SECURITIESTable ANDof EXCHANGE COMMISSIONWashington, D.C. 20549Contents

~~Form~~UNITED ~~10-Q~~STATES

~~x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE~~ SECURITIES AND EXCHANGE ~~ACT~~COMMISSION ~~OF 1934~~

~~FOR THE QUARTERLY PERIOD ENDED September 30~~Washington, ~~2002~~D.C. 20549

ORForm 10-Q

ox ~~TRANSITION~~QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE ~~TRANSITION~~QUARTERLY PERIOD ~~FROM~~ENDED ~~______________~~June 30, ~~TO ______________~~ 2006.

~~Commission~~OR ~~file number 333-87202~~

CIRCUS AND ELDORADO JOINT VENTURE SILVER LEGACY CAPITAL CORP.
(Exact names of registrants as specified in their charters)
Nevada		88-0310787
Nevada		71-0868362
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
407 North Virginia Street, Reno, Nevada 89501
(Address of principal executive offices, including zip code)
(800) 687-7733
(Registrants’ telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed since last report)

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

~~Indicate~~FOR byTHE ~~check~~TRANSITION ~~mark~~PERIOD whether the registrants (1) have 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 theFROM TO ~~registrants were required to file such reports), and (2) have been subject to such filing requirements for the past 90 days~~ .

~~Yes~~Commission file xnumber No333-87202 o

~~Indicate~~CIRCUS byAND ~~check~~ELDORADO ~~mark~~JOINT ~~whether~~VENTURE ~~either of the registrants is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).~~

~~Yes~~SILVER oLEGACY NoCAPITAL xCORP.

~~Number~~(Exact ofnames ~~shares~~ of ~~common~~registrants ~~stock~~as ofspecified ~~Silver~~in ~~Legacy~~their ~~Capital Corp. outstanding at November 14, 2002: 2,500~~charters) ~~shares.~~

CIRCUS AND ELDORADO JOINT VENTURE SILVER LEGACY CAPITAL CORP.


Nevada		88-0310787
Nevada		71-0868362
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

~~FORM~~407 ~~10-Q~~North Virginia Street, Reno, Nevada 89501

~~INDEX~~(Address of principal executive offices, including zip code)

			Page No.
PART I. FINANCIAL INFORMATION
	Item 1.	Financial Statements:
		Unaudited Condensed Consolidated Balance Sheets as of September 30, 2002 and December 31, 2001	3
		Unaudited Condensed Consolidated Statements of Income for the Three and Nine Months Ended September 30, 2002 and 2001	5
		Unaudited Condensed Consolidated Statements of Partners’ Equity as of September 30, 2002 and December 31, 2001	6
		Unaudited Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2002 and 2001	7
		Unaudited Notes to Condensed Consolidated Financial Statements	8
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	11
	Item 3.	Quantitative and Qualitative Disclosures About Market Risks	18
	Item 4.	Controls and Procedures	18
PART II. OTHER INFORMATION
	Item 6.	Exhibits and Reports on Form 8-K	19
SIGNATURES			21
CERTIFICATIONS			22

(800) 687-7733

2(Registrants’ telephone number, including area code)

~~PART~~Not ~~I. FINANCIAL~~Applicable ~~INFORMATION~~

~~Item~~(Former 1. name, former ~~Financial~~address ~~Statements.~~and former fiscal year, if changed since last report)

~~CIRCUS~~Indicate ~~AND~~by ~~ELDORADO~~check ~~JOINT~~mark ~~VENTURE~~whether the registrants (~~doing~~1) have ~~business~~filed asall reports ~~Silver~~required ~~Legacy~~to ~~Resort~~be ~~Casino~~filed by Section 13 or 15(d) ~~UNAUDITED~~ ~~CONDENSED~~of ~~CONSOLIDATED~~the ~~BALANCE~~Securities ~~SHEETS~~Exchange Act of 1934 during the preceding 12 months (Inor ~~thousands~~for such shorter period that the registrants were required to file such reports), and (2) have been subject to such filing requirements for the past 90 days. Yes x No ¨

			September 30, 2002		December 31, 2001
ASSETS
CURRENT ASSETS:
	Cash and cash equivalents		$	15,480	$	12,256
	Accounts receivable, net			4,493		4,300
	Interest rate swap receivable			2,419		—
	Inventories			1,628		1,877
	Prepaid expenses and other			4,216		3,186
		Total current assets		28,236		21,619
PROPERTY AND EQUIPMENT, NET				274,439		280,975
OTHER ASSETS, NET				6,995		575
		Total Assets	$	309,670	$	303,169

Indicate by check mark whether the registrants are large accelerated filers, accelerated filers, or non-accelerated filers. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.

~~The~~(Check ~~accompanying~~one): Large ~~notes~~accelerated ~~are~~filers ¨ Accelerated anfilers ¨ Non-accelerated ~~integral part of these unaudited condensed consolidated financial statements.~~filers x

3Indicate by check mark whether either of the registrants is a shell company (as defined in Rule 12b-2 of the Exchange Act).

~~CIRCUS~~Circus ~~AND~~and ~~ELDORDO~~Eldorado ~~JOINT~~Joint ~~VENTURE~~Venture ~~(doing~~Yes ~~business~~¨ asNo x Silver Legacy ~~Resort~~Capital ~~Casino)~~Corp. ~~UNAUDITED~~Yes ~~CONDENSED CONSOLIDATED~~x ~~BALANCE~~No ~~SHEETS (In thousands)~~¨

			September 30, 2002		December 31, 2001
LIABILITIES AND PARTNERS’ EQUITY
CURRENT LIABILITIES:
	Current portion of long-term debt	$	—	$	10,000
	Accounts payable		4,608		3,797
	Accrued interest		1,291		130
	Accrued and other liabilities		8,824		8,650
	Accrued guarantee fees to related party		—		185
	Total current liabilities		14,723		22,762
LONG-TERM DEBT, LESS CURRENT PORTION			177,414		135,000
OTHER LONG-TERM LIABILITIES			528		—
	Total liabilities		192,665		157,762
PARTNERS’ EQUITY			117,005		145,407
	Total Liabilities and Partners’ Equity	$	309,670	$	303,169

The number of shares of Silver Legacy Capital Corp.’s common stock outstanding at August 14, 2006 was 2,500. All of these shares are owned by Circus and Eldorado Joint Venture.

TheTable accompanying notes are an integral part of these unaudited condensed consolidated financial statements.Contents

4CIRCUS AND ELDORADO JOINT VENTURE

~~CIRCUS~~SILVER ~~AND~~LEGACY ~~ELDORADO~~CAPITAL ~~JOINT~~CORP. ~~VENTURE (doing business as Silver Legacy Resort Casino)~~

~~UNAUDITED~~FORM ~~CONDENSED~~10-Q ~~CONSOLIDATED STATEMENTS OF INCOME (In thousands)~~

			Three Months Ended September 30,						Nine Months Ended September 30,
			2002			2001			2002			2001
OPERATING REVENUES:
	Casino		$	27,085		$	26,803		$	73,211		$	75,777
	Rooms			10,738			10,640			27,766			29,848
	Food and beverage			10,117			9,361			27,461			27,206
	Other			2,492			2,221			6,677			5,708
				50,432			49,025			135,115			138,539
	Less: promotional allowances			(4,316	)		(3,764	)		(11,291	)		(11,091	)
		Net operating revenues		46,116			45,261			123,824			127,448
OPERATING EXPENSES:
	Casino			12,824			12,172			36,562			37,100
	Rooms			3,106			3,206			8,568			9,168
	Food and beverage			6,785			6,794			16,888			17,564
	Other			2,055			1,824			4,850			4,304
	Selling, general and administrative			7,919			8,165			22,257			22,667
	Depreciation			3,026			3,028			9,065			9,053
	Loss on sale of assets			3			—			3			4
		Total operating expenses		35,718			35,189			98,193			99,860
OPERATING INCOME				10,398			10,072			25,631			27,588
OTHER (INCOME) EXPENSE:
Insurance settlement proceeds				—			—			—			(225	)
Interest income				(5	)		(27	)		(27	)		(102	)
Interest expense, net				4,006			3,211			11,160			11,003
Loss on early redemption of debt				—			—			134			—
Interest rate swap (income) expense				(2,256	)		(486	)		(2,419	)		348
Other expense				77			—			77			—
		Total other (income) expense		1,822			2,698			8,925			11,024
Income before cumulative effect of change in accounting principle				8,576			7,374			16,706			16,564
Cumulative effect of change in accounting principle				—			—			—			(327	)
		NET INCOME	$	8,576		$	7,374		$	16,706		$	16,237

INDEX

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


		Page No.

PART I.	FINANCIAL INFORMATION

Item 1.	Financial Statements:

	Unaudited Condensed Consolidated Balance Sheets as of June 30, 2006 and December 31, 2005	3

	Unaudited Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2006 and 2005	4

	Unaudited Condensed Consolidated Statements of Partners’ Equity for the Six Months Ended June 30, 2006	5

	Unaudited Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2006 and 2005	6

	Notes to Unaudited Condensed Consolidated Financial Statements	7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	9

Item 3.	Quantitative and Qualitative Disclosures About Market Risks	16

Item 4.	Controls and Procedures	16

PART II.	OTHER INFORMATION

Item 6.	Exhibits	16

SIGNATURES		17

CIRCUSTable ANDof ELDORADO JOINT VENTURE (doing business as Silver Legacy Resort Casino)Contents

~~UNAUDITED~~PART ~~CONDENSED~~I. ~~CONSOLIDATED~~FINANCIAL ~~STATEMENTS~~INFORMATION ~~OF PARTNERS’ EQUITY (In thousands)~~

		Galleon, Inc.			Eldorado Resorts, LLC			Total
BALANCE, December 31, 2001		$	73,755		$	71,652		$	145,407
	Net income		8,353			8,353			16,706
	Partners’ distributions		(28,605	)		(16,503	)		(45,108	)
BALANCE, September 30, 2002		$	53,503		$	63,502		$	117,005

Item 1.

Financial Statements

~~The~~ CIRCUS ~~accompanying~~AND ~~notes~~ELDORADO ~~are~~JOINT anVENTURE ~~integral part of these unaudited condensed consolidated financial statements.~~

6(doing business as Silver Legacy Resort Casino)

~~CIRCUS~~UNAUDITED ~~AND~~CONDENSED ~~ELDORADO~~CONSOLIDATED ~~JOINT~~BALANCE ~~VENTURE~~SHEETS ~~(doing business as Silver Legacy Resort Casino)~~

~~UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS~~ (In thousands)

				Nine Months Ended September 30,
		June 30,2006			December 31,2005
				2002			2001
ASSETS
CASH FLOWS FROM OPERATING ACTIVITIES:
CURRENT ASSETS:
	Net Income			$	16,706		$	16,237
Cash and cash equivalents		$	43,859		$	35,142
	Adjustments to reconcile net income to net cash provided by operating activities:
Accounts receivable, net			4,525			6,041
		Depreciation and amortization			9,478			9,053
Inventories			2,205			2,057
		Loss on sale of assets			3			4
Prepaid expenses and other			3,743			4,216
		Loss on early redemption of debt			134			—
Total current assets			54,332			47,456
		Insurance settlement proceeds			—			(225	)
PROPERTY AND EQUIPMENT, NET			255,025			258,521
		Interest rate swap (receivable) payable			(2,419	)		675
OTHER ASSETS, NET			7,921			8,195
		Increase in accrued pension cost			528			—
Total Assets		$	317,278		$	314,172
	Changes in current assets and current liabilities:
LIABILITIES AND PARTNERS’ EQUITY
		(Increase) decrease in accounts receivable, net of allowance			(193	)		88
CURRENT LIABILITIES:
		Decrease in inventories			249			276
Accounts payable		$	5,025		$	6,505
		(Increase) in prepaid expenses			(1,030	)		(405	)
Accrued interest			5,400			5,413
		Increase in accounts payable			811			365
Accrued and other liabilities			10,839			9,006
		(Decrease) in accrued guarantee fees to related party			(185	)		(29	)
Total current liabilities			21,264			20,924
		Increase (decrease) in accrued interest			1,161			(661	)
LONG-TERM DEBT			159,647			159,616
		Increase in accrued and other liabilities			174			1,034
OTHER LONG-TERM LIABILITIES			4,431			4,004
	Total adjustments				8,711			10,175
Total liabilities			185,342			184,544
		Net cash provided by operating activities			25,417			26,412
PARTNERS’ EQUITY			131,936			129,628
CASH FLOWS FROM INVESTING ACTIVITIES:
Total Liabilities and Partners’ Equity		$	317,278		$	314,172
		Proceeds from sale of assets			4			7
		(Increase) decrease in other assets			(630	)		221
		Insurance settlement proceeds			—			225
		Purchase of property and equipment			(2,536	)		(2,810	)
		Net cash used in investing activities			(3,162	)		(2,357	)
CASH FLOWS FROM FINANCING ACTIVITIES:
		Proceeds from bank credit facility			36,700			—
		Proceeds from issuance of mortgage notes			159,378			—
		Distributions to partners			(45,108	)		(5,893	)
		Debt issuance costs			(6,301	)		—
		Payments on bank credit facility			(163,700	)		(17,500	)
		Net cash used in financing activities			(19,031	)		(23,393	)
		Net increase in cash and cash equivalents			3,224			662
	Cash and cash equivalents at beginning of period				12,256			11,125
	Cash and cash equivalents at end of period			$	15,480		$	11,787
SUPPLEMENTAL CASH FLOW DISCLOSURES:
	Cash paid during period for interest			$	9,705		$	11,390

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

CIRCUSTable ANDof ELDORADO JOINT VENTURE (doing business as Silver Legacy Resort Casino)Contents

~~UNAUDITED~~CIRCUS ~~NOTES~~AND TOELDORADO ~~CONDENSED~~JOINT ~~CONSOLIDATED~~VENTURE ~~FINANCIAL STATEMENTS~~

~~1. Summary~~(doing ~~of Significant~~business ~~Accounting~~as ~~Policies~~Silver Legacy Resort Casino)

~~Principles~~UNAUDITED ofCONDENSED ~~Consolidation/Operations~~CONSOLIDATED STATEMENTS OF OPERATIONS

~~Effective March 1, 1994, Eldorado Limited Liability Company~~ (aIn ~~Nevada limited liability company owned and controlled by Eldorado Resorts, LLC~~thousands) ~~(“ELLC”)~~ and Galleon, Inc. (a Nevada corporation owned and controlled by Mandalay Resort Group) (“Galleon” and, collectively with ELLC, the “Partners”), entered into a joint venture agreement to establish Circus and Eldorado Joint Venture (the “Joint Venture”), a Nevada general partnership. The Joint Venture owns and operates a casino and hotel located in Reno, Nevada (“Silver Legacy”), which began operations on July 28, 1995. ELLC contributed land to the Joint Venture with a fair value of $25,000,000 and cash of $26,900,000 for a total equity investment of $51,900,000. Galleon contributed cash to the Joint Venture of $51,900,000 to comprise their total equity investment. Each partner has a 50% interest in the Joint Venture.

The condensed consolidated financial statements include the accounts of the Joint Venture and its wholly owned subsidiary, Silver Legacy Capital Corp. (“Capital”). Capital was established solely for the purpose of serving as a co-issuer of $160 million principal amount of 101/8% mortgage notes due 2012 issued by the Joint Venture and Capital and, as such, Capital does not have any operations, assets, or revenues. All significant intercompany accounts and transactions have been eliminated in consolidation.


	Three Months Ended June 30,						Six Months Ended June 30,
	2006			2005			2006			2005
OPERATING REVENUES:
Casino	$	23,338		$	20,277		$	41,612		$	37,417
Rooms		11,154			9,442			20,064			17,118
Food and beverage		8,870			8,390			17,242			16,205
Other		2,138			2,261			4,041			4,210

		45,500			40,370			82,959			74,950
Less: promotional allowances		(3,305	)		(3,621	)		(6,637	)		(6,721	)

Net operating revenues		42,195			36,749			76,322			68,229

OPERATING EXPENSES:
Casino		10,656			10,680			20,832			20,099
Rooms		3,238			2,912			6,180			5,700
Food and beverage		6,296			5,806			12,252			11,544
Other		1,632			1,712			3,185			3,321
Selling, general and administrative		8,397			7,597			16,347			14,977
Depreciation		3,157			2,766			6,297			5,417
(Gain) loss on disposition of assets		4			(2	)		(57	)		(2	)

Total operating expenses		33,380			31,471			65,036			61,056

OPERATING INCOME		8,815			5,278			11,286			7,173

OTHER (INCOME) EXPENSE:
Interest expense, net		4,051			4,162			8,173			8,357
Other, net		48			(34	)		(57	)		—

Total other (income) expense		4,099			4,128			8,116			8,357

NET INCOME (LOSS)	$	4,716		$	1,150		$	3,170		$	(1,184	)

InThe ~~the opinion of Management, the~~ accompanying ~~unaudited condensed~~notes ~~consolidated financial statements contain all adjustments, all of which~~ are ~~normal~~an ~~and~~integral ~~recurring,~~part ~~necessary to present fairly the financial position~~ of ~~the~~these ~~Joint~~unaudited ~~Venture~~condensed asconsolidated ~~of September 30, 2002 and the results of operations and cash flows~~financial ~~for the three and nine months ended September 30, 2002 and 2001~~statements. ~~The results of operations for such periods are not necessarily indicative of the results to be expected for a full year.~~

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting standards generally accepted in the United States of America have been condensed or omitted. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto for the year ended December 31, 2001 included in the Registration Statement of Circus and Eldorado Joint Venture and Silver Legacy Capital Corp. on Form S-4 ~~filed with the Securities and Exchange Commission (Commission File No. 333-87202).~~

UseTable of EstimatesContents

~~The preparation of financial statements in conformity with accounting principles~~ ~~generally~~CIRCUS ~~accepted~~AND inELDORADO ~~the~~JOINT ~~United~~VENTURE States of America 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 these estimates.

~~Recently~~(doing ~~Issued~~business ~~Accounting Pronouncements~~as Silver Legacy Resort Casino)

AsUNAUDITED ofCONDENSED ~~January~~CONSOLIDATED 1,STATEMENTS ~~2001,~~OF the Joint Venture changed its method of accounting for interest rate swaps to comply with Statement of Financial Accounting Standards No. 133 (“SFAS 133”), “Accounting for Derivative Instruments and Hedging Activities,” and accordingly, changes to the fair value of the interest rate swaps are recognized in earnings. On January 1, 2001, the Joint Venture recorded a liability of $327,000 for the fair value of its interest rate swaps at that date with a corresponding cumulative effect adjustment in its statement of income. As of September 30, 2001, the fair value of the Joint VenturePARTNERS’s ~~interest~~EQUITY rate swaps was a liability of $675,000, and the Joint Venture recorded the change in fair market value of $348,000 to net interest rate swap expense in its statement of income and the corresponding liability. The interest rate swaps expired on October 29, 2001. See Note 3 for information regarding the Joint Venture’s swap agreement entered into in 2002.

(In ~~June 2001, the Financial Accounting Standards Board (“FASB”~~thousands) ~~issued SFAS No. 143, “Accounting for Asset Retirement Obligations.” This statement addresses financial accounting and reporting for obligations associated with the~~


	Galleon, Inc.			Eldorado Resorts, LLC			Total
BALANCE, January 1, 2006	$	59,814		$	69,814		$	129,628
Net income		1,585			1,585			3,170
Partner Distributions		(431	)		(431	)		(862	)

BALANCE, June 30, 2006	$	60,968		$	70,968		$	131,936

retirement of tangible long-lived assets and the associated asset retirement costs. This statement applies to all entities and to all legal obligations associated with the retirement of long-lived assets that result from the acquisition, construction, development and the normal operation of a long-lived asset, except for certain obligations of lessees. This statement is effective for the Joint Venture’s 2003 fiscal year and early adoption is permitted. The ~~Joint~~accompanying ~~Venture~~notes ~~believes~~are ~~that~~an ~~the~~integral ~~adoption~~part of ~~this~~these ~~statement~~unaudited ~~will~~condensed ~~not~~consolidated ~~have a material impact on its~~ financial ~~condition or results of~~ ~~operations~~statements.

In5 August 2001, the FASB issued SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets.” This statement requires one accounting model be used for long-lived assets to be disposed of by sale, whether previously held and used or newly acquired and broadens the presentation of discontinued operations to include additional disposal transactions. This statement is effective for fiscal years and interim periods beginning after December 15, 2001. The Joint Venture therefore adopted SFAS 144 in January 2002. The Joint Venture periodically evaluates its long-lived assets for impairment. Adoption of SFAS 144 did not have a material impact on the Joint Venture’s condensed consolidated financial statements.

InTable April 2002, the FASB issued SFAS No. 145, “Rescission of FASB Statements 4, 44, and 64, Amendment of FASB Statement 13, and Technical Corrections.” SFAS 145 rescinds SFAS 4, “Reporting Gains and Losses from Extinguishment of Debt.” Under SFAS 4, all gains and losses from extinguishment of debt were required to be aggregated, if material, and classified as an extraordinary item, net of related income tax effect, on the statement of income. SFAS 145 requires all gains and losses from extinguishment of debt to be classified as extraordinary only if they meet the criteria of Accounting Principles Board (“APB”) Opinion 30. This statement is effective for the Joint Venture’s 2003 fiscal year and early adoption is permitted. In May 2002, the Joint Venture adopted this statement and classified its fiscal 2002 loss from early retirement of debt as a component of other (income) expense.Contents

~~In June 2002, the FASB issued SFAS No. 146,~~ ~~“Accounting~~CIRCUS ~~for~~AND ~~Costs~~ELDORADO ~~Associated~~JOINT ~~with~~VENTURE Exit or Disposal Activities.” This statement addresses financial accounting and reporting for costs associated with exit or disposal activities and nullifies EITF No. 94-3, “Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring).” This statement requires that a liability for a cost associated with an exit or disposal activity be recognized when the liability is incurred. A fundamental conclusion reached by the FASB in SFAS No. 146 is that an entity’s commitment to a plan, by itself, does not create a present obligation to others that meets the definition of a liability. This statement also establishes that fair value is the objective for initial measurement of the liability. The provisions of this statement are effective for exit or disposal activities that are initiated after December 31, 2002, with early application encouraged. The Joint Venture does not expect the adoption of this statement to have a material impact on its condensed consolidated financial statements.

~~2. Certain~~(doing ~~Risks~~business ~~and~~as ~~Uncertainties~~Silver Legacy Resort Casino)

~~A significant~~UNAUDITED ~~portion~~CONDENSED ofCONSOLIDATED ~~the~~STATEMENTS ~~Joint~~OF ~~Venture’s~~CASH ~~revenues~~FLOWS and operating income are generated from patrons who are residents of northern California. A change in general economic conditions or the extent and nature of casino gaming in California, Washington or Oregon could adversely affect the Joint Venture’s operating results. On September 10, 1999, California lawmakers approved a constitutional amendment that would give Indian tribes the right to offer slot machines and a range of house-banked card games. On March 7, 2000, California voters approved the constitutional amendment which legalized “Nevada-style” gaming on Native American reservations.

9(In thousands)

3. Long-Term Debt


	Six Months Ended June 30,
	2006			2005
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	3,170		$	(1,184	)

Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization		6,658			5,778
Gain on disposition of assets		(57	)		(2	)
Increase in accrued pension cost		427			457
Changes in current assets and current liabilities:
Accounts receivable, net		1,516			622
Inventories		(148	)		(62	)
Prepaid expenses and other		430			501
Accounts payable		(1,480	)		365
Accrued interest		(13	)		—
Accrued and other liabilities		1,833			497

Total adjustments		9,166			8,156

Net cash provided by operating activities		12,336			6,972

CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of assets		100			16
Decrease in other assets		(56	)		82
Purchase of property and equipment		(2,801	)		(6,924	)

Net cash used in investing activities		(2,757	)		(6,826	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Distributions to partners		(862	)		—

Net cash used in financing activities		(862	)		—

Net increase in cash and cash equivalents		8,717			146
Cash and cash equivalents at beginning of period		35,142			30,239

Cash and cash equivalents at end of period	$	43,859		$	30,385

SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid during period for interest	$	8,153		$	8,140

~~Long-term~~The ~~debt~~accompanying ~~consists~~notes are an integral part of ~~the~~these ~~following~~unaudited ~~(in~~condensed ~~thousands):~~consolidated financial statements.

	September 30, 2002		December 31, 2001
Amounts due under credit facilities at floating interest rates, weighted average of 4.82% and 3.08%, respectively; due March 2007	$	18,000	$	145,000
101/8% Mortgage Notes due 2012 (net of unamortized discount of $586)		159,414		—
		177,414		145,000
Less—Current portion		—		(10,000	)
	$	177,414	$	135,000

OnTable March 5, 2002, the Joint Venture and Capital (the “Issuers”) completed an offering of senior secured mortgage notes (“Notes”) with a principal amount of $160,000,000 due 2012. Concurrent with issuing the Notes, the Joint Venture entered into a new senior secured credit facility (the “New Credit Facility”) for $40,000,000. The proceeds from the Notes, together with $26,000,000 in borrowings under the New Credit Facility, were used to repay $150,200,000 representing all of the indebtedness outstanding under the prior bank credit facility (the “Bank Credit Facility”) and to fund $30,000,000 of distributions to the Partners. In addition, the remaining proceeds along with operating cash flow were used to pay $6,300,000 in related fees and expenses of the transactions. These fees were capitalized and are included in other assets. Deferred loan costs of $134,000 related to the Bank Credit Facility were written-off upon repayment in full of the Bank Credit Facility. Contents

~~The Notes are senior secured obligations which rank equally with all of the Joint Venture’s~~ ~~outstanding~~CIRCUS ~~senior~~AND ~~debt~~ELDORADO ~~and~~JOINT ~~senior~~VENTURE to any subordinated debt. The Notes are secured by a security interest in the Issuers’ existing and future assets, which is junior to a security interest in such assets securing the Joint Venture’s obligations on the New Credit Facility and any refinancings of such facility that are permitted pursuant to the terms of the Notes. Each of the Partners executed a pledge of all of its partnership interests in the Joint Venture to secure the Notes, which is junior to a pledge of such partnership interests to secure the Joint Venture’s obligations on the New Credit Facility and any refinancings of such facility that are permitted pursuant to the terms of the Notes. The Notes mature on March 1, 2012 and bear interest at the rate of 101/8% per annum, payable semi-annually in arrears on March 1 and September 1 of each year, commencing on September 1, 2002.

~~The~~(doing ~~New~~business Credit Facility provides for a $20,000,000 senior secured revolving credit facility and a $20,000,000 five-year term loan facility, each of which bears interest at floating rates based on LIBOR plus a spread. The commitment under the term loan facility reduces as ~~follows: $1,000,000~~Silver ~~per~~Legacy ~~quarter~~Resort ~~beginning~~Casino) March 31, 2003 through December 31, 2004; $1,250,000 per quarter beginning March 31, 2005 through December 31, 2005; $1,500,000 per quarter beginning March 31, 2006 through December 31, 2006, with the remaining balances due March 31, 2007. During the three months ended September 30, 2002, the Joint Venture paid $6,000,000 on its term loan facility which constituted a permanent reduction of that amount in the term loan facility. As of September 30, 2002, under its most restrictive covenants, the Joint Venture had the ability to borrow all of the additional $16,000,000 then available under its revolving credit facility.

~~The~~NOTES ~~Notes~~TO ~~and~~UNAUDITED ~~New~~CONDENSED ~~Credit~~CONSOLIDATED ~~Facility~~FINANCIAL ~~contain~~STATEMENTS various restrictive covenants including the maintenance of certain financial ratios and limitations on additional debt, disposition of property, mergers and similar transactions. As of September 30, 2002, the Joint Venture was in compliance with all of its covenants.

OnNote ~~June 13, 2002, the Joint Venture entered into a fixed-to-floating swap agreement with a $50 million notional amount. Pursuant to this swap agreement, which had an expiration date of March~~ 1~~, 2006, the Joint Venture received interest at a fixed rate of 10~~.~~125%~~ ~~per~~Summary ~~annum and paid interest based on a floating rate index that was computed on a 6-month LIBOR, in arrears, plus 5.31%. The amounts due under the swap agreement were payable on September 1 and March 1~~ of ~~each~~Significant ~~year,~~Accounting ~~beginning~~Policies ~~September 1, 2002. The difference between the amount received~~ and ~~amount~~Basis ~~paid under such agreement was recorded as a reduction~~ of, ~~or addition~~Presentation ~~to interest expense as incurred over the life of the swap (a reduction of $408,000 for the nine months ended September 30, 2002). The interest rate swap did not meet the~~

10Principles of Consolidation/Operations

~~criteria~~Effective ~~for~~March 1, ~~hedge~~1994, ~~accounting~~Eldorado ~~established~~Limited Liability Company (a Nevada limited liability company owned and controlled by ~~SFAS~~Eldorado ~~133~~Resorts, LLC) (“ELLC”) and Galleon, Inc. ~~Accordingly~~ (a Nevada corporation owned and controlled by MGM MIRAGE and then owned and controlled by Mandalay Resort Group (“Mandalay”) (“Galleon” and, collectively with ELLC, the ~~fair~~“Partners”), entered ~~market~~into ~~value~~a ofjoint ~~the~~venture ~~swap~~agreement ~~was~~to ~~recorded~~establish asCircus ~~an asset~~and orEldorado ~~liability~~Joint inVenture ~~accordance~~(the ~~with~~“Partnership”), ~~SFAS~~a ~~133~~Nevada general partnership. As ofThe ~~September~~Partnership 30owns and operates a casino and hotel located in Reno, ~~2002~~Nevada (“Silver Legacy”), ~~the~~which ~~value~~began ofoperations ~~the~~on ~~interest~~July 28, ~~rate~~1995. ~~swap~~ELLC ~~was~~contributed land to the Partnership with a ~~receivable~~fair value of $225,~~419~~000,000 ~~with~~and acash ~~corresponding~~of ~~amount~~$26,900,000 ~~recorded~~for asa ~~interest~~total ~~rate~~equity ~~swap~~investment ~~income~~of $51,900,000. On ~~October~~Galleon 8,contributed ~~2002,~~cash to the ~~Joint~~Partnership ~~Venture~~of ~~terminated~~$51,900,000 ~~the~~to ~~swap~~comprise ~~agreement~~their intotal ~~advance~~equity ofinvestment. ~~its~~Each ~~scheduled~~partner ~~termination~~has ~~date~~a ~~and~~50% ~~received~~interest ~~$2,327,000~~in the Partnership.

4On April 25, 2005, a wholly owned subsidiary of MGM MIRAGE (“MGM”) was merged with and into Mandalay as a result of which Mandalay became a wholly owned subsidiary of MGM MIRAGE. ~~Related~~ ~~Parties~~With the consummation of the merger, MGM MIRAGE acquired Mandalay’s ownership of Galleon, Inc.

~~Each~~The ofcondensed ~~our~~consolidated ~~Partners~~financial ~~operates~~statements ainclude ~~casino~~the ~~attached~~accounts of the Partnership and ~~adjacent~~its towholly owned subsidiary, Silver Legacy Capital Corp. ~~Our~~ ~~Partners~~(“Capital”). ~~may~~Capital bewas ~~deemed~~established tosolely befor inthe purpose of serving as a ~~conflict~~co-issuer of ~~interest~~ ~~position~~$160,000,000 ~~with~~principal ~~respect~~amount toof ~~decisions~~10 1/8% ~~they~~mortgage ~~make~~notes ~~relating~~due to2012 issued by the ~~Joint~~Partnership ~~Venture~~and Capital and, ~~the~~as ~~Eldorado~~such, ~~Hotel~~Capital &does ~~Casino~~not have any operations, assets, or revenues. All significant intercompany accounts and transactions ~~Circus~~have ~~Circus~~been ~~Hotel~~eliminated &in ~~Casino-Reno~~consolidation.

AsIn athe ~~condition~~opinion toof management, the ~~Bank~~accompanying ~~Credit~~unaudited ~~Facility,~~condensed ~~Mandalay~~consolidated financial ~~Resort~~statements ~~Group~~contain ~~(“MRG”)~~all ~~guaranteed~~adjustments, ~~completion~~all of ~~the~~which ~~Silver~~are ~~Legacy~~normal and, ~~in addition~~recurring, ~~entered into~~necessary ~~a make-well agreement whereby it was obligated~~ to ~~make~~present ~~additional~~fairly ~~contributions to~~ the ~~Joint~~financial ~~Venture~~position asof ~~necessary~~the toPartnership ~~maintain a minimum coverage ratio (~~as ~~defined). As~~of ~~compensation~~June 30, ~~for the make-well agreement~~2006, ~~MRG~~and ~~received~~the aresults ~~guarantee fee~~ of ~~1½%~~operations offor the ~~outstanding~~three ~~balance~~and ofsix ~~the~~months ~~Bank~~ended June 30, ~~Credit~~2006 ~~Facility. The~~and ~~Joint~~2005 ~~Venture made payments totaling $563,000~~ and ~~$1,762,000~~cash onflows ~~its guarantee fee commitment~~ for the ~~periods~~six months ended ~~September~~ June 30, ~~2002~~2006 and ~~2001, respectively~~2005. ~~On March~~ 5,The ~~2002,~~results ~~MRG’s~~of ~~obligations~~operations ~~pursuant~~for tosuch ~~the~~periods ~~make-well~~are ~~agreement,~~not ~~and~~necessarily ~~its~~indicative ~~right~~of ~~to receive~~ the ~~guarantee~~results ~~fee,~~to ~~terminated. All~~be ~~unpaid~~expected ~~guarantee~~for ~~fees~~a ~~were paid in~~ full ~~in March 2002~~year.

5Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. ~~Supplemental~~ ~~Executive~~These ~~Retirement~~condensed ~~Plan~~consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Partnership’s annual report on Form 10-K for the year ended December 31, 2005.

~~The~~Use ~~Joint Venture adopted a Supplemental Executive Retirement Plan (“SERP”) for a select group~~ of ~~highly~~Estimates compensated management employees. The SERP was effective January 1, 2002 and provides for a lifetime benefit at age 65, based on a formula which takes into account a participant’s highest annual compensation, years of service, and executive level. The SERP also provides an early retirement benefit at age 55 with at least four years of service, a disability provision, and a lump sum death benefit. The obligation is being funded through life insurance contracts on the participants and related cash surrender value. The Joint Venture anticipates that its periodic pension cost for the year ending December 31, 2002 will be approximately $750,000, of which $528,000 has been accrued as of September 30, 2002. The accumulated benefit obligation is expected to be approximately $1,920,000 at December 31, 2002.

6The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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. ~~Joint~~ ~~Venture~~Actual ~~Agreement~~results could differ from these estimates.

~~Concurrent~~Note ~~with the issuance of the Notes on March 5, 2002, the Original Partnership Agreement was amended and restated in its entirety and was further amended in April 2002 (the “New Partnership Agreement”)~~2. ~~The~~ ~~New~~Certain ~~Partnership~~Risks ~~Agreement provides for, among other items, profits~~ and ~~losses~~Uncertainties to be allocated to the Partners in proportion to their percentage interests, separate capital accounts to be maintained for each Partner, provisions for management of the Joint Venture and payment of distributions and bankruptcy and/or dissolution of the Joint Venture. The April 2002 amendments were principally (i) to provide equal voting rights for ELLC and Galleon with respect to approval of the partnership’s annual business plan and the appointment and compensation of the general manager, and (ii) to give each Partner the right to terminate the general manager.

~~Item~~A 2significant portion of the Partnership’s revenues and operating income are generated from patrons who are residents of northern California. A ~~Management~~change in general economic conditions or the extent and nature of casino gaming in California, Washington or Oregon could adversely affect the Partnership’s ~~Discussion~~operating results. In March 2000, California voters approved the constitutional amendment which legalized “Nevada-style” gaming on Native American reservations. Many existing Native American gaming facilities in northern California are modest compared to Silver Legacy. However, some Native American tribes have established large-scale gaming facilities in California and ~~Analysis~~numerous Native American tribes have announced that they are in the process of ~~Financial~~expanding, ~~Condition~~developing, or are considering establishing large-scale hotel and ~~Results~~gaming facilities in northern California. In particular, a significant Native American casino located approximately 21 miles northeast of ~~Operations~~Sacramento opened in June 2003. While this casino does not currently have hotel rooms, it presently has approximately 2,700 slot machines and 100 table games which exceeds the number of gaming units at Silver Legacy.

~~Overview~~7

EffectiveTable March 1, 1994, Eldorado Limited Liability Company (“ELLC”), a Nevada limited liability company owned and controlled by Eldorado Resorts LLC, and Galleon, Inc. (“Galleon”), a Nevada corporation owned and controlled by Mandalay Resort Group, formerly known as Circus Circus Enterprises, Inc., entered into a joint venture agreement to establish Circus and Eldorado Joint Venture, a partnership (the “Joint Venture”), for the purpose of constructing, owning and operating Silver Legacy Resort Casino (“Silver Legacy”). Silver Legacy Capital Corp., a wholly owned subsidiary of the Joint Venture (“Capital”), was incorporated for the sole purpose of serving as a co-issuer of the 101/8% mortgage notes due 2012 issued by the Joint Venture and Capital (the “Notes”), and does not have any operations, assets or revenues.Contents

OnUnder ~~July~~their ~~28,~~current ~~1995~~compacts, ~~Silver~~most ~~Legacy commenced~~Native ~~operations~~American astribes ain ~~hotel-casino~~California inmay ~~downtown~~operate ~~Reno~~up to 2,000 ~~Nevada. Currently~~slot machines, ~~Silver~~and ~~Legacy~~up isto two gaming facilities may be operated on any reservation. The number of machines the tribes are allowed to operate may increase as a ~~leader~~result ~~within~~of any new or amended compacts the ~~Reno~~tribes ~~market~~may inenter ~~terms~~into with the State of ~~size~~California that receive the requisite approvals, ~~offering~~such as has been the ~~largest~~case with respect to a number of ~~slot~~new ~~machines,~~or ~~table~~amended ~~games~~compacts which have been executed and approved, including the ~~second~~aforementioned ~~largest~~Sacramento-area ~~number~~casino which received approval of ~~hotel~~amendments to ~~rooms~~its compact in September 2004 allowing for an increase in the number of slot machines at this property to approximately 2,700.

11We believe the continued growth of Native American gaming establishments could continue to place additional competitive pressure on our operations. While we cannot predict the extent of any future impact, it could be significant.

~~Critical~~Note ~~Accounting~~3. ~~Policies~~Long-Term Debt

~~Certain~~Long-term ~~of our accounting policies, including the estimated lives assigned to our assets, the determination of bad~~ debt, ~~asset~~consisted ~~impairment, self insurance~~of ~~reserves, pension costs, and certain gaming related liabilities require that we apply significant judgment in defining~~ the ~~appropriate~~following assumptions for calculating financial estimates. By their nature, these judgments are subject to an inherent degree of uncertainty. Our judgments are based on our historical experience, terms of existing contracts, our observance of trends (in ~~the~~thousands): industry, information provided by our customers and information available from other outside sources, as appropriate. There can be no assurance that actual results will not differ from our estimates.

Recent Developments


	June 30, 2006		December 31, 2005
10¹/8% Mortgage Notes due 2012 (net of unamortized discount of $353 and $384, respectively)	$	159,647	$	159,616

AOn ~~significant~~March 5, ~~portion~~2002, of the ~~Silver~~Partnership ~~Legacy’s revenues~~ and ~~operating~~Capital ~~income~~(the ~~are~~“Issuers”) ~~generated~~issued ~~from patrons who are residents of northern California~~$160, ~~and~~000,000 asprincipal ~~such,~~amount ~~our results~~ of ~~operations~~senior ~~have~~secured ~~been~~mortgage ~~adversely~~notes ~~impacted~~due by2012 ~~the~~(“Notes”). ~~growth~~Concurrent inwith ~~Native~~issuing ~~American~~the ~~gaming~~Notes, inthe ~~northern~~Partnership ~~California~~entered ~~that~~into ~~has~~a ~~occurred~~new tosenior ~~date. In~~secured ~~addition~~credit tofacility (the ~~existing~~“Credit ~~gaming~~Facility”) ~~facilities~~for $40,000,000. ~~numerous~~The ~~Native~~proceeds ~~American tribes have~~from ~~announced that they are in~~ the ~~process~~Notes, oftogether ~~developing~~with or$26,000,000 ~~are considering establishing large-scale gaming facilities~~ in ~~northern~~borrowings ~~California. The~~under ~~United~~the ~~Auburn~~Credit ~~Indian~~Facility, ~~Community~~were ~~(“UAIC”)~~used ~~has~~to ~~entered~~repay ~~into a development and management agreement with an established gaming operator~~$150,200,000 ~~Station~~representing ~~Casinos,~~all ~~Inc.,~~of tothe ~~develop~~indebtedness ~~and~~outstanding ~~manage~~under a ~~gaming~~prior ~~and~~bank ~~entertainment~~credit facility onand ato ~~proposed~~fund ~~49-acre~~$30,000,000 ~~site approximately 21 miles northeast~~ of ~~Sacramento. On~~distributions ~~September~~to ~~17, 2002,~~ the ~~United~~ ~~States~~Partners. ~~Department~~In ofaddition, ~~Interior accepted~~ the ~~49-acre~~remaining ~~site~~proceeds ~~into~~along ~~trust~~with ~~for~~operating ~~the~~cash ~~UAIC,~~flows ~~and~~were ~~Station~~used ~~Casinos,~~to ~~Inc.~~pay ~~announced an approximately~~ $~~215 million~~6, ~~200~~300,000 ~~square~~in ~~foot~~related ~~gaming~~fees and ~~entertainment~~expenses ~~facility which is anticipated to open during the second half~~ of ~~2003. Based on its size and proximity, we believe~~ the ~~opening of this new facility will impact our operations~~transactions. ~~While~~ weThese ~~cannot~~fees ~~predict~~were ~~the~~capitalized ~~extent~~and ofare ~~the~~included ~~potential~~in ~~impact,~~other ~~it could be significant~~assets.

~~Three~~The ~~Months~~Notes ~~Ended~~are ~~September~~senior 30secured obligations which rank equally with all of the Partnership’s outstanding senior debt and senior to any subordinated debt. The Notes are secured by a security interest in the Issuers’ existing and future assets, ~~2002~~which ~~Compared~~is junior to ~~Three~~a ~~Months~~security ~~Ended~~interest in such assets securing the Partnership’s obligations on the Credit Facility and any refinancings of such facility that are permitted pursuant to the terms of the Notes. Each of the Partners executed a pledge of all of its partnership interests in the Partnership to secure the Notes, which is junior to a pledge of such partnership interests to secure the Partnership’s obligations on the Credit Facility and any refinancings of such facility that are permitted pursuant to the terms of the Notes. The Notes mature on March 1, 2012 and bear interest at the rate of 10 1/8% per annum, payable semi-annually in arrears on March 1 and September 1 30of each year, ~~2001~~commencing on September 1, 2002.

~~Net~~The ~~Revenues~~Credit Facility originally provided for a $20,000,000 senior secured revolving credit facility and a $20,000,000 five-year term loan facility, each of which provided for the payment of interest at floating rates based on LIBOR plus a spread. The commitment under the term loan facility originally provided for periodic reductions with the then remaining balance due March 31, 2007.

~~Net~~The ~~revenues~~Notes ~~increased~~and $0Credit Facility contain various restrictive covenants including the maintenance of certain financial ratios and limitations on additional debt, disposition of property, mergers and similar transactions.9 ~~million~~On November 4, or2003, 1the Partnership, U.9%S. Bank, toN.A. ~~$46~~and Bank of America, N.1A., ~~million~~executed ~~for~~an amendment to the ~~three~~Credit Facility ~~months~~which ~~ended~~reduced ~~September~~the 30revolving facility to $10,000,000 ~~2002~~and ~~compared~~revised certain covenant ratios with ~~the~~retroactive ~~three~~effect ~~months~~to ~~ended~~ September 30, ~~2001~~2003. ~~This~~ ~~rise~~On inJune 15, ~~net~~2005, ~~revenues~~the ~~was~~parties ~~mainly~~executed ~~due~~a further amendment to ~~increases~~the Credit Facility to provide a conditional waiver of the facility’s financial covenants in ~~casino~~respect of the quarter ended June 30, ~~food~~2005, and ~~beverage~~each subsequent quarter through and ~~entertainment~~including ~~revenues~~December 31, in2005, provided that no additional credit was extended under the Credit ~~month~~Facility ofduring ~~July~~the ~~over~~quarter for which the ~~same~~waiver ~~prior~~was ~~year~~relied ~~period~~upon. ~~August~~ ~~and~~In ~~September~~addition, ~~taken~~ as a ~~whole~~condition ~~due~~precedent to any draw on the ~~timing~~ ofCredit Facility subsequent to June 15, 2005, the ~~Labor~~Partnership ~~Day~~must ~~holiday~~be ~~were~~in ~~flat~~compliance with the ~~same~~Credit ~~prior~~Facility’s financial ~~year~~covenants ~~period,~~as ~~despite~~to the ~~fact~~then ~~that~~most ~~terrorist~~recent ~~attacks~~fiscal onquarter ~~September~~in ~~11th~~respect ~~had~~of awhich ~~strong~~the ~~negative~~Partnership ~~impact~~is onrequired ~~our~~to ~~operations~~deliver infinancial statements pursuant to section 6.1 of the ~~prior~~Credit ~~year~~Facility. ~~Soft~~ ~~economic~~For ~~conditions~~further ininformation regarding our financial covenants, ~~northern~~see ~~California~~“Senior ~~and~~Secured ~~increased~~Credit ~~competition~~Facility” ~~from~~in ~~Native~~Item 2. ~~American~~On ~~gaming~~March 2, ~~remained~~2006, the Partnership executed a ~~challenge~~further ~~during~~amendment to the ~~three~~Credit ~~months~~Facility which extends the previously granted waiver for any defaults under the Credit Facility’s financial covenants to cover the fiscal quarter ended ~~September~~March 31, 302006, ~~2002.~~and each subsequent fiscal quarter through and including December 31, 2006, provided that no additional credit is extended under the Credit Facility

~~For the three months ended September 30, 2002, casino revenues were $27.1 million compared to $26.~~8 million for the same prior year period. This $0.3 million, or 1.1%, increase was attributed to increased pit volume combined with a stronger hold percentage compared to the same prior year period. Despite a decrease in slot handle during the three months ended September 30, 2002 compared to the three months ended September 30, 2001, our slot revenues remained flat due to a higher hold percentage in the current quarter.

RoomTable revenues for the three months ended September 30, 2002, increased $0.1 million, or 0.9%, over the prior year. Room occupancy increased to 89.8% for the three months ended September 30, 2002, as compared to 85.5% for the three months ended September 30, 2001. Silver Legacy’s average daily room rate was $69.77 and $71.88 for the three months ended September 30, 2002 and 2001, respectively. While the increase in occupied rooms of 4.7% contributed to the revenue increase, it was in part offset by the $2.11 decrease in our average daily room rate during the quarter compared to the prior year due to competition within the Reno market. Contents

~~For~~ during ~~the~~such quarter. ~~ended~~At ~~September~~ June 30, ~~2002~~2006, ~~food~~there ~~and~~was ~~beverage~~no ~~revenues~~indebtedness ~~rose~~outstanding ~~$0.8~~under ~~million,~~the orCredit 8Facility.~~1%,~~ ~~over~~As ~~the same~~of ~~prior~~such ~~year~~date, ~~period. The~~the ~~average~~Partnership ~~check~~was ~~increased~~in compliance ~~3.5%~~with ~~for~~all of the ~~three~~covenants ~~months~~in ~~ended~~the ~~September~~Credit ~~30,~~Facility ~~2002~~and ashad ~~compared~~the ability to ~~the~~borrow ~~three~~on ~~months~~a ~~ended~~revolving ~~September~~basis ~~30,~~all ~~2001~~of ~~primarily~~the ~~due~~$10,000,000 toavailable ~~selective~~under ~~menu~~the ~~pricing~~Credit ~~increases~~Facility. In ~~addition~~The entire principal amount, ~~customer~~if any, then outstanding under the Credit ~~counts~~Facility ~~rose~~becomes ~~2.1%~~due ~~during~~and payable on March 31, 2007 unless the ~~third~~maturity ~~quarter~~date inis ~~comparison~~extended towith the ~~same~~consent ~~prior~~of ~~year~~the ~~period~~lenders. ~~This~~ ~~increase~~As inof ~~customer~~June 30, ~~counts~~2006, ~~benefited~~the ~~from~~Partnership ~~several~~was ~~promotions~~in ~~that~~compliance ~~offered~~with ~~food~~the ~~coupons~~covenants ~~during~~in the ~~three~~indenture ~~months~~relating ~~ended~~to ~~September~~the ~~30, 2002~~Notes.

~~Other~~The ~~revenues~~March 2, ~~comprised~~2006 amendment also waived for 2005 the covenant in Section 7.8 of ~~revenues~~the ~~generated~~Credit byFacility ~~our~~which ~~retail~~then ~~outlets~~limited capital expenditures to $10,000,000 ~~arcade~~within a calendar year, ~~entertainment~~which ~~and~~the ~~other~~Partnership exceeded for the year ended December 31, 2005. In addition, the amendment raised the capital expenditure limit to $12,500,000 for future calendar years.

12Note 4. Related Parties

~~miscellaneous~~An ~~items,~~affiliate ~~increased~~of ~~$0.3~~each ~~million,~~of orour Partners ~~12.2%,~~owns ~~for~~and ~~the~~operates ~~three~~a ~~months~~casino ~~ended~~attached ~~September~~and ~~30,~~adjacent ~~2002 compared~~ to ~~the~~Silver ~~three~~Legacy. ~~months ended~~Our ~~September~~Partners ~~30,~~may ~~2001. This~~be ~~gain~~deemed ~~during~~to ~~the~~be ~~third~~in ~~quarter~~a ~~was~~conflict ~~primarily~~of ~~associated~~interest position with ~~increases~~respect into ~~entertainment~~decisions ~~revenues~~they inmake relating to the ~~current~~Partnership ~~year~~as ~~period~~a ~~due~~result toof anthe ~~increased~~interests ~~concert~~their affiliates ~~schedule~~have in ~~2002~~the ~~compared~~Eldorado ~~with~~Hotel & ~~2001~~Casino and Circus Circus Hotel & Casino-Reno, respectively.

~~Promotional~~Note ~~allowances, expressed as a percentage of gross revenues, increased to 8~~5.6% ~~for~~Supplemental ~~the three months ended September 30, 2002 up from 7.7%~~Executive ~~for~~Retirement ~~the~~Plan three months ended September 30, 2001. This increase resulted from an increase in the number of special events, concerts and convention groups for which promotional allowances were given during the current year period in comparison to the prior year. Also contributing to the increase was an Asian marketing program implemented in 2002 to build this market segment and promotional food coupons redeemed during the third quarter of the current year.

~~Operating~~Effective ~~Expenses~~January 1, 2002, the Partnership adopted a Supplemental Executive Retirement Plan (“SERP”) for a select group of highly compensated management employees. The SERP provides for a lifetime benefit at age 65, based on a formula which takes into account a participant’s highest annual compensation, years of service, and executive level. The SERP also provides an early retirement benefit at age 55 with at least four years of service, a disability provision, and a lump sum death benefit. While the SERP is an unfunded plan, the Partnership is informally funding the plan through life insurance contracts on the participants. The Partnership anticipates that its periodic pension cost for the year ending December 31, 2006 will be approximately $868,000, of which $427,000 had been accrued as of June 30, 2006.

~~Operating~~Note ~~expenses rose $0~~6.5 ~~million,~~Partnership orAgreement ~~1.5%, for the three months ended September 30, 2002 compared to the three months ended September 30, 2001 primarily due to increases in casino and entertainment expenses.~~

~~Casino~~Concurrent ~~expenses~~with ~~increased~~the issuance ~~$0.7~~of ~~million,~~the orNotes on March 5~~.4%. This~~, ~~increase~~2002, ~~was~~the ~~due~~Partnership’s ~~mainly~~partnership toagreement anwas ~~increase~~amended and restated in ~~special~~its ~~event~~entirety ~~expenses~~and ~~associated~~was ~~with~~further ~~our~~amended ~~Ultimate Party~~in ~~promotion~~April ~~held~~2002 in(the ~~July~~“Partnership Agreement”). In ~~the~~The ~~prior~~Partnership ~~year~~Agreement provides for, among ~~this~~other ~~event’s~~things, ~~expenses~~profits ~~were~~and ~~incurred~~losses into be allocated to the ~~second~~Partners ~~quarter~~in ~~due~~proportion to their percentage interests, separate capital accounts to be maintained for each Partner, provisions for management of the ~~date~~Partnership and payment of distributions and bankruptcy and/or dissolution of the ~~event~~Partnership. ~~Another~~ ~~contributor~~The April 2002 amendments were principally (i) to ~~the~~provide ~~increase~~equal ~~was~~voting ~~increased~~rights ~~costs~~for ~~related~~ELLC and Galleon with respect to approval of the ~~aforementioned~~Partnership’s annual business plan and ~~Asian~~the ~~marketing~~appointment ~~program~~and compensation of the general manager, and (ii) to give each Partner the right to terminate the general manager.

~~Despite~~Item ~~the increase in occupancy, room expenses for the three months ended September 30, 2002 compared to the same prior year period declined $0~~2.1 ~~million,~~Management’s orDiscussion ~~3.1%.~~and ~~This~~Analysis ~~decrease~~of ~~was~~Financial ~~due~~Condition toand ~~reductions~~Results inof ~~payroll expenses along with a reduction in travel agent commission expenses.~~Operations

~~Food~~Overview and beverage expenses for the three months ended September 30, 2002 and 2001 were flat at $6.8 million. While cover counts increased over the prior year as previously discussed, savings in food cost of sales and payroll as a percentage of revenues enabled the food department to increase profits in comparison to the same prior year period.

~~Other~~Effective ~~expenses~~March 1, ~~are~~1994, ~~comprised~~Eldorado ofLimited ~~expenses~~Liability ~~associated~~Company ~~with~~(“ELLC”), ~~the~~a Nevada ~~operation~~limited ofliability ~~our~~company ~~retail~~owned ~~outlets~~and controlled by Eldorado Resorts LLC, ~~arcade~~and Galleon, Inc. (“Galleon”), a Nevada corporation now owned and ~~events~~controlled ~~pavilion~~by ~~along~~MGM ~~with~~MIRAGE, entered into a joint venture agreement to establish the ~~entertainment~~Partnership, ~~department’s~~for ~~production~~the ~~costs~~purpose of constructing, owning and ~~professional~~operating ~~fees~~Silver Legacy. ~~For~~ ~~the~~Capital, ~~three~~a ~~months~~wholly ~~ended~~owned ~~September~~subsidiary ~~30,~~of ~~2002~~the Partnership, ~~other~~was ~~expenses~~incorporated ~~increased~~for the sole purpose of serving as a co-issuer of the $~~0.2~~160 million, orprincipal ~~12.7%,~~amount ~~over~~of ~~prior~~10 1/8% ~~year~~mortgage ~~primarily~~notes due to2012 ~~increased~~issued ~~professional~~by ~~fees~~the ~~for~~Partnership ~~entertainers~~and Capital (the “Notes”), and does not have any operations, assets or revenues.

~~For~~On ~~the~~July 28, ~~quarter~~1995, ~~ended~~Silver ~~September~~Legacy ~~30,~~commenced ~~2002~~operations ~~compared~~as toa ~~the~~hotel-casino ~~same~~in ~~prior~~downtown ~~year period~~Reno, ~~selling,~~Nevada. Silver ~~general~~Legacy ~~and~~is ~~administrative~~a ~~expenses~~leader ~~decreased $0.2~~within ~~million,~~the orReno ~~3.0%. A~~market, ~~decrease~~offering inthe ~~advertising~~largest ~~expenses~~number ~~was~~of ~~partially~~table ~~offset~~games byand anslot ~~increase~~machines inand ~~administrative~~the ~~expenses~~second inlargest ~~addition~~number toof anhotel ~~increase~~rooms inof ~~fixed~~any property ~~costs. Advertising expenses~~ in the ~~current~~Reno ~~quarter decreased $0~~market.~~6 million,~~ orSilver Legacy’s ~~30.6%,~~net ~~from~~operating ~~the~~revenues ~~prior year primarily due to decreases in professional services combined with declines in television media~~ and income ~~production~~are ~~expenditures. Administrative~~derived ~~expenses~~largely ~~increased~~from ~~$0.2~~our ~~million,~~gaming ~~or 9~~activities.~~4%,~~ ~~over~~In ~~prior~~an ~~year primarily~~effort ~~due~~ to ~~the~~enhance ~~adoption~~our ofgaming arevenues, ~~supplemental~~we ~~executive~~attempt ~~retirement~~to ~~plan~~maximize at the ~~beginning~~use of ~~2002. For~~our ~~the~~gaming ~~three~~facilities ~~months~~at ~~ended~~Silver ~~September~~Legacy ~~30,~~by ~~2002~~providing ~~compared~~a towell-balanced ~~the~~casino ~~three~~environment ~~months~~that ~~ended~~contains ~~September~~a ~~30,~~mix ~~2001,~~of ~~fixed~~games attractive ~~property~~to ~~costs~~multiple ~~rose~~market $0segments.~~3 million~~ Rooms, orfood ~~24.5%,~~and ~~due~~beverage toalso ancontribute ~~increase~~a inlarge ~~property~~portion ~~taxes~~of ~~and~~our ~~insurance~~net ~~costs~~revenues.

~~Other~~9 ~~(Income) Expense~~

OtherTable (income) expense is comprised of interest income, interest expense, interest rate swap income and other expense. Interest expense increased $0.8 million for the three months ended September 30, 2002 compared to the same prior year period. This increase was primarily due to higher average outstanding borrowings and higher average interest rates resulting from our issuance of $160 million principal amount of 101/8% mortgage notes and related transactions described under “Liquidity and Capital Resources.” Interest rate swap income of $2.3 million was recognized for the three months ended September 30, 2002 based on the increase in the swap’s fair market value during the third quarter. Other expense of $0.1 million was recognized during the three months ended September 30, 2002 due to the change in market value of the funded portion of the supplemental executive retirement plan. Contents

13Our operating results are highly dependent on the volume of customers visiting and staying at our resort. Key volume indicators include table games drop and slot handle, which refer to amounts wagered by our customers. The amount of volume we retain, which is not fully controllable by us, is recognized as casino revenues and is referred to as our win or hold. In addition, hotel occupancy and price per room, or average daily rate (“ADR”), are key indicators for our hotel business.

~~Nine~~Significant Factors ~~Months~~Affecting ~~Ended~~Results ~~September~~of ~~30,~~Operations ~~2002 Compared to Nine Months Ended September 30, 2001~~

~~Net~~Expansion ~~Revenues~~of Native American Gaming

~~For~~A ~~the~~significant ~~nine~~portion ~~months~~of ~~ended~~Silver ~~September~~Legacy’s ~~30,~~revenues ~~2002,~~and ~~net~~operating ~~revenues~~income ~~decreased~~are ~~$3.6~~generated ~~million~~from patrons who are residents of northern California, or ~~2.8%~~and as such, toour ~~$123.8~~results ~~million~~of asoperations ~~compared~~have tobeen ~~$127.4~~adversely ~~million~~impacted ~~for~~by the ~~nine~~growth ~~months~~in ~~ended~~Native ~~September~~American ~~30,~~gaming ~~2001~~in northern California. ~~The~~ ~~primary~~Many ~~contributors~~existing Native American gaming facilities in northern California are modest compared to ~~this~~Silver ~~decrease~~Legacy. ~~were~~However, ~~declines~~some Native American tribes have established large-scale gaming facilities in ~~casino~~California and ~~room~~numerous ~~revenues~~Native ~~from~~American ~~the~~tribes ~~prior~~have ~~year~~announced asthat athey ~~result~~are ofin the ~~previously discussed~~process ~~Reno~~of ~~market~~expanding, ~~and~~developing, ~~economic~~or ~~factors,~~are ~~including~~considering ~~expanded~~establishing, ~~Native~~large-scale ~~American~~hotel and gaming facilities in northern California. ~~and~~In ~~the~~particular, ~~continued~~a ~~effect~~significant Native American casino located approximately 21 miles northeast of aSacramento ~~weak~~opened ~~economy~~in June 2003. ~~Mid-week~~ ~~levels~~While ~~decreased~~this ~~significantly~~casino indoes ~~comparison~~not tocurrently ~~the~~have ~~same~~hotel ~~prior~~rooms, ~~year~~it ~~period~~presently inhas ~~part~~approximately ~~due~~2,700 toslot machines and 100 table games which exceeds the ~~absence~~number of ~~the~~gaming ~~American~~units ~~Bowling~~at ~~Congress~~Silver ~~National~~Legacy. ~~Championship~~As ~~tournament~~this ~~that~~facility ~~was~~and ~~held~~other ~~throughout~~northern ~~the~~California ~~majority~~Native ofAmerican ~~the~~gaming ~~first~~operations ~~and~~have ~~second~~expanded, ~~quarters~~we inbelieve ~~2001. In~~the ~~addition,~~increasing ~~poor~~competition generated ~~weather~~by ~~throughout~~these ~~March~~gaming ~~2002~~operations has negatively ~~affected~~impacted ~~our results~~drive-in, ~~for~~day-trip ~~the~~visitor ~~nine~~traffic ~~months~~from ~~ended~~our ~~September~~main ~~30,~~feeder ~~2002~~markets in northern California.

~~Casino~~Under ~~revenues~~their ~~decreased~~current ~~$2.6 million~~compacts, ormost ~~3.4%,~~Native ~~for~~American ~~the~~tribes ~~nine~~in ~~months ended~~California ~~September~~may 30operate up to 2,000 ~~2002~~slot ~~compared~~machines, and up to ~~the~~two ~~nine~~gaming ~~months~~facilities ~~ended~~may ~~September~~be ~~30,~~operated ~~2001~~on any reservation. ~~Table~~ ~~games~~The ~~volume~~number ~~and~~of ~~revenues~~machines ~~experienced~~the ~~slight~~tribes ~~growth~~are allowed ~~over~~to ~~the~~operate ~~same~~may ~~prior~~increase ~~year~~as ~~period~~a ~~and~~result ~~benefited~~of ~~from~~any ~~various~~new ~~special~~or ~~events~~amended ~~and~~compacts ~~marketing~~the ~~promotions. However,~~tribes may enter into with the ~~factors~~State ~~discussed~~of inCalifornia that receive the ~~preceding~~requisite ~~paragraph~~approvals, ~~negatively~~such ~~impacted~~as ~~slot~~has ~~volume~~been ~~and~~the ~~revenues~~case with respect to a ~~greater~~number ~~extent~~of ~~and~~new ~~resulted~~or inamended ancompacts which ~~overall~~have ~~decrease~~been inexecuted ~~casino~~and ~~revenues~~approved, ~~for~~including the ~~nine~~aforementioned ~~months~~Sacramento-area ~~ended~~casino ~~September~~which ~~30,~~received ~~2002~~approval asof ~~compared~~amendments to its compact in September 2004 allowing for an increase in the ~~prior~~number of slot machines at this property to ~~year~~approximately ~~period~~2,700.

~~For~~We ~~the~~believe ~~nine months ended September 30, 2002, room revenues declined $2.1 million, or 7.0%, in comparison to~~ the ~~nine~~continued ~~months~~growth ~~ended~~of ~~September~~Native ~~30,~~American ~~2001. Our~~establishments ~~average~~could ~~daily~~continue ~~room rate and occupancy percentage were $64.27 and 84.2%, respectively, for the nine months ended September 30, 2002 compared~~ to ~~$67.18~~place ~~and~~additional ~~87.0%, respectively, for the nine months~~competitive ~~ended~~pressure ~~September~~on ~~30,~~our ~~2001~~operations. ~~These~~ ~~declines~~While ~~were~~we ~~principally~~cannot ~~due~~predict to the ~~absence~~extent of ~~the~~any ~~American~~future ~~Bowling Congress National Championship Bowling Tournament that was held in 2001~~impact, ~~which~~it ~~increased~~could ~~our~~be ~~average daily room rate and occupancy, primarily mid-week, during the first six months of the prior year~~significant. In addition, increased competition throughout the Reno market in the third quarter was also a factor affecting our average daily room rate for the nine months ended September 30, 2002 in comparison to the same prior year period.

~~Food~~Severe ~~and~~Weather beverage revenues increased $0.3 million, or 0.1%, for the nine months ended September 30, 2002 compared to the nine months ended September 30, 2001. This increase resulted from strong convention banquet revenues during our first quarter combined with increased customer counts associated with our promotional coupons throughout our third quarter.

~~Other~~Silver ~~revenues~~Legacy’s operations are ~~comprised~~subject ofto ~~revenues~~seasonal ~~generated~~variation, bywith ~~our~~the ~~retail~~weakest ~~outlets,~~results ~~arcade,~~generally ~~entertainment and~~occurring ~~other~~during ~~miscellaneous~~the ~~items~~winter months. ~~For~~ ~~the~~Variations ~~nine~~occur when ~~months~~weather ~~ended~~conditions ~~September~~make ~~30,~~travel ~~2002,~~to ~~other~~Reno ~~revenues~~by ~~increased~~visitors ~~$1.0~~from ~~million~~northern California, orour 17main feeder market, difficult.0% From January through April of 2005, ~~compared~~our toregion ~~the~~experienced ~~prior~~extremely poor weather, including 100-year record snowfall. ~~This~~ ~~increase~~As a result, there was ~~attributed~~a tosignificant ~~increases~~adverse inaffect ~~entertainment~~on ~~revenues~~our ~~due~~hotel tooccupancy ~~an increased~~and ~~concert~~slots, ~~schedule~~table games, and restaurant volume during these months. In 2006, March was the ~~nine~~only ~~months~~month ~~ended~~in ~~September~~which ~~30,~~we ~~2002~~were asimpacted ~~compared~~by topoor ~~the~~weather ~~same~~while ~~prior~~January ~~year~~and ~~period~~February benefited from unseasonably mild weather.

~~Promotional~~Other ~~allowances,~~Factors ~~expressed~~Affecting asResults ~~a percentage~~ of ~~gross~~Operations revenues, grew to 8.4% for the nine months ended September 30, 2002 as compared to 8.0% for the nine months ended September 30, 2001. This increase was associated with the previously discussed promotion expenses that impacted our third quarter in comparison to the prior year.

~~Operating~~A ~~Expenses~~public works project is underway in the downtown Reno area which will lower the train tracks that traverse Reno’s downtown district and separate the Silver Legacy and the two adjoining properties from the rest of the downtown gaming facilities. Construction on this project began in 2003 and is expected to be completed in 2006. To date, the impact of this project on our operations has been minimal; however, we cannot determine its impact on our future operations.

~~For~~10 the nine months ended September 30, 2002 compared to the nine months ended September 30, 2001, operating expenses decreased $1.7 million, or 1.7%. This reduction was due to declines in casino, room, food and beverage and selling, general and administrative expenses. With the exception of entertainment expenses which increased as the result of additional professional fees associated with our more aggressive concert schedule, efforts to reduce operating costs remained in effect throughout the nine months ended September 30, 2002.

CasinoTable expenses for the nine months ended September 30, 2002 decreased by $0.5 million, or 1.5%, from the same prior year period. The majority of this decrease was associated with declines in casino payroll expenditures along with reductions in state gaming taxes associated with decreased casino revenues.Contents

~~Room~~Summary ~~expenses~~Financial ~~declined~~Results $0.6 million, or 6.5%. This decrease was attributed to departmental operating efficiencies and decreases in payroll expenses in addition to a decline in travel agent commission expenses due to the absence of a bowling tournament in 2002.

14The following table highlights the results of our operations (dollars in thousands):

For the nine months ended September 30, 2002, food and beverage expenses decreased $0.7 million, or 3.8%, in comparison to the prior year. Food cost of sales, and to a lesser degree, food payroll expenses decreased both in absolute value and as a percentage of revenues. Cost cutting measures implemented throughout the nine month period continued to be successful in improving profit in the food department.


	Three months ended June 30, 2006		Three months ended June 30, 2005		Percent Change		Six months ended June 30, 2006		Six months ended June 30, 2005			Percent Change
Net revenues	$	42,195	$	36,749	14.8	%	$	76,322	$	68,229		11.9	%
Operating expenses		33,380		31,471	6.1			65,036		61,056		6.5
Operating income		8,815		5,278	67.0			11,286		7,173		57.3
Net income (loss)		4,716		1,150	310.1			3,170		(1,184	)	367.7

~~Other expenses~~Net ~~are~~Revenues. ~~comprised~~Net ofrevenues ~~expenses~~rose ~~associated~~during ~~with~~ the ~~operation~~three ofand ~~our~~six ~~retail~~months ~~outlets~~ended June 30, ~~arcade~~2006 compared ~~and~~to ~~events~~the ~~pavilion~~same ~~along~~prior ~~with~~year ~~the~~periods ~~entertainment~~primarily ~~department’s~~due ~~production~~to ~~costs~~growth in casino, rooms, and ~~professional~~food ~~fees~~and beverage revenues. ~~Other~~ ~~expenses~~We believe the primary contributors were increased ~~$0.5~~convention ~~million,~~business orcombined with traffic generated by the United States Bowling 12Congress Women’s Bowling Tournament (“USBC Tournament”).7% In addition, ~~for~~aggressive ~~the~~casino ~~nine~~marketing ~~months~~promotions ~~ended~~and ~~September~~higher ~~30,~~hold ~~2002. This~~percentages ~~increase~~in ~~was~~the ~~primarily~~table ~~due~~games toand anslots ~~increase~~departments produced higher net revenues in ~~entertainment~~2006. ~~expenses,~~Severe ~~principally~~weather conditions ~~professional~~from ~~fees~~January ~~for~~through ~~entertainers,~~April ~~associated~~of ~~with~~2005 ~~our~~had ~~enhanced~~a ~~concert~~negative ~~schedule~~impact on drive-in visitors from northern California resulting in lower revenues during the ~~current~~ prior year periods.

~~Selling,~~The ~~general~~National ~~and~~Bowling ~~administrative expenses decreased by $0.4 million~~Stadium, orlocated ~~1.8%,~~one ~~for~~block ~~the~~from ~~nine~~Silver ~~months ended September 30~~Legacy, ~~2002~~ ~~compared~~is toone of the ~~nine~~largest ~~months~~bowling ~~ended~~complexes ~~September 30, 2001. Increases~~ in ~~insurance~~North America and ~~property~~has ~~taxes~~been ~~along~~selected ~~with~~to host ~~new~~multi-month ~~costs~~tournaments ~~associated~~in ~~with~~Reno ~~our~~two ~~supplemental~~out ~~executive~~of ~~retirement~~every ~~plan~~three ~~partially~~years ~~offset~~through ~~decreases~~2018. inHistorically, ~~facility~~these ~~operations~~bowling ~~and marketing~~tournaments ~~costs. The~~attracted ~~decrease~~a insignificant ~~facility~~number ~~operations~~of ~~was~~visitors ~~attributed~~ to ~~lower utility expenses during~~ the ~~first~~Reno ~~quarter~~market and ~~reduced~~have ~~payroll~~benefited ~~expenses throughout~~ the ~~nine~~downtown ~~months ended September 30, 2002~~area. ~~Declines~~ inThe ~~marketing~~USBC ~~costs~~Tournament ~~were~~took ~~associated~~place ~~with~~from ~~reduced~~mid-March ~~professional~~through ~~services~~the ~~for~~first ~~advertising~~week ~~throughout~~of ~~the~~July ~~year~~ in ~~addition~~2006. toA ~~reductions~~major inbowling ~~television~~tournament ~~media~~was ~~and~~not ~~production~~held ~~expenditures~~ during ~~our third quarter 2002 compared to third quarter 2001~~2005.

~~Other~~Operating (Income and Net Income (Loss). ~~Expense~~During the three and six months ended June 30, 2006 compared to the same prior year periods, operating income and net income increased due to increased departmental revenues, including higher casino hold percentages, combined with operational efficiencies which resulted in improved departmental profit margins.

~~Other~~Revenues (income) expense is comprised of interest income, interest expense, income related to an insurance settlement, interest rate swap (income) expense and other expense. Interest expense increased $0.2 million for the nine months ended September 30, 2002 compared to prior year. This increase resulted from higher average outstanding borrowings combined with higher average interest rates resulting from our issuance in March 2002 of our $160 million principal amount of 101/8% mortgage notes and the related transactions described under “Liquidity and Capital Resources” which was offset in part by lower average outstanding borrowings combined with a lower average interest rate during the majority of the first quarter prior to the aforementioned transaction. Interest rate swap income of $2.4 million was recorded for the nine months ended September 30, 2002. Other expense of $0.1 million was recognized during the nine months ended September 30, 2002 due to the change in market value of the funded portion of the supplemental executive retirement plan. For the nine months ended September 30, 2001, a $0.2 million insurance settlement was received and $0.3 million in interest rate swap expense was recognized.

~~Liquidity~~The ~~and~~following ~~Capital~~table ~~Resources~~highlights our sources of net operating revenues (dollars in thousands):

During the nine months ended September 30, 2002, we generated cash flows from operating activities of $25.4 million. As of September 30, 2002, cash and cash equivalents were $15.5 million, sufficient for normal operating requirements.


	Three months ended June 30, 2006		Three months ended June 30, 2005		Percent Change		Six months ended June 30, 2006		Six months ended June 30, 2005		Percent Change
Casino	$	23,338	$	20,277	15.1	%	$	41,612	$	37,417	11.2	%
Rooms		11,154		9,442	18.1			20,064		17,118	17.2
Food and beverage		8,870		8,390	5.7			17,242		16,205	6.4
Other		2,138		2,261	(5.4	)		4,041		4,210	(4.0	)
Promotional allowances		3,305		3,621	(8.7	)		6,637		6,721	(1.2	)

~~Cash~~Casino ~~used in investing activities for the nine months ended September 30, 2002 was $3~~Revenues.2 ~~million~~During ~~compared to $2.4 million for~~ the ~~nine~~three ~~months ended September 30, 2001. Cash used in investing activities related primarily to capital expenditures for various renovation projects~~ and ~~equipment~~ ~~purchases. Capital~~six ~~spending for the nine~~ months ended ~~September~~ June 30, ~~2002~~2006 ~~decreased $0.3 million~~ compared to the same ~~nine~~prior ~~months~~year ~~ended September 30~~periods, ~~2001~~casino ~~mainly~~revenues rose due to ~~scheduling~~increased ofslot avolume ~~carpet~~combined ~~renovation~~with ~~project~~higher inhold ~~the~~percentages ~~fourth quarter of the current year. The increase~~ in ~~investing~~both ~~activities from~~ the ~~prior~~table ~~year~~games ~~primarily~~and ~~resulted~~slots ~~from an increase in other assets of $0~~departments.9 ~~million~~Slot ~~primarily~~volume ~~due~~benefited tofrom athe ~~$0.8~~on-property ~~million~~traffic ~~payment~~generated toby ~~fund~~the ~~our~~USBC ~~supplemental~~Tournament ~~executive retirement plan~~and ~~established~~higher athotel ~~the~~occupancy ~~beginning~~combined ofwith ~~2002. During~~additional ~~the~~casino ~~nine~~marketing ~~months~~promotions ~~ended~~offered ~~September~~during ~~30, 2001, we received $0~~2006.2 ~~million in insurance proceeds.~~

~~Cash~~Rooms ~~used in financing activities was $19~~Revenues.0 ~~million~~During ~~for~~ the ~~nine~~three and six months ended ~~September~~ June 30, ~~2002,~~2006 compared to ~~$23.4 million for~~ the ~~nine~~same ~~months~~prior ~~ended September~~year 30periods, ~~2001.~~our ~~Concurrent~~room ~~with~~revenues ~~the~~increased ~~issuance~~as a result of ~~the~~higher ~~Notes~~ADR onand ~~March~~occupancy 5,percentages ~~2002,~~in the ~~Joint~~2006 ~~Venture~~periods. ~~entered~~Our ~~into~~ADR aand ~~new~~occupancy ~~senior~~were ~~secured credit facility comprised of a~~ $2075.098 ~~million~~and ~~term~~86.6%, ~~loan~~respectively, ~~facility~~for ~~that~~the three ~~amortizes~~months ~~over~~ended aJune 30, ~~period~~2006 ofcompared ~~five~~to ~~years~~$68.33 and ~~a $20~~80.09%, ~~million~~respectively, ~~revolving~~for ~~credit~~the ~~facility~~three ~~with~~months aended ~~five-year~~June 30, ~~maturity~~2005. ~~The~~Our ~~proceeds~~ADR ~~from~~and ~~the~~occupancy ~~Notes,~~percentages ~~together~~were ~~with~~ $2672.038 ~~million~~and of81.75%, ~~borrowings~~respectively, ~~under~~for ~~our~~the ~~new~~six ~~credit~~months ~~facility~~ended ~~and~~June 30, ~~operating~~2006 compared ~~cash~~to of $065.691 ~~million~~and 76.0% respectively, ~~were~~for ~~used~~the tosix ~~repay~~months ~~$150.2~~ended ~~million~~June 30, ~~representing~~ ~~all~~2005. ofThese ~~the~~increases ~~indebtedness~~in ~~outstanding~~ADR ~~under~~and ~~the~~occupancy ~~prior~~were ~~credit~~driven ~~facility,~~by togrowth ~~fund~~in ~~$30.0~~our ~~million~~convention ofsegment ~~distributions~~attributable to the ~~Joint~~USBC ~~Venture’s~~Tournament ~~partners,~~and ~~ELLC~~several ~~and~~large ~~Galleon,~~convention ~~and~~group bookings tothroughout ~~pay~~the ~~$5.8~~first ~~million~~half inof ~~fees~~2006. ~~and~~In ~~expenses~~addition, ~~related~~severe towinter ~~the transactions.~~weather ~~During~~during ~~the~~January ~~nine~~through ~~months~~April ~~ended~~of ~~September~~2005 ~~30,~~and ~~2002,~~our ~~prior~~hotel toroom ~~the~~renovation ~~issuance~~project, ofwhich ~~the~~removed ~~Notes,~~from ~~the~~service ~~Joint~~approximately ~~Venture~~100 ~~also~~rooms ~~made~~per ~~distributions~~day tothroughout ~~its~~the ~~partners~~first half of ~~(i)~~2005, including ~~$2.4~~holidays ~~million~~and ~~(representing~~weekends ~~tax~~when ~~distributions~~we ~~attributable~~generally towould ~~the~~have ~~fourth~~otherwise ~~quarter~~achieved ~~of 2001),~~an ~~(ii)~~occupancy ~~$5.2~~level ~~million~~at ~~(representing~~or ~~tax~~near ~~distributions~~100%, ~~attributable~~negatively toimpacted the prior year ~~2000),~~periods.

15Food and Beverage Revenues. During the three and six months ended June 30, 2006 compared to the same prior year periods, food and beverage revenues grew due to increased visitors to our property in connection with the USBC Tournament, higher banquet revenues associated with additional convention business, and an increase in our average

~~and~~11 (iii) $2.1 million representing the remaining balance of a priority allocation payable to Galleon. During the nine months ended September 30, 2002 and subsequent to the issuance of the Notes, additional tax payments of $5.4 million were distributed to our partners and $0.5 million in additional fees and expenses related to the transaction were paid. In addition, principal payments of $6.0 million each were made on the term and revolving portions of the credit facility and $4.0 million was re-borrowed on the revolving portion of the credit facility. As of September 30, 2002, the Joint Venture was in compliance with all of its covenants, including the covenants in our new credit facility and those in the indenture relating to the Notes, and, under our most restrictive covenants, we had the ability to borrow all of the additional $16.0 million available under our revolving credit facility. See “Senior Secured Credit Facility” below.

We currentlyTable expect our capital expenditures for 2002 to be approximately $4.0 million, of which we have incurred $2.5 million through September 30, 2002. In future years, we intend to make capital expenditures consistent with historical expenditures and, to the extent necessary to continue to maintain an attractive property and a competitive position in our marketplace, additional amounts as approved by our executive committee. Contents

In restaurant ~~July 2002, we renewed our general and liability insurance policies which included a change to our previous earthquake coverage~~check. ~~Under~~ ~~the new policy~~Additionally, ~~the~~cash ~~Joint~~beverage ~~Venture~~sales ~~and our partner, Eldorado Resorts LLC,~~ have ~~combined~~continued ~~earthquake coverage of $400 million. In the event that an earthquake causes damage~~ to ~~only~~rise ~~the Joint Venture’s property, the Joint Venture is eligible to receive up to $400 million~~ in ~~coverage~~comparison ~~depending on the replacement cost. However, in the event that both properties are damaged, the Joint Venture is entitled~~ to ~~receive, to~~ the ~~extent~~same ofprior ~~any~~year ~~replacement~~periods ~~cost~~as ~~incurred,~~a upresult ~~to $221 million~~ of ~~the~~ ~~coverage amount and up to~~ the ~~portion~~growing popularity of ~~the~~our ~~other~~Rum ~~$179 million, if any, remaining after satisfaction of the Eldorado~~Bullion’s ~~claim. In~~Island ~~addition, our new insurance policy excludes terrorism coverage in excess of $100,000~~Bar.

~~The~~Other ~~Joint~~Revenues. ~~Venture’s~~Other ~~partnership~~revenues ~~agreement~~are ~~obligates~~comprised ~~the~~of ~~Joint~~revenues ~~Venture,~~generated ~~subject~~by toour ~~any~~retail ~~contractual restrictions~~outlets, ~~to (i) distribute~~ ~~each~~arcade, ~~year~~entertainment, ~~for~~events aspavilion, ~~long~~and asother itmiscellaneous isitems. ~~not~~The ~~taxed~~declines asin aother ~~corporation~~revenues toduring ~~each of~~ the ~~partners~~three anand ~~amount~~six ~~equal~~months toended ~~such~~June 30, ~~partner’s~~2006 ~~allocable~~compared ~~share~~to of the ~~Joint~~same ~~Venture’s~~prior ~~taxable~~year ~~income~~periods ~~multiplied~~were bymainly ~~the~~due ~~highest~~to ~~marginal~~decreased ~~Federal (and, if applicable,~~entertainment ~~state)~~revenues ~~income~~resulting ~~tax~~from ~~rate~~fewer ~~applicable~~concerts toproduced ~~either~~by ~~partner~~Silver ~~for that year~~Legacy, ~~and~~either ~~(ii)~~on-property ~~make~~or ~~annual~~at ~~distributions~~the ofdowntown ~~remaining~~Reno ~~“Net~~Event ~~Cash~~Center, ~~From~~during ~~Operations”~~2006 incompared ~~proportion~~ to the ~~percentage~~same ~~interests~~prior ofyear ~~the partners~~periods. AsIn ~~defined~~addition, ~~the~~our ~~term~~arcade ~~“Net~~was ~~Cash From~~permanently ~~Operations”~~closed ~~means~~in ~~the~~December ~~gross cash proceeds received by the Joint Venture, less the following amounts: (i) cash operating expenses and payments~~ of ~~other~~2005. ~~expenses and obligations of the Joint Venture, including interest and scheduled~~The ~~principal~~arcade ~~payments~~was onreplaced ~~Joint~~by ~~Venture~~two ~~indebtedness,~~new ~~including~~retail ~~indebtedness owed to the partners~~outlets, ifBijoux ~~any~~Terner, ~~(ii)~~an ~~all~~international ~~capital~~accessory ~~expenditures~~store ~~made~~which bywe ~~the Joint Venture~~operate, and ~~(iii)~~Harley ~~such~~Davidson, ~~reasonable~~which ~~reserves~~is asoperated ~~the~~under ~~partners~~a ~~deem~~lease ~~necessary~~to ina ~~good~~third ~~faith~~party. ~~and~~Decreases in ~~the~~ ~~best~~entertainment ~~interests~~revenues ofwere ~~the~~partially ~~Joint~~offset ~~Venture~~by increased toretail ~~meet~~revenues ~~anticipated~~associated ~~future~~with ~~obligations and liabilities of~~ the ~~Joint~~new ~~Venture~~outlet ~~(less~~we ~~any~~operate ~~release~~which ofopened ~~reserves~~in ~~previously~~February ~~established, as similarly determined)~~2006.

WePromotional ~~believe~~Allowances. Promotional weallowances, ~~have~~expressed ~~sufficient~~as ~~capital~~a ~~resources~~percentage toof ~~meet~~gross ~~all~~revenues, ofdeclined ~~our~~to ~~obligations~~7.3% ~~These~~and ~~obligations~~8.0%, ~~include~~respectively, ~~existing~~during ~~cash~~the ~~obligations,~~three ~~funding~~and ofsix ~~capital commitments~~months ~~and~~ended ~~servicing~~June 30, ~~our~~2006 ~~debt~~compared to 9.0% Weduring ~~also~~both ~~believe~~periods ~~our~~in ~~capital~~2005. ~~resources~~These ~~are~~decreases ~~sufficient~~were primarily due to ~~provide~~declines ~~for~~in ~~permitted~~complimentary ~~partner~~concert ~~distributions.~~tickets ~~Our~~as ~~future~~a ~~sources~~result of ~~liquidity~~the ~~are~~aforementioned ~~anticipated~~reduction toin bethe ~~from~~number ~~our~~of ~~operating~~concert ~~cash~~dates ~~flow~~during ~~and~~2006 ~~borrowings~~compared ~~available under~~to ~~our~~2005 ~~new~~along ~~credit~~with ~~facility~~a decrease in complimentary rooms and food promotional offers.

~~Senior~~Operating ~~Secured~~Expenses ~~Credit Facility~~

~~On March~~The 5,following ~~2002,~~table ~~concurrently with the issuance of~~ highlights our ~~101/8%~~operating ~~mortgage~~expenses ~~notes, we entered into a new senior secured credit facility~~ (~~the~~dollars “Credit Facility”) comprised of a $20.0 million term loan facility (of which $14.0 million was outstanding at September 30, 2002) and a $20.0 million revolving facility (of which $4.0 million was outstanding at September 30, 2002). See “Liquidity and Capital Resources.” The Credit Facility is secured by a first priority security interest in substantially all of our existing and future assets, other than certain licenses which may not be pledged under applicable law, and the Joint Venture’s partners have executed and delivered a first priority pledge in all of the partnership interests in Circus and Eldorado Joint Venture to secure the Credit Facility. The Credit Facility ranks equal in right of payment to our existing and future senior indebtedness, including the 101/8% mortgage notes, but the security interests securing our obligations under the Credit Facility are senior to the security interests securing our obligations on the 101/8% mortgage notes. Prepayments on the term loan portion of the Credit Facility permanently reduce the amount of the term loan and qualify as payments toward the quarterly amortization of the term loan according to the schedule as set forth belowthousands):

Quarterly Payment Dates	Amount
	Three monthsendedJune 30, 2006		Three monthsendedJune 30, 2005		Percent Change		Six monthsended June 30,2006		Six monthsended June 30,2005		Percent Change
March 31, 2003 to December 31, 2004	$	1,000,000
Casino	$	10,656	$	10,680	0.0	%	$	20,832	$	20,099	3.6	%
March 31, 2005 to December 31, 2005	$	1,250,000
Rooms		3,238		2,912	11.2			6,180		5,700	8.4
March 31, 2006 to December 31, 2006	$	1,500,000
Food and beverage		6,296		5,806	8.4			12,252		11,544	6.1
March 31, 2007	$	1,000,000
Other		1,632		1,712	(4.7	)		3,185		3,321	(4.1	)
Selling, general and administrative		8,397		7,597	10.5			16,347		14,977	9.1
Depreciation		3,157		2,766	14.1			6,297		5,417	16.2

16Casino Expenses. Despite growth in casino revenues, casino expenses remained flat during the three months ended June 30, 2006 compared to the same prior year period. Savings in the slot department’s payroll, as a percentage of revenues, and lower special events costs were offset by increases in casino bad debt and an expense recorded for unredeemed complimentaries associated with our new players’ club program put into operation in January 2005.

WeCasino expenses ~~have~~increased ~~made~~during ~~voluntary~~the ~~prepayments~~six ofmonths ended June 30, 2006 compared to the ~~term~~same ~~facility~~prior ~~which~~year ~~totaled~~period ~~$6.0~~primarily ~~million~~as ata ~~September~~result ~~30,~~of ~~2002.~~higher ~~Accordingly~~casino volume; however, ~~based~~casino ~~on our~~revenues ~~prepayments~~increased atby ~~September~~a ~~30,~~higher ~~2002,~~percentage ~~our~~than ~~maximum~~casino ~~outstanding~~expenses. ~~balance~~Casino payroll, as a percentage of revenues, declined during the ~~term~~six ~~portion~~months ofended June 30, 2006 compared to the ~~Credit~~same ~~Facility~~prior ~~was~~year ~~$14~~period.0 ~~million~~This ~~and~~decrease wewas ~~will~~offset ~~not~~by beincreases ~~required~~in topromotional ~~make~~expenditures, aslot ~~quarterly~~machine ~~payment~~conversion ~~pursuant~~costs, tocasino bad debt and the previously ~~above-described~~discussed ~~schedule~~expense ~~until~~for ~~September~~unredeemed ~~30, 2004~~complimentaries.

~~Interest~~Rooms onExpenses. ~~outstanding~~During ~~balances and commitment fees on unused availabilities under~~ the ~~Credit~~three ~~Facility~~and ~~are~~six ~~determined~~months byended June 30, a2006, ~~formula~~rooms ~~based~~expenses onincreased ~~our~~compared ~~leverage~~to ~~ratio, which is~~ the ~~ratio~~same ofprior ~~our~~year ~~total~~periods ~~debt~~due to ~~annualized~~an ~~cash~~increase ~~flow, and~~ in ~~the~~hotel ~~case~~occupancy ofduring ~~interest~~both ~~rates,~~periods. onThe ~~the~~increase ~~basis~~in of the ~~Eurodollar~~average ordaily ~~base~~ rate ~~existing~~during ~~for~~2006 ~~each~~resulted ~~interest~~in ~~calculation~~higher ~~date. As~~profit ~~our~~margins ~~leverage ratio~~in ~~declines or increases,~~ the ~~interest~~rooms ~~rate and commitment fees we pay decline or increase commensurately~~department. ~~At September 30, 2002, the effective rate of interest on the indebtedness outstanding under the Credit Facility was 4.82%. The~~ ~~Credit~~Additional ~~Facility contains customary events of default and covenants~~costs, including ~~covenants~~housekeeping ~~that limit or restrict our ability to incur additional debt~~labor, ~~create~~amenity ~~liens~~supplies orand ~~other encumbrances~~laundry, ~~pay~~were ~~dividends~~incurred orwith ~~make~~each ~~other~~newly ~~restricted~~renovated ~~payments,~~hotel ~~prepay subordinated~~room ~~indebtedness,~~placed ~~make~~in ~~investments,~~service ~~loans~~during orthe ~~other~~first ~~guarantees,~~half ~~sell or otherwise dispose~~ of ~~a portion of our assets~~2005, orwhich ~~make~~adversely ~~acquisitions~~affected ordepartmental ~~merge~~profit orin ~~consolidate with another entity. In addition,~~ the ~~Credit~~2005 ~~Facility requires us to~~periods. ~~meet specified financial tests on an ongoing basis, including the following:~~

	•	we are required to maintain a maximum ratio of total debt to EBITDA as follows:
Quarters Ending			Maximum Ratio
On or prior to September 30, 2002			4.50 : 1.00
December 31, 2002 through September 30, 2003			4.25 : 1.00
December 31, 2003 and thereafter			4.00 : 1.00
	•	we are required to maintain a minimum ratio of EBITDA to fixed charges of 1.10 : 1.00 at all times.

Food and Beverage Expenses. During the three and six months ended June 30, 2006 compared to the same prior year periods, food and beverage expenses increased in conjunction with increased food and beverage revenues. Lower food cost of sales, as a percentage of revenues, during both current year periods produced improved profit margins in 2006 in comparison to 2005.

~~Impact~~Other Operating Expenses. Other operating expenses are comprised of ~~Inflation~~expenses associated with the operation of our retail outlets, arcade and events pavilion along with the entertainment department’s production costs and professional fees. Other operating expenses declined during the three and six months ended June 30, 2006 compared to the same prior year periods primarily due to a decrease in entertainment expenses, principally for professional entertainer fees, as a result of a decline in the number of concert dates during 2006 compared to 2005.

~~Absent~~Selling, ~~changes~~General ~~in competitive~~ and ~~economic~~Administrative ~~conditions~~Expenses. orDuring ~~in specific prices affecting~~ the ~~industry,~~three weand dosix ~~not~~months ~~expect~~ended ~~that~~June 30, ~~inflation~~2006 ~~will~~compared ~~have~~to athe ~~significant~~same ~~impact~~prior onyear ~~our operations. Changes in specific prices~~periods, selling, ~~such~~general asand ~~fuel~~administrative ~~and~~expenses ~~transportation~~increased ~~prices,~~primarily ~~relative~~due to ~~the~~ ~~general~~elevated ~~rate~~facilities ofcosts ~~inflation~~including ~~may~~utilities, ~~have~~payroll, aand ~~material~~building ~~adverse~~repairs ~~effect~~and onmaintenance. ~~the~~In ~~hotel~~addition, ~~and~~advertising ~~casino~~costs ~~industry~~increased induring ~~general.~~

~~Forward-Looking~~12 ~~Statements~~

CertainTable information included in this report and other materials filed or to be filed by the Issuers with the Securities and Exchange Commission (as well as information included in oral statements or written statements made or to be made by the Issuers) 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. These statements can be identified by the fact that they do not relate strictly to historical or current facts. We have based these forward-looking statements on our current expectations about future events. These forward-looking statements include statements with respect to our beliefs, plans, objectives, goals, expectations, anticipations, intentions, financial condition, results of operations, future performance and business, including, current and future operations and statements that include the words “may”, “could”, “should”, “would”, “believe”, “expect”, “anticipate”, “estimate”, “intend”, “plan” or similar expressions. Such statements include information relating to capital spending, financing sources and the effects of regulation (including gaming and tax regulation) 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 us or on our behalf. These risks and uncertainties include, but are not limited to dependence on existing management, leverage and debt service (including sensitivity to fluctuations in interest rates), domestic or global 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), expansion of gaming on Native American lands (including such lands in California), risks and uncertainties relating to any development and construction activities and applications for licenses and approvals under applicable laws and regulations (including gaming laws and regulations) and any further terrorist attacks similar to those that occurred September 11, 2001. If one or more of the assumptions underlying our forward-looking statements proves incorrect, then our actual results, performance or achievements could differ materially from those expressed in, or implied by, the forward-looking statements contained in this report. Therefore, we caution you not to place undue Contents

17 both periods in 2006 compared to 2005 due to increased television and radio media expenditures. Higher administration expenses also contributed to the increases in 2006 resulting from increases in credit card discounts, professional fees, and equipment rental and maintenance contracts related to our computer information systems.

~~reliance~~Depreciation onExpense. ~~our~~Depreciation ~~forward-looking~~expense ~~statements.~~increased ~~This~~during ~~statement~~the isthree ~~provided~~and assix ~~permitted~~months byended ~~the~~June 30, ~~Private~~2006 ~~Securities~~compared ~~Litigation~~to ~~Reform~~the same prior year ~~Act~~periods ofprimarily ~~1995~~due to depreciation associated with new capital purchases.

~~Item~~Other ~~3. Quantitative~~(Income) ~~and~~Expense ~~Qualitative Disclosures About Market Risks~~

WeOther ~~are~~(income) ~~exposed~~expense tois ~~market~~comprised ~~risk in the form~~ of ~~fluctuations in~~ interest ~~rates~~expense, net and ~~their~~other, ~~potential~~net. ~~impact~~During ~~upon~~the ~~our~~three ~~variable~~and ~~rate~~six ~~debt.~~months Weended ~~evaluate~~June 30, ~~our~~2006 ~~exposure~~compared to ~~market risk by monitoring interest rates in~~ the ~~marketplace~~same prior ~~and~~year ~~we have~~periods, oninterest ~~occasion~~expense, ~~utilized~~net ~~derivative~~decreased ~~financial instruments~~as toa ~~help~~result ~~manage~~of ~~this~~increased ~~risk.~~interest Weincome doduring ~~not~~2006 ~~utilize~~which ~~derivative~~was ~~financial~~generated ~~instruments~~by ~~for~~growth ~~trading~~in ~~purposes.~~our ~~There~~invested ~~were~~cash noreserves. ~~material~~Other, ~~quantitative~~net ~~changes~~ in ~~our~~both ~~market~~periods ~~risk~~was ~~exposure,~~related orto ~~how~~the ~~such~~change ~~risks~~in ~~are~~market ~~managed,~~value ~~during~~of ~~2001or during~~ the ~~nine~~funded ~~months~~portion ~~ended~~of ~~September~~our ~~30,~~supplemental ~~2002~~executive ~~other~~retirement ~~than as discussed below~~plan.

~~The~~Liquidity ~~derivative~~and ~~financial~~Capital ~~instruments~~Resources we utilized during 2001 consisted exclusively of three interest rate swap agreements which expired during the year. Interest differentials resulting from these agreements were recorded on an accrual basis as an adjustment to interest expense. Interest rate swaps related to debt were matched with our variable-rate borrowings.

ToDuring ~~manage~~the ~~our~~six ~~exposure~~months toended ~~counterparty~~June 30, ~~credit~~2006, ~~risk~~we ingenerated ~~interest~~cash ~~rate swaps,~~flows wefrom ~~entered~~operating ~~into~~activities ~~agreements~~of ~~with~~$12.3 million ~~highly~~compared ~~rated~~to ~~institutions~~$7.0 ~~Each~~million of during the ~~institutions~~six ~~that~~months ~~was~~ended aJune 30, ~~counterparty~~2005. toThe ~~our~~$5.3 ~~recently~~million ~~expired~~increase ~~interest~~in ~~rate~~cash ~~swap~~provided ~~agreements~~by operations was aprimarily ~~member~~due ofto the ~~bank~~$4.4 ~~group~~million ~~providing~~increase ~~our~~in ~~prior~~net ~~credit~~income ~~facility~~ and ~~the counterparty~~various tochanges ~~the~~in ~~new~~balance ~~interest~~sheet ~~rate~~accounts. ~~swap~~The ~~that~~changes wein ~~entered~~these ~~into~~balance sheet accounts represented changes which occurred in ~~June~~the ~~2002~~normal iscourse aof ~~member~~business. As of ~~the~~June 30, ~~bank~~2006, ~~group~~cash ~~providing~~and ~~the~~cash ~~Credit~~equivalents ~~Facility~~were $43.9 million, sufficient for normal operating requirements.

~~The~~Cash ~~three~~used ~~interest~~in ~~rate~~investing ~~swap~~activities ~~agreements~~for ~~utilized~~the ~~during~~six ~~2001~~months ~~were~~ended ~~for~~June 30, ~~notional~~2006 ~~amounts~~was of $252.08 million, compared to $256.08 million ~~and~~for ~~$50.0~~the ~~million,~~six ~~respectively.~~months ended ~~All~~June 30, of2005, ~~these~~and ~~interest~~related ~~rate~~primarily ~~swap~~to ~~agreements~~capital ~~expired~~expenditures onfor ~~October~~various ~~29,~~renovation ~~2001~~projects and equipment purchases. ~~Each~~Capital ofexpenditures ~~these~~in ~~swaps~~2005 ~~provided~~exceeded ~~for~~the anlevel ~~approximate~~in ~~fixed~~2006 ~~interest~~primarily ~~rate~~due ofto 6expenditures related to our hotel room remodel project which was completed in December 2005.4% Our executive committee has approved $11.2 ~~The~~million ~~floating~~in ~~rate~~capital ~~index~~expenditures ~~was~~for ~~computed~~2006, onof awhich ~~3-month~~$2.8 ~~LIBOR~~million ~~payable~~had onbeen incurred through June 30, 2006 and the ~~29th~~balance of ~~each January,~~which ~~April,~~is ~~July~~scheduled to be spent on projects and ~~October~~equipment during the last half of 2006.

AsCash ofused ~~December~~in ~~31,~~financing ~~2001,~~activities during the ~~interest~~six ~~rate~~months onended ~~our~~June 30, ~~prior credit facility~~ 2006 was ~~LIBOR~~$0.9 ~~plus~~million ~~1.1%. The~~representing ~~indebtedness~~tax ~~outstanding~~distributions ~~under~~to our ~~prior~~partners ~~credit~~for ~~facility as of December 31, 2001, totaled $145~~2006.0 ~~million.~~There ~~For~~was ~~information~~no ~~concerning~~cash ~~our~~used ~~New Credit Facility, see the discussion~~ in ~~Item~~financing 2activities ~~under~~during the ~~caption~~six ~~“Senior~~months ~~Secured~~ended ~~Credit Facility~~June 30, 2005.”

OnIn ~~June~~July 132006, ~~2002~~ we ~~and~~renewed ~~Bank~~our ofgeneral ~~America~~and ~~N.A.~~liability ~~entered~~insurance ~~into~~policies. aUnder ~~new~~these ~~fixed-to-floating~~policies, ~~swap~~the ~~agreement~~Partnership ~~with~~and athe ~~$50.0 million~~owner ~~notional~~of ~~amount. Pursuant~~an toadjacent ~~this~~property, ~~swap~~Eldorado ~~agreement,~~Resorts LLC (which ~~had~~is an ~~expiration~~affiliate ~~date~~ of ~~March 1~~ELLC), ~~2006,~~have wecombined earthquake ~~received~~coverage ~~interest~~of at$350 amillion ~~fixed~~and ~~rate~~combined flood coverage of 10$225 million.~~125%~~ ~~per~~In ~~annum~~the ~~and~~event wethat ~~paid~~an ~~interest~~earthquake ~~based~~causes ondamage aonly ~~floating~~to ~~rate~~the ~~index~~Partnership’s ~~that~~property, ~~was~~the ~~computed~~Partnership onis ~~a 6-month~~eligible ~~LIBOR,~~to inreceive ~~arrears,~~up ~~plus~~to ~~5.31%. The~~$350 ~~amounts~~million ~~due~~in ~~under~~coverage depending on the ~~swap~~replacement ~~agreement~~cost. ~~were~~However, ~~payable~~in onthe ~~September~~event 1that ~~and~~both ~~March~~properties 1are ofdamaged, ~~each~~the ~~year,~~Partnership ~~beginning~~is ~~September~~entitled 1to receive, ~~2002. We~~to ~~were~~the ~~required~~extent of any replacement cost incurred, up to ~~record~~$220 ~~changes~~million inof the ~~fair~~coverage ~~market~~amount ~~value~~(based on our percentage of the ~~contract~~earthquake oncoverage) aand ~~quarterly~~up ~~basis~~to inthe ~~our~~portion ~~income~~of ~~statement. On~~the ~~October~~other 8$130 million, ~~2002~~if any, ~~the~~remaining ~~Joint~~after ~~Venture~~satisfaction ~~terminated~~of ~~the~~a ~~swap~~claim ~~agreement~~of inEldorado ~~advance~~Resorts ofLLC with respect to its ~~scheduled~~adjoining ~~termination~~property. ~~date~~In ~~and~~the ~~received~~event ~~$2,327,000. Our~~that ~~variable~~a ~~rate~~flood ~~indebtedness~~causes ~~outstanding at~~damage ~~September~~only ~~30,~~to ~~2002~~the Partnership’s property, asthe ~~adjusted~~Partnership is eligible to ~~give~~receive ~~effect~~up to ~~the~~$225 ~~termination~~million ofin ~~this~~coverage ~~swap~~depending ~~agreement~~on asthe ofreplacement cost. However, in the event that ~~date~~both properties are damaged, ~~would~~the ~~have~~Partnership ~~been~~is ~~$18.0~~entitled ~~million~~to receive, ~~subject~~to the extent of any replacement cost incurred, up to $220 million of the coverage amount (based on our ~~ability~~percentage of the flood coverage) and up to ~~incur~~the anportion ~~additional~~of the other $~~16.0~~5 million, if any, remaining after satisfaction of ~~variable~~a ~~rate~~claim ~~debt~~of ~~under~~Eldorado ~~the~~Resorts ~~Credit~~LLC with ~~Facility~~respect to its adjoining property.

~~Item~~Our 4insurance policy also includes combined terrorism coverage up to $450 million for a certified act of terrorism and up to $250 million for a non-certified act of terrorism. In the event that a certified, or a non-certified, act of terrorism causes damage only to the Partnership’s property, the Partnership is eligible to receive up to $450 ~~Controls~~million, or $250 million, respectively, in coverage depending on the replacement cost. However, in the event that both properties are damaged, the Partnership is entitled to receive, to the extent of any replacement cost incurred, up to $238.5 million for a certified act, or up to $132.5 million for a non-certified act, of the coverage amount (based on our percentage of the total property value) and ~~Procedures~~up to the portion of the other $211.5 million, or $117.5 million, respectively, if any, remaining after satisfaction of a claim of Eldorado Resorts LLC with respect to its adjoining property. This new policy also covers an additional property located in Shreveport, LA which was recently acquired by Eldorado Resorts LLC. In the event that a certified, or a non-certified, act of terrorism causes damage to all three properties, the Partnership is entitled to receive, to the extent of any replacement cost incurred, up to $193.5 million for a certified act, or up to $107.5 million for a non-certified act, of the coverage amount (based on our percentage of the total property value) and up to the portion of the other $256.5 million, or $142.5 million, respectively, if any, remaining after satisfaction of the claims with respect to the other two properties.

~~Disclosure~~13 ~~Controls and Procedures~~

WithinTable the 90 days prior to the date of this report, we carried out an evaluation, under the supervision and with the participation of our management, including the Joint Venture’s and Capital’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rule 15d-14(c) under the Securities Exchange Act of 1934 (the “Exchange Act”). Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer of the Joint Venture and Capital concluded that our disclosure controls and procedures are effective in timely making known to them by others within the Joint Venture and Capital (collectively, the “registrants”) material information relating to the registrants that is required to be included in our Exchange Act filings.Contents

~~Internal~~The ~~Controls~~Partnership’s partnership agreement, as currently in effect, provides that, subject to any contractual restrictions to which the Partnership is subject, including the indenture relating to the Notes, and ~~Procedures~~prior to the occurrence of a “Liquidating Event,” the Partnership will be required to make distributions to its partners as follows:

~~There~~(i) The ~~were~~estimated notaxable ~~significant~~income ~~changes~~of inthe ~~internal~~Partnership ~~controls~~allocable orto each partner multiplied by the greater of inthe ~~other~~maximum ~~factors~~marginal ~~that~~federal ~~could~~income ~~significantly~~tax ~~affect~~rate ~~internal~~applicable ~~controls~~to ~~subsequent~~individuals for such period or the maximum marginal federal income tax rate applicable to corporations for such period (as of the date ofhereof ~~their~~both ~~evaluation~~rates were 35%); provided, however, that if the State of Nevada enacts an income tax (including any ~~corrective~~franchise ~~actions~~tax ~~with~~based ~~regard~~on income), the applicable tax rate for any tax distributions subsequent to ~~significant~~the ~~deficiencies~~effective date of such income tax shall be increased by the higher of the maximum marginal individual tax rate or ~~material~~corporate ~~weaknesses~~income tax rate imposed by such tax (after reduction for the federal tax benefit for the deduction of state taxes, using the maximum marginal federal individual or corporate rate, respectively).

18(ii) Annual distributions of remaining “Net Cash From Operations” in proportion to the percentage interests of the partners.

~~Part II.~~(iii) Distributions of “Net Cash From Operations” in amounts or at times that differ from those ~~OTHER~~described ~~INFORMATION~~in (i) and (ii) above, provided in each case that both partners agree in writing to the distribution in advance thereof.

~~Item~~As 6. defined in the partnership agreement, the term “Net Cash From Operations” means the gross cash proceeds received by the Partnership, less the following amounts: (i) cash operating expenses and payments of other expenses ~~Exhibits~~and obligations of the Partnership, including interest and ~~Reports~~scheduled principal payments on ~~Form~~Partnership ~~8-K~~indebtedness, including indebtedness owed to the partners, if any, (ii) all capital expenditures made by the Partnership, and (iii) such reasonable reserves as the partners deem necessary in good faith and in the best interests of the Partnership to meet its anticipated future obligations and liabilities (less any release of reserves previously established, as similarly determined).

~~(a) Exhibits~~The Partnership’s partnership agreement provides that the partners shall not be permitted or required to contribute additional capital to the Partnership without the consent of the partners, which consent may be given or withheld in each partner’s sole and absolute discretion.

3.1	Articles of Incorporation of Silver Legacy Capital Corp. (Incorporated by reference to Exhibit 3.1 to the Registrants’ Form S-4 Registration Statement - Commission File Nos. 333-87202 and 333-87202(01))
3.2	Bylaws of Silver Legacy Capital Corp. (Incorporated by reference to Exhibit 3.2 to the Registrants’ Form S-4 Registration Statement - Commission File Nos. 333-87202 and 333-87202(01))
3.3	Amended and Restated Agreement of Joint Venture of Circus and Eldorado Joint Venture between Eldorado Limited Liability Company and Galleon, Inc. (Incorporated by reference to Exhibit 3.3 to the Registrants’ Form S-4 Registration Statement - Commission File Nos. 333-87202 and 333-87202(01))
4.1	Indenture, dated as of March 5, 2002, among the Registrants and The Bank of New York, with respect to the 10’/s% Mortgage Notes due 2012 (Incorporated by reference to Exhibit 10.10.1 to the Annual Report of Eldorado Resorts LLC and Eldorado Capital Corp. (Commission File No. 333-11811) on Form 10-K for the year ended December 31, 2001)
4.2	Deed of Trust, Fixture Filing and Security Agreement with Assignment of Rents, dated as of February 26, 2002, by Circus and Eldorado Joint Venture, to First American Title Company of Nevada for the benefit of The Bank of New York, as trustee (Incorporated by reference to Exhibit 10.10.2 to the Annual Report of Eldorado Resorts LLC and Eldorado Capital Corp. (Commission File No. 333-11811) on Form 10-K for the year ended December 31, 2001)
4.3	Security Agreement, dated as of March 5, 2002, by the Registrants for the benefit of The Bank of New York, as trustee (Incorporated by reference to Exhibit 10.10.3 to the Annual Report of Eldorado Resorts LLC and Eldorado Capital Corp. (Commission File No. 333-11811) on Form 10-K for the year ended December 31, 2001)
4.4	Assignment of Rent and Revenues, entered into as of February 26, 2002, between Circus and Eldorado Joint Venture and The Bank of New York, as trustee (Incorporated by reference to Exhibit 10.10.4 to the Annual Report of Eldorado Resorts LLC and Eldorado Capital Corp. (Commission File No. 333 11811) on Form 10-K for the year ended December 31, 2001)
4.5	Collateral Account Agreement, dated as of March 5, 2002, among the Registrants and The Bank of New York, as trustee (Incorporated by reference to Exhibit 10.10.5 to the Annual Report of Eldorado Resorts LLC and Eldorado Capital Corp. (Commission File No. 333-11811) on Form 10-K for the year ended December 31, 2001)
4.6	Environmental Indemnity, entered into as of March 5, 2002, by the Registrants (Incorporated by reference to Exhibit 10.10.6 to the Annual Report of Eldorado Resorts LLC and Eldorado Capital Corp. (Commission File No. 333-11811) on Form 10-K for the year ended December 31, 2001)
4.7	Registration Rights Agreement, dated as of March 5, 2002, among the Registrants and Banc of America Securities LLC (Incorporated by reference to Exhibit 4.7 to the Registrants’ Form S-4 Registration Statement - Commission File Nos. 333-87202 and 333-87202(01))
4.8	Second Amended and Restated Credit Agreement, dated as of March 5, 2002, among Circus and Eldorado Joint Venture, Bank of America, N.A., Bank of Scotland, and U.S. Bank National Association (Incorporated by reference to Exhibit 10.9.2 to the Annual Report of Eldorado Resorts LLC and Eldorado Capital Corp. (Commission File No. 333-11811) on Form 10-K for the year ended December 31, 2001)
4.9	Guaranty, dated as of March 5, 2002, made by Silver Legacy Capital Corp. in favor of Bank of America,

We believe we have sufficient capital resources to meet all of our obligations. These obligations include existing cash obligations, funding of capital commitments and servicing our debt. Our future sources of liquidity are anticipated to be from our operating cash flow and borrowings available under our amended senior secured credit facility. For information concerning limitations on our ability to utilize our credit facility, see “Senior Secured Credit Facility” below.

19The Notes

	N.A., as administrative agent (Incorporated by reference to Exhibit 10.9.3 to the Annual Report of Eldorado Resorts LLC and Eldorado Capital Corp. (Commission File No. 333-11811) on Form 10-K for the year ended December 31, 2001)
4.10	Second Amended and Restated Security Agreement, dated as of March 5, 2002, between Circus and Eldorado Joint Venture and Bank of America, N.A., as administrative agent (Incorporated by reference to Exhibit 10.9.4 to the Annual Report of Eldorado Resorts LLC and Eldorado Capital Corp. (Commission File No. 333-11811) on Form 10-K for the year ended December 31, 2001)
4.11	Guarantor Security Agreement, dated as of March 5, 2002, between Silver Legacy Capital Corp. and Bank of America, N.A., as administrative agent (Incorporated by reference to Exhibit 10.9.5 to the Annual Report of Eldorado Resorts LLC and Eldorado Capital Corp. (Commission File No. 333-11811) on Form 10-K for the year ended December 31, 2001)
4.12	Second Amended and Restated Construction Deed of Trust, Fixture Filing and Security Agreement with Assignment of Rents, dated as of February 26, 2002, but effective March 5, 2002, among Circus and Eldorado Joint Venture, First American Title Company of Nevada, as trustee, and Bank of America, N.A., as administrative agent (Incorporated by reference to Exhibit 10.9.6 to the Annual Report of Eldorado Resorts LLC and Eldorado Capital Corp. (Commission File No. 333-11811) on Form 10-K for the year ended December 31, 2001)
4.13	Second Amended and Restated Assignment of Rents and Revenues, entered into as of February 26, 2002, but effective as of March 5, 2002, between Circus and Eldorado Joint Venture and Bank of America, N.A., as administrative agent (Incorporated by reference to Exhibit 10.9.7 to the Annual Report of Eldorado Resorts LLC and Eldorado Capital Corp. (Commission File No. 333-11811) on Form 10-K for the year ended December 31, 2001)
4.14	Second Amended and Restated Collateral Account Agreement, dated March 5, 2002, between Circus and Eldorado Joint Venture and Bank of America, N.A., as administrative agent (Incorporated by reference to Exhibit 10.9.8 to the Annual Report of Eldorado Resorts LLC and Eldorado Capital Corp. (Commission File No. 333-11811) on Form 10-K for the year ended December 31, 2001)
4.15	Intercreditor Agreement, dated as of March 5, 2002, among Bank of America, N.A., as administrative agent, The Bank of New York, as trustee, and the Registrants (Incorporated by reference to Exhibit 10.9.9 to the Annual Report of Eldorado Resorts LLC and Eldorado Capital Corp. (Commission File No. 333-11811) on Form 10-K for the year ended December 31, 2001)
10.1	Silver Legacy Supplemental Executive Retirement Plan (Incorporated by reference to Exhibit 10.1 to the Registrants’ Form S-4 Registration Statement - Commission File Nos. 333-87202 and 333-87202(01))
10.2	Letter Agreement, dated June 13, 2002, between Circus and Eldorado Joint Venture and Bank of America N.A. (Incorporated by reference to Exhibit 10.2 to the Registrants’ Form S-4 Registration Statement - Commission File Nos. 333-87202 and 333-87202(01))
21	Subsidiaries of Registrants (Incorporated by reference to Exhibit 21 to the Registrants’ Form S-4 Registration Statement - Commission File Nos. 333-87202 and 333-87202(01))
99.1	Certification of Gary L. Carano pursuant to 18 U.S.C. Section 1350
99.2	Certification of Bruce C. Sexton pursuant to 18 U.S.C. Section 1350

On March 5, 2002, the Partnership and Capital issued $160,000,000 principal amount of senior secured mortgage notes due 2012 (“Notes”). The Notes are senior secured obligations which rank equally with all of the Partnership’s other outstanding senior debt and senior to any subordinated debt. The Notes are secured by a security interest in the Issuers’ existing and future assets, other than certain licenses which may not be pledged under applicable law, which is junior to a security interest in such assets securing the Partnership’s obligations under its credit facility and any refinancings of such facility that are permitted pursuant to the terms of the Notes. Each of the Partners executed a pledge of all of its partnership interest in the Partnership to secure the Notes, which is junior to a pledge of such partnership interest to secure the Partnership’s obligations on the credit facility and any refinancings of such facility that are permitted pursuant to the terms of the indenture relating to the Notes. The Notes mature on March 1, 2012 and bear interest at the rate of 10¹/8% per annum, payable semi-annually in arrears on March 1 and September 1 of each year, commencing on September 1, 2002. At June 30, 2006, we were in compliance with all of the covenants in the indenture related to the Notes.

~~(b) Reports~~Senior onSecured ~~Form~~Credit ~~8-K~~Facility

~~During~~On November 4, 2003, we executed an amendment to our credit facility (as amended, the ~~period~~“Credit ~~covered~~Facility”) bythat ~~this~~originally included ~~report~~a term facility (which was paid in full in 2003) and a revolving facility. The amendment reduced the revolving facility to $10.0 million, none of which was outstanding at June 30, 2006, and revised certain covenant ratios with retroactive effect to September 30, 2003. Under the ~~Joint~~Credit ~~Venture~~Facility, ~~did~~we were required to maintain a maximum ratio of total debt to EBITDA of 5.00 to 1.00 for the quarters ending September 30, 2003 through March 31, 2006 and are ~~not~~required ~~file~~to ~~any~~maintain ~~report~~a onmaximum ~~Form~~ratio ~~8-K~~of total debt to EBITDA of 4.75 to 1.00 for the quarter ending June 30, 2006 and thereafter. Under the Credit Facility, we are also required to maintain a minimum ratio of EBITDA to fixed charges of 1.20 to 1.00 at all times. The Credit Facility is secured by a first priority security interest in substantially all of our

2014

SIGNATURESTable of Contents

~~Pursuant~~ existing toand ~~the~~future ~~requirements~~assets, other than certain licenses which may not be pledged under applicable law, and a first priority pledge of and security interest in all of the ~~Securities~~partnership ~~Exchange~~interests ~~Act~~in the Partnership held by its partners. The Credit Facility ranks equal in right of ~~1934~~payment to our other existing and future senior indebtedness, including the ~~registrants~~Notes, ~~have~~but ~~duly~~the ~~caused~~security ~~this~~interests ~~report~~securing our obligations under the Credit Facility are senior to ~~be signed~~the onsecurity ~~their~~interests ~~behalf~~securing byour obligations on the ~~undersigned~~Notes. ~~thereunto~~The ~~duly~~Credit ~~authorized~~Facility contains customary events of default and covenants, including covenants that limit or restrict our ability to incur additional debt; create liens or other encumbrances; pay dividends or make other restricted payments; prepay subordinated indebtedness; make investments, loans or other guarantees; sell or otherwise dispose of a portion of our assets; or make acquisitions or merge or consolidate with another entity.

~~CIRCUS~~On ~~AND~~June 15, ~~ELDORADO~~2005, ~~JOINT~~we ~~VENTURE~~executed a further amendment to the Credit Facility to provide a conditional waiver of the facility’s financial covenants in respect of the quarter ended June 30, 2005, and each subsequent quarter through and including December 31, 2005, provided that no additional credit was extended under the Credit Facility during a quarter for which a waiver was relied upon. In addition, as a condition precedent to any draw on the Credit Facility subsequent to June 15, 2005, we must be in compliance with the Credit Facility’s financial covenants as to the then most recent fiscal quarter in respect of which we are required to deliver financial statements pursuant to the Credit Facility.

Date: November 14, 2002	By:	/s/ GARY L. CARANO
		Gary L. Carano
		Chief Executive Officer (Principal Executive Officer)
Date: November 14, 2002	By:	/s/ BRUCE C. SEXTON
		Bruce C. Sexton
		Chief Accounting and Financial Officer (Principal Financial and Accounting Officer)
		SILVER LEGACY CAPITAL CORP.
Date: November 14, 2002	By:	/s/ GARY L. CARANO
		Gary L. Carano
		Chief Executive Officer (Principal Executive Officer)
Date: November 14, 2002	By:	/s/ BRUCE C. SEXTON
		Bruce C. Sexton
		Treasurer (Principal Financial and Accounting Officer)

On March 2, 2006, the Partnership executed a further amendment to the Credit Facility which extends the previously granted waiver for any defaults under the Credit Facility’s covenants to cover the fiscal quarter ended March 31, 2006 and each subsequent fiscal quarter through and including December 31, 2006, provided that no additional credit is extended under the Credit Facility during such quarters. The March 2, 2006 amendment also waived for 2005 the covenant in Section 7.8 of the Credit Facility which then limited capital expenditures to $10.0 million within a calendar year, which the Partnership exceeded for the year ended December 31, 2005. In addition, the amendment raised the capital expenditure limit to $12.5 million for future calendar years.

21There is no indebtedness currently outstanding under the Credit Facility and we do not anticipate utilizing our borrowing capacity under the Credit Facility during 2006. So long as we do not have any indebtedness outstanding under the Credit Facility our inability to satisfy its covenant ratios would not constitute a default under the indenture relating to the Notes. Any principal amount then outstanding under the Credit Facility becomes due and payable on March 31, 2007 unless the Credit Facility is terminated earlier or the maturity date is extended with the consent of the lenders.

~~CERTIFICATIONS~~Critical Accounting Policies

I,A ~~Gary~~description L.of ~~Carano,~~our ~~Chief~~critical ~~Executive~~accounting ~~Officer~~policies can be found in Item 7 of ~~Circus~~our ~~and~~Annual ~~Eldorado~~Report ~~Joint~~on ~~Venture~~Form ~~and~~10-K ~~Silver~~for ~~Legacy~~the ~~Capital~~year ~~Corp.~~ended December 31, 2005. ~~certify~~There ~~that:~~have been no material changes to these policies during the six months ended June 30, 2006.

1.	I have reviewed this quarterly report on Form 10-Q of Circus and Eldorado Joint Venture and Silver Legacy Capital Corp. (collectively, the “registrant”):
2.	Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
3.	Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
4.	The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
	a)	designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
	b)	evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”); and
	c)	presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;
5.	The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):
	a)		all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize, and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and
	b)		any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and
6.	The registrant’s other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.
Date:	November 14, 2002
By:	/s/ GARY L. CARANO
	Gary L. Carano
	Chief Executive Officer

Forward-Looking Statements

22Certain information included in this report and other materials filed or to be filed by the Partnership and Capital with the Securities and Exchange Commission (as well as information included in oral statements or written statements made or to be made by them) 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. These statements can be identified by the fact that they do not relate strictly to historical or current facts. We have based these forward-looking statements on our current expectations about future events. These forward-looking statements include statements with respect to our beliefs, plans, objectives, goals, expectations, anticipations, intentions, financial condition, results of operations, future performance and business, including, current and future operations and statements that include the words “may”, “could”, “should”, “would”, “believe”, “expect”, “anticipate”, “estimate”, “intend”, “plan” or similar expressions. Such statements include information relating to capital spending, financing sources and the effects of regulation (including gaming and tax regulation) 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 us or on our behalf. These risks and uncertainties include, but are not limited to dependence on existing management, leverage and debt service (including sensitivity to fluctuations in interest rates), domestic or global 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), expansion of gaming on Native American lands (including such lands in California), risks and uncertainties relating to any applications for licenses and approvals under applicable laws and regulations (including gaming laws and regulations) and any further terrorist attacks similar to those that occurred September 11, 2001. Additional information concerning potential factors that we think could cause our actual results to differ materially from expected and historical results is included in Item 1A of our annual report on Form 10-K for the fiscal year ended December 31, 2005. If one or more of the assumptions underlying our forward-looking statements

I,15 ~~Bruce C. Sexton, Chief Financial Officer of Circus and Eldorado Joint Venture, certify that:~~

1.	I have reviewed this quarterly report on Form 10-Q of Circus and Eldorado Joint Venture and Silver Legacy Capital Corp. (collectively, the “registrant”):
2.	Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
3.	Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
4.	The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
	a)	designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
	b)	evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”); and
	c)	presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;
5.	The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):
	a)	all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize, and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and
	b)	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and
6.	The registrant’s other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.
Date:	November 14, 2002
By:	/s/ BRUCE C. SEXTON
	Bruce C. Sexton
	Chief Financial Officer

23 proves incorrect, then our actual results, performance or achievements could differ materially from those expressed in, or implied by, the forward-looking statements contained in this report. Therefore, we caution you not to place undue reliance on our forward-looking statements. This statement is provided as permitted by the Private Securities Litigation Reform Act of 1995.

Item 3.

Quantitative and Qualitative Disclosures About Market Risks

We are potentially exposed to market risk in the form of fluctuations in interest rates and their potential impact upon our variable rate debt outstanding, if any. We evaluate our exposure to this market risk by monitoring interest rates in the marketplace and we have, on occasion, utilized derivative financial instruments to help manage this risk. To manage our exposure to counterparty credit risk in interest rate swaps, we have entered into agreements with highly rated institutions. As of June 30, 2006, we had no variable rate debt outstanding. However, under our $10.0 million revolving credit facility, we may have outstanding from time to time up to $10.0 million of variable rate debt. For information concerning limitations on our ability to utilize our credit facility, see the discussion under the caption “Senior Secured Credit Facility” in Item 2 above.

Item 4. Controls and Procedures

An evaluation was performed by management, with the participation of our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on this evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that, as of June 30, 2006, our disclosure controls and procedures are effective to ensure that information required to be disclosed in the reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in applicable rules and forms of the Securities and Exchange Commission.

There have been no changes in our internal controls over financial reporting that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, these internal controls over financial reporting.

Part II. OTHER INFORMATION

Item 6.

Exhibits

(a)

Exhibits.

31.1

Certification of Gary L. Carano

31.2

Certification of Stephanie D. Lepori

32.1

Certification of Gary L. Carano pursuant to 18 U.S.C. Section 1350

32.2

Certification of Stephanie D. Lepori pursuant to 18 U.S.C. Section 1350

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrants have duly caused this report to be signed on their behalf by the undersigned thereunto duly authorized.


		CIRCUS AND ELDORADO JOINT VENTURE

Date: August 14, 2006	By:	/s/ Gary L. Carano
		Gary L. Carano Chief Executive Officer (Principal Executive Officer)



Date: August 14, 2006	By:	/s/ Stephanie D. Lepori
		Stephanie D. Lepori Chief Accounting and Financial Officer (Principal Financial and Accounting Officer)


		SILVER LEGACY CAPITAL CORP.

Date: August 14, 2006	By:	/s/ Gary L. Carano
		Gary L. Carano Chief Executive Officer (Principal Executive Officer)



Date: August 14, 2006	By:	/s/ Stephanie D. Lepori
		Stephanie D. Lepori Treasurer (Principal Financial and Accounting Officer)

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