Herbst Gaming 10-K/A 2003 FY Annual report (amended)

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D. C.  20549

FORM 10-K/A

(Amendment No. 1)

(Mark One)

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

For the fiscal year ended December 31, 2003

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

For the transition period from                             to                             

Commission file number 0-71094

HERBST GAMING, INC.

(Exact name of registrant as specified in its charter)

NEVADA	88-0446145
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
3440 West Russell Road, Las Vegas, Nevada	89118
(Address of principal executive offices)	(Zip Code)
(702) 889-7695
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Name of each exchange on which registered
Not Applicable	Not Applicable

Securities registered pursuant to Section 12(g) of the Act:

Not Applicable

(Title of class)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   ý Yes          o No

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.     o

Indicate by check mark whether the registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2).   o Yes          ý No

The aggregate market value of voting and non-voting common equity held by non-affiliates of the registrants as of December 31, 2001, based on the price at which the common equity was sold, was approximately $0.

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of December 31, 2001.

Common Stock, no par value, 300 outstanding shares.

Documents Incorporated by Reference

None.

Explanatory Note

This Amendment No. 1 to the registrant’s annual report on Form 10-K for the year ended December 31, 2003 is being filed pursuant to Rule 12b-15 for the sole purpose of correcting the “due from related parties” and “accounts payable” line items in the Consolidated Statements of Cash Flows contained in Item 8.  Financial Statements and Supplementary Data that were inadvertently omitted and/or moved when the financial statements were converted for EDGAR purposes.  Accordingly, Item 8.  Financial Statements and Supplementary Data is restated in its entirety.  There were no changes made to sub-totals or totals as a result of this change.  All information in this Amendment No. 1 is as of December 31, 2003, and does not reflect any subsequent information or events other than the changes referred to above.

PART I

Item 8.Financial Statements and Supplementary Data

2

INDEPENDENT AUDITORS’ REPORT

To the Board of Directors and Stockholders of
Herbst Gaming, Inc. and Subsidiaries
Las Vegas, Nevada

We have audited the accompanying consolidated balance sheets of Herbst Gaming, Inc. and Subsidiaries (the “Company”) as of December 31, 2002 and 2003, and the related consolidated statements of operations, stockholders’ deficiency, and cash flows for each of the three years in the period ended December 31, 2003.  These financial statements are the responsibility of the Company’s management.  Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States of America.  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.  An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.  An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of Herbst Gaming, Inc. and Subsidiaries as of December 31, 2002 and 2003, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2003, in conformity with accounting principles generally accepted in the United States of America.

DELOITTE & TOUCHE LLP

Las Vegas, Nevada

March 9, 2004

3

Herbst Gaming, Inc.

Consolidated Balance Sheets

(in thousands)

	December 31,
	2002			2003
Assets
Current assets
Cash and cash equivalents	$	55,035		$	54,030
Accounts receivable, net	1,389			1,216
Notes and loans receivable	266			706
Prepaid expenses	3,520			4,070
Inventory	1,143			1,039
Total current assets	61,353			61,061
Property and equipment, net	99,932			106,824
Lease acquisition costs, net	15,140			59,620
Due from related parties	546			563
Other assets, net	6,742			9,000
Total assets	$	183,713		$	237,068
Liabilities and stockholders’ equity (deficiency)
Current liabilities
Current portion of long-term debt	$	127		$	170
Accounts payable	4,695			5,727
Accrued expenses	10,707			13,599
Due to related parties	430			—
Total current liabilities	15,959			19,496
Long-term debt, less current portion	167,814			215,099
Other liabilities	1,175			919
Commitments and contingencies (Note 9)
Stockholders’ equity (deficiency)
Common stock (no par value; 2,500 shares authorized; 300 shares issued and outstanding)	2,368			2,368
Additional paid-in-capital	1,631			1,631
Accumulated deficit	(5,234		)	(2,445		)
Total stockholders’ equity (deficiency)	(1,235		)	1,554
Total liabilities and stockholders’ equity (deficiency)	$	183,713		$	237,068

See notes to consolidated financial statements.

4

Herbst Gaming, Inc.

Consolidated Statements of Operations

(in thousands)

	Year Ended December 31,
	2001			2002			2003
Revenues
Route operations	$	170,893		$	183,877		$	241,833
Casino operations	67,831			72,498			78,342
Other—non-gaming	2,878			3,078			3,049
Total revenues	241,602			259,453			323,224
Less promotional allowances	(8,410		)	(9,802		)	(11,249		)
Net revenues	233,192			249,651			311,975
Costs and expenses
Route operations	141,535			150,781			192,757
Casino operations	46,686			48,635			51,142
Depreciation and amortization	14,198			15,741			24,382
General and administrative	10,168			10,812			12,514
Total costs and expenses	212,587			225,969			280,795
Income from operations	20,605			23,682			31,180
Other income (expense)
Interest income	407			336			228
Interest expense, net of capitalized interest	(19,952		)	(18,785		)	(22,932		)
Loss on early retirement of debt	(13,024		)	—			(267		)
Total other expense	(32,569		)	(18,449		)	(22,971		)
Net income (loss)	$	(11,964	)	$	5,233		$	8,209

See notes to consolidated financial statements.

5

Herbst Gaming, Inc.

Consolidated Statements of Stockholders’ Equity (Deficiency)

(in thousands)

Balance	Common Stock		Additional Paid-In Capital		Retained Earnings (Accumulated Deficit)			Total
Balance, January 1, 2001	$	2,368	$	731	$	3,873		$	6,972
Net loss	—		—		(11,964		)	(11,964		)
Stockholders’ distributions	—		—		(2,376		)	(2,376		)
Contributed capital	—		900		—			900
Balance, December 31, 2001	2,368		1,631		(10,467		)	(6,468		)
Net income	—		—		5,233			5,233
Balance, December 31, 2002	2,368		1,631		(5,234		)	(1,235		)
Net income	—		—		8,209			8,209
Stockholders’ distributions	—		—		(5,420		)	(5,420		)
Balance, December 31, 2003	$	2,368	$	1,631	$	(2,445	)	$	1,554

See notes to consolidated financial statements.

6

Herbst Gaming, Inc.

Consolidated Statements of Cash Flows

(in thousands)

	Year Ended December 31,
	2001			2002			2003
Cash flows from operating activities
Net income (loss)	$	(11,964	)	$	5,233		$	8,209
Adjustments to reconcile net income (loss) to net cash provided by operating activities
Depreciation and amortization	14,198			15,741			24,382
Debt discount amortization	1,633			424			83
Gain on sale of property and equipment	(41		)	(129		)	(119		)
Other	(202		)	—			—
Loss on early retirement of debt	13,024			—			267
Decrease (increase) in
Accounts receivable	(621		)	7			173
Prepaid expenses	2,182			(561		)	(343		)
Inventory	(120		)	(370		)	104
Due from related parties	21			(94		)	(17		)
Increase (decrease) in
Accounts payable	(8,597		)	170			630
Accrued expenses	6,157			(688		)	2,314
Due to related parties	(1,499		)	(544		)	(430		)
Other liabilities	774			134			(256		)
Net cash provided by operating activities	14,945			19,323			34,997
Cash flows from investing activities
Net cash paid for acquisition of Anchor’s Slot Route	—			—			(57,171		)
Additions to notes receivable	(325		)	(860		)	(619		)
Collection on notes receivable	432			870			689
Proceeds from sale of property and equipment	951			395			577
Purchases of property and equipment	(3,226		)	(8,442		)	(15,117		)
Lease acquisition costs	(610		)	(663		)	(3,083		)
Net cash used in investing activities	(2,778		)	(8,700		)	(74,724		)
Cash flows from financing activities
Increase in notes payable to related parties	3,553			—			—
Decrease in notes payable to related parties	(20,947		)	—			—
Proceeds from long-term debt	167,025			—			49,115
Reduction of long-term debt	(127,531		)	(104		)	(2,153		)
Loan origination fees	(7,838		)	(234		)	(2,553		)
Prepayment penalty on retired debt	(9,776		)	—			(267		)
Additional paid-in capital	900			—			—
Stockholders’ distributions	(2,376		)	—			(5,420		)
Net cash provided by (used in) financing activities	3,010			(338		)	38,722
Net increase (decrease) in cash and cash equivalents	15,177			10,285			(1,005		)
Cash and cash equivalents
Beginning of year	29,573			44,750			55,035
End of year	$	44,750		$	55,035		$	54,030

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	Year Ended December 31,
	2001		2002		2003
Supplemental cash flow information
Cash paid during the year for interest	$	12,983	$	18,637	$	21,198
Supplemental schedule of non-cash investing and financing activities
Purchase of property and equipment financed through accounts payable	—		271		661
Purchase of assets through direct financing	2,445		302		283
Acquisition of Anchor Coin’s Slot Route
Fair value of assets and liabilities acquired
Current assets, other than cash					$	717
Property and equipment					5,200
Lease acquisition costs					50,532
Other long-term assets					1,300
Other liabilities					(578		)
Cash paid, net of cash acquired					$	57,171

See notes to consolidated financial statements.

8

Herbst Gaming, Inc.

Notes to Consolidated Financial Statements

1.Description of Business and Summary of Significant Accounting Policies

Description of Business and Principles of Consolidation—The accompanying consolidated financial statements of Herbst Gaming, Inc. (“Herbst” or the “Company”) include the accounts of Herbst and its subsidiaries; E-T-T, Inc. and Subsidiaries (“E-T-T”), Market Gaming, Inc. (“MGI”), E-T-T Enterprises L.L.C. (“E-T-T Enterprises”), and Flamingo and Paradise Gaming, LLC (“FPG”).  The financial statements of E-T-T are consolidated and include the following wholly-owned subsidiaries:  Cardivan Company, Corral Coin, Inc., and Corral Country Coin, Inc.

All significant intercompany balances and transactions between Herbst, E-T-T, MGI, E-T-T Enterprises, and FPG have been eliminated in the consolidated financial statements.

Herbst Gaming, Inc. was incorporated in Nevada on January 21, 1997.  In August of 2001, a restructuring occurred, wherein E-T-T, MGI, FPG and E-T-T Enterprises became wholly-owned subsidiaries of Herbst.  This restructuring occurred in conjunction with the $170.0 million offering of senior secured notes that was used to retire the majority of the existing debt of the consolidated entities.  Prior to August of 2001, the newly consolidated entities were combined for presentation purposes.

E-T-T and MGI conduct business in the gaming industry and generate revenue principally from gaming machine route operations and casino operations.  Gaming machine route operations involve the installation, operation, and service of gaming machines owned by the Company that are located in licensed, leased, or subleased space in retail stores (supermarkets, convenience stores, etc.), bars, and restaurants throughout the State of Nevada.  The Company operates Terrible’s Town Casino & Bowl (Henderson) in Henderson, Nevada, Terrible’s Searchlight Casino in Searchlight, Nevada, and Terrible’s Town Casino and Terrible’s Lakeside Casino & RV Park, both of which are located in Pahrump, Nevada, a community 60 miles west of Las Vegas.

E-T-T Enterprises develops and leases real estate to E-T-T.

FPG owns and operates Terrible’s Hotel & Casino in Las Vegas, Nevada, which began operations in December 2000.

The gaming industry in the State of Nevada is subject to extensive state and local government regulation.  The Company’s gaming operations are subject to the licensing and regulatory control of the Nevada Gaming Commission, the Nevada Gaming Control Board, and local jurisdictions.

Use of Estimates—The 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 period.  Significant estimates incorporated into the Company’s consolidated financial statements include the estimated useful lives for depreciable and amortizable assets, the estimated allowance for doubtful accounts receivable and the estimated cash flows in assessing the recoverability of long-lived assets.  Actual results could differ from those estimates.

Reclassifications—Certain prior period amounts have been reclassified in the consolidated financial statements to conform to the current period’s presentation.  Such reclassifications had no impact on net income.

9

Cash and Cash Equivalents—Cash and cash equivalents include highly liquid investments with a maturity at the date of purchase of three months or less.  The carrying value of these investments approximates their fair value due to their short maturities.

Fair Value of Financial Instruments—The carrying value of the Company’s cash, trade, notes and loans receivable, and trade payables approximates fair value primarily because of the short maturities of these instruments.  The fair value of the Company’s long-term debt is estimated based on the quoted market prices for the same or similar issues or on the current rates offered to the Company for debt of the same remaining maturities.  Based on the borrowing rates currently available to the Company for debt with similar terms and average maturities, the estimated fair value of long-term debt outstanding is approximately $242,412,500 as of December 31, 2003.

Accounts Receivable—Receivables consist primarily of amounts due from customers as a result of normal business operations.  The Company periodically performs credit evaluations of its customers.  The Company reviews accounts receivable balances in order to determine an allowance for potential credit losses.  At December 31, 2002 and 2003, an allowance for potential credit losses was $1,224,000 and $310,629, respectively.

Notes and Loans Receivable—In order to secure various route locations, the Company has provided certain incentives to the location operators in the form of loans.  The loans, made for build-outs, tenant improvements, and initial operating expenses, are generally secured by the personal guarantees of the operators and the locations’ assets.  The majority of the loans are non-interest bearing and are expected to be repaid within one year from the locations’ share of net gaming win.

On a regular basis, the Company evaluates the collectibility of the loans by individually evaluating each location’s operating results and cash flows.  Management provides for the carrying value of loans that are determined to be uncollectible.  At December 31, 2002 and 2003, an allowance for potential credit losses was not deemed necessary.

Inventory—Inventories are stated at the lower of cost or market value.  Cost is determined using the first-in, first-out method.

Property and Equipment—Property and equipment are stated at cost and depreciated using the straight-line method over the estimated useful lives of the assets.  Leasehold improvements are amortized using the straight-line method over the shorter of the lease term or estimated useful life of the asset.  Useful lives are as follows:

Building	40 years
Gaming equipment	5 years
Furniture, fixtures, and equipment	5-10 years
Leasehold improvements	1-20 years

Lease Acquisition Costs—Significant incremental costs associated with the acquisition of location leases are capitalized and amortized using the straight-line method over the term of the related leases, including expected renewals, which range from 1 to 20 years.  Lease acquisition costs are stated at cost less accumulated amortization of $7,528,000 and $16,601,268 at December 31, 2002 and 2003, respectively.

10

Debt Issuance Costs—Debt issuance costs incurred in connection with the issuance of long-term debt are capitalized and amortized to interest expense over the terms of the related debt agreements.  Debt issuance costs are included in other assets on the balance sheets (see Note 5).

Long-Lived Assets—In accordance with the provisions of SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets,” the Company evaluates the potential impairment of long-lived assets when events or changes in circumstances indicate that the carrying amount of a long-lived asset may not be recoverable.  If it is determined that the carrying value of long-lived assets may not be recoverable based upon the relevant facts and circumstances, the Company estimates the future undiscounted cash flows expected to result from the use of the asset and its eventual disposition.  If the sum of the expected undiscounted future cash flows is less than the carrying value of the asset, the Company will recognize an impairment loss for the difference between the carrying value of the asset and its fair value.  The Company believes that no material impairment of long-lived assets exists at December 31, 2003.

Revenue and Promotional Allowances—In accordance with industry practice, the Company recognizes as gaming revenues the net win from route operations, which is the difference between gaming wins and losses.  The Company recognizes total net win from gaming devices as revenues from gaming routes that operate under revenue-sharing arrangements.  Revenue-sharing payments to route locations are recorded as costs of route operations.  Revenues from casino operations are gaming wins less losses.  Revenues from casino operations include the retail value of food and beverage, and goods and services provided to customers on a complimentary basis.  Such amounts are then deducted as promotional allowances.  The estimated cost of providing these promotional allowances is as follows:

	Year Ended December 31,
	2001		2002		2003
	(dollars in thousands)
Room	$	658	$	597	$	498
Food and beverage	3,785		4,507		4,798
Other	1,322		2,049		3,538
Total	$	5,765	$	7,153	$	8,834

These costs are periodically reclassified out of the respective department into the casino department.

Location Rent Expense—Fixed rental payments (including scheduled increases) are recorded on a straight-line basis over the agreement term, including any optional extension periods that are expected to be exercised.  Contingent payments are expensed in the period incurred.  Renewal agreements are considered new agreements and are accounted for as described above over the new agreement term.

Income Taxes—Herbst, E-T-T and MGI have elected to be taxed under the provisions of Subchapter S of the Internal Revenue Code.  Under those provisions, the owners of each company are liable for income tax on the taxable income of the Company as it affects the owners’ individual income tax returns.  Therefore, a provision for income taxes has not been included in the accompanying consolidated financial statements.  E-T-T Enterprises and FPG are treated as partnerships for federal income tax purposes and, therefore, do not incur income taxes.  Instead, their earnings and losses are included in the personal returns of the members and are taxed depending on their personal tax situations.  Accordingly, the accompanying financial statements do not reflect a provision for income taxes.

11

Concentrations of Credit Risk—The Company maintains cash balances at certain financial institutions located in southern Nevada.  The balances are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $100,000.  At times, cash balances may be in excess of FDIC limits.

Recently Issued and Adopted Accounting Standards—

In November 2002, the FASB issued Interpretation No. 45, “Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others, an interpretation of SFAS Nos. 5, 57 and 107 and a rescission of FASB Interpretation No. 34” (“Interpretation 45”).  Interpretation 45 elaborates on the disclosures to be made by a guarantor in its interim and annual financial statements about its obligations under certain guarantees that it has issued.  It also clarifies that a guarantor is required to recognize, at the inception of a guarantee, a liability for the fair value of the obligation undertaken in issuing the guarantee.  The provisions of this Interpretation 45 are applicable on a prospective basis to guarantees issued or modified after December 31, 2002, and the disclosure requirements are generally effective for financial statements of interim or annual periods ending after December 15, 2002.  The Company believes that Interpretation 45 will not have a significant impact on its results of operations or financial position.

In December 2003, the FASB issued Interpretation No. 46, “Consolidation of Variable Interest Entities (revised December 2003)” (“FIN 46R”), clarifying FIN 46 and exempting certain entities from the provisions of FIN 46R.  Generally, application of FIN 46R is required in financial statements of public entities that have interests in structures commonly referred to as special-purpose entities for periods ending after December 15, 2003, and, for other types of variable interest entities for periods ending after March 15, 2004.  FIN 46R addresses consolidation by business enterprises of variable interest entities that either:  (1) do not have sufficient equity investment at risk to permit the entity to finance its activities without additional subordinated financial support, or (2) the company will hold a significant variable interest in, or have significant involvement with, an existing variable interest entity.  During the fourth quarter of 2003, the Company adopted the provisions of FIN 46R related to special-purpose entities, which did not have a material impact on its financial position and results of operations.  The Company will adopt the provisions of FIN 46R related to other types of variable interest entities during the first quarter of 2004.

2.Acquisition

In February 2003, the Company completed its acquisition of the route assets of Anchor Coin, Inc., a subsidiary of IGT (“Anchor”).  Anchor was a leading route operator in Nevada.  The acquisition, which was recorded under the purchase method of accounting, included the purchase of all of the assets of the Anchor’s Slot Route for an initial purchase price of $61,000,000.  A portion of the purchase price has been allocated to assets acquired and liabilities assumed based on estimated fair market value at the date of acquisition with the remaining balance of $50,532,000 recorded as lease acquisition costs for the route contracts acquired.  Such intangible asset is being amortized on a straight-line basis over the remaining lives of the contracts.

12

The table below reflects unaudited pro forma consolidated results of the Company and Anchor Coin as if the acquisition had taken place at the beginning of the year (dollars in thousands):

	Year Ended December 31, 2002		Year Ended December 31, 2003
Gross Revenues	$	305,832	$	329,393
Net Income	$	5,311	$	7,239

Included in the pro forma net income are approximately $4,668,000 and $453,000 of interest expense and $1,736,000 and $953,000 of depreciation and amortization expense for the years ended 2002 and 2003, respectively.  In management’s opinion, these unaudited pro forma amounts are not necessarily indicative of what the actual consolidated results of operations might have been if the acquisition had been effective at the beginning of 2002.

3.Property and Equipment

Property and equipment consist of the following (dollars in thousands):

	December 31,
	2002			2003
Building	$	52,847		$	53,779
Gaming equipment	51,448			63,821
Furniture, fixtures, and equipment	18,031			23,312
Leasehold improvements	1,622			1,690
Land	15,925			15,925
Construction in progress	267			204
	140,140			158,731
Less accumulated depreciation	(40,208		)	(51,907		)
	$	99,932		$	106,824

4.Lease Acquisition Costs

	As of December 31, 2002				As of December 31, 2003
	(dollars in thousands)
	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Lease Acquisition Costs	$	22,668	$	7,528	$	76,221	$	16,601

The aggregate amortization expense for the years ended December 31, 2001, 2002 and 2003 was  $2,931,000, $2,930,000 and $9,134,000, respectively.

Estimated amortization expense for the years ending December 31, 2004, 2005, 2006, 2007, and 2008 is $9,903,000, $9,649,000, $9,434,000, $9,289,000, and $8,542,000, respectively.

13

5.Other Assets

Other assets consist of the following (dollars in thousands):

	December 31,
	2002		2003
Debt issuance costs, net of accumulated amortization of $1,563 and $3,158, respectively	$	6,510	$	7,468
Other assets	232		1,532
Total	$	6,742	$	9,000

6.Accrued Expenses

Accrued expenses consist of the following (dollars in thousands):

	December 31,
	2002		2003
Accrued interest	$	6,183	$	7,833
Progressive Jackpot liabilities	1,089		1,593
Other accrueds	3,435		4,173
Total	$	10,707	$	13,599

7.             Long-Term Debt

Long-term debt consists of the following (dollars in thousands):

	December 31,
	2002		2003
Senior notes secured by assets of the Company.  The notes bear interest at 10¾% per annum, payments are due on March 1 and September 1, commencing on March 1, 2003.  The notes mature on September 1, 2008	$	167,598	$	214,798
Notes payable to leasing company secured by vehicles, payable in monthly installments of $4, including interest ranging from 4.9% to 5.3%, due April 2004	343		471
Total debt	167,941		215,269
Less current portion	127		170
Total long-term debt	$	167,814	$	215,099

On August 24, 2001, the Company issued (under a private placement) $170.0 million in 10¾% senior secured notes due in 2008.

The proceeds of these notes, approximately $167.0 million, were used to retire outstanding balances on substantially all credit facilities of $123.6 million, related-party debt of $20.2 million, and $12.0 million in accrued interest and other costs associated with the early termination of the retired debt.

14

In addition, the Company used $6.8 million of the proceeds to pay fees associated with the offering of the 10¾% senior secured notes and the remaining $4.4 million was paid to the Company in cash.  The Company incurred an extraordinary charge to earnings of $13.0 million in August 2001.

In February 2003, the Company issued $47.0 million in additional notes under the existing indenture. The proceeds of the debt were used to purchase the slot route assets of Anchor Coin, Inc.

In December 2003, the Company repurchased $2.0 million principal amount of the 10¾% senior secured notes, resulting in a principal balance of those notes at December 31, 2003 of $215.0 million.  The Company incurred a charge related to the early retirement of debt of $267,000.

In December 2003, the Company renewed its $10.0 million undrawn line of credit from U.S. Bank of Nevada.

The fees associated with both issuances of the 10¾% senior secured notes are included in other assets at December 31, 2002 and 2003 and are being amortized to interest expense over the life of the indebtedness.

The notes mature on August 24, 2008.  Interest is payable in cash at a rate of 10¾% per annum on March 1 and September 1, commencing March 1, 2003.  The indenture under which the notes were issued contains various limitations and restrictions including (i) change-in-control provisions, (ii) limitations on indebtedness and (iii) limitations on restricted payments such as dividends.  The Company is in compliance with these covenants as of December 31, 2003.

In October 2001, the Company filed a Form S-4 registration statement with the Securities and Exchange Commission (“SEC”) for the purpose of effecting the exchange of the notes for identical notes registered for resale under the federal securities laws.  This registration statement became effective on December 21, 2001 and the exchange offer was consummated on January 22, 2002.  In March 2003, the Company filed another Form S-4 registration statement with the SEC for the purpose of effecting the exchange of the additional notes for identical notes registered for resale under the federal securities laws.  This registration statement became effective on May 27, 2003 and the exchange offer was consummated on June 24, 2003.

Long-term debt at December 31, 2003 is expected to mature as follows (dollars in thousands):

2004	$	170
2005	120
2006	82
2007	77
2008	214,820
Thereafter	—
Total	$	215,269

8.Related-Party Transactions

The Company leases the land underlying its facilities for its Terrible’s Town Casino (Pahrump) operations from the Herbst Family Limited Partnership and the E-T-T Corporate facilities from Herbst Family Limited Partnership II.  The leases require monthly payments of $26,916 through June 2006 with

15

several 5-year options by the Company to extend.  Rent expense of $307,992, $322,992 and $322,992 was incurred under these agreements for the years ended December 31, 2001, 2002 and 2003, respectively.

The Company rents space for certain slot machine route operations in convenience stores owned by Terrible Herbst, Inc. (“Terrible’s”), a corporation in which the Company’s owners are officers and which is owned by the father of the owners.  Rent expense of $3,653,000, $4,132,800 and $4,754,400 was incurred under this agreement for the years ended December 31, 2001, 2002 and 2003, respectively.

The Company leases a warehouse located in Las Vegas, Nevada, for its employment center and purchasing departments, from the Herbst’s Grandchildren’s Trust.  The lease began in November 2002 and requires payments of $43,525 through November 2012.  Rent expense was $43,525 and $522,300 incurred under this lease arrangement for the years ended December 31, 2002 and 2003, respectively.

The Company leases the real property on which Terrible’s Searchlight Casino in Searchlight is located from Terrible Herbst, Inc. for $15,000 per month, pursuant to a lease agreement entered into on June 30, 2002 that expires in 2022, with options to renew the lease for 5 additional successive terms of 10 years each.  Amounts paid under this lease were $90,000 and $180,000 in the years ended December 31, 2002 and 2003, respectively.

The Company leases land and office space in certain of its facilities to Terrible’s under noncancelable lease agreements ranging from 10 to 20 years.  Monthly rental income is $63,500.  Rental income from these leases was $623,000, $662,000 and $642,000 for the years ended December 31, 2001, 2002 and 2003, respectively.

Future rental income under related-party agreements is as follows (dollars in thousands):

2004	$	642
2005	642
2006	652
2007	663
2008	663
Thereafter	3,304
Total	$	6,566

The Company has entered into a trademark and license agreement with Terrible’s in which Terrible’s agrees to permit the Company to use the Terrible Herbst brand name and its cowboy logo for 25 years including renewal periods.  The agreement was amended in 2001 and the annual royalty fee was increased from $600,000 to $1,200,000.  Pursuant to this trademark and license agreement, the Company paid approximately $800,000 in 2001, $1,200,000 in 2002 and $1,301,000 in 2003.

Due from related parties at December 31, 2002 and 2003 includes $437,000 and $434,000, respectively, in notes receivable from an owner.  The notes bore interest at rates from 5 to 6 percent and were repaid in full in the first quarter of 2004.  Due from related parties also includes receivables of $107,000 from Terrible’s, which is non-interest bearing.  Interest income related to the notes receivable was $27,000, $26,000 and $ 26,000 for the years ended December 31, 2001, 2002 and 2003, respectively.

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Obligations due to related parties at December 31, 2002 and 2003 consisted of balances due to Terrible’s for expenditures made on behalf of the Company, accrued rent, and accrued management fees.  The balances are non-interest bearing and payable on demand.

The Company has also entered into a servicing arrangement with Terrible’s pursuant to which the Company provides accounting and administrative services related to the collection of daily deposits from Terrible’s convenience stores.  The Company also provides personnel to Terrible’s to count, maintain and safeguard large amounts of coin and currency.  Terrible’s reimburses the Company’s expenses in providing these services.  Under this servicing arrangement, the Company recorded approximately $214,000, $205,800 and $205,800 for services rendered for the years ended December 31, 2001, 2002 and 2003, respectively.

In 1999, HIGCO, Inc. (“HIGCO”), a company owned and operated by Mr. Higgins, the Company’s General Counsel, and two of his brothers, agreed to purchase from the Company for $200,000 a liquor license related to owning and operating a tavern located in Henderson, Nevada.  The terms of the purchase between the Company and HIGCO require HIGCO to repay the debt at 9% interest per annum.  The balance of that note at December 31, 2002 was $116,000 and $0 at December 31, 2003.  In addition, the Company entered into a slot route contract to install, operate and service slot machines at the tavern.  Pursuant to the revenue-sharing contract, HIGCO paid the Company, $114,442, $105,559 and $1,566 in gaming fees in 2001, 2002 and 2003, respectively.  The bar was sold on December 31, 2002 to an unrelated party.  In January 2003, HIGCO repaid the note in full.

During 2003, HIGCO opened a new tavern and entered into a new slot route contract.  Pursuant to the revenue-sharing contract, HIGCO paid the Company $27,097 in gaming fees in 2003.  At December 31, 2003, HIGCO had a note outstanding of $20,000.

A member of the Company’s board of directors is a partner with Kummer Kaempfer Bonner & Renshaw.  The Company retains Kummer Kaempfer Bonner & Renshaw as outside legal counsel, and Kummer Kaempfer Bonner & Renshaw has received fees for legal services in the amount of $387,369, $234,309 and $251,188 for 2001, 2002 and 2003, respectively.

A member of the Company’s board of directors, is the President and Chief Executive Officer of Las Vegas Dissemination, Inc., which provides services related to the race and sports books at Terrible’s Hotel & Casino and Terrible’s Town. Las Vegas Dissemination, Inc. has received fees for services in the amount of $220,555, $239,111 and $366,526 for 2001, 2002 and 2003, respectively.

9.Commitments and Contingencies

Pursuant to a lease agreement that expires in 2067, including renewal periods, the Company leases the real property on which its corporate headquarters is located from The Herbst Family Limited Partnership II, or Herbst FLP II.  The general partners of the Herbst FLP II are Jerry and Maryanna Herbst.  In each of 2001, 2002 and 2003, the Company paid $172,992 under this lease.

Pursuant to a lease agreement that expires in 2026, including renewal periods, the Company leases the real property on which Terrible’s Town in Pahrump is located from the Herbst Family Limited Partnership.  In each of 2001, 2002 and 2003, the Company paid $135,000, $150,000 and $150,000, respectively, under this lease.

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The Company leases the facilities for its casino operations.  The lease for Terrible’s Town Casino (Henderson) requires monthly payments of $27,500 through January 2004.  Commencing February 2004, and on each five-year anniversary thereafter, the monthly rent increases by $2,500.  The initial lease term expires January 2014, with options for ten additional five-year terms with a $2,500 increase in monthly rent at the beginning of each option period.

The Company leases the land underlying its facilities for its Terrible’s Town Casino (Pahrump) and its Las Vegas warehouse and employment center from related parties (see Note 8).

In December 1999, the Company executed agreements to lease certain gaming machines for $110,000 per month beginning in July 2000 through October 2004.

In April 2001, the Company executed agreements to lease certain gaming machines for $91,776 per month, beginning in July 2001 through July 2004.

At December 31, 2003, the Company has noncancelable location license agreements for space leases at groups of affiliated stores that expire on various dates from 2005 through 2010, with certain options for renewal.  Revenues from gaming machines in these stores accounted for approximately 45 percent of the Company’s total revenues for the year ended December 31, 2003.

Future minimum lease payments under noncancelable operating leases and location license agreements are as follows (dollars in thousands):

2004	$	74,348
2005	71,043
2006	58,809
2007	49,429
2008	31,132
Thereafter	36,611
Total	$	321,372

Rent expense related to noncancelable leases with terms exceeding one year was $56,074,000, $55,998,000 and $67,111,000 for the years ended December 31, 2001, 2002 and 2003, respectively.

The Company is a party to certain claims, legal actions, and complaints arising in the ordinary course of business or asserted by way of defense or counterclaim in actions filed by the Company.  Management believes that its defenses are substantial in each of these matters and that the Company’s legal position can be successfully defended without material adverse effect on its consolidated financial statements.

10.Revenue Derived From Major Locations

Route operations revenues at three groups of affiliated store chains in the year ended December 31, 2003 and two groups of affiliated store chains in the years ended December 31, 2001 and 2002 each accounted for more than 10 percent of the Company’s total route revenues.  The total of such revenues were approximately $81,833,000, $87,299,000 and $117,692,000, in the years ended December 31, 2001, 2002 and 2003, respectively.  Each individual store chain included in an affiliated group of store chains has a separate lease with the Company.

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11.          Business Segments

The Company has adopted SFAS No. 131, “Disclosures about Segments of an Enterprise and Related Information.”  SFAS No. 131 established standards for the way public companies are to report information about operating segments in annual financial statements and requires those enterprises to report selected information about operating segments in interim financial reports issued to stockholders.  It also established standards for related disclosures about products and services, geographic areas, and major customers.  The Company’s management does not use segment information on assets to manage its business.

The Company operates through two business segments—slot route operations and casino operations.  The slot route operations involve the installation, operation, and service of slot machines at strategic, high traffic non-casino locations, such as grocery stores, drug stores, convenience stores, bars, and restaurants.  Casino operations consist of the following five casinos: Terrible’s Town Casino (Henderson) in Henderson, Nevada, Terrible’s Searchlight Casino in Searchlight, Nevada and Terrible’s Town Casino and Terrible’s Lakeside Casino, both of which are located in Pahrump, Nevada, and Terrible’s Hotel & Casino in Las Vegas, Nevada.

Revenues and income for these segments are as follows (dollars in thousands):

	Year Ended December 31,
	2001			2002			2003
Net revenues
Route operations	$	170,750		$	183,572		$	241,462
Casino operations	59,564			63,001			67,464
Other — non-gaming	2,878			3,078			3,049
Total	$	233,192		$	249,651		$	311,975
Income from operations
Route operations	$	20,907		$	23,327		$	30,812
Casino operations	7,329			8,502			10,283
Other(1)	(7,631		)	(8,147		)	(9,915		)
Total	$	20,605		$	23,682		$	31,180
Depreciation and amortization
Slot route operations	$	8,308		$	9,464		$	17,893
Casino operations	5,548			5,864			6,039
Other	342			413			450
Total	$	14,198		$	15,741		$	24,382
EBITDA(2)
Route operations	$	29,215		$	32,791		$	48,705
Casino operations	12,878			14,366			16,322
Other	(6,883		)	(7,398		)	(9,237		)
Consolidated EBITDA	$	35,210		$	39,759		$	55,790

(1)Amount represents primary other—non-gaming revenues and general and administrative expenses.

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(2)Consolidated EBITDA consists of net income (loss) plus depreciation and amortization, interest expense net of capitalized interest and loss on early retirement of debt.  Segment EBITDA for route and casino is calculated before allocation of overhead.  Other EBITDA represents other revenue, general and administrative expenses, interest income and other income.  EBITDA is presented because it is used as a performance measure to analyze the performance of our business segments and because it is frequently used by securities analysts, investors and others in the evaluation of companies in our industry.  However, other companies in our industry may calculate EBITDA differently.  EBITDA is not a measurement of financial performance under generally accepted accounting principles and should not be considered as an alternative to cash flow from operating activities or as a measure of liquidity or as an alternative to net income or as an indicator of operating performance or any other measure of performance derived in accordance with generally accepted accounting principles.

The following table is a reconciliation of net income (loss) to EBITDA:

	Year Ended December 31,
	2001			2002		2003
	(in thousands)
Net income (loss)	$	(11,964	)	$	5,233	$	8,209
Adjustments:
Depreciation and amortization	14,198			15,741		24,382
Interest expense, net of capitalized interest	19,952			18,785		22,932
Loss on early retirement of debt	13,024			—		267
Consolidated EBITDA	$	35,210		$	39,759	$	55,790

Selected Quarterly Financial Information (Unaudited)
(in thousands)

	Mar. 31		June 30		Sept. 30		Dec. 31		Total
Year Ended December 31, 2003
Net revenues - Route operations	$	53,680	$	61,344	$	62,178	$	64,260	$	241,462
Net revenues - Casino operations	16,885		16,383		16,701		17,495		67,464
Net revenues - Other	724		725		863		737		3,049
Operating income	8,579		9,335		6,193		7,073		31,180
Net income	3,336		3,561		351		961		8,209
Year Ended December 31, 2002
Net revenues - Route operations	$	44,844	$	46,471	$	45,147	$	47,110	$	183,572
Net revenues - Casino operations	16,047		15,884		15,360		15,710		63,001
Net revenues - Other	657		636		1,054		731		3,078
Operating income	6,168		6,327		4,643		6,544		23,682
Net income	1,568		1,686		12		1,967		5,233

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Item 15.         Exhibits, Financial Statement Schedules, and Reports on Form 8-K

(a)           1.             Financial Statements

Included in Part II of this report:

2.             Financial Statement Schedules

All required schedules are omitted because of the absence of conditions under which they are required or because the required information is given in the financial statements or notes thereto.

(b)           Reports on Form 8-K

The following report on Form 8-K was filed by Herbst Gaming during the fourth quarter of 2003 and thereafter through March 15, 2003:

•Form 8-K filed November 5, 2003, regarding the results for the quarter and the nine-month period ended September 30, 2003.

(c)           Exhibits, including those incorporated by reference.

2.1++++	Asset Purchase Agreement between Anchor Coin and Herbst Gaming, Inc. and Market Gaming, Inc. and E-T-T, Inc. dated as of November 21, 2002
2.2++++	First Amendment to Asset Purchase Agreement by and among Anchor Coin and Herbst Gaming, Inc. and Market Gaming, Inc. and E-T-T, Inc. dated as of January 14, 2003
3.1+	Articles of Incorporation of Herbst Gaming, Inc., filed January 21, 1997.
3.2+	By-laws of Herbst Gaming, Inc., adopted January 21, 1997.
4.1+	Indenture dated as of August 24, 2001 between Herbst Gaming, Inc., certain guarantors and The Bank of New York relating to Series A and Series B 10¾% Senior Secured Notes Due 2008.

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4.2++	First Supplemental Indenture dated as of August 23, 2002 between Herbst Gaming, Inc., certain guarantors and The Bank of New York.
4.3+++++	Second Supplemental Indenture dated as of January 23, 2003 between Herbst Gaming, Inc., certain guarantors and The Bank of New York.
4.4+++++	Third Supplemental Indenture dated as of February 6, 2003 between Herbst Gaming, Inc., certain guarantors and The Bank of New York.
4.5+	Form of Herbst Gaming, Inc. 10¾% [Series A] [Series B] Senior Secured Notes due 2008 (included as part of the Indenture at Exhibit 4.1).
4.6+	Form of Herbst Gaming, Inc. Regulation S Global Note 10¾% [Series A] [Series B] Senior Secured Notes due 2008 (included as part of the Indenture at Exhibit 4.1).
4.7+++++	Form of Herbst Gaming, Inc. 10¾% [Series A] [Series B] Senior Secured Notes due 2008 (included as part of the Third Supplemental Indenture at Exhibit 4.4).
4.8+++++	Form of Herbst Gaming, Inc. Regulation S Global Note 10¾% [Series A] [Series B] Senior Secured Notes due 2008 (included as part of the Third Supplemental Indenture at Exhibit 4.4).
4.9+++++	Registration Rights Agreement dated as of February 7, 2003, by and among Herbst Gaming, Inc., certain of its subsidiaries, and Lehman Brothers Inc.
4.10+++	Specimen common stock certificate for the common stock of Herbst Gaming, Inc.
10.1+	Escrow Agreement dated August 24, 2001 among Herbst Gaming, Inc., E-T-T, Inc., Edward Herbst, Timothy Herbst and Troy Herbst and Wilmington FSB, as escrow agent, and The Bank of New York, as trustee.
10.2+	Hazardous Substances Indemnity Agreement dated August 24, 2001 by Herbst Gaming, Inc. and certain guarantors in favor of The Bank of New York, as trustee.
10.3+	Trademark License Agreement dated August 24, 2001 by and between Herbst Gaming, Inc. and Terrible Herbst, Inc.
10.4+	Security Agreement dated August 24, 2001, among Herbst Gaming, Inc., certain guarantors and Bank of New York, as trustee.
10.5++	First Amendment to Security Agreement dated as of August 23, 2002 among Herbst Gaming, Inc. and its subsidiaries and The Bank of New York.
10.6+++++	Second Amendment to Security Agreement dated as of February 6, 2003 among Herbst Gaming, Inc. and its subsidiaries and The Bank of New York (included as part of the Third Supplemental Indenture at Exhibit 4.4).
10.7+	Collateral Assignment of Contracts and Documents dated August 24, 2001by Herbst Gaming, Inc. and certain guarantors in favor of The Bank of New York, as trustee.
10.8+	Pledge and Security Agreement (Herbst Gaming, Inc.) dated August 24, 2001 by Herbst Gaming, Inc. in favor of The Bank of New York, as trustee.

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10.9+	Pledge and Security Agreement (E-T-T, Inc.) dated August 24, 2001 by E-T-T, Inc. in favor of The Bank of New York, as trustee.
10.10+	Pledge and Security Agreement (Edward, Tim and Troy Herbst) dated August 24, 2001 by Edward J. Herbst, Timothy P. Herbst, and Troy D. Herbst in favor of The Bank of New York, as trustee.
10.11+	Deed of Trust, Assignment of Leases and Rents, Security Agreement and Fixture Filing (4100 Paradise Road) dated August 24, 2001, and made by Flamingo Paradise Gaming, LLC to National Title Co., as trustee, for the benefit of The Bank of New York, as beneficiary.
10.12++	First Amendment to Deed of Trust dated as of August 23, 2002 among Flamingo Paradise Gaming, LLC and The Bank of New York.
10.13+++++	Second Amendment to Deed of Trust dated as of February 6, 2002 among Flamingo Paradise Gaming, LLC and The Bank of New York (included as part of the Third Supplemental Indenture at Exhibit 4.4).
10.14+	Deed of Trust, Assignment of Leases and Rents, Security Agreement and Fixture Filing (Terrible’s Casino & Bowl) dated August 24, 2001, and made by Market Gaming, Inc. to National Title Co., as trustee, for the benefit of The Bank of New York, as beneficiary.
10.15+++++	First Amendment to Deed of Trust, Assignment of Leases and Rents, Security Agreement and Fixture Filing (Terrible’s Casino & Bowl) dated February 6, 2003 (included as part of the Third Supplemental Indenture at Exhibit 4.4).
10.16+	Deed of Trust, Assignment of Leases and Rents, Security Agreement and Fixture Filing (5870 S. Homestead Road) dated August 24, 2001, and made by E-T-T Enterprises L.L.C. to National Title Co., as trustee, for the benefit of The Bank of New York, as beneficiary.
10.17+++++	First Amendment to Deed of Trust, Assignment of Leases and Rents, Security Agreement and Fixture Filing (5870 S. Homestead Road) dated February 6, 2003 (included as part of the Third Supplemental Indenture at Exhibit 4.4).
10.18+	Leasehold Deed of Trust, Security Agreement and Fixture Filing (Warehouse Property) dated August 24, 2001, and made by E-T-T Enterprises L.L.C. to National Title Co., as trustee, for the benefit of The Bank of New York, as beneficiary.
10.19+++++	First Amendment to Leasehold Deed of Trust, Security Agreement and Fixture Filing (Warehouse Property) dated February 6, 2003 (included as part of the Third Supplemental Indenture at Exhibit 4.4).
10.20+	Leasehold Deed of Trust, Assignment of Leases and Rents, Security Agreement and Fixture Filing (Terrible’s Casino & Bowl) dated August 24, 2001, and made by Market Gaming, Inc. to National Title Co., as trustee, for the benefit of The Bank of New York, as beneficiary.
10.21+++++	First Amendment to Leasehold Deed of Trust, Assignment of Leases and Rents, Security Agreement and Fixture Filing (Terrible’s Casino & Bowl) dated February 6, 2003 (included as part of the Third Supplemental Indenture at Exhibit 4.4).

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10.22+	Leasehold Deed of Trust, Assignment of Leases and Rents, Security Agreement and Fixture Filing (771 S. Nevada Highway) dated August 24, 2001, and made by E-T-T, Inc. to National Title Co., as trustee, for the benefit of The Bank of New York, as beneficiary.
10.23+++++	First Amendment to Leasehold Deed of Trust, Assignment of Leases and Rents, Security Agreement and Fixture Filing (771 S. Nevada Highway) dated February 6, 2003 (included as part of the Third Supplemental Indenture at Exhibit 4.4).
10.24+++++	Leasehold Deed of Trust, Assignment of Leases and Rents, Security Agreement and Fixture Filing (Terrible’s Searchlight Casino) dated February 7, 2003, and made by E-T-T, Inc. to National Title Co., as trustee, for the benefit of The Bank of New York, as beneficiary.
10.25**+	Gaming Devices License Agreement dated August 31, 1998 by and between The Vons Companies, Inc. and Market Gaming, Inc.
10.26**+	License Agreement (Gaming Devices) dated September 16, 1998 by and between Albertson’s, Inc. and Cardivan Company.
10.27**+	Settlement Agreement dated November 18, 1999 among Cardivan Company, Corral United, Inc., Jackpot Enterprises Inc. and Albertson’s Inc.
10.28**+	First Amendment to Settlement Agreement dated December 22, 1999 among Cardivan Company, Corral United, Inc., Jackpot Enterprises Inc. and Albertson’s, Inc.
10.29**+	License Agreement dated April 24, 1997 between American Drug Stores, Inc. and Cardivan Company.
10.30**+	License Agreement dated April 24, 1997 between American Drug Stores, Inc. and Corral United, Inc.
10.31**+	Gaming Devices License Agreement dated August 31, 1998 by and between Safeway, Inc. and Market Gaming, Inc.
10.32*+	License Agreement dated March 12, 1999 between Rite Aid Corporation and Cardivan Company.
10.33*+	First Amendment to Cardivan License Agreement dated March 27, 2000 between Rite Aid Corporation and Cardivan Company.
10.34*+	License Agreement dated March 12, 1999 between Rite Aid Corporation and Corral Coin, Inc.
10.35*+	First Amendment to Corral Coin License Agreement dated March 27, 2000 between Rite Aid Corporation and Corral Coin, Inc.
10.36*+	Gaming Devices License Agreement dated December 20, 1999 by and between Terrible Herbst, Inc. and E-T-T, Inc.
10.37+	Amendment to Gaming Device License Agreement dated May     , 2001 by and between E-T-T, Inc. and Terrible Herbst, Inc.
10.38*+	Agreement dated May 1, 1998 by and between Kmart Corporation and Cardivan Company.

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10.39**+	License Agreement dated April 24, 1997 between Lucky Stores, Inc. and Cardivan Company.
10.40*+++++	Lease and Sublease Agreement dated July 28, 1993, by and between Smith’s Food & Drug Centers, Inc. and Anchor Coin, as amended.
10.41+++++	Hold Harmless Agreement dated as of September 2, 1993 executed by Anchor Coin in favor of Smith’s Food & Drug Centers, Inc.
10.42*+++++	Letter Agreement and Consent to Assignment dated January 16, 2003.
10.43+	Lease Agreement dated July 1, 1997 by and between The Herbst Family Limited Partnership II and E-T-T Enterprises, L.L.C.
10.44+	Lease Agreement dated July 1, 1996 by and between The Herbst Family Limited Partnership and E-T-T, Inc.
10.45+	Lease extension dated April 30, 2001 between The Herbst Family Limited Partnership and E-T-T, Inc.
10.46+	Lease dated September 3, 1993 between The 1993 Samuel Josephson Revocable Family Trust and Phoenix Associates.
10.47+	Agreement for Sale dated August 1, 1995 between Phoenix Associates and Market Gaming, Inc.
10.48+++++	Lease Agreement dated November 27, 2002 by and between Herbst Grandchildren’s Trust and Herbst Gaming, Inc.
10.49+++++	Lease dated June     , 2002 by and between Centennial Acquisitions, LLC and Terrible Herbst, Inc.
10.50+++++	Amendment to Lease dated July 30, 2002 by and between Centennial Acquisitions, LLC and Terrible Herbst, Inc.
10.51+++++	Lease Agreement dated July 1, 2002 by and between Terrible Herbst, Inc. and E-T-T, Inc.
10.52+	Employment Agreement with Edward J. Herbst dated August 1, 2001.
10.53+	Employment Agreement with Mary E. Higgins dated August 1, 2001.
10.54+	Form of Executive Compensation and Bonus Plan.
10.55++	Credit Agreement dated September 6, 2002 by and among Herbst Gaming, Inc., Flamingo Paradise Gaming, LLC, and U.S. Bank National Association.
10.56++	Security Agreement dated as of September 6, 2002, by and between Flamingo Paradise Gaming, LLC and U.S. Bank National Association
10.57+++++	Code of Ethics
10.58++#	First Amendment to Credit Agreement dated December 15, 2003 by and among Herbst Gaming, Inc., Flamingo Paradise Gaming, LLC and U.S. Bank National Association.
12.1++#	Computation of Ratio of Earnings to Fixed Charges.
21.1+	Subsidiaries of Herbst Gaming, Inc.

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31.1	Certification of Edward J. Herbst under Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Mary E. Higgins under Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certifications of Edward J. Herbst and Mary E. Higgins pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

*	Confidential Treatment for a portion of this document has been granted pursuant to Rule 406 under the Securities Act.  The omitted portions have been separately filed with the Commission.
**	Confidential Treatment for a portion of this document has been requested pursuant to Rule 406 under the Securities Act.  The omitted portions have been separately filed with the Commission.
+	Incorporated herein by reference from our registration statement on Form S-4 (SEC No. 33-71094), Part II, Item 21.
++	Incorporated herein by reference from our quarterly report on Form 10-Q filed with the SEC on November 14, 2002.
+++	Incorporated herein by reference from our annual report on Form 10-K/A filed with the SEC on April 9, 2002.
++++	Incorporated herein by reference from our current report on Form 8-K filed with the SEC on March 10, 2003.
+++++	Incorporated herein by reference from our annual report on Form 10-K filed with the SEC on March 24, 2003.
++#	Incorporated herein by reference from our annual report on Form 10-K filed with the SEC on March 17, 2004.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	HERBST GAMING, INC.
	By:		/s/  Edward J. Herbst
			Edward J. Herbst
			Chairman of the Board, Chief Executive Officer
			and President
			(Principal Executive Officer)
Date:		May 20, 2004

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EXHIBIT INDEX

Exhibit No.	Description of Exhibit
31.1	Certification of Chairman and Chief Executive Officer Pursuant to SEC Rules 13c-14(a)
31.2	Certification of Chief Financial Officer Pursuant to SEC Rules 13c-14(a)
32.1	Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

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