership would otherwise be inconsistent with the declared policies of the state of Nevada. The applicant must pay all costs of investigation incurred by the Nevada Gaming Authorities in conducting any such investigation. The Nevada Act requires any person who acquires beneficial ownership of more than 5% of a Registered Company's voting securities (including warrants exercisable into voting securities) to report the acquisition to the Nevada Commission. The Nevada Act requires that beneficial owners of more than 10% 6 of a Registered Company's voting securities apply to the Nevada Commission for a finding of suitability within thirty days after the Chairman of the Nevada Board mails the written notice requiring such filing. Under certain circumstances, an "institutional investor," as defined in the Nevada Act, which acquires more than 10%, but not more than 15%, of the Registered Company's voting securities (including warrants exercisable into voting securities) may apply to the Nevada Commission for a waiver of such finding of suitability if such institutional investor holds the voting securities for investment purposes only. An institutional investor shall not be deemed to hold voting securities for investment purposes unless the voting securities were acquired and are held in the ordinary course of business as an institutional investor and not for the purpose of causing, directly or indirectly, the election of a majority of the members of the board of directors of the Registered Company, and change in the Registered Company's corporate charter, bylaws, management, policies or operations of the Registered Company, or any of its gaming affiliates, or any other action which the Nevada Commission finds to be inconsistent with holding the Company's voting securities for investment purposes only. Activities which are not deemed to be inconsistent with holding voting securities for investment purposes only include: (i) voting on all matters voted on by stockholders or interest holders; (ii) making financial and other inquiries of management of the type normally made by securities analysts for information purposes and not to cause a change in its management, policies or operations; and (iii) such other activities as the Nevada Commission may determine to be consistent with such investment intent. If the beneficial holder of voting securities who must be found suitable is a corporation, partnership or trust, it must submit detailed business and financial information, including a list of beneficial owners. The applicant is required to pay all costs of investigation. Under new provisions of the Nevada Act and under certain circumstances, an "institutional investor" as defined in the Nevada Act, which intends to acquire not more than 15% of any class of nonvoting securities of a privately-held corporation, limited partnership or limited liability company that is also a registered holding or intermediary company or the holder of a gaming license, may apply to the Nevada Commission for a waiver of the usual prior licensing or finding of suitability requirement if such institutional investor holds such nonvoting securities for investment purposes only. An institutional investor shall not be deemed to hold nonvoting securities for investment purposes unless the nonvoting securities were acquired and are held in the ordinary course of business as an institutional investor, do not give the institutional investor management authority, and do not, directly or indirectly, allow the institutional investor to vote for the election or appointment of members of the board of directors, a general partner or manager, cause any change in the articles of organization, operating agreement, other organic document, management, policies or operations, or cause any other action that the Nevada Commission finds to be inconsistent with holding nonvoting securities for investment purposes only. Activities that are not deemed to be inconsistent with holding nonvoting securities for investment purposes only include: (i) nominating any candidate for election or appointment to the entity's board of directors or equivalent in connection with a debt restructuring; (ii) making financial and other inquiries of management of the type normally made by securities analysts for informational purposes and not to cause a change in the entity's management, policies or operations; and (iii) such other activities as the Nevada Commission may determine to be consistent with such investment intent. If the beneficial holder of nonvoting securities who must be found suitable is a corporation, partnership or trust, it must submit detailed business and financial information including a list of beneficial owners. The applicant is required to pay all costs of investigation. Any person who fails or refuses to apply for a finding of suitability of a license within thirty days after being ordered to do so by the Nevada Commission or the Chairman of the Nevada Board, may be found unsuitable. The same restrictions apply to a record owner if the record owner, after request, fails to identify the beneficial owner. Any stockholder or beneficial owner found unsuitable and who holds, directly or indirectly, any beneficial ownership of the common stock or other equity securities of a Registered Company beyond such period of time as may be prescribed by the Nevada Commission may be guilty of a criminal offense. The Registered Company is subject to disciplinary action if, after it receives notice that a person is unsuitable to be a stockholder or to have any other relationship with the Company, 7 the Registered Company: (i) pays that person any dividend, distribution or interest upon voting securities of the Registered Company; (ii) allows that person to exercise, directly or indirectly, any voting right conferred through securities held by that person; (iii) pays remuneration in any form to that person for services rendered or otherwise; or (iv) fails to pursue all lawful efforts to require such unsuitable person to relinquish his voting securities including, if necessary, the immediate purchase of said voting securities for cash at fair market value. The Nevada Commission may, in its discretion, require the holder of any debt security of a Registered Company (such as the Notes) to file an application, be investigated and be found suitable to own the debt security of a Registered Company. If the Nevada Commission determines that a person is unsuitable to own such security, then pursuant to the Nevada Act, the Registered Company can be sanctioned, including the loss of approvals, if without the prior approval of the Nevada Commission, it: (i) pays to the unsuitable person any dividend, interest, or any distribution whatsoever; (ii) recognizes any voting right by such unsuitable person in connection with such securities; (iii) pays the unsuitable person remuneration in any form; or (iv) makes any payment to the unsuitable person by way of principal, redemption, conversion, exchange, liquidation, or similar transaction. Gaming Enterprises, the Company and Gaming Holdings may not make a public offering of any securities (including, but not limited to, the Common Stock of Enterprises upon the exercise of the Warrants) without the prior approval of the Nevada Commission if the securities or the proceeds therefrom are intended to be used to construct, acquire or finance gaming facilities in Nevada, or to retire or extend obligations incurred for such purposes. Such approval, if given, does not constitute a finding, recommendation or approval by the Nevada Commission or the Nevada Board as to the accuracy or adequacy of the prospectus or the investment merits of the securities. Any representation to the contrary is unlawful. In connection with the original registration and licensing of Gaming Holdings and the Company, London Clubs was also registered as a "publicly traded corporation" and became a Registered Company. On March 22, 2001, the Nevada Commission granted London Clubs prior approval to make public offerings for a period of two (2) years, subject to certain conditions (the "Shelf Approval"). However, the Shelf Approval may be rescinded for good cause without prior notice upon the issuance of an interlocutory stop order by the Chairman of the Nevada Board. The Shelf Approval does not constitute a finding, recommendation or approval by the Nevada Commission or the Nevada Board as to the accuracy or adequacy of the prospectus or the investment merits of the securities offered. Any representation to the contrary is unlawful. Changes in control of a Registered Company through merger, consolidation, stock or asset acquisitions, management or consulting agreements, or any act or conduct whereby a person obtains control, may not occur without the prior approval of the Nevada Commission. Entities seeking to acquire control of a Registered Company must satisfy the Nevada Board and Nevada Commission in a variety of stringent standards prior to assuming control of such Registered Company. The Nevada Commission may also require controlling stockholders, officers, directors and other persons having a material relationship or involvement with the entity proposing to acquire control, to be investigated and licensed as part of the approval process relating to the transaction. The Nevada Legislature has declared that some corporate acquisitions opposed by management, repurchases of voting securities and corporate defense tactics affecting Nevada gaming licensees, and Registered Companies that are affiliated with those operations, may be injurious to stable and productive corporate gaming. The Nevada Commission has established a regulatory scheme to ameliorate the potentially adverse effects of these business practices upon Nevada's gaming industry and to further Nevada's policy to: (i) assure the financial stability of corporate gaming operators and their affiliates; (ii) preserve the beneficial aspects of conducting business in the corporate form; and (iii) promote a neutral environment for the orderly governance of corporate affairs. Approvals are, in certain 8 circumstances, required from the Nevada Commission before the Registered Company can make exceptional repurchases of voting securities above the current market price thereof and before a corporate acquisition opposed by management can be consummated. The Nevada Act also requires prior approval of a plan of recapitalization proposed by the Registered Company's Board of Directors in response to a tender offer made directly to the Registered Company's stockholders or interest holders for the purposes of acquiring the Registered Company. License fees and taxes, computed in various ways depending on the type of gaming or activity involved, are payable to the state of Nevada and to Clark County, Nevada. Depending upon the particular fee or tax involved, these fees and taxes are payable either monthly, quarterly or annually and are based upon either: (i) a percentage of the gross revenues received; (ii) the number of gaming devices operated; or (iii) the number of table games operated. A casino entertainment tax will also be paid by the Company where certain entertainment is provided in a cabaret, nightclub, cocktail lounge or casino showroom in connection with admissions and the serving or selling of food, refreshments or merchandise. Any person who is licensed, required to be licensed, registered, required to be registered, or is under common control with such persons (collectively, "Licensees"), and who proposes to become involved in a gaming venture outside of Nevada, is required to deposit with the Nevada Board and thereafter maintain, a revolving fund in the amount of $10,000 to pay the expenses of investigation by the Nevada Board of their participation in such foreign gaming. The revolving fund is subject to increase or decrease at the discretion of the Nevada Commission. Thereafter, Licensees are also required to comply with certain reporting requirements imposed by the Nevada Act. Licensees are also subject to disciplinary action by the Nevada Commission if they knowingly violate any laws of the foreign jurisdiction pertaining to the foreign gaming operation, fail to conduct the foreign gaming operation in accordance with the standards of honesty and integrity required of Nevada gaming operations, engage in activities or enter into associations that are harmful to the state of Nevada or its ability to collect gaming taxes and fees, or employ, contract with or associate with a person in the foreign operation who has been denied a license or a finding of suitability in Nevada on the ground of personal unsuitability. The sale of alcoholic beverages by the Company on the premises of the Aladdin is also subject to licensing, control and regulation by the CCLGLB. All licenses are revocable and are not transferable. The CCLGLB has full power to limit, condition, suspend or revoke any such license, and any such disciplinary action could (and revocation would) have a material effect on the financial position and results of operations of the Company and the Issuers. CERTAIN FACTORS In addition to factors discussed elsewhere in this Annual Report on Form 10-K, the following are important factors that could impact the Company and its operations and financial condition. LIQUIDITY AND CAPITAL RESOURCES. The Company estimates that cash on hand and projected internally generated funds will be sufficient to fund the Company's current operations, however, such amounts will not be sufficient to fund all of the Company's principal and interest payments on its debt during 2001. Therefore, the Company will continue to rely on cash equity contributions from the Sommer Trust and London Clubs. There can be no assurances that such cash equity contributions will be made, or if made, will be sufficient to fund all the Company's principal and interest payments on its debt. To the extent that this source of liquidity is insufficient, the Company will have to seek other forms of capital, which may include, incurring additional indebtedness, to the extent permitted under the Company's various credit facilities, sale of an adjacent 5-acre parcel of undeveloped land, reaching an agreement with the Company's creditors reducing the Company's liquidity needs and/or cash equity infusions. However, there can be no assurances that such sources of liquidity will be available to the Company, or if available, will be sufficient to address the Company's liquidity and capital resource needs. 9 FUTURE COMPLIANCE WITH DEBT COVENANTS. Pursuant to Gaming's credit facilities, it must maintain on a quarterly basis certain financial covenants. Absent an improvement in Gaming's operating results or cash equity contributions to Gaming pursuant to the Keep-Well Agreement, Gaming estimates that, based on its results year-to-date, it may not be in compliance with the financial covenant levels contained in Gaming's credit facilities for the quarter ended June 30, 2001. Failure to achieve such financial covenant levels will constitute defaults under the credit facilities. While the Company has commenced discussions with the lenders regarding further revisions to Gaming's financial covenant levels, there can be no assurances that such discussions will result in reducing the financial covenants to achievable levels. LIENS. Currently there are numerous liens filed on the Aladdin parcel, which liens relate to both the construction of the Aladdin and the Desert Passage. The Company and Fluor Daniel, the design/builder of the Aladdin, are currently finalizing payments to those contractors who worked on the Aladdin to which there is no dispute on the amounts owed. With such payments, the Company expects that any remaining liens that are related to the Aladdin are, in general, disputed by Gaming, unsubstantiated, without merit, overstated and/or duplicative. As to the liens on the Desert Passage, the Company has been advised that Bazaar and/or its tenants, as applicable, are having such liens removed, discharged and/or bonded. However, in the interim, such liens remain on Gaming's parcel, which provides certain statutory remedies to the lien holder, including seeking a foreclosure action. COMPETITION. The hotel casino industry is highly competitive and many of the Company's competitors are larger than the Company and have greater resources. Further, as California, especially Southern California, is a major market for the Company's customers, expansion of casino gaming in California will be competitive with the Aladdin and may have an adverse impact on the Company's results. ECONOMIC UNCERTAINTY. With the recent decline in the United States stock market and the slow down in the United States economy, there is increasing concern that, if these trends continue, they will adversely impact consumer spending, especially in the leisure and gaming industry. To the extent that the economy does continue to slow down, the Company's operating results may be adversely effected. The current issues regarding electricity supply and cost thereof, especially in California, may also undermine consumer confidence in spending money on discretionary activities, such as leisure and gaming. To the extent such occur, the Company's operating results may be adversely effected. ITEM 2. PROPERTIES. Gaming Enterprises does not own or lease any property. The Company owns approximately 21.8 acres of land in Las Vegas, Nevada upon which the Aladdin and the Complex's central utility plant are located as well as two adjacent vacant parcels. Of such land, 6.2 acres is subject to a lease to Northwind Aladdin, LLC, an unrelated entity that is the owner and operator of the central utility plant for the Complex. The Company has evaluated its options in connection with an approximately 5-acre parcel of land, which the Company owns adjacent to the Complex, which options included: (a) seeking a joint venture partner and financing for a second hotel casino; or (b) selling the parcel to a third party. On March 13, 2001, Gaming entered into a non-binding agreement in principle to sell the parcel to an unrelated third party, which sale proceeds will be used to reduce Gaming's indebtedness under the Bank Credit Facility. There can be no assurance that Gaming and the third party can reach a definitive purchase and sale agreement for the parcel. ITEM 3. LEGAL PROCEEDINGS. Gaming Enterprises is not currently party to any material pending litigation. In December, 2000, Bazaar initiated an arbitration against Gaming alleging various defaults by Gaming under the respective agreements between the parties and seeking damages in excess of $10 million. Gaming has responded to the allegations and asserted its own claims against Bazaar and seeks 10 damages in an amount to be determined. Gaming will continue to vigorously pursue these matters and believes that the liability, if any, is minimal. There can be no assurance about the outcome of these matters. In December, 2000, Korte-Bellew & Associates, the contractor who renovated the Theater ("KBA"), initiated in Nevada State District Court an action seeking foreclosure on its mechanic's lien and payment of approximately $7.5 million. The District Court action has been stayed pending arbitration as required by the contract between Gaming and KBA. While there can be no assurances, Gaming does not believe that it owes any remaining moneys to KBA and believes that Gaming has further causes of action challenging the validity of KBA's mechanic's lien. Mr. Jack Sommer, the Chairman of the Gaming Holdings Board and the Gaming Board and a trustee of the Sommer Trust, and the other trustees of the Sommer Trust, were named co-defendants in a legal action relating to the then existing Aladdin hotel and casino. The suit was commenced by members of the Aronow family ("Aronow Plaintiffs") in May 1995 in the Supreme Court of the State of New York, County of New York. In their complaint, the Aronow Plaintiffs alleged that Mr. Sommer and the Aronow Plaintiffs were parties to a joint venture to acquire and develop the Aladdin hotel and casino and that Mr. Sommer breached such alleged agreement when the Sommer Trust acquired an interest in the Aladdin hotel and casino in December, 1994. The Aronow Plaintiffs sought (among other remedies) to impress a constructive trust upon the Sommer Trust's interest in the Aladdin hotel and casino, an accounting, compensatory damages of not less than $200 million and punitive damages of not less than $500 million. On January 27, 2000, each of the Aronow Plaintiffs' claims against the trustees was dismissed. On October 17, 2000, the Appellate Division, First Judicial District, affirmed the dismissal of the Aronow Plaintiffs' Complaint. On January 16, 2001, the New York Court of Appeals denied the Aronow Plaintiffs' Motion for Leave to Appeal to the Court of Appeals as against Jack Sommer as Trustee of the Sommer Trust and as against the other Trustees of the Sommer Trust. The Court of Appeals also dismissed the Aronow Plaintiffs' Motion for Leave to Appeal to the Court of Appeals as against Jack Sommer individually on the ground that the order sought to be appealed from did not finally determine an action within the meaning of the New York State constitution. It is not known at this time whether the Aronow Plaintiffs will attempt to reargue, or file a petition for certiorari in the United States Supreme Court, with respect to the Court of Appeals decision. It also is not known at this time whether the Aronow Plaintiffs will at some future date renew their motion for leave to appeal to the Court of Appeals as against Jack Sommer individually. As such, there is no way to evaluate the success of any appeal or motion for reargument. Any adverse decision could have a material and adverse effect on the Company. If the decision of the Appellate Division stands, there can be no liability as a result of the Aronow Plaintiffs' lawsuit. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. Not applicable. 11 PART II ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS. Neither the capital stock of Gaming Enterprises nor the membership interests of Gaming Holdings has been registered under the Securities Act of 1933 nor under Section 12 of the Securities Exchange Act of 1934. There is no established trading market for either the capital stock of Gaming Enterprises or the common membership interests of Gaming Holdings. Gaming Enterprises is not aware of any bid quotations for the capital stock of Gaming Enterprises or the common membership interests of Gaming Holdings. See Item 12 regarding the numbers of shareholders for Gaming Enterprises. Since inception, Gaming Enterprises has not paid any dividends on its equity and due to the Company's current long-term debt arrangements restrict, subject to certain exceptions, the payment of dividends on the Company's equity. See Exhibit 10.12 to this Form 10-K for additional information on the covenants, conditions and restrictions on the Company under the Bank Credit Facility. ITEM 6. SELECTED FINANCIAL DATA. The historical selected financial data set forth below should be read in conjunction with "Item 7 Management's Discussion and Analysis of Financial Condition and Results of Operations" and the Financial Statements and Notes thereto included elsewhere in this Form 10-K. The statement of operations data for the years ended December 31, 2000, 1999 and 1998, and the balance sheet data at December 31, 2000, 1999 and 1998 are derived from and are elsewhere in this Form 10-K. Due to the brief operating history, comparisons between periods may not be relevant and the historical results are not necessarily indicative of the results of operations to be expected in the future.

12 ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. The following discussion should be read in conjunction with the various other reports which have been previously filed with the United States Securities and Exchange Commission ("SEC"), which may be inspected, without charge, at the Public Reference Section of the SEC located at 450 Fifth Street, N.W., Washington, D.C. 20549 or at the SEC internet site address: http://www.sec.gov. DEVELOPMENT ACTIVITIES Gaming Enterprises has no business or activities other than its investment in Gaming Holdings. Until August 18, 2000, the operations of the Company were limited to constructing and developing, and applying for the appropriate gaming licenses for, the Aladdin. RESULTS OF OPERATIONS Enterprises has no business or activities or material assets other than its investment in Gaming Holdings. Until August 18, 2000, the Company was in the development stage and did not have any historical operating income as there was no operating revenues. The Company's operating expenses primarily have consisted of interest, amortization costs, expenses related to the Notes and pre-opening costs. Due to the short operating period, there will not be a comparative discussion of prior periods included in this Form 10-K. Historical results may not be indicative of future operating results. The Company operated the Aladdin 136 days during the calendar year 2000, producing gross revenues of $137.0 million. Casino revenue represented 52% of gross revenue, hotel 27% of gross revenue, food and beverage 18% of gross revenue, and entertainment and other revenue 3% of gross revenue. The net loss for the year was $76.2 million, inclusive of pre-opening expenses totaling $28.9 million. Because Gaming Enterprises' only material asset is its 25% interest in Gaming Holdings, Gaming Enterprises records 25% of Gaming Holdings' losses and preferred dividend in arrears as equity in loss of unconsolidated affiliate. However, Gaming Enterprises has discontinued applying the equity method as the investment in Gaming Holdings has been reduced to zero. Gaming Enterprises will resume applying the equity method after cummulative net income exceeds the unrecognized losses. Gaming Enterprises recorded a net loss of approximately $8.6 million for the year ended December 31, 2000. REVENUES The Casino revenues (inclusive of The London Club at Aladdin) of $70.5 million were derived $33.0 million from slot operations, $36.9 million from table games and $.6 million from other sources of gaming revenue. The London Club at Aladdin produced $21.5 million of Casino revenues, $19.5 million from table games and $2.0 million from slot operations. The overall table games gross win percentage was approximately 21% for the 136 day period while the average daily win per table game was $3,099. The Company expects the normal gross win percentage to be approximately 17.5% for table games. The table games gross win percentage has decreased during the First Quarter 2001 to approximately 14.8%. The average daily net win per slot machine was approximately $92 during the period. The Company experienced hotel occupancy of 86% at an average daily rate of $129 during the 136 day period. The Company did not book any substantial convention groups until October, 2000. In addition, the Aladdin experienced normal issues relating to the initial occupancy of the facilities. These issues were resolved during September, 2000. The Company believes the occupancy and average daily rate were 13 negatively impacted by the lack of free and independent traveler demand and the lack of booking of convention room occupancy during the period. During the First Quarter 2001, the Company completed organizational changes to its marketing and advertising functions. The Company has repositioned its advertising to market the Aladdin as a hip, fun, new, must-see property. With these new advertising and promotional campaigns, reservation call volume increased approximately 37% beginning mid-February, 2001 and Hotel occupancy increased from 78.7% and 90.1% during January and February, 2001, respectively, to approximately 99% during March, 2001. This trend in occupancy is expected to continue into April, 2001, which is estimated to achieve occupancy in excess of 95%. The Company also hired two new Casino marketing executives during March, 2001, who have been focused on slot and table games marketing. Casino marketing efforts have been focused on enhancing the data base, implementing an aggressive direct mail program and increasing the number of special events and promotions. The Company estimates the new programs will begin to improve Casino revenues during the Second Quarter 2001. There can be no assurances that such improvement will be significant or that other negative factors could arise offsetting such improvement. During February, 2001, the Company completed the redesign and layout of the slot gaming floor. The number of slot machines was reduced from 2,800 to approximately 2,350. The slot floor reconfiguration was intended to improve the overall competitiveness of the slot product and enhance traffic flow through the Casino. A "mid-limit" slot room and lounge in the main Casino was completed, as well as enhancement to the slot product in The London Club at Aladdin. The average daily net win per slot machine was $66, $78 and $97 (estimated) for January, February and March 2001, respectively. OTHER FACTORS AFFECTING EARNINGS The Company incurred pre-opening expenses of $28.9 million during the period prior to opening the Aladdin. The Company expenses pre-opening costs as incurred. The Company has written off $2.6 million of project development costs and expenses related to the originally contemplated second hotel casino project that was to be adjacent to the Complex. Such costs and expenses were determined to be related to services that will be of little or no future value. The Company has implemented costs savings and labor efficiency programs throughout all the operations. The full-time equivalent number of employees has decreased from approximately 4,500 at the opening of the Aladdin to approximately 3,100 as of March 12, 2001. There can be no assurances that the measures implemented will significantly improve the Company's results of operations. LIQUIDITY AND CAPITAL RESOURCES In connection with the development of the Aladdin, Gaming entered into a $410 million (which was subsequently reduced to $403.7 million) bank credit facility ("Bank Credit Facility") with various lenders and The Bank of Nova Scotia, as Administrative Agent, and an $80 million furniture, fixture and equipment financing with General Electric Capital Corporation ("FF&E Facility"). From January 1, 2000 to March 30, 2001, the Company received a total of approximately $148.0 million in capital and debt infusions as follows: (a) $81.0 million in payments pursuant to the Bank Completion Guaranty, which was funded by London Clubs during 2000; (b) in July, 2000, the Bank Credit Facility was increased by $50 million, with the addition of a new "Term D Loan," which increased the Bank Credit Facility to $453.7 million, which funds were used for construction and pre-opening expenses; (c) in December, 2000, a $5 million increase was made to the Term A Loan of the Bank Credit Facility, which increased the Bank Credit Facility to $458.7 million, which funds were utilized by Gaming for working capital; (d) in January, 2001, a $5 million advanced payment under the Keep-Well Agreement, which was funded by London Clubs; and (e) on March 30, 2001, the Sommer Trust funded an additional $7 million 14 pursuant to the Keep-Well Agreement to satisfy the Sponsors' obligations under the Keep-Well Agreement for the fiscal period ended December 31, 2000. On March 30, 2001, Gaming and the various lenders under the Bank Credit Facility amended the Bank Credit Facility. This amendment provided: (a) a waiver of Gaming's compliance with the total debt to EBITDA ratio, the interest coverage ratio and the EBITDA covenants required pursuant to the Bank Credit Facility for the fiscal quarters ending on or prior to March 31, 2001; (b) a waiver until August 18, 2001, of the requirement to fund the FF&E reserve, provided that Gaming cannot make certain restricted payments until the FF&E reserve is funded as otherwise required by the Bank Credit Facility; (c) a waiver of the default that otherwise would have occurred as a result of a "going concern" qualification to the Company's auditor's report in respect of the Company's financial statements for the fiscal year ended December 31, 2000; (d) amendments to certain of Gaming's financial covenants. The foregoing is qualified in its entirety by the "Sixth Amendment to Credit Agreement," dated March 30, 2001. There can be no assurances that Gaming can comply with the revised financial covenant levels. Absent an improvement in Gaming's operating results or cash equity contributions to Gaming pursuant to the Keep-Well Agreement, as defined below, Gaming estimates that, based on its results year-to-date, it may not be in compliance with the revised financial covenant levels for the quarter ended June 30, 2001. Corresponding amendments and waivers have been made to the FF&E Facility. London Clubs, the Sommer Trust, and Aladdin Bazaar Holdings, LLC ("Bazaar Holdings"), which is indirectly owned 99% by the Sommer Trust, are guarantors under a completion guaranty ("Bank Completion Guaranty") for the benefit of the lenders under the Bank Credit Facility, under which they have agreed to guarantee, among other things, the completion of the Aladdin. As of March 16, 2001, the Aladdin has not achieved "final completion" within the meaning of the Bank Completion Guaranty, the occurrence of which would cause the Bank Completion Guaranty to terminate. In July, 2000, Jack Sommer, the Company's Chairman of the Board, and his spouse, Laura Sommer, each became a party to the Bank Completion Guaranty. The Bank Completion Guaranty is not subject to any maximum dollar limitations. For payments made pursuant to the Bank Completion Guaranty, Gaming Holdings issues (i) Series A Preferred Shares in exchange for the contribution of such payments and (ii) Series D Preferred Shares representing a profits-only interest in Gaming Holdings. The holders of the Notes are not entitled to the benefit of the Bank Completion Guaranty, however, London Clubs, the Sommer Trust and Bazaar Holdings have entered into a limited completion guaranty for the benefit of the Noteholders ("Noteholder Completion Guaranty") under which they guarantee completion of the Aladdin, subject to certain important exceptions, limitations and qualifications. The Noteholder Completion Guaranty contains certain intercreditor provisions which significantly limit the rights of the Trustee under the Noteholder Completion Guaranty. There can be no assurance that the parties to either the Bank Completion Guaranty or the Noteholder Completion Guaranty will be able to make such payments to the Company if required pursuant to these agreements. AHL, Bazaar Holdings and London Clubs entered into the Keep-Well Agreement ("Keep-Well Agreement") in favor of the lenders under the Bank Credit Facility. The Sommer Trust joined and became a party to the Keep-Well Agreement in July, 2000 (collectively, AHL, Bazaar Holdings, London Clubs and the Sommer Trust, "Sponsors"). The Sponsors and The Bank of Nova Scotia amended the definition of "Keep-Well Termination Date" on March 30, 2001. The Keep-Well Agreement is the joint and several agreement of the Sponsors to make certain quarterly cash equity contributions to Gaming if Gaming fails to comply with the Minimum Fixed Charge Coverage Ratio set forth in the Bank Credit Facility, but in no event shall the aggregate cash equity contributions required to be made in any fiscal year of Gaming exceed $30.0 million. Based on Gaming's EBITDA from August 18, 2000, to December 31, 2000, approximately $12 million was due from the Sponsors under the Keep-Well Agreement ("Fourth Quarter 2000 Keep-Well Payment"). In January, 2001, London Clubs made an advance payment of $5 million against the Fourth Quarter 2000 Keep-Well Payment. The Sommer Trust paid the balance of the Fourth Quarter 2000 Keep-Well Payment on March 30, 2001. There can be no assurances that the Sponsors will, 15 or will be able to, make further cash equity contributions to Gaming if required pursuant to the Keep-Well Agreement. During the twelve months ended December 31, 2000, approximately $360.2 million had been expended primarily on the development of the Aladdin, of which approximately $337.8 million had been expended in construction, furniture, fixtures and equipment, and capitalized interest, approximately $5.7 million in debt issuance and member equity costs, and approximately $17.4 million in pre-opening costs, net interest expense, and other current assets. As of March 22, 2001, the Company had unrestricted funds available of approximately $13.4 million. The estimated principal and interest payments pursuant to the Bank Credit Facility for the next twelve months are as follows:

The estimated principal and interest payments pursuant to the FF&E Facility for the next twelve months are as follows:

The Company estimates that cash on hand and projected internally generated funds will be sufficient to fund the Company's current operations; however, such amounts will not be sufficient to fund all the principal and interest payments on the Company's debt during 2001. The Company and the Sponsors are seeking alternatives to improve the Company's current liquidity, which alternatives may include incurring 16 additional indebtedness, to the extent permitted under the Company's various credit facilities, sale of an adjacent 5-acre parcel of undeveloped land, reaching an agreement with the Company's creditors reducing the Company's liquidity needs and/or cash equity infusions. In order for the Company to fund all the principal and interest payments, the Company will continue to rely on payments by the Sponsors pursuant to the Keep-Well Agreement. However, there can be no assurances that the Company or the Sponsors will be able to improve the Company's current liquidity or that the Sponsors will continue to perform pursuant to the Keep-Well Agreement. In the event the Company's liquidity does not improve or that the Sponsors do not perform under the Keep-Well Agreement or that the Company is unable to reach agreements with its creditors reducing the Company's liquidity needs, there would be serious doubt as to whether or not the Company will be able to continue as a going concern. MARKET RISK Beginning July 20, 2000, Gaming has the following interest rate derivative financial instruments in effect: (i) an interest rate collar with an amortizing notional amount of $245.7 million ($237.1 million at December 31, 2000), a maximum and minimum interest rate of 8.00% and 6.25%, respectively, and a maturity date of June 30, 2005, (ii) an interest rate collar with an amortizing notional amount of $159.2 million ($158.4 million at December 31, 2000), a maximum rate of 8.00%, a minimum rate of 6.25% and a maturity date of June 30, 2005; (iii) an interest rate collar with a notional amount of $50 million, a maximum rate of 8.00%, a minimum rate of 6.25%, and a maturity of June 30, 2005. All rates noted above are the three-month LIBOR equivalents only and do not include the impact of the basis point additions to LIBOR that are used in calculating interest expense on Gaming's term loans. The fair market value of Gaming's interest rate derivative financial instruments as provided by the counterparty, is a net payable of approximately $10.7 million at December 31, 2000 which is not included in the Company's consolidated financial statements. The notional amounts do not represent amounts exchanged by the parties, and thus are not a measure of exposure of Gaming. The amounts exchanged are based on the notional amounts and other terms of the swaps. The variable rates are subject to change over time as LIBOR fluctuates. Neither Gaming nor the counterparty, which is a prominent financial institution, is required to collateralize their respective obligations under these swaps. Gaming is exposed to loss if the counterparty defaults. However, the Company considers the risk of non-performance to be minimal as the counterparty is a member of the Bank Credit Facility. Gaming has a credit facility with various financial institutions which consists of four separate term loans. Gaming pays interest on each term loan at LIBOR plus between 150 and 300 basis points. Gaming has entered into the collar instruments discussed above to assist in managing interest variability on its long-term debt. If the notional amounts on the collar differs from the long-term debt balances, Gaming may be exposed to additional interest rate variability. On the aforementioned collar instruments, Gaming will pay the hedge counterparty to the extent that the three-month LIBOR drops below 6.25% and will receive payments from the hedge counterparty to the extent the three-month LIBOR exceeds 8.0% on the then outstanding notional amount of such instruments. CERTAIN FORWARD LOOKING STATEMENTS Certain information included in this Form 10-K and other materials filed or to be filed by the Company with the Securities and Exchange Commission (as well as information included in oral statements or other written statements made or to be made by the Company) contains statements that are forward-looking within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements include, without limitation, those relating to the Bank Credit Facility, FF&E Facility, the Keep-Well Agreement and other agreements, plans for future operations, current operations, other business development activities, capital 17 spending, financing sources and the effect of regulation (including gaming and tax regulations) and competition. Such forward-looking information involves important risks and uncertainties that could significantly affect anticipated results in the future and, accordingly, such results may differ from those expressed in any forward-looking statements made by or on behalf of the Company. These risks and uncertainties include, but are not limited to, those relating to the current development and operations, the Company's liquidity and the extent of the Company's alternatives thereto, the sources and extent of the Sponsors' liquidity and the Sponsors' payments under the Keep-Well Agreements, dependence on existing management, leverage and debt service, domestic or international economic conditions, changes in federal or state tax laws or the administration of such laws, changes in gaming laws or regulations (including the legalization of gaming in certain jurisdictions) and retention of licenses and approvals under applicable jurisdictional laws and regulations (including gaming laws and regulations). ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. There is incorporated by reference the information appearing under the caption "Market Risk" in Item 7 of this Form 10-K. 18 ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA. Report of Independent Public Accountants To the Board of Directors of Aladdin Gaming Enterprises, Inc.: We have audited the accompanying balance sheets of Aladdin Gaming Enterprises, Inc. ("Enterprises") as of December 31, 2000 and 1999, and the related statements of operations, stockholders' equity/(deficit) and cash flows for each of the three years in the period ended December 31, 2000. These financial statements are the responsibility of Enterprises' management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatment. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Enterprises as of December 31, 2000 and 1999, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2000 in conformity with accounting principles general accepted in the United States. The accompanying financial statements have been prepared assuming that Enterprises will continue as a going concern. As discussed in Note 2 to the financial statements, Enterprises' sole material asset is its investment in Aladdin Gaming Holdings, LLC, an unconsolidated affiliate, which has disclosed that cash on hand and projected internally generated funds will not be sufficient to fund principal and interest payments in fiscal 2001 on its debt and that it may not be in compliance with certain debt covenants in fiscal 2001 and future periods which raises substantial doubt about Enterprises' ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 2. The financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might result should the Company be unable to continue as a going concern. ARTHUR ANDERSEN LLP Las Vegas, Nevada April 2, 2001 19 ALADDIN GAMING ENTERPRISES, INC. BALANCE SHEETS DECEMBER 31, 2000 AND 1999 (IN THOUSANDS EXCEPT FOR SHARE DATA)

The accompanying notes to consolidated financial statements are an integral part of these consolidated financial statements. 20 ALADDIN GAMING ENTERPRISES, INC. STATEMENT OF OPERATIONS YEARS ENDED DECEMBER 31, 2000, 1999, AND 1998 (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

The accompanying notes to consolidated financial statements are an integral part of these consolidated financial statements. 21 ALADDIN GAMING ENTERPRISES, INC. STATEMENTS OF STOCKHOLDERS' EQUITY/(DEFICIT) FOR THE YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998 (IN THOUSANDS)

The accompanying notes to consolidated financial statements are an integral part of these consolidated financial statements. 22 ALADDIN GAMING ENTERPRISES, INC. STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2000, 1999, AND 1998 (IN THOUSANDS)

The accompanying notes to consolidated financial statements are an integral part of these consolidated financial statements. 23 ALADDIN GAMING ENTERPRISES, INC. NOTES TO FINANCIAL STATEMENTS 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES NATURE OF OPERATIONS AND EQUITY METHOD ACCOUNTING Aladdin Gaming Enterprises, Inc., a Nevada corporation ("Gaming Enterprises"), has no other business or activity other than its investment in Aladdin Gaming Holdings, LLC ("Gaming Holdings") and Gaming Enterprises' sole material asset is 25% of the common membership interests of Gaming Holdings ("Holdings Common Membership Interests"). Gaming Holdings is a holding company, the material assets of which are 100% of the outstanding common membership interests and 100% of the outstanding Series A preferred interests of Aladdin Gaming, LLC ("Gaming"). Aladdin Capital Corp. ("Capital") is a wholly-owned subsidiary of Gaming Holdings and was incorporated solely for the purpose of serving as a co-issuer of the Gaming Holdings 13 1/2% Senior Discount Notes ("Notes"). Capital does not have any material operations or assets and has no revenues. Aladdin Holdings, LLC, a Delaware limited liability company ("AHL"), indirectly holds a majority interest in Gaming Holdings. The members of AHL are the Trust Under Article Sixth u/w/o Sigmund Sommer ("Sommer Trust"), which holds a 95% interest in AHL, and GW Vegas, LLC, a Nevada limited liability company, a wholly owned subsidiary of the Trust Company of the West, which holds a 5% interest in AHL. As of December 31, 2000, Holdings Common Membership Interests were held 39.953125% by London Clubs Nevada Inc ("LCNI"), a subsidiary of London Clubs International plc ("London Clubs"); 31.859375% by Sommer Enterprises, LLC, a Nevada limited liability company ("Sommer Enterprises"), which is a subsidiary of AHL; 25.0% by Gaming Enterprises, which is a subsidiary of Sommer Enterprises; 3.0% by GAI, LLC, a Nevada limited liability company, which is owned by Richard J. Goeglein, the President and Chief Executive Officer of Gaming Holdings; and 0.1875% by Jose Rueda, a former executive of Gaming Holdings. Except where the context otherwise requires, Gaming Holdings and its subsidiaries are collectively referred to herein as "Company." Much of the following information relates to Gaming Holdings and its subsidiaries and is included due to the relative significance of Gaming Holdings to Gaming Enterprises. Until August 18, 2000, the operations of the Company had been primarily limited to the design, development and construction of the new Aladdin Resort and Casino ("Aladdin"). The Aladdin, which commenced operations on August 18, 2000, is the centerpiece of an approximately 35-acre world-class resort, casino and entertainment complex ("Complex") located at the center of Las Vegas Boulevard. The Aladdin includes a luxury themed hotel of approximately 2,600 rooms, an approximately 116,000 square foot casino and six restaurants. The Complex is comprised of: (i) the Aladdin; (ii) a themed entertainment shopping mall with approximately 496,000 square feet of retail space ("Desert Passage"); (iii) the newly renovated 7,000 seat Theater of the Performing Arts ("Theater"); and (iv) an approximately 4,800 space car parking facility ("Carpark" and, together with the Desert Passage, hereinafter, "Mall Project"). The Mall Project is separately owned in part by an affiliate of the Sommer Trust. Enterprises' interest in Gaming Holdings has been accounted for under the equity method. However, Enterprises has discontinued applying the equity method as the investment in Gaming Holdings has been reduced to zero. Enterprises will resume applying the equity method after cumulative net income exceeds the unrecognized losses. 24 ALADDIN GAMING ENTERPRISES, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) CASH AND CASH EQUIVALENTS Gaming Enterprises considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. INCOME TAXES Gaming Enterprises accounts for income taxes using the liability method as set forth in the SFAS No. 109, "Accounting For Income Taxes". Under the liability method, deferred taxes are provided based on the temporary differences between the financial reporting basis and the tax basis of Gaming Enterprises' assets and liabilities. There was no income tax expense or benefit recorded for the period ending December 31, 2000, 1999 and 1998 as there was a net loss for each period and the realization of any deferred tax asset is uncertain. LOSS PER BASIC AND DILUTED SHARE Loss per basic and diluted share is based on the weighted average number of shares outstanding. Basic and diluted shares outstanding were 3,322,500, 3,322,500 and 2,984,990 for the years ended December 31, 2000, 1999 and 1998. Diluted shares include stock options and warrants when dilutive. Due to the loss accumulated during the three year peiod, Gaming Enterprises' warrants would be anti-dilutive and therefore have not been utilized in the computation of dilutive shares. IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS In June 1998, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards ("SFAS") No. 133, "Accounting for Derivative Instruments and Hedging Activities." SFAS No. 133 requires that entities record all derivatives as assets or liabilities measured at fair value, with the change in fair value recognized in earnings or in other comprehensive income, depending on the use of the derivative and whether it qualifies for hedge accounting. SFAS No. 133 amends or supercedes several current accounting statements. In July 1999, the FASB issued SFAS No. 137 which delays the effective date of SFAS No. 133 from fiscal year 2000 to fiscal year 2001. Gaming Holdings is in the process of analyzing SFAS No. 133 and the impact on its consolidated financial position and results of operations. USE OF ESTIMATES The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. 2. LIQUIDITY AND MANAGEMENT'S PLAN Absent an improvement in Gaming's operating results or cash equity contributions to Gaming pursuant to the Keep-Well Agreement, Gaming estimates that, based on its results year-to-date, it may not be in compliance with the quarter ended June 30, 2001, financial covenant levels contained in the Bank Credit Facility and the FF&E Facility, as amended, both as defined in Note 6 of Aladdin Gaming Holdings LLC's consolidated financial statements. The Company estimates that cash on hand and projected 25 ALADDIN GAMING ENTERPRISES, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) 2. LIQUIDITY AND MANAGEMENT'S PLAN (CONTINUED) internally generated funds will be sufficient to fund the Company's current operations, however, such amounts will not be sufficient to fund all the principal and interest payments on the Company's debt during fiscal 2001. In order for the Company to fund all of its principal and interest payments, the Company will continue to rely on payments from its sponsors, the Sommer Trust and London Clubs (collectively, with their respective affiliates, "Sponsors"), pursuant to the Keep-Well Agreement. Further, the Company and the Sponsors are seeking alternatives to improve the Company's current liquidity, which alternatives may include incurring additional indebtedness, to the extent permissible under the Company's various credit facilities, sale of an adjacent 5-acre parcel of undeveloped land, reaching an agreement with the Company's creditors reducing the Company's liquidity needs and/or equity infusions from either a third party and/or the Sponsors. 3. INVESTMENT IN UNCONSOLIDATED AFFILIATE As discussed in Note 1, Gaming Enterprises holds a 25% interest in Gaming Holdings. Enterprises' interest in Gaming Holdings has been accounted for under the equity method. However, Enteprises has discontinued applying the equity method as the investment in Gaming Holdings has been reduced to zero. Enterprises will resume applying the equity method after cumulative net income exceeds the unrecognized losses. Summarized condensed financial information of Gaming Holdings as of and for the years ended December 31, 2000 and 1999, is as follows:

The changes in Gaming Enterprises' investment in unconsolidated affiliate is as follows:

26 ALADDIN GAMING ENTERPRISES, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) 3. INVESTMENT IN UNCONSOLIDATED AFFILIATE (CONTINUED) The consolidated financial statements, and notes thereto, of Gaming Holdings are attached hereto as Exhibit 99.01 and incorporated herein by this reference. 4. EQUITY CONTRIBUTIONS On February 26, 1998, Sommer Enterprises, LLC contributed land and $7 million of predevelopment costs in exchange for 100% of the Class A Common Stock in Gaming Enterprises. Gaming Enterprises contributed the land, the $7 million of predevelopment costs and the net proceeds, $15 million allocable from the sale of the warrants to Gaming Holdings in exchange for 25% of the common membership interests in Gaming Holdings. NOTE 5. INCOME TAXES Gaming Enterprises has adopted the provisions of Statement of Financial Accounting Standards No. 109, Accounting for Income Taxes ("SFAS 109"), whereby deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under SFAS 109, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. SFAS 109 requires recognition of a future tax benefit of net operating loss carryforwards and certain other temporary differences to the extent that realization of such benefit is more likely than not; otherwise, a valuation allowance is applied. The deferred tax asset is comprised of the net operating loss carryforward related to Gaming Enterprises' tax allocation of Aladdin Gaming Holdings, LLC's taxable loss. SFAS 109 requires recognition of the future tax benefit of this asset to the extent realization of such benefits is more likely than not; otherwise, a valuation allowance is applied. At December 31, 2000, the Company determined that approximately $12.1 million, of tax benefits did not meet the realization criteria because of the Company's historical operating results. Accordingly, a valuation allowance was applied to reserve against the applicable deferred tax asset. At December 31, 2000, the Company had net operating loss carryforwards available for income tax purposes of approximately $12.1 million, which expire in 2020. NOTE 6. PRIVATE OFFERING On February 26, 1998, Gaming Holdings, Gaming Capital Corp. ("Capital," together with Gaming Holdings, the "Issuers") and Gaming Enterprises consummated a private offering ("Offering") under Rule 144A of the Securities Act of 1933. The private offering consisted of 221,500 units ("Units"), each unit consisting of (i) $10,000 principal amount at maturity of 13 1/2% Senior Discount Notes due 2010 ("Notes') of Gaming Holdings and Capital and (ii) 10 Warrants ("Warrants") to purchase 10 shares of Class B non-voting Common Stock, no par value, of Gaming Enterprises. The Notes and the Warrants became separately transferable on July 23, 1998 and the Warrants became exercisable on July 23, 1998 and will expire on March 1, 2010. The total amount paid for the warrants was $15 million and is reflected as additional paid-in capital in the accompanying financial statements. 27 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE. Not applicable. 28 PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT. The following table sets forth the executive officers and the directors of Gaming Enterprises, Gaming Holdings, Gaming and Capital. A "director" of the Gaming Holdings or Gaming as such term is used in this Form 10-K, shall refer to a person who sits on the Board of Managers of Gaming Holdings ("Gaming Holdings Board") or Gaming ("Gaming Board").

Jack Sommer has been the Chairman of the Gaming Holdings Board and a director of Capital since November, 1997 and has been the Chairman of the Gaming Board since February, 1998 and President and Director of Gaming Enterprises since December, 1997. Mr. Sommer is both a trustee and contingent beneficiary of the Trust. He has over 25 years of experience in developing residential and commercial real estate, including luxury residential projects such as North Shore Towers, in Queens County, New York, and The Sovereign at 425 East 58th Street in Manhattan. Jack Sommer is the son of Viola Sommer. 29 Richard J. Goeglein has been Chief Executive Officer and a director of Gaming Holdings, Gaming and Capital since November, 1997 and has been a director of Gaming since February, 1998. Mr. Goeglein served as a member of the Gaming Oversight Committee of Marriott Corporation ("Marriott") and through Gaming Associates, provided consulting services to Marriott's gaming operations situated outside of the United States through December 1997. Mr. Goeglein served as a director of Hollywood Park, Inc. until October 1998. Mr. Goeglein has spent over 30 years in the hotel/casino and food service industries. Previously, Mr. Goeglein served as Executive Vice President and member of the Board of Directors of Holiday Inns and Holiday Corp., and led the management team that consummated the 1980 acquisition of Harrah's Hotels and Casino ("Harrah's") for Holiday Inns. Subsequently, Mr. Goeglein served as President and Chief Executive Officer of Harrah's and President and Chief Operating Officer of Holiday Corp. Alan Goodenough has been a director of Gaming Holdings, Gaming and Capital since February, 1998. Since August, 1999, Mr. Goodenough has been the Executive Chairman of London Clubs, having previously served as Chief Executive since 1993. Mr. Goodenough has wide experience in the leisure and gaming industry having been a board director of Pleasurama plc and subsequently Mecca Leisure Group plc. G. Barry C. Hardy has been a director of Gaming Holdings, Gaming and Capital since February, 1998. Mr. Hardy has served as Chief Operating Officer of London Clubs since June 1999 and before that as Finance Director of London Clubs since 1989. Previously, Mr. Hardy served as a board director of Pleasurama plc and subsequently Mecca Leisure Group plc and has over 23 years' experience in the leisure and gaming industry. William Timmins has been a director of Gaming Holdings, Gaming and Capital since December, 1998 and has been Executive Vice President of Gaming Holdings, Gaming and Capital and President and Chief Operating Officer of the Aladdin Resort & Casino since February 2000. Mr. Timmins has served as Executive Director of London Clubs since June 1999, before that as Director of International Operations of London Clubs since March, 1996. Mr. Timmins has over thirty years of experience in the casino industry. Before joining London Clubs, Mr. Timmins was the Managing Director of Societe Participation Investisments Casino, the third largest gaming company in France, from 1990 until 1995. Roy Ramm has been a Director of Gaming and Gaming Holdings since October 21, 2000. Mr. Ramm has served as the Compliance and Security Director of London Clubs since 1998 having joined the London Clubs group in 1996. Prior to London Clubs, Mr. Ramm was Commander Specialist Operations (Crime) at New Scotland Yard with London's Metropolitan Police Service where he served for 27 years. Mr. Ramm is a Council member of the British Casino Association and is a member of the FBI National Academy Graduates Association. Viola Sommer has been a director of Gaming Holdings and Capital since July, 2000 and a director of Gaming Enterprises since July 12, 2000. Mrs. Sommer is both a trustee and beneficiary of the Trust. She is a member of the Jockey Club and a trustee of the National Racing Museum and Racing Hall of Fame. She is a Trustee Emeritus of NYRA. Viola Sommer is the mother of Jack Sommer. Patricia Becker has been the Senior Vice President/Corporate Affairs and Legal of Gaming Holdings, Gaming and Capital and Secretary of Gaming Holdings, Gaming and Capital since March, 1999 and Secretary of Gaming Enterprises since July 12, 2000. Ms. Becker currently is a director of Fitzgerald's Gaming Corporation and chairs the Compliance Committee. On December 5, 2000, Fitzgerald's Gaming Corporation filed a petition for bankruptcy under Chapter 11 of Title 11 of the United States Code and has been acting as a debtor-in-possession since such petition date. From 1993 to 1995, Ms. Becker was Chief of Staff for Nevada Governor, Bob Miller. From 1985 to 1993, Ms. Becker was with Harrah's Hotels and Casinos, where she held the position of Senior Vice President and General Counsel. Prior to joining Harrah's, Ms. Becker was a member of the Nevada State Gaming Control Board. 30 Barbara D. Falvey has been the Senior Vice President of Human Resources of Gaming Holdings, Gaming and Capital since February 2000. From July 1998 to January 2000, Ms. Falvey was the Vice President of Organization Development and Training for Caesars World, Inc. From 1996 to 1998, Ms. Falvey was Vice President of Human Resources for The Desert Inn in Las Vegas. Thomas A. Lettero has been the Senior Vice President/Chief Financial Officer of Gaming Holdings, Gaming and Capital and Treasurer of Gaming Enterprises since March, 2000. From December 1994 to March 2000, Mr. Lettero was the Executive Vice President and Chief Financial Officer of Stratosphere Corporation, which filed for reorganization under Chapter 11 of the Bankruptcy Code with its wholly-owned subsidiary, Stratosphere Gaming Corp., on January 27, 1997. The effective date for the companies' Restated Second Amended Plan of Reorganization was October 14, 1998. Previously, Mr. Lettero has held senior executive, financial and administrative positions with Mirage Hotel and Casino, MGM Grand Hotel Casino, Main Street Station, Bullwackers casinos and Palace Casinos. Mark A. Clayton has been Vice President and General Counsel of Gaming Holdings and Gaming since April, 1999 and was from June, 1998 to April, 1999 Vice President and Associate General Counsel of Gaming Holdings and Gaming. From July 1995 until June 1998, Mr. Clayton served as Vice President and General Counsel of Showboat, Inc. From May 1993 until October 1993 and from October 1993 until June 1995, Mr. Clayton served as Deputy Chief and the Chief, respectively, of the Corporate Securities Division of the Nevada State Gaming Control Board. COMMITTEES There are currently no committees of the Board of Directors of Gaming Enterprises. The Gaming Holdings Operating Agreement provides that there will be Executive Management Committees which will be responsible for the day to day management of Gaming Holdings and Gaming. The Executive Management Committee includes the following persons: the President and Chief Executive Officer of Gaming; the Chief Financial Officer of Gaming; the President and Chief Operating Officer of the Aladdin; the Senior Vice President of Human Resources of Gaming; and the Senior Vice President/Corporate Affairs of Gaming. The Gaming Holdings Board may also establish committees of the Gaming Holdings Board as it may deem necessary or advisable. Each of London Clubs and Sommer Enterprises is entitled to have one of its nominee Gaming Holdings Board members on each such committee. The Gaming Holdings Board has established a Compensation Committee that currently consists of Messrs. Sommer, Goodenough, Hardy, Ramm and Mrs. Sommer and an Audit Committee that currently consists of Messrs. Sommer, Goodenough and Hardy. 31 ITEM 11. EXECUTIVE COMPENSATION. Gaming Enterprises has not compensated any of its officers during 2000, 1999 or 1998. The following table summarizes the compensation earned during 2000, 1999 and 1998 by Gaming Holdings', Gamings' and Capital's Chief Executive Officer and the four highest compensated executive officers of the Gaming Holdings, Gaming or Capital who earned over $100,000 in 2000, 1999 and 1998.

-------------------------- (1) All of the executive officers of the Company are compensated by Gaming. Compensation has been paid on the Company's behalf by Aladdin Holdings, LLC until February 26, 1998. (2) Includes $150,000 paid to GAI in 2000, 1999 and 1998 for consulting fees. (3) Represents automobile allowance paid to executive including federal income tax gross-up. (4) Represents life and disability insurance premiums paid on behalf of the executive. (5) Represents automobile allowance of $19,536 and moving expenses of $228,843 including federal income tax gross-up paid to Mr. Goeglein. (6) Messrs. Timmins and Lettero became officers of the Company in 2000 and in 1999 Mr. Timmins was compensated for services which he rendered to the Company prior to becoming an officer. (7) Represents moving expenses of $173,163 and automobile allowance of $8,500 paid to Mr. Attaway including federal income tax gross-up. (8) Mr. Attaway resigned all of his positions effective January 5, 2001, and, pursuant to Mr. Attaway's employment agreement, the Company paid Mr. Attaway $475,000 in January, 2001. (9) Mr. Clayton's employment with the Company began in 1998. 32 EMPLOYMENT AGREEMENTS Richard J. Goeglein, William Timmins, Patricia Becker, Barbara Falvey and Thomas Lettero (collectively, "Officers") each signed an employment agreement ("Employment Agreement") with the Company. The initial term of Mr. Goeglein's Employment Agreement is five years and six months, and the remaining Officers' Employment Agreements have varying durations depending upon when the Employment Agreements were executed. Pursuant to each Employment Agreement, the Officers have such authority, responsibilities and duties as are customarily associated with their positions with the Company. The Employment Agreements provide that, during the term of their employment, the Officers, other than for Ms. Becker, will devote their full time, efforts and attention to the business and affairs of Gaming and for Ms. Becker, she will devote 60% of her time, efforts and attention to the business and affairs of Gaming. The terms of the Employment Agreements provide for current annual base salary for the Officers as follows: Mr. Goeglein, $600,000; Mr. Timmins, $475,000, Ms. Becker, $255,000 ($215,000, base salary, $40,000 as member of compliance committee), Ms. Falvey, $200,000, and Mr. Lettero, $400,000, plus for Messrs. Timmins and Lettero and Ms. Becker and Ms. Falvey, any bonus granted by the Board of Directors based on relevant criteria and performance standards, and for Mr. Goeglein a bonus based upon "on target" performances, ranging from 50% to 75% of his base salary, and subject to certain tax provisions. Gaming's Board will consider increases to the Officers' base salary no less frequently than annually, commencing at the end of each Officer's first employment year. Any increase in base salary shall be within the sole discretion of Gaming's Board. The Employment Agreements provide that the Officers' salary cannot be reduced. After the initial term of Mr. Goeglein's and Ms. Becker's Employment Agreements, Gaming has agreed to retain Mr. Goeglein as a consultant to Gaming for an additional five years at $100,000 per year and to retain Ms. Becker as a member of the Company's Compliance Committee for an additional three years at $50,000 per year. The Officers are entitled to receive other employee benefits from Gaming, such as automobile allowance, health, pension and retirement and reimbursement of certain expenses. Pursuant to the terms of the Employment Agreement, as amended, Mr. Goeglein purchased for a total purchase price of $1,200, unvested Gaming Common Membership Interests which were contributed to Gaming Holdings on February 26, 1998 in return for unvested Holdings Common Membership Interests representing 2.0% of the Holdings Common Membership Interests ("Restricted Membership Interests") subject to the receipt of applicable Nevada Gaming Approval. Gaming Enterprises' interest in Gaming Holdings will be unaffected by the vesting of the Officer's Restricted Membership Interests. Mr. Goeglein's Restricted Membership Interests become fully vested at the earlier of July 1, 2002 or the date on which such interests become publicly traded, conditioned upon Mr. Goeglein's continued relationship with Gaming. If Mr. Goeglein's employment with Gaming and Gaming Holdings terminates, Gaming and Gaming Holdings have the right to repurchase any unvested portion of Mr. Goeglein's Restricted Membership Interest for an amount equal to the purchase price originally paid by Mr. Goeglein for the Common Membership Interests. Under certain circumstances as set forth in the Employment Agreement, including if an initial public offering with respect to the Restricted Membership Interests has not occurred prior to the full vesting of such interests, Mr. Goeglein has the right to sell his vested Restricted Membership Interests to Gaming Holdings at fair market value (subject to the receipt of applicable Gaming Approvals and to certain restrictions on restricted payments set forth in the Note Indenture and the Bank Credit Facility). If Gaming Holdings does not satisfy its obligation to purchase the Restricted Membership Interests within seven days, Mr. Goeglein has the right to require Gaming to purchase such interests at fair market value (subject to certain restrictions on Restricted Payments set forth in the Note Indenture). After Gaming has satisfied its obligation to purchase the Restricted Membership Interests, Gaming Holdings has the right to call such interests from Gaming for nominal consideration. The Company is obligated to develop an equity compensation arrangement, or the economic equivalent thereof, for Messrs. Timmins, Lettero, Ms. Becker and Ms. Falvey. 33 The Employment Agreements may be terminated by Gaming with or without Cause (as defined in each Employment Agreement) or by the Officers for Good Reason (as defined in each Employment Agreement). If an Officer is terminated for Cause, he shall be entitled only to such salary, bonus and benefits then accrued or vested. If an Officer is terminated without Cause or upon a Change in Control (as defined in the Employment Agreements), the Officer shall be entitled to such salary, bonus and benefits to which he would have been entitled for the remainder of the term or twelve months, whichever is longer (in the case of Mr. Goeglein, any such amount remaining in connection with his term plus certain other amounts). Each Officer has agreed not to compete with Gaming during the term of the Employment Agreements (plus one additional year if the Officer was terminated for Cause) and has agreed to refrain from certain other activities in competition with Gaming. Each of the Employment Agreements provides that Gaming shall indemnify and hold the Officers harmless to the fullest extent permitted by Nevada law against costs, expenses, liabilities and losses, including reasonable attorneys' fees and disbursements of counsel, incurred or suffered by the Officer in connection with his services as an employee of Gaming during the term of the respective Employment Agreement. Mr. Goeglein's Employment Agreement provided Mr. Goeglein with relocation expense reimbursement, an interest-free mortgage loan of $500,000 from AHL and certain excise tax gross-up provisions. GAI CONSULTING AGREEMENT Gaming has entered into a consulting agreement (as amended, "Consulting Agreement") with GAI. The Consulting Agreement was subsequently amended on February 26, 1998, to add Gaming Holdings as a party and, pursuant to which amendment, GAI contributed its Common Membership Interests in Gaming to Gaming Holdings in return for Holdings Common Membership Interests. Pursuant to the Consulting Agreement, GAI will render such consulting services as are reasonably requested by the Gaming Board until June 30, 2002. During the term of the Consulting Agreement, Gaming shall pay GAI a retainer of $12,500 each month as payment for remaining on call to provide services and expertise for such month. In addition, GAI purchased a 3% Common Membership Interest in Gaming, which was contributed to Gaming Holdings on February 26, 1998 in return for a 3% Holdings Common Membership Interest ("GAI Membership Interest") for a purchase price of $1,800. The GAI Membership Interest is fully vested and is subject to certain anti-dilution provisions contained in the Consulting Agreement (but subject to dilution upon exercise of the warrant) issued in connection with the offering of the Notes). In addition: (a) if Richard Goeglein is terminated from his employment with Gaming other than for "Cause" or voluntarily terminates for "Good Reason" (as such terms are defined in Mr. Goeglein's Employment Agreement with Gaming) after the consummation of the Funding Transactions and the Offering; or (b) if an initial public offering in respect of the GAI Membership Interest has not occurred prior to July 1, 2002, GAI has the right to sell any shares purchased under the Consulting Agreement back to Gaming Holdings at their fair market value at the time of such sale (subject to the receipt of applicable Gaming Approvals and to certain restrictions on restricted payments set forth in the Notes Indenture and the Bank Credit Facility). If Gaming Holdings does not satisfy its obligation to purchase the GAI Membership Interest within seven days, GAI has the right to require Gaming to purchase such interests at fair market value. After Gaming has satisfied its obligation to purchase the GAI Membership Interest, Gaming Holdings will have the right to call such interests from Gaming at nominal value. Pursuant to the Consulting Agreement, GAI has certain "piggyback" registration rights with respect to its interests purchased pursuant to the Consulting Agreement. Gaming Holdings has agreed to indemnify GAI, its legal counsel and independent accountants against all expenses, claims, losses, damages 34 and liabilities which may arise out of certain acts or omissions committed in connection with the registration of such membership interests, and, in connection with certain acts or omissions not committed in connection with the registration of such membership interests, to the same extent that other senior management and directors of Gaming and Gaming Holdings are indemnified. For further details on the Consultant Agreement, see Exhibit 10.35 to the Company's Registration Statement on Form S-4, Amendment No. 1, filed June 10, 1998, Part II, Item 21. Mr. Goeglein has granted a third party an option to acquire 15% of GAI's interest in Gaming Holdings, subject to receipt of all necessary gaming regulatory approvals. The Company believes that any exercise of the option will not have a material adverse effect on the Company. BONUS AND INCENTIVE PLANS Gaming and Gaming Holdings are currently developing bonus and/or incentive plans (subject to supermajority approval by the Gaming Holdings members, such approval not to be unreasonably withheld). It is expected that the terms of any such plans would be comparable to those customary in the industry. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT. The following tables set forth certain information with respect to the beneficial ownership of and the capital stock of Gaming Enterprises and the common membership interests of Gaming Holdings by: (i) each person who, to the knowledge of Gaming Enterprises or the Company, beneficially owns more than 5% of the outstanding capital stock or membership interests (as the case may be); (ii) the directors of Gaming Enterprises and Gaming Holdings; (iii) all executive officers of Gaming Enterprises and Gaming Holdings included in the Executive Compensation Table under "Item 11. Executive Compensation;" and (iv) all directors and executive officers of Gaming Enterprises and Gaming Holdings, respectively, as a group. Neither the capital stock of Gaming Enterprises nor the membership interests of Gaming Holdings is presently listed or traded on any securities exchange or securities market. ALADDIN GAMING ENTERPRISES, INC.

35 ALADDIN GAMING ENTERPRISES, INC.

------------------------ * Represents less than one percent of the outstanding shares of Class B Common Stock. (1) The Sommer Trust has an option to acquire 5% of the common membership interest in AHL from GW Vegas (representing all of GW Vegas' common membership interest in AHL). Such option is exercisable at any time prior to December 2001. The address of the Sommer Trust is 280 Park Avenue, New York, New York 10017. (2) Includes Gaming Holdings Common Membership Interests held by the Sommer Trust. Mr. Jack Sommer, who is Chairman and a director of Gaming and Gaming Holdings and a director of Capital and director and the President of Gaming Enterprises, is a trustee and contingent beneficiary of the Sommer Trust. Mrs. Sommer, Mr. Sommer and Mr. Landsberg are each deemed to beneficially own the same interest as the Sommer Trust owns in Gaming Enterprises because each of them is a trustee of the Sommer Trust. (3) Subject to receipt of the necessary gaming regulatory approvals, Mr. Sommer will own this interest directly rather than through the Sommer Trust. (4) The directors of Gaming Enterprises are Mr. Sommer and Mrs. Sommer. The executive officers of Gaming Enterprises are Messrs. Sommer and Lettero and Ms. Becker. The address for Mr. Lettero and Ms. Becker is 3667 Las Vegas Boulevard South, Las Vegas, Nevada 89109. (5) The Class A Common Stock and Class B Common Stock in Gaming Enterprises held by Sommer Enterprises were pledged on February 26, 1998 to the Bank Lenders under the Credit Agreement. (6) Upon the exercise of the Warrants, holders of the Warrant Shares will own 50% of the outstanding Class B Common Stock and 0% of the outstanding Class A Common Stock of the Issuer. 36 ALADDIN GAMING HOLDINGS, LLC.

------------------------ * Represents less than one percent of the outstanding Holdings Common Membership Interests. (1) The Sommer Trust has an option to acquire 5% of the common membership interests in AHL from GW Vegas (representing all of GW Vegas' common membership interests in AHL). Such option is exercisable at any time prior to December, 2001. The address of the Sommer Trust is 280 Park Avenue, Floor 38 West, New York, New York 10017. (2) Includes Gaming Holdings Common Membership Interests held by the Sommer Trust. Mr. Jack Sommer, who is Chairman and a director of Gaming Holdings and Gaming and a director of Capital and Gaming Enterprises, is a trustee and contingent beneficiary of the Sommer Trust. Mrs. Sommer, Mr. Sommer and Mr. Landsberg are each deemed to beneficially own the same interest as the Sommer Trust owns in Gaming Holdings because each of them is a trustee of the Sommer Trust. The address for Mrs. Sommer, Mr. Sommer and Mr. Landsberg is 280 Park Avenue, Floor 38 West, New York, New York 10017. (3) London Clubs owns 39.953125% of the Gaming Holdings Common Membership Interests. On November 30, 1998, London Clubs and the Sommer Trust agreed that the Sommer Trust and its affiliates shall vote their respective Holdings Common Membership Interests and cause Gaming Enterprises to vote its Holdings Common Membership Interests so that (taking into account Holdings Common Membership Interests held by London Clubs or its affiliates) London Clubs controls fifty percent of the voting power of Gaming Holdings. Mr. Alan Goodenough is Executive Chairman of London Clubs and a director of Gaming Holdings, Gaming and Capital. Mr. G. Barry C. Hardy is Chief Operating Officer of London Clubs and a director of Gaming Holdings, Gaming and Capital. William Timmins is Executive Director of London Clubs and is a director of Gaming Holdings, Gaming and Capital. Roy Ramm is Compliance and Security Director of London Clubs and a director of Gaming Holdings, Gaming and Capital. The address of London Clubs and Messrs. Goodenough, Hardy and Ramm is 10 Brick Street, London, W1J 7HQ, United Kingdom. 37 (4) Mr. Richard J. Goeglein, who is Chief Executive Officer, President and a director of Gaming Holdings, Gaming and Capital, beneficially owns 100% of GAI, which holds 3% of the Holdings Common Membership Interests. Mr. Goeglein has granted to a third party an option to acquire 15% of GAI's interest in Gaming Holdings. Mr. Goeglein's address is 3667 Las Vegas Boulevard South, Las Vegas, Nevada 89109. (5) The address of Messrs. Goeglein, Timmins, Lettero, Attaway, Clayton and Rueda is 3667 Las Vegas Boulevard South, Las Vegas, Nevada 89109. Mr. Rueda is a former executive of the Company. (6) Mr. Goeglein has the right to acquire beneficial ownership of Gaming Holdings Common Membership Interests representing an aggregate of 2% of such interests, which right does not vest within 60 days. See "Item 11. Executive Compensation." (7) Gaming Holdings owns 100% of the Common Membership Interests and Series A Preferred Interests of Gaming. The Common Membership Interests were, on closing of the Bank Credit Facility, pledged to the Bank Lenders. The Series A Preferred Interests were, on closing of the Notes offering, pledged to the Trustee for the benefit of the Note Holders. (8) Gaming Enterprises owns 25% of the Gaming Holdings Common Membership Interests. Upon full exercise of the warrants issued in connection with the offering of the Notes, holders of the shares issued upon conversion of warrants will indirectly own 10% of the outstanding Holdings Common Membership Interests. (9) Mr. Attaway resigned all his positions with the Company effective January 5, 2001. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS. THE SALLE PRIVEE AGREEMENT Gaming, London Clubs and LCNI are parties to an agreement ("Salle Privee Agreement") which relates to The London Club at Aladdin. Under the Salle Privee Agreement, London Clubs has agreed to guaranty the obligations of LCNI. In consideration for the services to be furnished by LCNI under the Salle Privee Agreement, Gaming will pay to LCNI a performance-based incentive fee ("Incentive Marketing and Consulting Fee") calculated as follows: (i) 10% of The London Club at Aladdin EBITDA (defined in the Salle Privee Agreement to mean gross revenue attributable to The London Club at Aladdin, less all costs and expenses directly attributable to The London Club at Aladdin), up to and including $15.0 million of EBITDA; plus (ii) 12.5% of The London Club at Aladdin EBITDA, in excess of $15.0 million, up to and including $17.0 million; plus (iii) 25% of The London Club at Aladdin EBITDA, in excess of $17.0 million, up to and including $20.0 million; plus (iv) 50% of The London Club at Aladdin EBITDA, in excess of $20.0 million. The foregoing thresholds will be adjusted in accordance with consumer price index changes every five years. OTHER PAYMENTS TO CONTROLLING STOCKHOLDERS In consideration for certain expenses incurred by the Sommer Trust prior to February 26, 1998, relating to the management and coordination of the development of the Aladdin, Gaming reimbursed $3.0 million to the Sommer Trust on February 26, 1998. In addition, Gaming will reimburse certain ongoing out-of-pocket expenses of the Sommer Trust relating to the development of the Aladdin, not to exceed $0.9 million. In November, 1998, the Sommer Trust agreed to defer reimbursement. As of December 31, 2000, the Sommer Trust had received approximately $3.3 million of the total $3.9 million reimbursement. In consideration for its obligations under the Keep-Well Agreement and related arrangements, under the London Clubs Purchase Agreement, the parties agreed that London Clubs receive (a) an initial fee of 1.0% of Gaming's indebtedness with respect to a $265.0 million portion of the Bank Credit Facility, which is supported and enhanced by the Keep-Well Agreement, which fee was paid on February 26, 1998, and (b) an annual fee of 1.5%, payable in arrears, of Gaming's annual average indebtedness with respect to a $265.0 million portion of the Bank Credit Facility, which is supported and enhanced by the Keep-Well Agreement for each relevant twelve month period ending on an anniversary of the closing date of the Bank 38 Credit Facility, which amount shall reflect the extent, if any, by which the obligations under the Keep-Well Agreement are reduced or eliminated over time. As of December 31, 2000, the Company has accrued approximately $11.3 million in Keep-Well fees payable to London Clubs. Additionally, Gaming agreed to reimburse approximately $2.8 million to London Clubs for certain expenses incurred relating to the Aladdin; however, in November, 1998, London Clubs agreed to defer the payment of approximately $189,000 of this reimbursement. As of December 31, 2000, London Clubs received approximately $2.4 million of this $2.8 million reimbursement obligation. MUSIC INDEBTEDNESS PAYMENTS BY THE SOMMER TRUST AND MR. SOMMER During 1998, the Sommer Trust paid approximately $260,000 to certain trade creditors on behalf of Aladdin Music, LLC ("Aladdin Music"), a subsidiary of Gaming, and Mr. Sommer individually paid $500,000 to a trade creditor on behalf of Aladdin Music. Further, during the first quarter of 1999, the Sommer Trust paid approximately $747,000 to a trade creditor on behalf of Aladdin Music. To the extent permissible, Aladdin Music has agreed, if and when Aladdin Music secures a joint venture partner and financing for the hotel casino, a previously contemplated 1,000 room hotel casino to be integrated with the Complex, to reimburse the Sommer Trust and Mr. Sommer such advanced funds. KEEP-WELL AGREEMENT On February 26, 1998, London Clubs, AHL and Bazaar Holdings entered into the Keep-Well Agreement in favor of the Administrative Agent and the lenders under the Bank Credit Facility. The Sommer Trust joined and became a party to the Keep-Well Agreement in July, 2000 (collectively, AHL, Bazaar Holdings, London Clubs and the Sommer Trust, "Sponsors"). The Keep-Well Agreement is the joint and several agreement of the Sponsors to make certain quarterly cash equity contributions to Gaming from and after the Conversion Date if Gaming fails to comply the minimum fixed charge coverage ratio set forth in the Bank Credit Facility. Under the Keep-Well Agreement, the Sponsors are not required to contribute an aggregate of more than $150 million to Gaming ($30 million in any one fiscal year) and are not required to contribute any amounts to Gaming on or after the earlier of the date on which Gaming complies with all of the financial covenants set forth in the Credit Agreement for six consecutive quarterly periods or the date on which the aggregate outstanding principal amounts of the Credit Agreement are reduced below certain amounts. The Keep-Well Agreement was amended in March, 2001. For a discussion of the amendment and payments under the Keep-Well Agreement, see "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations". BANK COMPLETION GUARANTY AND NOTEHOLDER COMPLETION GUARANTY London Clubs, the Sommer Trust and Bazaar Holdings have entered into the Bank Completion Guaranty in favor of the Bank Lenders. Pursuant to the Bank Completion Guaranty, such parties have guaranteed, among other things, the timely completion of the Aladdin. The Bank Completion Guaranty is not subject to any maximum dollar limitations. While holders of the Notes are not party to the Bank Completion Guaranty, London Clubs, the Sommer Trust and Bazaar Holdings have entered into the Noteholder Completion Guaranty for the benefit of the holders of the Notes. ARRANGEMENTS WITH RICHARD GOEGLEIN AND GAI Gaming has entered into the Consulting Agreement with GAI. Pursuant to the Consulting Agreement, GAI will render such consulting services as are reasonably requested by the Board of Gaming until June 30, 2002. During the term of the Consulting Agreement, Gaming shall pay GAI a retainer of $12,500 per month as payment for remaining on call to provide services and expertise for such month. Pursuant to the Consulting Agreement, GAI purchased 3% of the Common Membership Interests in Gaming (which were contributed to Gaming Holdings on February 26, 1998 for a 3% interest in Gaming Holdings) for $1,800. Such membership interest is fully vested, subject to certain anti-dilution provisions, put rights and certain "piggyback" registration rights. See "Item 10. Directors and Executive Officers of the Registrant-GAI Consulting Agreement." In addition, Mr. Goeglein's Employment Agreement provided Mr. Goeglein with a relocation expense reimbursement, an interest free mortgage loan of $500,000 from AHL and certain excise tax gross-up provisions. 39 PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K. (a)(l) The following consolidated financial statements of the Company and its subsidiaries have been filed as a part of this report (See "Part II, Item 8: Financial Statements and Supplementary Data"): Report of Independent Public Accountants; Balance Sheets as of December 31, 2000 and 1999; Statements of Operations for the Years Ended December 31, 2000, 1999 and 1998; Statements of Stockholders' Equity for the Years Ended December 31, 2000, 1999 and 1998; Statements of Cash Flows for the Year Ended December 31, 2000, 1999 and 1998; and Notes to Consolidated Financial Statements: (a)(2) All schedules are omitted because they are not required, inapplicable, or the information is otherwise shown in the financial statements or notes thereto. (a)(3) The following exhibits(1) are filed as part of this Form 10-K or incorporated herein by reference.

------------------------ (1) Copies of exhibits to this Form 10-K will be furnished to any requesting security holder who furnishes the Company a list identifying the exhibits to be copied by the Company at a charge of $.25 per page. Alternatively, these exhibits can be inspected, without charge, at the Public Reference Section of the SEC located at 450 Fifth Street, NW, Washington, DC 20549 or at the SEC internet site: http:// www.sec.gov. 40

------------------------ (b) Reports on Form 8-K. During the fourth quarter of the fiscal year ended December 31, 2000, Gaming Enterprises did not file any Current Report on Form 8-K. (c) The exhibits required by Item 601 of Regulation S-K filed as part of this Report or incorporated herein by reference are listed in Item 14(a)(3) above, and the exhibits filed herewith are listed on the Index to Exhibits which accompanies this Report. (d) See Item 14(a)(2) of this Report. 48 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by this undersigned, thereunto duly authorized. REGISTRANT: ALADDIN GAMING ENTERPRISES, INC. By: /s/ JACK SOMMER ----------------------------------------- Jack Sommer, PRESIDENT AND DIRECTOR (PRINCIPAL EXECUTIVE OFFICER)

DATE: April 2, 2001 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. April 2, 2001 By: /s/ JACK SOMMER ----------------------------------------- Jack Sommer, PRESIDENT AND DIRECTOR April 2, 2001 By: /s/ THOMAS A. LETTERO ----------------------------------------- Thomas A. Lettero, TREASURER (PRINCIPAL ACCOUNTING OFFICER) April 2, 2001 By: /s/ VIOLA SOMMER ----------------------------------------- Viola Sommer, DIRECTOR

SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED PURSUANT TO SECTION 15(d) OF THE ACT BY REGISTRANTS WHICH HAVE NOT REGISTERED SECURITIES PURSUANT TO SECTION 12 OF THE ACT. Other than this Form 10-K, Aladdin Gaming Enterprises, Inc. has not issued, and will not be issuing, any annual report to its security holders covering Aladdin Gaming Enterprises, Inc.'s last fiscal year. Aladdin Gaming Enterprises, Inc. has not sent, and will not send, any proxy statement, form of proxy or other proxy soliciting material to its security holders. 49 EXHIBIT INDEX

ALADDIN GAMING ENTERPRISES INC 10-K