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SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

FOR ANNUAL AND TRANSITION REPORTS
PURSUANT TO SECTIONS 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934

(MARK ONE)

/X/ Annual report pursuant to section 13 or 15(d) of the
Securities Exchange Act of 1934
For the fiscal year ended December 31, 1999

/ / Transition report pursuant to section 13 or 15(d) of the
Securities Exchange Act of 1934
For the transition period from to
Commission file number 333-49717
333-49717-01

ALADDIN GAMING HOLDINGS, LLC

ALADDIN CAPITAL CORP.
(Exact name of registrant as specified in its charter)

Nevada 88-0379607
Nevada 88-0379606
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)

831 Pilot Road, Las Vegas, Nevada 89119
(Address of principal executive offices) (Zip code)

(702) 736-7114
(Registrant's telephone number, including area code)

Securities registered pursuant to section 12(b) of the Act: None

Securities registered pursuant to section 12(g) of the Act: None

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

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

Indicate the number of shares outstanding of each of the registrants'
classes of common stock, as of March 15, 2000: Aladdin Gaming Holdings, LLC: Not
applicable; Aladdin Capital Corp.: 2,500 shares of common stock, no par value.

DOCUMENTS INCORPORATED BY REFERENCE

Not applicable.

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PART I

ITEM 1. BUSINESS.

GENERAL

Aladdin Gaming Holdings, LLC, a Nevada limited liability company ("Gaming
Holdings"), was formed on December 1, 1997. Gaming Holdings initially was owned
by Aladdin Gaming Enterprises, Inc., a Nevada corporation ("Gaming Enterprises")
(25%), Sommer Enterprises, LLC, a Nevada limited liability company ("Sommer
Enterprises") (72%), and GAI, LLC, a Nevada limited liability company ("GAI")
(3%). On February 26, 1998, London Clubs International plc ("London Clubs"),
through its subsidiary London Clubs Nevada Inc. ("LCNI"), contributed $50
million for a 25% interest in Gaming Holdings common membership interests
("Holdings Common Membership Interests"). Sommer Enterprises contributed a
portion of land for Holdings Common Membership Interests. Gaming Enterprises,
which is owned 100% by Sommer Enterprises, contributed a portion of land, $7
million of predevelopment costs and $15 million in cash for Holdings Common
Membership Interests. After the additional contributions, Sommer Enterprises
owns 47% of Gaming Holdings, Gaming Enterprises owns 25% of Gaming Holdings,
LCNI owns 25% of Gaming Holdings, and GAI owns 3% of Gaming Holdings. On
November 30, 1998, the Trust Under Article Sixth u/w/o Sigmund Sommer ("Sommer
Trust") and its affiliates agreed that they will cause Sommer Enterprises and
Gaming Enterprises to vote their Holdings Common Membership Interests so that
(taking into account Holdings Common Membership Interests held by London Clubs
or its affiliates) London Clubs controls fifty percent of the voting power of
Gaming Holdings. On December 10, 1999, the holders of Holdings Common Membership
Interests agreed to restate the capital structure of Gaming Holdings, which
restatement provided, in addition to other matters, that LCNI has an option to
convert certain preferred membership interests of Gaming Holdings into 15% of
Holdings Common Membership Interests, the creation of certain new classes of
preferred membership interests and for LCNI's control of the majority of the
Board of Managers of Gaming Holdings; however, most material decisions remain
subject to the supermajority consent of Gaming Holdings members. See "Item 7.
Management's Discussion and Analysis of Financial Condition and Results of
Operations." Aladdin Holdings, LLC, a Delaware limited liability company
("AHL"), indirectly holds a majority interest in Gaming Holdings. The members of
AHL are the Sommer Trust which holds a 95% interest in AHL and GW Vegas, LLC, a
Nevada limited liability company ("GW"), a wholly owned subsidiary of Trust
Company of the West ("TCW"), which holds a 5% interest in AHL.

Gaming Holdings is a holding company, the material assets of which are 100%
of the outstanding common membership interests and 100% of the outstanding
Series A preferred interests of Aladdin Gaming, LLC ("Gaming"). Aladdin Capital
Corp. ("Capital") is a wholly owned subsidiary of Gaming Holdings and was
incorporated solely for the purpose of serving as a co-issuer of the Gaming
Holdings 13 1/2% Senior Discount Notes ("Notes") issued by Gaming Holdings and
Capital in 1998. For further details relating to the Notes, and the Indenture
relating to the Notes ("Note Indenture"), including the covenants, restrictions
and limitations on the Companies pursuant to the Note Indenture, see Exhibit 4.1
to the Company's Registration Statement on Form S-4 filed on April 9, 1998.
Capital does not have any material operations or assets and will not have any
revenues. Gaming Holdings, through its subsidiaries, also owns 100% of Aladdin
Music, LLC ("Aladdin Music"). Except where the context otherwise requires,
Gaming Holdings and its subsidiaries are collectively referred to herein as
"Company."

NARRATIVE DESCRIPTION OF BUSINESS

ALADDIN. The operations of the Company have been primarily limited to the
design, development, financing and construction of a new Aladdin Resort & Casino
("Aladdin"). The Aladdin will be the centerpiece of an approximately 35-acre
world-class resort, casino and entertainment complex ("Complex") located on the
site of the former Aladdin hotel and casino in Las Vegas, Nevada, at the center
of Las Vegas Boulevard ("Strip"). The Aladdin has been designed to include a
luxury-themed hotel of

approximately 2,567 rooms ("Hotel"), an approximately 116,000 square foot casino
("Casino"), an approximately 1,200-seat production showroom and six restaurants.

The Hotel will have 1,832 deluxe guestrooms, 404 resort guestrooms, 258
suites, 46 luxury rooms and 27 mega suites for a total of 2,567 rooms. In
addition, the Hotel will provide recreational facilities for the guests,
including a health spa and outdoor swimming pool complex.

The Aladdin is expected to include six restaurants offering a wide range of
dining selections. Food service facilities at the Aladdin will include a buffet,
contemporary Asian restaurant and a 24-hour casual dining facility. The
mezzanine level, which will offer panoramic views of the main casino floor and
Las Vegas Boulevard, will feature an Italian restaurant, a steakhouse, and a
casual dining/coffee bar.

The Casino's main gaming area will contain approximately 2,800 slot
machines, 87 table games, keno and a race and sports book facility. Included on
a separate level of the Casino will be a 15,000 square foot luxurious gaming
section ("The London Club at Aladdin") that is expected to contain approximately
20 to 30 high denomination table games and approximately 100 high denomination
slot machines. See "Strategic Alliances-London Clubs."

The Aladdin is also expected to include on the mezzanine level of the main
building over 90,000 square feet of convention, conference, trade show and
reception facilities, including a 37,000-square foot main ballroom, 12,000
square feet of pre-function space and 41,000 square feet of breakout space in 15
separate rooms.

THE COMPLEX. The Complex, which has been designed to promote casino traffic
and to provide customers with a wide variety of entertainment alternatives, will
comprise: (i) the Aladdin; (ii) a themed entertainment shopping mall with
approximately 496,000 square feet of retail space ("Desert Passage"); (iii) a
second hotel and casino with a music and entertainment theme ("Aladdin Music
Project"); (iv) the newly renovated 7,000 seat Theater of the Performing Arts
("Theater"); and (v) an approximately 4,800 space car parking facility
("Carpark" and, together with the Desert Passage, hereinafter, "Mall Project").
The Mall Project will be separately owned in part by an affiliate of the Company
and Aladdin Music is currently seeking a joint venture partner for the Aladdin
Music Project. See "Narrative Description of Business--Aladdin Music Project."

The theming of the Aladdin and the Desert Passage has been designated to
create an environment based upon the Legends of the 1001 Arabian Nights,
including the tales of Aladdin, Ali Baba and the 40 Thieves, Sinbad and other
legendary stories woven around ancient wealth and wonders. The Aladdin theme
will be carefully crafted through the interior and exterior architecture of the
Complex. The Aladdin's exterior will be designed to include a highly articulated
streetscape and exterior facade that invokes the Legends of the 1001 Arabian
Nights. The interior of the Aladdin will utilize rich colors, textures and
design, enhancing the fantasy of a mystical, romantic time and place. A
significant feature of the Desert Passage will be the themed area to be known as
the "Lost City." The Lost City is expected to contain a re-creation of an
ancient mystical mountain city and will house a variety of specialty shops and
restaurants underneath a 85-foot high ceiling.

DESERT PASSAGE. Aladdin Bazaar Holdings, LLC ("Bazaar Holdings"), which is
owned 99% by the Sommer Trust, and TrizecHahn Bazaar Centers, Inc. ("THB"), a
subsidiary of TrizecHahn Centers, Inc. ("TrizecHahn"), have entered into a joint
venture agreement and formed Aladdin Bazaar, LLC ("Aladdin Bazaar") to develop,
construct, own and operate the Desert Passage. The Desert Passage, which is
contemplated to contain approximately 496,000 square feet of retail space, is
expected to include an array of high fashion specialty stores, exotic boutiques,
theme restaurants, cafes, and other entertainment offerings. The Desert Passage
will be directly connected to the Casino and the Aladdin Music Project upon its
completion.

ALADDIN MUSIC PROJECT. The Company, through its subsidiary Aladdin Music,
is pursuing prospective joint venture partners for the development, construction
and opening of the Aladdin Music Project, a music and entertainment-themed hotel
casino. The Aladdin Music Project, which is expected to be developed as a second
phase by the Company, is expected to include a hotel with approximately 1,000
rooms, a 50,000 square foot casino, three restaurants, including a music-themed
restaurant, a 1,500-person nightclub, a health spa and an outdoor swimming pool.
Although the Company has not yet secured a joint venture partner, it has
expended certain funds on the Aladdin Music Project. While the Company is
pursuing prospective joint venture partners and acceptable financing for the
Aladdin Music Project, there can be no assurance that the Company will secure an
acceptable joint venture partner and secure financing on terms and conditions
acceptable to the Company. Without securing an acceptable joint venture partner
and financing, there is no assurance that the Company will proceed with the
development of the Aladdin Music Project.

STRATEGIC ALLIANCES

The Company has formed strategic alliances with certain third parties that
the Company believes to be uniquely qualified for the development and operation
of the Complex.

LONDON CLUBS. London Clubs, a prestigious multi-national casino operator,
owns through LCNI 25% of the outstanding Holdings Common Membership Interests,
and preferred interests that are convertible, at the option of LCNI, into an
additional 15% of the Holdings Common Membership Interests. The Sommer Trust and
its affiliates agreed that they will cause Sommer Enterprises and Gaming
Enterprises to vote their Holdings Common Membership Interests so that (taking
into account Holdings Common Membership Interests held by London Clubs or its
affiliates) London Clubs controls fifty percent of the voting power of Gaming
Holdings. Further, the holders of Holding Common Membership Interests entered
into an agreement, dated December 10, 1999, which provided, among other matters,
that LCNI has the option to convert certain preferred membership interests of
Gaming Holdings into 15% of Holdings Common Membership Interests, for the
creation of certain new classes of preferred membership interests and, while
most material decisions remain subject to the supermajority consent of the
members, for LCNI's control of a majority of the Board of Managers of Gaming
Holdings. See "Item 7 Management's Discussion and Analysis of Financial
Condition and Results of Operations."

London Clubs has extensive experience in the international marketing of
casinos to premium players and maintains a strong presence in the United Kingdom
(where it controls the largest share of the London casino market) and the Middle
East. In addition to its equity ownership of Gaming Holdings, London Clubs,
through its subsidiary LCNI, will direct the operations of, and act as marketing
consultant to, The London Club at Aladdin, the luxurious 30,000 square foot
area, which includes 15,000 square feet of gaming area, to be located on the
mezzanine level of the Casino which will be designed to cater to the needs of
the premium-play guest. The Company believes that The London Club at Aladdin
will be the first of its kind in the United States managed by a European
operator and based on the European concept of luxurious, full service gaming
areas for premium players. The London Club at Aladdin's primary business and
marketing focus will be to access London Clubs' worldwide member base of upscale
casino clientele. The London Club at Aladdin Hotel guests will be escorted
through a private entrance to a dedicated registration lobby and then taken via
a private elevator to the suites located on the top two floors. Once there, the
24-hour butler and concierge will cater to the care and comfort of The London
Club at Aladdin guest. In the elegantly appointed The London Club at Aladdin,
the customer may dine in the 100-seat exclusive restaurant, which will offer
fine cuisine from around the world.

London Clubs has extensive experience in the international marketing of
casinos to premium players. London Clubs operates seven casinos in London, one
near Johannesburg, South Africa, two in Egypt and one in Lebanon. Each of London
Clubs' casinos offers its own individual style, but with comparable
internationally recognized standards of service. In recent years, London Clubs
has embarked upon a period of expansion, acquiring the Park Tower Casino in
London's Knightsbridge in October, 1995,

reopening and managing the casino operations of the famous Casino du Liban in
Lebanon in December, 1996, and the opening of the Emerald Safari Casino Resort
in South Africa in December, 1998.

London Clubs provides the Aladdin with an extensive international network of
premium casino players, having established substantial goodwill and customer
loyalty from high-end customers in the United Kingdom, Europe, Asia and the
Middle East. In addition, London Clubs is an experienced service provider to
high-end gaming customers and brings a wealth of knowledge to the Aladdin in
building and maintaining relationships with and customer loyalty from such
clientele. London Clubs also provides the Company with superb promotional
opportunities, not only by word of mouth through its network of contacts, but
also through international sporting sponsorships, including horse racing and
motor racing and its international print publications, which are distributed to
members worldwide utilizing London Clubs' substantial database of premium
clientele.

TRIZECHAHN. The Mall Project will be owned, developed and operated by
Aladdin Bazaar, a joint venture between Bazaar Holdings and TBH, a wholly-owned
subsidiary of TrizecHahn. TrizecHahn is a wholly-owned subsidiary of TrizecHahn
Corporation, a publicly traded real estate company.

TrizecHahn was the developer of the Fashion Show Shopping Mall on the Strip
and other major shopping malls including Horton Plaza in San Diego, Bridgewater
Commons in New Jersey, Valley Fair in San Jose and Park Meadows in Denver. The
Company believes that TrizecHahn's proven ability in designing well laid-out
retail centers, attracting high quality tenants and successfully promoting and
operating its retail projects will benefit the Aladdin by attracting a
consistent stream of visitors to the Complex and its various attractions.

NORTHWIND. The Complex, once fully constructed, will require substantial
amounts of electricity, hot and cold water and heating and cooling. For this
purpose, the Company has entered into certain agreements with Northwind Aladdin,
LLC ("Northwind"), for the construction of a central utility plant ("Plant") to
supply electricity and hot and cold water to certain parts of the Complex.

STRATEGY

The Company's business and marketing strategies are linked together by the
Complex's premier location, its design, mixed-use theme development and
strategic partnering.

CREATE A "MUST-SEE" DESTINATION. The Company believes that the Aladdin,
with its unique, well-executed design, together with the Desert Passage and the
renovated Theater, will ensure its place as a "must-see" destination. The
Company plans to support the Aladdin theme by an interior design enhancing the
fantasy of a mystical and romantic time and place. The Company believes that the
Aladdin's main Casino traffic will be driven not only by Hotel guests, but also
by the customers directly attracted from the Strip, and that visitor traffic to
the Aladdin will also be enhanced by the attractiveness of the Desert Passage.
With the addition of the Aladdin Music Project during the second phase of
developing the Complex, the Complex will have a combined room count of
approximately 3,600 rooms and appeal to what the Company perceives to be a broad
customer demographic.

MARKETING POSITIONING. The Company intends to focus on three different
market segments to attract customers to the Aladdin:

- UPSCALE CLIENTELE. The Hotel has been designed to appeal to the upscale
clientele, providing the amenities and level of service such high-end
guests expect. In particular, 24% of the Hotel's guest rooms and suites
will have an area exceeding 620 square feet. Each of the rooms and suites
will have a large four or five fixture bathroom with a separate shower,
bathtub, up to two washbasins and an enclosed watercloset. The Hotel will
provide recreational facilities for its guests, including a health spa and
two outdoor swimming pools. The Company intends to promote the Hotel's
many features to the upscale market through a variety of media, including
high-end print publications, travel

agents and event sponsorships. A targeted relationship marketing program
is expected to ensure clientele retention and repeat visitation.

- PREMIUM PLAYER CLIENTELE. The Company believes that The London Club at
Aladdin will be the first of its kind in the United States managed by a
European operator and based on the European concept of full-service gaming
areas for premium players. The focus on The London Club at Aladdin's
business is expected to be the wealthy clientele that form the core of
London Clubs' business in London and elsewhere. The Hotel will include 30
suites primarily for use by premium players of Aladdin and The London Club
at Aladdin. The Company intends to maintain The London Club at Aladdin's
premium player atmosphere through more sophisticated dining options,
higher table limits and more formal levels of service and dress.

- UPPER-MIDDLE MARKET CLIENTELE. The Hotel's variety of guest rooms and
restaurants and the 1,200-seat production showroom, combined with the
heavily-themed Casino, Theater and Desert Passage, are expected to appeal
broadly to the upper-middle market guest. In addition, the Aladdin Music
Project, which will be developed as the second phase of the Complex, is
expected to appeal to the upper-middle market by attracting younger,
affluent customers to the Complex through its music and
entertainment-based theme. The Theater, which is expected to be a major
feature of the Complex, will be central to the Company's promotional
strategies for this market segment, with publicity expected to be gained
through the booking of popular performers. The Company intends to use
cooperative advertising and promotion through various media, such as
television, radio and print, will be used to promote the Complex to the
upper-middle market.

CONSTRUCTION BUDGET AND SCHEDULE

Fluor Daniel, Inc. is the design/builder ("Design/Builder") of the Aladdin.
The Design/Builder has entered into a guaranteed maximum price design/build
contract ("Design/Build Contract") (subject to scope changes) with the Company
to design and construct the Aladdin. The Design/Build Contract provides the
Design/Builder with incentives for completing the Aladdin prior to the Contract
Completion Date (as defined herein) and within budget and for payment of
liquidated damages to the Company for certain delays. The Design/Build Contract
is guaranteed by Fluor Corporation, the parent of the Design/ Builder, subject
to certain limitations described in Exhibit 10.10 to this Form 10-K. An
equitable adjustment in the Contract Completion Date and guaranteed maximum
price may be made for changes that either increase or decrease the
Design/Builder's time for performance and/or cost of construction outside what
was contemplated in the Design/Build Contract. For the scope of work outside of
the Design/ Build Contract, Gaming has entered into various guaranteed maximum
price construction contracts, which provide for completion of the respective
work on or before the completion date of the Aladdin.

The development of the Aladdin commenced during the first quarter of 1998.
The Aladdin originally was required by the terms of its financing arrangement to
be completed and opened to the public by June 26, 2000. On January 28, 2000, The
Bank of Nova Scotia, as Administrative Agent under Gaming's Bank Credit Facility
(as defined in "Item 7--Management's Discussion and Analysis of Financial
Condition and Results of Operations"), confirmed the existence of certain force
majeure events and extended the outside completion deadline to August 17, 2000.
The Company currently believes that the completion of the Aladdin will occur
during August 2000, assuming acceleration.

Trust and 25% by London Clubs. Effective as of October 1, 1999, these
contribution percentages were amended to be 60% in the case of the Sommer Trust
and 40% in the case of London Clubs. Notwithstanding the Contribution Agreement,
the $87.8 million Budget increase was funded approximately $83.5 million by
London Clubs and approximately $4.3 million by the Sommer Trust. During March
2000, the Company completed a review of the estimated total costs to complete
and open the Aladdin and, as a result of that review, increased the Budget by
$60.4 million. The Company advised the Sommer Trust and London Clubs of the need
to fund such increase pursuant to the Bank Completion Guaranty. The Sommer Trust
advised the Company and London Clubs that it is not at this time making any
capital contribution in order to fund any portion of this Budget increase of
$60.4 million. In light of the joint and several obligation of the Bank
Completion Guaranty, London Clubs has advised the Company that it would fund all
of this Budget increase by (a) providing a cash equity contribution to the
Company of approximately $13.1 million, which the Company received on March 30,
2000, and (b) establishing a letter of credit in the amount of approximately
$47.3 million to be used to fund the Budget increase. The Company believes that
the Budget as set out above is reasonable and can be achieved.

The Company has submitted the following disputes with the Design/Builder to
arbitration ("Arbitration") pursuant to the provisions of the Design/Build
Contract: caisson and foundation issues; adjustment of contract allowance;
ballroom ceiling heights; trash chutes and laundry chutes; pool area redesign;
increases to site work allowance; drywall changes to hotel tower; temporary
supply lines; plumbing fixture selections; incentive payments; acceleration;
general conditions; and design and project management issues (collectively,
"Claims"). The Company believes that these Claims relate to design and work
which is base contract work contemplated in the Design/Build Contract and
therefore allocated to the Design/ Builder, or alternatively, that the work in
question was required as a result of the Design/Builder's failure to provide
timely and appropriate design services, which design services the Design/Builder
was solely responsible for under the Design/Build Contract, and therefore, the
Claims are not an appropriate basis for a change order modifying the
Design/Build Contract and the contract time for completion date ("Contract
Completion Date"). The Design/Builder has responded to the Company's Claims
alleging, among other things, that the Claims relate to unforeseen conditions,
and/or are due to the actions of the Company, therefore, the Company is
responsible for all costs and delays associated with the Claims. While the
Company intends to aggressively and vigorously pursue the Claims, and believes
that it will ultimately prevail in the Arbitration, the Claims are only in the
preliminary stages of the Arbitration process, and therefore, no assurances can
be given with respect to the ultimate outcome. The Design/Builder has presented
change orders in the amount of approximately $13.8 million, of which the Company
has funded $8.3 million, for the Claims and the Company disputes this amount.
However, if the Company is not successful on all the Claims, it could be
obligated for all or a part of the remaining amounts claimed by the
Design/Builder. Further, if the Company does not prevail on the delay Claims,
the Contract Completion Date would be extended, and to the extent Design/Builder
completes the Project prior to the revised Contract Completion Date, the
Design/Builder would be entitled to an early completion bonus of $100,000 per
day (up to a maximum of 90 days). Any such payments by the Company would
increase the Project's budget. Notwithstanding the Arbitration, work on the
Project continues.

Given the significant risks and unforeseen contingencies inherent in the
construction process, especially a large scale construction project such as the
Aladdin, it is possible that construction costs could be significantly higher
than budget and that delays could occur. Such risks and contingencies include,
for example, potential shortages of materials and labor, work stoppages, labor
disputes, weather interference, unforeseen engineering, environmental or
geological problems and unanticipated cost increases, any of which could be
beyond the Company's control, and any of which could give rise to delays or cost
increases. In addition, difficulties in obtaining any of the requisite licenses,
permits, allocations or authorizations from regulatory authorities could also
increase the total cost, delay or prevent the construction or opening of the
Aladdin or their other components of the Complex or otherwise affect their
respective design and features. If construction costs do exceed the amounts set
forth in the construction budget, it is expected the potential sources to pay
such excess include: (a) the $31.8 million contingency fund of which $22.7
million

has been utilized as of December 31, 1999; (b) London Clubs, the Sommer Trust
and Bazaar Holdings pursuant to their obligations under the Bank Completion
Guaranty of which approximately $67.2 million has been contributed through
December 31, 1999; and (c) the Design/Builder, pursuant to its liability under
the Design/Build Contract, which liability is guaranteed by Fluor Corporation
(subject to certain limitations discussed above).

While management believes that its estimates are reasonable, and that the
projected targets can be met, there can be no assurance that the Complex will be
completed within the time period or budget currently contemplated. In addition,
if the additional identified potential funding sources are insufficient or
unavailable to fully cover any excess, the Company could be materially and
adversely affected. So, while management believes that its estimates are
reasonable, and that the projected targets can be met, there can be no assurance
that the Complex, including the Aladdin, will be completed within the time
period or budget currently contemplated. Failure to complete the Aladdin on
budget or on schedule may have a material adverse effect on the Company and its
financial operations.

The Aladdin, together with the Theater and Desert Passage, is expected to be
developed as the first phase of a planned two-phase redevelopment of the
Complex. In the second phase, subject to the discussion herein, Aladdin Music
plans to develop the Aladdin Music Project. It is currently anticipated that the
Aladdin Music Project will open within approximately 24 months after financing
and a joint venture partner are secured.

The completion and full operation of the Aladdin is not contingent upon the
subsequent financing or completion of the Mall Project or the Aladdin Music
Project and there can be no assurance that either the Mall Project or the
Aladdin Music Project will be completed. If the Mall Project is not completed,
the Company will be required to expend additional amounts, which amounts have
not been quantified by the Company, with respect to the completion of shared
structural space and the cost of parking.

COMPETITION

The hotel and casino industry is highly competitive. Hotels located on or
near the Strip ("Strip Hotels") compete with other Strip Hotels and with other
major hotels in downtown Las Vegas. Aladdin will compete with a large number of
hotel casinos in the Las Vegas area, with many of the competitors being
subsidiaries or divisions of large public companies that may have greater
financial or other resources than the Company.

Competitors of the Aladdin will include themed resorts on the Strip such as
Bellagio, Mandalay Bay Resort, Mirage, Treasure Island Hotel and Casino, Bally's
Casino Resort, Monte Carlo Resort & Casino, Luxor Hotel and Casino, Paris Casino
Resort and Venetian Hotel Casino. Aladdin is the only major resort casino
planned to open on the Strip in 2000. Several other Las Vegas resort casinos
have announced future expansions; however, none of these expansions has
commenced.

The hotel casino operations of the Company will also compete, to some
extent, with other hotel casino facilities in Nevada, Atlantic City and
worldwide and with the state lotteries. In addition, certain states have
recently legalized, and others may or are likely to legalize, casino gaming in
specific areas. The passage of the Indian Gaming Regulatory Act in 1988 has led
to increases in American Indian gaming operations. The Company expects many
competitors to enter such new jurisdictions that authorize gaming. Some of these
competitors may have greater financial and other resources than the Company. The
Company believes that the legalization of large-scale land-based casino gaming
in or near certain major metropolitan areas, particularly in California, from
which the Company expects to attract customers, could have a material adverse
effect on the Las Vegas market. Such proliferation of gaming activities could
significantly and adversely affect the business of the Company.

The Desert Passage will compete with retail malls in or near Las Vegas,
including the Fashion Show Mall, the Forum Shops at Caesars Palace, the Canal
Shoppes at the Venetian Hotel Casino, the themed mall attraction being
constructed at the Mandalay Bay Resort, and retailers in theme-oriented resorts,
all of which may attract consumers away from the Desert Passage and the Complex.

EMPLOYEES

As of March 15, 2000, the Company had approximately 140 employees. The
Company anticipates that immediately prior to completion of the Aladdin, it will
employ approximately 3,800 employees in connection with the Aladdin. The Company
has undertaken a major recruiting and training program prior to the opening of
the Aladdin at a time when other major new facilities have completed recruiting
employees. The Company believes it will be able to attract and retain a
sufficient number of qualified individuals to operate the Aladdin, however,
there can be no assurance that it will be able to do so. Furthermore, the
Company does not know whether or to what extent such employees will be covered
by collective bargaining agreements, as that determination will be ultimately
made by such employees.

SERVICE MARKS

The Company owns four federally registered trademarks utilizing "Aladdin"
for use in connection with casinos and casino entertainment services and hotel
and restaurant services (collectively, "Marks"). The company has filed the
appropriate documentation with the United States Patent and Trademark Office to
ensure the validity of its Marks through the period of time the Aladdin is under
construction. A lien on the Marks was granted to the Bank Lenders on February
26, 1998.

REGULATION AND LICENSING

The ownership and operation of casino gaming facilities in the state of
Nevada are subject to: (i) the Nevada Gaming Control Act and the regulations
promulgated thereunder (collectively, "Nevada Act"); and (ii) various local
regulations (collectively, "Gaming Approvals"). The operation of the Casino by
the Company will be subject to the licensing and regulatory control of the
Nevada Gaming Commission ("Nevada Commission"), the Nevada State Gaming Control
Board ("Nevada Board"), and the Clark County Liquor and Gaming Licensing Board
("CCLGLB"). The Nevada Commission, the Nevada Board, and the CCLGLB are
collectively referred to as the "Nevada Gaming Authorities."

The laws, regulations and supervisory procedures of the Nevada Gaming
Authorities are based upon declarations of public policy that are concerned
with, among other things: (i) the prevention of unsavory or unsuitable persons
from having a direct or indirect involvement with gaming at any time or in any
capacity; (ii) the establishment and maintenance of responsible accounting
practices and procedures; (iii) the maintenance of effective controls over the
financial practices of licensees, including the establishment of minimum
procedures for internal fiscal affairs and the safeguarding of assets and
revenues, providing reliable record keeping and requiring the filing of periodic
reports with the Nevada Gaming Authorities; (iv) the prevention of cheating and
fraudulent practices; and (v) providing a source of state and local

revenues through taxation and licensing fees. Any change in such laws,
regulations and procedures could have a material adverse effect on the proposed
gaming operations of the Aladdin and the financial condition and results of
operations of Aladdin Gaming, LLC, which is defined for this section only as
"Company."

As operator and manager of the Aladdin, the Company will conduct
nonrestricted gaming operations at the Casino and so will be required to be
licensed by the Nevada Gaming Authorities. A nonrestricted gaming license
permits the holder to operate sixteen or more slot machines, or any number of
slot machines with at least one table game. The gaming license will require the
periodic payment of fees and will not be transferable. No person will be able to
become a member of, or receive any percentage of the profits of, the Company
without first obtaining Gaming Approvals. In connection with the registration
and licensing of Gaming Holdings as a holding company and a member, each direct
and indirect owner of Gaming Holdings, including, but not limited to, Gaming
Enterprises, London Clubs, LCNI, London Clubs Holdings, Ltd. (a wholly-owned
subsidiary of London Clubs and the holding company for LCNI), AHL, the Sommer
Trust, Sommer Enterprises, GAI and their respective owners (collectively,
"Aladdin Owners") will be required to obtain from the Nevada Gaming Authorities
the applicable Gaming Approvals. Capital will also be subject to being called
forward for a finding of suitability as a co-issuer of the Notes in the
discretion of the Nevada Gaming Authorities.

Gaming Holdings is a "publicly traded corporation" as that term is defined
in the Nevada Act. If the Company issues an initial public offering of equity it
will also become a "publicly traded corporation" (IPO Entity) as that term is
defined in the Nevada Act. In order for a company that is a publicly traded
corporation to receive a gaming license, the Nevada Commission must exempt the
company from a regulatory provision in the Nevada Act which makes publicly
traded corporations ineligible to apply for or hold a gaming license. However,
the Nevada Commission has exempted companies from this provision in the past and
has granted gaming licenses to publicly traded corporations. If the Company
becomes an IPO Entity, the Company intends to apply for an exemption from this
eligibility requirement ("Exemption") in connection with its application for a
gaming license. In connection with licensing and receipt of the Exemption,
Gaming Holdings, London Clubs, Enterprises and the Company will each also be
required to be registered by the Nevada Commission as a publicly traded
corporation ("Registered Company"). The following regulatory requirements will
be applicable to the Company, Gaming Holdings and the Aladdin Owners upon their
receipt of all necessary Gaming Approvals from the Nevada Gaming Authorities.
The Company, Gaming Holdings and the Aladdin Owners have not yet obtained from
the Nevada Gaming Authorities the Gaming Approvals required in order for the
Company to conduct gaming operations at the Aladdin and there can be no
assurances given that such Gaming Approvals will be obtained, or that they will
be obtained on a timely basis. There can also be no assurances that the
Company's officers, managers and key employees will obtain Gaming Approvals from
the Nevada Gaming Authorities.

As a Registered Company and an entity licensed by the Nevada Gaming
Authorities ("Company Licensee"), the Company will be required to periodically
submit detailed financial information and operating reports to the Nevada
Commission and furnish any other information that the Nevada Commission may
require. No person may become a member of, or receive any percentage of profits
from, a Company Licensee without first obtaining licenses and approvals from the
Nevada Gaming Authorities.

The Nevada Gaming Authorities may investigate any individual who has a
material relationship to, or material involvement with, the Company, Gaming
Holdings and the Aladdin Owners to determine whether such individual is suitable
or should be licensed as a business associate of a Company Licensee. Officers,
managers and certain key employees of the Company and Gaming Holdings must file
applications with the Nevada Gaming Authorities and will be required to be
licensed or found suitable by the Nevada Gaming Authorities in connection with
the Company's application. The Nevada Gaming Authorities may deny an application
for licensing or a finding of suitability for any cause they deem reasonable. A
finding of suitability is comparable to licensing, and both require submission
of detailed personal and financial information followed by a thorough
investigation. The entity with whom the applicant is employed or for

whom the applicant serves, must pay all the costs of the investigation. Changes
in licensed positions must be reported to the Nevada Gaming Authorities, and in
addition to their authority to deny an application for a finding of suitability
or licensure, the Nevada Gaming Authorities have jurisdiction to disapprove a
change in a Company position.

If the Nevada Gaming Authorities were to find an officer, manager or key
employee of the Company or Gaming Holdings unsuitable for licensing or to
continue having a relationship with the Company or Gaming Holdings, the Company
or Gaming Holdings, as the case may be, would have to sever all relationships
with such person. In addition, the Nevada Commission may require the Company or
Gaming Holdings, as the case may be, to terminate the employment of any person
who refuses to file appropriate applications. Determinations of suitability or
of questions pertaining to licensing are not subject to judicial review in
Nevada.

The Company will be required to submit detailed financial and operating
reports to the Nevada Commission. Substantially all material loans, leases,
sales of securities and similar financing transactions by the Company will be
required to be reported to or approved by the Nevada Commission. If the Company
is licensed by the Nevada Gaming Authorities, any (i) guarantees of the Notes
issued by the Company or its members; (ii) hypothecation of assets of the
Company as security for the Notes; and/or (iii) pledges of the equity securities
of the Company as security for the Notes will require the approval of the Nevada
Commission in order to remain effective. An approval by the Nevada Commission of
a pledge of equity securities does not constitute approval to foreclose on such
pledge. Separate approval is required to foreclose on a pledge of equity
securities of a Company Licensee and such approval requires the licensing of the
indenture trustee unless such requirement is waived upon the application of the
indenture trustee. Additionally, any (i) restrictions on the transfer of, and
(ii) agreements not to encumber the equity securities of the Company in respect
of the Notes, may require the approval of the Nevada Commission in order to
remain effective.

If it were determined that the Nevada Act was violated by the Company or
Gaming Holdings, the Gaming Approvals they hold could be limited, conditioned,
suspended or revoked, subject to compliance with certain statutory and
regulatory procedures. In addition, the Company, Gaming Holdings and the persons
involved could be subject to substantial fines for each separate violation of
the Nevada Act at the discretion of the Nevada Commission. Further, a supervisor
could be appointed by the Nevada Commission to operate the Aladdin and, under
certain circumstances, earnings generated during the supervisor's appointment
(except for the reasonable rental value of the Aladdin) could be forfeited to
the state of Nevada. Limitation, conditioning or suspension of any Gaming
Approval or license or the appointment of a supervisor could (and revocation of
any Gaming Approval would) materially adversely affect the gaming operations of
the Aladdin and the financial position and results of operations of the Company
and the Issuers.

Any beneficial holder of a Registered Company's voting or non-voting
securities (including warrants exercisable into such securities) regardless of
the number of shares owned, may be required to file an application, be
investigated, and have its suitability as a beneficial holder of the Registered
Company's securities determined if the Nevada Commission has reason to believe
that such ownership would otherwise be inconsistent with the declared policies
of the state of Nevada. The applicant must pay all costs of investigation
incurred by the Nevada Gaming Authorities in conducting any such investigation.

The Nevada Act requires any person who acquires beneficial ownership of more
than 5% of a Registered Company's voting securities (including warrants
exercisable into voting securities) to report the acquisition to the Nevada
Commission. The Nevada Act requires that beneficial owners of more than 10% of a
Registered Company's voting securities apply to the Nevada Commission for a
finding of suitability within thirty days after the Chairman of the Nevada Board
mails the written notice requiring such filing. Under certain circumstances, an
"institutional investor," as defined in the Nevada Act, which acquires more than
10%, but not more than 15%, of the Registered Company's voting securities
(including warrants

exercisable into voting securities) may apply to the Nevada Commission for a
waiver of such finding of suitability if such institutional investor holds the
voting securities for investment purposes only. An institutional investor shall
not be deemed to hold voting securities for investment purposes unless the
voting securities were acquired and are held in the ordinary course of business
as an institutional investor and not for the purpose of causing, directly or
indirectly, the election of a majority of the members of the board of directors
of the Registered Company, and change in the Registered Company's corporate
charter, bylaws, management, policies or operations of the Registered Company,
or any of its gaming affiliates, or any other action which the Nevada Commission
finds to be inconsistent with holding the Company's voting securities for
investment purposes only. Activities which are not deemed to be inconsistent
with holding voting securities for investment purposes only include: (i) voting
on all matters voted on by stockholders or interest holders; (ii) making
financial and other inquiries of management of the type normally made by
securities analysts for information purposes and not to cause a change in its
management, policies or operations; and (iii) such other activities as the
Nevada Commission may determine to be consistent with such investment intent. If
the beneficial holder of voting securities who must be found suitable is a
corporation, partnership or trust, it must submit detailed business and
financial information, including a list of beneficial owners. The applicant is
required to pay all costs of investigation.

Any person who fails or refuses to apply for a finding of suitability of a
license within thirty days after being ordered to do so by the Nevada Commission
or the Chairman of the Nevada Board, may be found unsuitable. The same
restrictions apply to a record owner if the record owner, after request, fails
to identify the beneficial owner. Any stockholder or beneficial owner found
unsuitable and who holds, directly or indirectly, any beneficial ownership of
the common stock or other equity securities of a Registered Company beyond such
period of time as may be prescribed by the Nevada Commission may be guilty of a
criminal offense. The Registered Company is subject to disciplinary action if,
after it receives notice that a person is unsuitable to be a stockholder or to
have any other relationship with the Company, the Registered Company: (i) pays
that person any dividend, distribution or interest upon voting securities of the
Registered Company; (ii) allows that person to exercise, directly or indirectly,
any voting right conferred through securities held by that person; (iii) pays
remuneration in any form to that person for services rendered or otherwise; or
(iv) fails to pursue all lawful efforts to require such unsuitable person to
relinquish his voting securities including, if necessary, the immediate purchase
of said voting securities for cash at fair market value.

The Nevada Commission may, in its discretion, require the holder of any debt
security of a Registered Company (such as the Notes) to file an application, be
investigated and be found suitable to own the debt security of a Registered
Company. If the Nevada Commission determines that a person is unsuitable to own
such security, then pursuant to the Nevada Act, the Registered Company can be
sanctioned, including the loss of approvals, if without the prior approval of
the Nevada Commission, it: (i) pays to the unsuitable person any dividend,
interest, or any distribution whatsoever; (ii) recognizes any voting right by
such unsuitable person in connection with such securities; (iii) pays the
unsuitable person remuneration in any form; or (iv) makes any payment to the
unsuitable person by way of principal, redemption, conversion, exchange,
liquidation, or similar transaction.

The Company will be required to maintain a current members' ledger in Nevada
that may be examined by the Nevada Gaming Authorities at any time. The Nevada
Commission has the power to require that their respective members' certificates
bear a legend indicating that such securities are subject to the Nevada Act. It
is unknown at this time whether the Nevada Commission will impose this
requirement on the Company.

After becoming a Registered Company, London Clubs, Gaming Enterprises, the
Company and Gaming Holdings may not make a public offering of any securities
(including, but not limited to, the Common Stock of Enterprises upon the
exercise of the Warrants) without the prior approval of the Nevada Commission if
the securities or the proceeds therefrom are intended to be used to construct,
acquire or finance gaming facilities in Nevada, or to retire or extend
obligations incurred for such purposes. Such

approval, if given, does not constitute a finding, recommendation or approval by
the Nevada Commission or the Nevada Board as to the accuracy or adequacy of the
prospectus or the investment merits of the securities. Any representation to the
contrary is unlawful.

The regulations of the Nevada Board and the Nevada Commission also provide
that any entity which is not an "affiliated company," as such term is defined in
the Nevada Act, or which is not otherwise subject to the provisions of the
Nevada Act or such regulations, such as the Company and Gaming Holdings, which
plans to make a public offering of securities intending to use such securities,
or the proceeds from the sale thereof for the construction or operation of
gaming facilities in Nevada, or to retire or extend obligations incurred for
such purposes, may apply to the Nevada Commission for prior approval of such
offering ("Qualified Public Offering"). The Nevada Commission may find an
applicant unsuitable based solely on the fact that it did not submit such an
application, unless upon a written request for a ruling, the Nevada Board
Chairman has ruled that it is not necessary to submit an application. The
exchange offer for the Notes qualified as a public offering. Holdings filed a
written request ("Ruling Request") with the Nevada Board Chairman for a ruling
that it is not necessary to submit the Exchange Offer for prior approval. On
August 21, 1998, the Nevada Board Chairman ruled it was not necessary to submit
the exchange offer for the Notes for the Nevada Commission's prior approval. If
Gaming Holdings or the Company become an IPO Entity prior to receiving its
Gaming Approvals, they intend to file a second Ruling Request with the Nevada
Board Chairman for a ruling that it is not necessary to submit the Qualified
Public Offering for the Nevada Commission's prior approval. No assurance can be
given that such a Ruling Request will be granted or that it will be considered
on a timely basis. If the Nevada Board Chairman rules that approval of the
Qualified Public Offering is required, the Company or Gaming Holdings, as
applicable, will file an application for such approval. If the Ruling Request is
not granted, the Qualified Public Offering could be significantly delayed while
the Company or Holdings seeks approval of the Nevada Board and the Nevada
Commission for the Qualified Public Offering. No assurance can be given that
approval of the Qualified Public Offering, if required, will be granted.

Changes in control of a Registered Company through merger, consolidation,
stock or asset acquisitions, management or consulting agreements, or any act or
conduct whereby a person obtains control, may not occur without the prior
approval of the Nevada Commission. Entities seeking to acquire control of a
Registered Company must satisfy the Nevada Board and Nevada Commission in a
variety of stringent standards prior to assuming control of such Registered
Company. The Nevada Commission may also require controlling stockholders,
officers, directors and other persons having a material relationship or
involvement with the entity proposing to acquire control, to be investigated and
licensed as part of the approval process relating to the transaction.

The Nevada Legislature has declared that some corporate acquisitions opposed
by management, repurchases of voting securities and corporate defense tactics
affecting Nevada gaming licensees, and Registered Companies that are affiliated
with those operations, may be injurious to stable and productive corporate
gaming. The Nevada Commission has established a regulatory scheme to ameliorate
the potentially adverse effects of these business practices upon Nevada's gaming
industry and to further Nevada's policy to: (i) assure the financial stability
of corporate gaming operators and their affiliates; (ii) preserve the beneficial
aspects of conducting business in the corporate form; and (iii) promote a
neutral environment for the orderly governance of corporate affairs. Approvals
are, in certain circumstances, required from the Nevada Commission before the
Registered Company can make exceptional repurchases of voting securities above
the current market price thereof and before a corporate acquisition opposed by
management can be consummated. The Nevada Act also requires prior approval of a
plan of recapitalization proposed by the Registered Company's Board of Directors
in response to a tender offer made directly to the Registered Company's
stockholders or interest holders for the purposes of acquiring the Registered
Company.

License fees and taxes, computed in various ways depending on the type of
gaming or activity involved, are payable to the state of Nevada and to Clark
County, Nevada. Depending upon the particular

fee or tax involved, these fees and taxes are payable either monthly, quarterly
or annually and are based upon either: (i) a percentage of the gross revenues
received; (ii) the number of gaming devices operated; or (iii) the number of
table games operated. A casino entertainment tax will also be paid by the
Company where certain entertainment is provided in a cabaret, nightclub,
cocktail lounge or casino showroom in connection with admissions and the serving
or selling of food, refreshments or merchandise.

Any person who is licensed, required to be licensed, registered, required to
be registered, or is under common control with such persons (collectively,
"Licensees"), and who proposes to become involved in a gaming venture outside of
Nevada, is required to deposit with the Nevada Board and thereafter maintain, a
revolving fund in the amount of $10,000 to pay the expenses of investigation by
the Nevada Board of their participation in such foreign gaming. The revolving
fund is subject to increase or decrease at the discretion of the Nevada
Commission. Thereafter, Licensees are also required to comply with certain
reporting requirements imposed by the Nevada Act. Licensees are also subject to
disciplinary action by the Nevada Commission if they knowingly violate any laws
of the foreign jurisdiction pertaining to the foreign gaming operation, fail to
conduct the foreign gaming operation in accordance with the standards of honesty
and integrity required of Nevada gaming operations, engage in activities or
enter into associations that are harmful to the state of Nevada or its ability
to collect gaming taxes and fees, or employ, contract with or associate with a
person in the foreign operation who has been denied a license or a finding of
suitability in Nevada on the ground of personal unsuitability.

The sale of alcoholic beverages by the Company on the premises of the
Aladdin is also subject to licensing, control and regulation by the CCLGLB. All
licenses are revocable and are not transferable. The CCLGLB has full power to
limit, condition, suspend or revoke any such license, and any such disciplinary
action could (and revocation would) have a material effect on the financial
position and results of operations of the Company and the Issuers.

ITEM 2. PROPERTIES.

The Company owns approximately 35 acres of land on the Strip on the site of
the original Aladdin hotel and casino in Las Vegas, Nevada. Such property
includes the site on which the Aladdin, Mall Project and the Plant are being
constructed and the site on which the Company intends to build the Aladdin Music
Project. The Company is obligated to transfer approximately 12.4 acres of land
to Aladdin Bazaar at a future date and may contribute approximately 4.8 acres of
land to Aladdin Music as part of the development of the Aladdin Music Project.

The Company currently leases three facilities of approximately 63,000 square
feet for its corporate offices, employee recruiting and warehouse requirements.

ITEM 3. LEGAL PROCEEDINGS.

Other than the Arbitration discussed in "Item 1. Business--Construction
Budget and Schedule," the Company is not a party to any material pending
litigation.

Mr. Jack Sommer, the Chairman of the Gaming Holdings Board and the Gaming
Board and a trustee of the Sommer Trust, and the other trustees of the Sommer
Trust, are co-defendants in a legal action relating to the then existing Aladdin
hotel and casino. The suit was commenced by members of the Aronow family
("Aronow Plaintiffs") in May 1995 in the Supreme Court of the State of New York,
County of New York. In their complaint, the Aronow Plaintiffs alleged that Mr.
Sommer and the Aronow Plaintiffs were parties to a joint venture to acquire and
develop the Aladdin hotel and casino and that Mr. Sommer breached such alleged
agreement when the Sommer Trust acquired an interest in the Aladdin hotel and
casino in December, 1994. The Aronow Plaintiffs are seeking (among other
remedies) to impress a constructive trust upon the Sommer Trust's interest in
the Aladdin hotel and casino, an accounting, compensatory damages of not less
than $200 million and punitive damages of not less than $500 million.

On January 27, 2000, each of the Aronow Plaintiffs' claims against the
trustees was dismissed. If this decision stands, there can be no liability as a
result of the Aronow Plaintiffs' lawsuit. It is not known at this time whether
the Aronow Plaintiffs will decide to attempt to reargue or decide to appeal, or
whether any reargument or appeal would be successful. As such, there is no way
to evaluate the likelihood of success of any appeal. An adverse decision could
have a material and adverse effect on the Company.

A lawsuit which was filed by Edward Kanbar, Romano Tio and Adina Winston
against Mr. Sommer and the other trustees of the Sommer Trust has been
successfully resolved in favor of Mr. Sommer and the other trustees and all
appeals have been exhausted. No liability will result from this lawsuit.

In 1988, the Sommer Trust and two related entities commenced an action in
the Southern District of New York against certain entities owned and controlled
by Bronfman family interests ("Bronfman Defendants") alleging, among other
things, that the Bronfman Defendants committed violations of Rule 10b-5 under
the Securities Exchange Act of 1934, as amended, as well as multiple breaches of
fiduciary duties as general partner of a partnership in which the Sommer Trust
owns limited partnership interests. Relief requested includes an accounting,
imposition of a constructive trust and damages in excess of $100 million. The
Bronfman Defendants have asserted counterclaims against plaintiffs and certain
Sommer family members individually alleging causes of action for breach of
contract, fraud and various related torts. The Bronfman Defendants claim damages
in excess of $100 million. The trustees of the Sommer Trust have informed the
Company that they are vigorously defending the counterclaim. However, in the
event the Bronfman Defendants are successful, the Sommer Trust might be required
to pay substantial damages. An adverse decision could have a material and
adverse effect on the Sommer Trust.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

Not applicable.

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

The Company's membership interests have not been registered under the
Securities Act of 1933 nor under Section 12 of the Securities Exchange Act of
1934. There is no established trading market for the common membership interests
of Aladdin Gaming Holdings, LLC and the Company is not aware of any bid
quotations for the common membership interests of Aladdin Gaming Holdings, LLC.

As of March 15, 2000, there were four holders of the common membership
interests of Aladdin Gaming Holdings, LLC and in addition there are two
individuals who have rights to acquire beneficial ownership of common membership
interests of Aladdin Gaming Holdings, LLC. See "Security Ownership of Certain
Beneficial Owners."

Since inception the Company has not paid any dividends on its equity. The
Company's current long-term debt arrangements restrict, subject to certain
exceptions, the payment of dividends on the Company's equity. See
"Item 7--Management's Discussion and Analysis of Financial Condition and Results
of Operations," Exhibit 10.7 to this Form 10-K and "Note 2 Long-Term Debt" of
the Notes to Consolidated Financial Statements for additional information on the
covenants, conditions and restrictions on the Company under the Bank Credit
Facility.

ITEM 6. SELECTED FINANCIAL DATA.

The historical selected financial data set forth below should be read in
conjunction with "Item 7--Management's Discussion and Analysis of Financial
Condition and Results of Operations" and the Financial Statements and Notes
thereto included elsewhere in this Form 10-K. The statement of operations data
for the years ended December 31, 1999, 1998 and 1997, and the balance sheet data
at December 31, 1999, 1998 and 1997 are derived from, and are elsewhere in this
Form 10-K. The historical results are not necessarily indicative of the results
of operations to be expected in the future.

YEAR ENDED DECEMBER 31,
---------------------------------
1999 1998 1997(1)
--------- --------- ---------
(IN THOUSANDS, EXCEPT PER SHARE
DATA)

INCOME STATEMENT DATA:
Gross revenues.............................................. None None None
Promotional Allowances...................................... None None None
Net revenues................................................ None None None
Operating expenses.......................................... None None None
Operating income (loss)..................................... None None None
Interest income (expense), net.............................. $(14,377) $(17,731) None
Net loss.................................................... $ 26,112 $ 42,468 None

Per Share Data:
Loss before extraordinary item.............................. N/A N/A N/A
Extraordinary item.......................................... N/A N/A N/A
Basic and diluted loss per share............................ N/A N/A N/A

Other Data:
Capital expenditures........................................ $217,934 $ 74,669 None
Cash dividends per common membership interest............... None None None

DECEMBER 31,
------------------------------
1999 1998 1997
-------- -------- --------
(IN THOUSANDS)
DATA)

BALANCE SHEET DATA:
Total assets................................................ $468,700 $402,761 $7
Long-term debt (including current maturities)............... $415,426 $392,475 $4
Members' equity............................................. $ 27,236 $(13,860) $3

- - ------------------------

(1) This is for the period from inception (December 1, 1997) through
December 31, 1997.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.

The following discussion should be read in conjunction with the various
other reports which have been previously filed with the United States Securities
and Exchange Commission ("SEC"), which may be inspected, without charge, at the
Public Reference Section of the SEC located at 450 Fifth Street, N.W.,
Washington, D.C. 20549 or at the SEC internet site address: http://www.sec.gov.

DEVELOPMENT ACTIVITIES

The operations of the Company have been limited to obtaining financing for,
securing the land for, arranging for the construction of, finalizing the design
of, constructing and developing, and applying for the appropriate gaming
licenses for the Aladdin.

RESULTS OF OPERATIONS

The Company is in the development stage and has no significant operations to
date. The Company has capitalized all qualifying construction costs.
Accordingly, the Company does not have any historical

operating income. The capitalized costs consist primarily of land contributed by
certain members of Gaming Holdings, design fees, financing and commitment fees,
construction costs and interest on qualifying assets. Capitalized costs include
approximately $2.2 million related to Aladdin Music for necessary predevelopment
costs and expenses of the Aladdin Music Project. The Company's operating
expenses primarily have consisted of interest, amortization costs and expenses
related to the Notes and pre-opening costs.

The Company anticipates that its results of operations from inception to the
opening of the Aladdin will be adversely affected by the expensing of
pre-opening costs and interest not qualifying for capitalization and should not
be indicative of future operations. Accordingly, historical results will not be
indicative of future operating results. Future operating results of the Company
are subject to significant business, economic, regulatory and competitive
uncertainties and contingencies, many of which are beyond the Company's control.
While the Company believes that the Aladdin will be able to attract a sufficient
number of patrons and achieve the level of activity necessary to permit the
Company to meet its debt payment obligations, including the Notes and other
indebtedness, and its other obligations, there can be no assurance with respect
thereto.

Pre-opening expenses for the year ended December 31, 1999, were $11.7
million compared to $24.7 million for the year ended December 31, 1998.
Pre-opening expenses were higher in the prior year due to organizational costs
and expenses related to arranging the financing of the Aladdin.

Interest expense for the year ended December 31, 1999 was $52.2 million
compared to $38.4 million for the year ended December 31, 1998. Interest expense
increased in the current year due to higher funded debt levels as construction
has progressed on the project. The Company pays a higher interest rate on its
bank debt once the funds are utilized for construction compared to the amount
paid for interest when the funds are held in the cash collateral account. The
amount of capitalized interest has increased from $8.2 million in 1998 to $29.5
million in 1999 as construction in progress has increased.

Interest income has decreased in the current year compared to the prior year
as cash balances have been used to fund construction costs, pre-opening expenses
and interest expense.

The Company recorded a net loss of approximately $26.1 million for the year
ended December 31, 1999 and approximately $42.5 million for the year ended
December 31, 1998. The cumulative loss for the period of inception (December 1,
1997) to December 31, 1999 was approximately $68.6 million. The Company had no
operations for the period of inception (December 1, 1997) to December 31, 1999.
The losses were due to the pre-opening expenses, interest expense, amortization
costs and expenses related to the Notes.

MATERIAL CHANGES IN FINANCIAL CONDITION

Through December 31, 1999, approximately $424.2 million had been expended
primarily on the development of the Aladdin, of which approximately $74.5
million had been expended on repayment of debt associated with the land
contribution to the Company, approximately $292.6 million in construction,
furniture, fixtures and equipment, and capitalized interest, approximately $39.5
million in debt issuance and member equity costs, and approximately $17.6
million in pre-opening costs, net interest expense, and other current assets.

LIQUIDITY AND CAPITAL RESOURCES

On February 26, 1998, Gaming Holdings and Capital issued $221.5 million in
aggregate principal amount of the Notes. The proceeds to the Company from the
Notes were approximately $115.0 million and all the proceeds have been utilized
by the Company for the development and construction of the Aladdin. For further
details on the Notes, including the covenants, restrictions and limitations on
the Company pursuant to the Notes Indenture, see Exhibit 4.1 to the Company's
Form 10-K for the year ended December 31, 1998 and "Note 2--Long-Term Debt" to
"Item 8--Financial Statements and Supplementary Data."

Gaming has a credit facility ("Bank Credit Facility" or "Credit Agreement")
with various financial institutions and The Bank of Nova Scotia as the
administrative agent for the lenders (collectively, "Lenders"). The Credit
Agreement consists of three separate term loans. Term A Loan comprises a term
loan of $129.7 million and matures approximately five and one-half years after
the initial borrowing date. Term B Loan comprises a term loan of $114 million
and matures eight and one-half years after the initial borrowing date. Term C
Loan comprises a term loan of $160 million and matures ten years after the
initial borrowing date. As of December 31, 1999, approximately $7.3 million of
the Term B Loan proceeds, plus accrued interest, and approximately $53.3 million
of the Term C Loan proceeds, plus accrued interest, is available. As of December
31, 1999, Gaming has approximately $20 million of interest income that has been
earned on the Term B and Term C Loan proceeds that is also available. The
disbursement of the proceeds of the Term A Loan has not commenced as of the date
hereof. Under the Credit Agreement, Gaming had $21.3 million available for its
investment in Aladdin Music. However, during the Third Quarter of 1999, pursuant
to the Credit Agreement, Gaming could, and did, allocate $15.0 million of such
funds to the Theater renovation and reduced the Term A Loan by the remaining
$6.3 million. For further details on the Bank Credit Facility, including the
covenants, restrictions and limitations on Gaming pursuant to the Bank Credit
Facility, see "Note 2--Long Term Debt" set forth in "Item--8. Financial
Statements and Supplementary Data," and Exhibit 10.8 to the Company's
Registration Statement on Form S-4, Amendment No. 1 filed June 10, 1998.

Gaming has operating lease financing of up to $60 million and a term loan
facility of $20 million to obtain gaming equipment and other specified equipment
(collectively, "FF&E Financing"). On March 6, 2000, disbursements under the FF&E
Financing commenced. For further details on the operating lease financing and
term loan facility, including the covenants, restrictions and limitations on
Gaming pursuant to the FF&E Financing, see Exhibit 10.35 to the Company's Form
10-K for the year ended December 31, 1998 and "Note 2--Long Term Debt" set forth
in "Item 8--Financial Statements and Supplementary Data."

Upon the later of (a) the transfer of the real property under the Mall
Project by Gaming to Aladdin Bazaar or (b) the commencement of Aladdin's
operations, Aladdin Bazaar will execute a promissory note of approximately $16.7
million to Gaming. Principal and interest on the note is payable by Aladdin
Bazaar to Gaming in the amount of $2 million per year. The required payments are
subordinated to various restrictions under the Aladdin Bazaar operating
agreement. Due to the restrictions upon the payments, there can be no assurances
that Gaming will receive any payments under this note.

London Clubs, the Sommer Trust, and Aladdin Bazaar Holdings, LLC ("Bazaar
Holdings"), which is owned 99% by the Sommer Trust, (collectively, "Bank
Completion Guarantors") have entered into a completion guaranty ("Bank
Completion Guaranty") for the benefit of the Lenders under the Bank Credit
Facility, under which they have agreed to guarantee, among other things, the
completion of the Aladdin. The Bank Completion Guaranty is not subject to any
maximum dollar limitations. From January 1, 1999 to December 31, 1999, a total
of approximately $67.2 million in payments has been made pursuant to the Bank
Completion Guaranty, which has been funded approximately $62.8 million by London
Clubs and approximately $4.4 million by the Sommer Trust. Pursuant to a
contribution agreement ("Contribution Agreement"), dated as of February 26,
1998, the Sommer Trust and London Clubs agreed to share all obligations under
the Bank Completion Guaranty, 75% and 25%, respectively, and to the extent that
one of the parties could not fund its proportionate amount under the
Contribution Agreement, the other party could fund the non-contributing party's
proportionate amount. However, effective as of October 1, 1999, London Clubs and
the Sommer Trust amended the "Contribution Percentage" provided in the
Contribution Agreement to be 60% in the case of the Sommer Trust and 40% in the
case of London Clubs. The holders of the Notes are not a party to the Bank
Completion Guaranty; however, London Clubs, the Sommer Trust and Bazaar Holdings
have entered into a limited completion guaranty for the benefit of the
Noteholders ("Noteholder Completion Guaranty") under which they guarantee
completion of the Aladdin, subject to certain important exceptions, limitations
and qualifications. The Noteholder Completion

Guaranty contains certain intercreditor provisions which significantly limit the
rights of the Trustee under the Noteholder Completion Guaranty.

During 1999, the Company increased the Main Project Budget by approximately
$79.6 million, of which $12.4 million was funded in the first quarter of 2000.
This amount reflected an increase in construction costs of approximately $53.2
million, an increase in pre-opening costs of approximately $21.9 million and an
increase in capitalized interest of $4.5 million. Pursuant to the Bank
Completion Guaranty, during 1999, a total of $67.2 million was paid,
approximately $62.8 million by London Clubs and approximately $4.4 million by
the Sommer Trust.

The Aladdin project budget ("Budget") was $826 million when Gaming and
Gaming Holdings entered into arrangements to finance construction of the Aladdin
in February 1998. Since that time and to March 1, 2000, the Budget was increased
by an aggregate of $87.8 million to $913 million, which amounts were funded
pursuant to the Bank Completion Guaranty by London Clubs and the Sommer Trust.
Pursuant to the Contribution Agreement between London Clubs and the Sommer
Trust, dated February 26, 1998 ("Contribution Agreement"), Sommer Trust and
London Clubs agreed that any amounts required to be paid pursuant to the Bank
Completion Guaranty would be funded 75% by the Sommer Trust and 25% by London
Clubs. Effective as of October 1, 1999, these contribution percentages were
amended to be 60% in the case of the Sommer Trust and 40% in the case of London
Clubs. Notwithstanding the Contribution Agreement, the $87.8 million Budget
increase was funded approximately $83.5 million by London Clubs and
approximately $4.3 million by the Sommer Trust. During March 2000, the Company
completed a review of the estimated total costs to complete and open the Aladdin
and, as a result of that review, increased the Budget by $60.4 million. The
Company advised the Sommer Trust and London Clubs of the need to fund such
increase pursuant to the Bank Completion Guaranty. The Sommer Trust advised the
Company and London Clubs that it is not at this time making any capital
contribution in order to fund any portion of this Budget increase of
$60.4 million. In light of the joint and several obligation of the Bank
Completion Guaranty, London Clubs has advised the Company that it would fund all
of this Budget increase by (a) providing a cash equity contribution to the
Company of approximately $13.1 million, which the Company received on March 30,
2000, and (b) establishing a letter of credit in the amount of approximately
$47.3 million to be used to fund the Budget increase. The Company believes that
the Budget as set out above is reasonable and can be achieved.

In connection with the development of the Mall Project, Aladdin Bazaar will
reimburse the Company approximately $14.2 million for the construction of
certain areas shared by the Aladdin and the Mall Project and the facade to the
Aladdin. Additionally, Aladdin Bazaar is obligated to spend no more than $36
million for the Carpark. Therefore, any cost overruns associated with these
items will be borne by the Company. In addition, the Company is obligated to pay
to Aladdin Bazaar: (i) a $3.2 million fee per year for a term of 99 years, which
is adjusted every fifth year pursuant to a consumer price index-based formula,
for usage of the Carpark; and (ii) the Company's proportionate share of the
operating costs associated with the Carpark and other common areas.

The Company believes that the funds provided by the Notes, the Bank Credit
Facility, the FF&E Financing, London Clubs' equity contribution and
contributions pursuant to the Bank Completion Guaranty (collectively, "Funding
Transactions") will be sufficient to develop, complete and commence operation of
the Aladdin; however, there can be no assurance that the Funding Transactions
will be sufficient for the development, construction and commencement of
operation of the Aladdin.

Following the commencement of operations of the Aladdin, the Company expects
to fund its operating, debt service and capital needs, as currently
contemplated, with $15 million of working capital from the Funding Transactions
and operating cash flows. In addition, upon the opening of the Aladdin, the
Company is expected to have an aggregate of $10.0 million available under a
working capital facility; however, there can be no assurance such facility will
be available to the Company, or that, if available, the facility will be on
terms favorable to the Company.

Although no additional financing is contemplated, the Company will seek, if
necessary and to the extent permitted under the Notes Indenture and the terms of
the Bank Credit Facility and the FF&E Financing, additional financing through
additional bank borrowings or debt or equity financings. There can be no
assurance that additional financing, if needed, will be available to the
Company, or that, if available, the financing will be on terms favorable to the
Company. There can also be no assurance that estimates by the Company of its
reasonably anticipated liquidity needs are accurate or that new business
developments or other unforeseen events will not occur, resulting in the need to
raise additional funds.

GAMING HOLDINGS CAPITAL RESTRUCTURE

On December 10, 1999, the holders of Holdings Common Membership Interests
entered into an agreement ("Agreement") to restate the capital structure of
Gaming Holdings. The Sommer Trust and London Clubs are collectively referred to
below as the "Guarantors."

Prior to the execution of the Agreement, if either the Sommer Trust or
London Clubs (each a "Guarantor") was unable to make a capital contribution to
Gaming Holdings as required under the Bank Completion Guaranty and the Gaming
Holdings Operating Agreement, the contributing Guarantor could lend funds to the
other Guarantor to satisfy its obligations under the guaranty. Gaming Holdings
issued Series A Preferred Shares in exchange for all completion guaranty
payments made prior to the execution of the Agreement. The Guarantors determined
that this mechanism for contributing such amounts to Gaming Holdings was not
adequate. Accordingly, they adopted the Agreement to rescind the loans between
them and restate all Completion Guaranty Payments as contributions from the
Guarantor providing the capital directly to Gaming Holdings.

Pursuant to the Agreement, the Series A Preferred Shares previously issued
in exchange for payments made pursuant to the Bank Completion Guaranty
("Completion Guaranty Payments") were rescinded and Gaming Holdings issued (i)
Series A Preferred Shares to London Clubs for $11,817,539 of Completion Guaranty
Payments plus $2,534,519 of unpaid preferred return accrued on such payments
prior to October 1, 1999, (ii) Series C Convertible Preferred Shares to London
Clubs for $30,000,000 of Completion Guaranty Payments made prior to October 1,
1999, (iii) Series CC Convertible Preferred Shares to London Clubs for the
unpaid cumulative preferred return on the Series C Convertible Preferred Shares
that accrued between October 1, 1999 and the date of conversion of the Series C
Convertible Preferred Shares, (iv) Series D Preferred Shares to London Clubs
representing a profits only interest in Gaming Holdings, and (v) Series E
Preferred Shares to the Sommer Trust for $4,333,034 of Completion Guaranty

Payments made prior to October 1, 1999. The Agreement further provides that
Gaming Holdings shall issue, for all future completion guaranty payments made by
the Guarantors (i) Series A Preferred Shares in exchange for the contribution of
such payments and (ii) Series D Preferred Shares representing a profits only
interest in Gaming Holdings.

The Series C Convertible Preferred Shares shall earn a return equal to
twenty percent (20%) per annum, cumulative and compounded semi-annually from
October 1, 1999. London Clubs has the option to convert all (but not less than
all) of the Series C Convertible Preferred Shares into fifteen percent (15%) of
the Holdings Common Membership Interests at any time on or before April 30,
2000. If the Series C Convertible Preferred Shares are converted, LCNI's
ownership interest would increase to forty percent (40%) of the Holdings Common
Membership Interests and Sommer Enterprises' ownership interest would decrease
to thirty-two percent (32%) of the Holdings Common Membership Interests, so
that, when combined with Sommer Enterprises interest in Gaming Enterprises,
Sommer Enterprises would have a total ownership interest of fifty seven percent
(57%). The Series CC Preferred Shares shall earn a return equal to twenty
percent (20%) per annum, cumulative and compounded semi-annually. Pursuant to a
subsequent Letter Agreement between the Guarantors dated February 23, 2000, the
Series D Preferred Shares and the Series A Preferred Shares shall earn a
combined preferred return equal to the return earned on the Series E Preferred
Shares (i.e., thirty percent (30%) per annum, cumulative and compounded
semi-annually). The Series E Preferred Shares shall earn a return equal to
thirty percent (30%) per annum, cumulative and compounded semi-annually. With
respect to the allocation of Profits and Losses, and Distributions including
distributions in liquidation, the following is the order of priority of the
Preferred Shares: Series A Preferred Shares, Series D Preferred Shares, Series C
Convertible, and Series CC Preferred Shares, and collectively (pari passu)
Series E and B Preferred Shares.

As a function of the Agreement, the Guarantors further amended, effective as
of October 1, 1999, the Contribution Agreement so that the "Contribution
Percentage" shall mean, for the purposes of Completion Guaranty Payments, (a)
sixty percent (60%) in the case of the Sommer Trust and (b) forty percent (40%)
in the case of London Clubs.

As part of the Agreement, Gaming Holdings, the Sommer Trust, London Clubs
and LCNI entered into a Redemption Agreement with regard to their respective
right to redeem or purchase, as the case may be, the Series A and D Preferred
Shares (as a unit consisting of one Series A Preferred Share and one Series D
Preferred Share ("Redeemable Preferred Share")) as follows:

Gaming Holdings shall have the right, subject to and in conformity with the
provisions of the Indenture to redeem any amount of Redeemable Preferred Shares
at an amount equal to the fully accreted value of such shares at the time of
redemption, together with a "make whole" agreement whereby the holder of the
Redeemable Preferred Shares being redeemed shall be made whole by Gaming
Holdings with respect to the holder's costs and expenses incurred in financing
the Redeemable Preferred Shares and making them available for redemption by
Gaming Holdings.

Redeemable Preferred Shares (but solely with respect to the proportionate share
of the proceeds from such financing which is directly invested in the Aladdin)
and their purchase by the Sommer Trust including interest at the rate of prime
plus two percent (2%) per annum from the time expenses were incurred by London
Clubs to the time of the make whole payment; and (ii) 100% of any increased tax
consequences to London Clubs or LCNI resulting from the purchase of the
Redeemable Preferred Shares by the Sommer Trust as opposed to redemption by
Gaming Holdings. Upon purchase by the Sommer Trust, and at its option to be
exercised at the time of purchase, the Redeemable Preferred Shares purchased
from London Clubs or LCNI may either (i) (a) be subordinated to those Redeemable
Preferred Shares still held by London Clubs or LCNI, but rank ahead of all other
Preferred Shares, and (b) earn a reduced unit return to be no greater than
twenty percent (20%) or less than fifteen percent (15%) per annum, cumulative
and compounded semi-annually to be determined no later than the time the parties
enter into formal amendments to the Operating and Contribution Agreements; or
(ii) (a) be pari passu with the Redeemable Preferred Shares still held by London
Clubs or LCNI and (b) earn a reduced unit return equal to the yield to worst on
the Notes at the time of purchase by the Sommer Trust plus 100 basis points,
such return to be per annum, cumulative and compounded semi-annually. In the
event that the Sommer Trust is in the position to offer payment as set forth
herein, and makes a good faith offer to purchase up to 60% of the Redeemable
Preferred Shares but London Clubs or LCNI, as the case may be, is unable to sell
such shares for any reason, London Clubs will negotiate in good faith with the
Sommer Trust a "make whole" agreement whereby the Sommer Trust shall be
compensated no more than its actual losses, taking account of the full costs
including financing costs and "make whole" payments it would have incurred in
acquiring and holding such shares, and in any event no more than the return it
would have received by owning the Redeemable Preferred Shares if offered to
purchase from London Clubs or LCNI and exercising the option set forth herein,
less the return the Sommer Trust would receive if it acquired an equivalent
amount of United States Treasury securities at the then prevailing rate.

In the event that the terms of the financing arrangements obtained by London
Clubs with respect to financing future Completion Guaranty Payments requires a
transfer of Holdings Common Membership Interest to London Club's lenders in the
form of non-voting warrants, or otherwise, the Trust and London Clubs have
agreed that both LCNI and Sommer Enterprises shall be diluted in such
proportions and in such amounts as shall be agreed upon by the parties when the
terms of such financing arrangements have been finalized.

The holders of Holdings Common Membership Interests also amended the Gaming
Holdings Operating Agreement (a) in regards to the definition of "Permitted
Transferee" and "Prohibited Transferee;" (b) to provide that the Board of
Managers of Gaming Holdings shall be expanded to seven Board Members and
appointed as follows: (i) Aladdin Enterprises shall appoint three Board Members
and (ii) LCNI shall appoint four Board Members, and as of March 15, 2000, the
Board Members are Jack Sommer, Ronald B. Dictrow and Richard J. Goeglein as
Aladdin Enterprises appointees and Alan L. Goodenough, G. Barry C. Hardy,
William Timmins and one other appointee who shall be an officer, director or
employee of LCI still to be named by LCNI; (c) to provide that the failure of
either the Sommer Trust or London Clubs to pay its pro rata shares of Completion
Guaranty Payments (i) shall not result in the removal by LCNI if London Clubs
has failed to pay its pro rata share, or Aladdin Enterprises, if the Sommer
Trust has failed to pay its pro rata share, of one of their respective
designated Board Members and (ii) shall not result in the replacement of Jack
Sommer as Chairman of the Board; (d) eliminating the requirement of the vote or
consent in writing of a Supermajority to declare setting aside or payment of any
Distribution with respect to Series A Preferred Shares; and (e) including Music
within the definition of Subsidiary of Gaming Holdings.

Section 6.7(b), (c) and (d) of the Amended and Restated Purchase Agreement
dated as of February 26, 1998 between LCNI, London Clubs, Gaming Holdings,
Gaming, Aladdin Holdings, LLC, Sommer Enterprises and the Sommer Trust, which
relates to certain participation and approval rights of LCNI with respect to the
Aladdin Music Project is deleted.

The Board of Managers for Aladdin Music Holdings, LLC and Aladdin Music, LLC
shall each have six Board Members appointed as follows: (a) the Sommer Trust
shall appoint three Board Members; and (b) London Clubs shall appoint three
Board Members.

Notwithstanding any other provision in the parties' agreement as detailed
above, if the parties are unable for any reason to effect a transfer of fifteen
percent (15%) of the Holdings Common Membership Interests to LCNI upon
conversion of the Series C Convertible Preferred Shares, no part of the
Agreement shall be effective.

As of February 23, 2000, the holders of Holdings Common Membership Interests
entered into an agreement whereby, if certain payments are made with respect to
certain letters of credit issued in connection with Gaming's acquisition of
furniture, fixtures and equipment, such payments shall be treated in a manner
similar to Completion Guaranty Payments as set forth above.

MARKET RISK

Effective June 30, 1999, Gaming restructured its interest rate swap
arrangements in an effort to reduce future expenditures for interest. Gaming has
entered into these agreements to manage interest expense, which is subject to
fluctuations due to the variable nature of the London Interbank Offered Rate
("LIBOR"). In exchange for entering into the transaction, Gaming received
$500,000 from the counterparty in July, 1999.

Beginning June 30, 1999, Gaming has the following interest rate swaps,
interest rate ceilings and floor caps, and related notional amounts in effect:
(i) an interest rate swap with an original notional amount of $114 million
increasing to a maximum of $222.5 million whereby interest is fixed at 5.50%
through March 31, 2000; (ii) after March 31, 2000, an interest rate collar with
a notional amount of $250 million, a maximum and minimum interest rate of 7.5%
and 5.15%, respectively, will go into effect and mature on September 30, 2006;
and (iii) an interest rate collar with a notional amount of $160 million, a
maximum rate of 8.00%, a minimum rate of 5.15% and a maturity date of March 31,
2003. All rates noted above are LIBOR equivalents only and do not include the
impact of the basis point additions to LIBOR that are used in calculating
interest expense on Gaming's term loans. The LIBOR applicable to these
agreements was 6.16% as of December 31, 1999. The fair market value of the
Gaming's interest rate swaps, interest rate ceilings and floor caps as provided
by the counterparty, is a net receivable of approximately $4.9 million at
December 31, 1999.

The notional amounts do not represent amounts exchanged by the parties, and
thus are not a measure of exposure of Gaming. The amounts exchanged are normally
based on the notional amounts and other terms of the swaps. The variable rates
are subject to change over time as LIBOR fluctuates.

Neither Gaming nor the counterparty, which is a prominent financial
institution, is required to collateralize their respective obligations under
these swaps. Gaming is exposed to loss if the counterparty defaults. However,
the Company considers the risk of non-performance to be minimal as the
counterparty is a member of the Bank Credit Facility.

RECENTLY ISSUED ACCOUNTING STANDARDS

In June 1998, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 133, "Accounting for
Derivative Instruments and Hedging Activities." SFAS No. 133 requires that
entities record all derivatives as assets or liabilities measured at fair value,
with the change in fair value recognized in earnings or in other comprehensive
income, depending on the use of the derivative and whether it qualifies for
hedge accounting. SFAS No. 133 amends or supercedes several current accounting
statements. In July 1999, the FASB issued SFAS No. 137 which delays the
effective date of SFAS No. 133 from fiscal year 2000 to fiscal year 2001. Gaming
Holdings is in the process of analyzing SFAS No. 133 and the impact on its
consolidated financial position and results of operations.

CERTAIN FORWARD LOOKING STATEMENTS

Certain information included in this Form 10-K and other materials filed or
to be filed by the Company with the Securities and Exchange Commission (as well
as information included in oral statements or other written statements made or
to be made by the Company) contains statements that are forward-looking within
the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. Such statements
include, without limitation, those relating to the Design/Build Contract, the
Credit Agreement and other agreements, plans for future operations, current
construction and development activities (including competition dates and
budgets), other business development activities, capital spending, financing
sources and the effect of regulation (including gaming and tax regulations) and
competition. Such forward-looking information involves important risks and
uncertainties that could significantly affect anticipated results in the future
and, accordingly, such results may differ from those expressed in any
forward-looking statements made by or on behalf of the Company. These risks and
uncertainties include, but are not limited to, those relating to the current
development and construction activities and costs and timing thereof, the
sources and extent of financing for the Project, dependence on existing
management, leverage and debt service (including sensitivity to fluctuations in
interest rates), domestic or international economic conditions (including
sensitivity to fluctuations in foreign currencies), changes in federal or state
tax laws or the administration of such laws, changes in gaming laws or
regulations (including the legalization of gaming in certain jurisdictions) and
application for licenses and approvals under applicable jurisdictional laws and
regulations (including gaming laws and regulations).

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

There is incorporated by reference the information appearing under the
caption "Market Risk" in Item 7 of this Form 10-K.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

Report of Independent Public Accountants

To the Board of Directors and Members of
Aladdin Gaming Holdings, LLC:

We have audited the accompanying consolidated balance sheets of Aladdin
Gaming Holdings, LLC (a Nevada limited liability company in the development
stage) and subsidiaries as of December 31, 1999 and 1998, and the related
consolidated statements of operations, members' equity and cash flows for the
years ended December 31, 1999 and 1998 and for the period from inception
(December 1, 1997) to December 31, 1999. 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. 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, the financial statements referred to above present fairly,
in all material respects, the financial position of Aladdin Gaming Holdings, LLC
and subsidiaries as of December 31, 1999 and 1998, and the results of their
operations and their cash flows for the years ended December 31, 1999 and 1998,
and for the period from inception (December 1, 1997) to December 31, 1999 in
conformity with accounting principles generally accepted in the United States.

ARTHUR ANDERSEN LLP

Las Vegas, Nevada
March 30, 2000

ALADDIN GAMING HOLDINGS, LLC AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

CONSOLIDATED BALANCE SHEETS

DECEMBER 31, 1999 AND 1998

(IN THOUSANDS)

DECEMBER 31, DECEMBER 31,
1999 1998
------------ -------------

ASSETS
Current assets:
Cash and cash equivalents................................. $ 1,669 $ 1,248
Restricted cash and cash equivalents...................... 80,471 --
Interest receivable restricted cash....................... 222 859
Receivables, related parties.............................. 8 77
Other receivables......................................... 1 765
Inventory................................................. 59 60
Prepaid assets............................................ 320 119
Restricted land to be transferred......................... 6,842 6,842
-------- --------
Total current assets.................................... 89,592 9,970
-------- --------
Property and equipment:
Land...................................................... 33,407 33,407
Furniture, fixtures and equipment......................... 950 272
Construction in progress.................................. 274,398 86,557
Capitalized interest...................................... 37,758 8,213
-------- --------
346,513 128,449
Less accumulated depreciation and amortization.............. (176) (17)
-------- --------
Net property and equipment................................ 346,337 128,432
-------- --------
Other assets:
Restricted cash and cash equivalents...................... -- 227,983
Other assets.............................................. 2,067 2,061
Debt issuance costs, net of accumulated amortization of
$6,442 and $2,831 as of December 31, 1999 and 1998,
respectively............................................ 30,704 34,315
-------- --------
Total other assets...................................... 32,771 264,359
-------- --------
$468,700 $402,761
======== ========
LIABILITIES AND MEMBERS' EQUITY
Current liabilities:
Current maturities of long-term debt...................... $ 4,700 $ --
Accounts payable.......................................... 2,752 1,005
Construction payable...................................... 12,193 12,063
Obligation to transfer land............................... 6,842 6,842
Accrued interest.......................................... 2,183 1,734
Accrued expenses.......................................... 2,068 2,502
-------- --------
Total current liabilities............................... 30,738 24,146
-------- --------
Long-term debt, net of discount............................. 403,393 388,353
Related party payables...................................... 7,330 4,119
Advances to purchase membership interests................... 3 3
Commitments and contingencies............................... -- --
Members' equity:
Preferred membership interest............................. 75,044 --
Common membership interest, 10,000,000 membership
interests authorized; 1,000,000 common membership
interests issued and outstanding as of December 31, 1999
and 1998................................................ 28,608 28,608
Deficit accumulated during the development stage.......... (76,416) (42,468)
-------- --------
Total members' equity................................... 27,236 (13,860)
-------- --------
$468,700 $402,761
======== ========

See accompanying summary of accounting policies and notes to consolidated
financial statements.

ALADDIN GAMING HOLDINGS, LLC AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

CONSOLIDATED STATEMENTS OF OPERATIONS

YEAR ENDED DECEMBER 31, 1999 1998 AND THE PERIOD
FROM INCEPTION (DECEMBER 1, 1997) THROUGH DECEMBER 31, 1999

(IN THOUSANDS)

FOR THE PERIOD FROM
INCEPTION
(DECEMBER 1, 1997)
FOR THE YEAR ENDED FOR THE YEAR ENDED THROUGH
DECEMBER 31, 1999 DECEMBER 31, 1998 DECEMBER 31, 1999
------------------- ------------------- -------------------

Pre-opening costs.......................... $ 11,735 $ 24,737 $ 36,472

Other (income) expense:
Interest income.......................... (8,280) (12,472) (20,752)
Interest expense......................... 52,202 38,416 90,618
Less: Interest capitalized............... (29,545) (8,213) (37,758)
-------- -------- --------
Total other (income) expense........... 14,377 17,731 32,108
-------- -------- --------
Net loss accumulated during the development
stage.................................... $ 26,112 $ 42,468 $ 68,580
======== ======== ========

See accompanying summary of accounting policies and notes to consolidated
financial statements.

ALADDIN GAMING HOLDINGS, LLC AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF MEMBERS' EQUITY

FOR THE PERIOD FROM INCEPTION (DECEMBER 1, 1997)

THROUGH DECEMBER 31, 1999

(IN THOUSANDS)

SOMMER ENTERPRISES, LLC ALADDIN GAMING ENTERPRISES, LLC
------------------------------------- -------------------------------------
DEFICIT DEFICIT
ACCUMULATED ACCUMULATED
COMMON PREFERRED DURING THE COMMON PREFERRED DURING THE
MEMBERSHIP MEMBERSHIP DEVELOPMENT MEMBERSHIP MEMBERSHIP DEVELOPMENT
INTEREST INTEREST STAGE INTEREST INTEREST STAGE
---------- ---------- ----------- ---------- ---------- -----------

BALANCE, DECEMBER 1, 1997.... $ -- $ -- $ -- $ -- $ -- $ --
Member Contributions......... 1 -- -- -- -- --
-------- -------- -------- -------- -------- --------
BALANCE, DECEMBER 31,
1997....................... 1 -- -- -- -- --
Net loss for the period...... -- -- (19,960) -- -- (10,617)
Member Contributions......... (47,317) -- -- 28,247 -- --
Members' equity costs........ (1,093) -- -- (581) -- --
-------- -------- -------- -------- -------- --------
BALANCE, DECEMBER 31,
1998....................... (48,409) -- (19,960) 27,666 -- (10,617)
Net loss for the period...... -- -- (12,273) -- -- (6,528)
Member Contributions......... -- 34,613 -- -- -- --
Restatement of Preferred
Interests.................. -- (30,280) -- -- -- --
Preferred Return............. -- 1,944 (2,637) -- -- (1,402)
Restatement of Preferred
Return..................... -- (1,069) (1,046) -- -- (557)
-------- -------- -------- -------- -------- --------
BALANCE, DECEMBER 31,
1999....................... $(48,409) $ 5,208 $(35,916) $ 27,666 $ -- $(19,104)
======== ======== ======== ======== ======== ========

See accompanying summary of accounting policies and notes to consolidated
financial statements.

ALADDIN GAMING HOLDINGS, LLC AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF MEMBERS' EQUITY (CONTINUED)

FOR THE PERIOD FROM INCEPTION (DECEMBER 1, 1997)

THROUGH DECEMBER 31, 1999

(IN THOUSANDS)

LONDON CLUBS NEVADA, INC. GAI, LLC
------------------------------------- -------------------------------------
DEFICIT DEFICIT
ACCUMULATED ACCUMULATED
COMMON PREFERRED DURING THE COMMON PREFERRED DURING THE
MEMBERSHIP MEMBERSHIP DEVELOPMENT MEMBERSHIP MEMBERSHIP DEVELOPMENT
INTEREST INTEREST STAGE INTEREST INTEREST STAGE
---------- ---------- ----------- ---------- ---------- -----------

BALANCE, DECEMBER 1, 1997.... $ -- $ -- $ -- $ -- $-- $ --
Member Contributions......... -- -- -- 2 -- --
-------- ------- -------- ---- --- -------
BALANCE, DECEMBER 31,
1997....................... -- -- -- 2 -- --
Net loss for the period...... -- -- (10,617) -- -- (1,274)
Member Contributions......... 50,000 -- -- -- -- --
Members' equity costs........ (581) -- -- (70) -- --
-------- ------- -------- ---- --- -------
BALANCE, DECEMBER 31,
1998....................... (49,419) -- (10,617) (68) -- (1,274)
Net loss for the period...... -- -- (6,528) -- -- (783)
Member Contributions......... -- 32,595 -- -- -- --
Restatement of Preferred
Interests.................. -- 30,280 -- -- -- --
Preferred Return............. -- 3,665 (1,402) -- -- (168)
Restatement of Preferred
Return..................... -- 3,296 (557) -- -- (67)
-------- ------- -------- ---- --- -------
BALANCE, DECEMBER 31,
1999....................... $(49,419) $69,836 $(19,104) $(68) $-- $(2,292)
======== ======= ======== ==== === =======

See accompanying summary of accounting policies and notes to consolidated
financial statements.

ALADDIN GAMING HOLDINGS, LLC AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF MEMBERS' EQUITY (CONTINUED)

FOR THE PERIOD FROM INCEPTION (DECEMBER 1, 1997)

THROUGH DECEMBER 31, 1999

(IN THOUSANDS)

TOTAL
-------------------------------------
DEFICIT
ACCUMULATED
COMMON PREFERRED DURING THE
MEMBERSHIP MEMBERSHIP DEVELOPMENT
INTEREST INTEREST STAGE
---------- ---------- -----------

BALANCE, DECEMBER 1, 1997................................. $ -- $ -- $ --
Member Contributions...................................... 3 -- --
------- ------- --------
BALANCE, DECEMBER 31, 1997................................ 3 -- --
Net loss for the period................................... -- -- (42,468)
Member Contributions...................................... 30,930 -- --
Members' equity costs..................................... (2,325) -- --
------- ------- --------
BALANCE, DECEMBER 31, 1998................................ 28,608 -- (42,468)
Net loss for the period................................... -- -- (26,112)
Member Contributions...................................... -- 67,208 --
Restatement of Preferred Interests........................ -- -- --
Preferred Return.......................................... -- 5,609 (5,609)
Restatement of Preferred Return........................... -- 2,227 (2,227)
------- ------- --------
BALANCE, DECEMBER 31, 1999................................ $28,608 $75,044 $(76,416)
======= ======= ========

See accompanying summary of accounting policies and notes to consolidated
financial statements.

ALADDIN GAMING HOLDINGS, LLC AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

CONSOLIDATED STATEMENTS OF CASH FLOWS

YEAR ENDED DECEMBER 31, 1999 AND 1998 AND THE PERIOD
FROM INCEPTION (DECEMBER 1, 1997)
THROUGH DECEMBER 31, 1999

(IN THOUSANDS)

FOR THE PERIOD
FROM INCEPTION
(DECEMBER 1, 1997)
FOR THE YEAR ENDED FOR THE YEAR ENDED THROUGH
DECEMBER 31, 1999 DECEMBER 31, 1998 DECEMBER 31, 1999
------------------- ------------------- -------------------

Cash flows from operating activities:
Net loss.................................. $ (26,112) $ (42,468) $ (68,580)
Adjustments to reconcile net loss to net
cash provided by (used in) operating
activities:
Depreciation and amortization............. 159 17 176
Amortization of debt costs................ 3,611 2,831 6,442
Amortization of original issue discount... 19,740 14,306 34,046
Change in assets and liabilities:
Interest receivable....................... 637 (859) (222)
Inventory................................. 1 (60) (59)
Prepaid expense........................... (201) (118) (320)
Receivables............................... 833 (842) (8)
Other assets.............................. (6) (2,061) (2,067)
Accounts payable.......................... 1,747 3,394 2,752
Accrued expenses.......................... (434) 113 2,068
Accrued interest.......................... 449 1,734 2,183
Related party payable..................... 3,211 3,354 6,565
--------- --------- ---------
Net cash provided by (used in) operating
activities................................ 3,635 (20,659) (17,024)
--------- --------- ---------
Cash flows from investing activities:
Payments for construction in progress..... (187,711) (66,184) (253,895)
Payments for furniture and equipment...... (678) (272) (950)
Payments for capitalized interest......... (29,545) (8,213) (37,758)
(Increase) Decrease in restricted cash.... 147,512 (227,983) (80,471)
--------- --------- ---------
Net cash used in investing activities....... (70,422) (302,652) (373,074)
--------- --------- ---------
Cash flows from financing activities:
Proceeds from issuance of notes........... -- 100,047 100,047
Proceeds from long-term debt.............. -- 274,000 274,000
Repayment of long-term debt............... -- (547) (547)
Debt issuance costs....................... -- (37,146) (37,146)
Members' contributions.................... 67,208 65,000 132,211
Members' equity costs..................... -- (2,325) (2,325)
Payment of debt on contributed land....... -- (74,477) (74,477)
Payable to related parties................ -- -- 1
Advances to purchase membership
interests............................... -- -- 3
--------- --------- ---------
Net cash provided by financing activities... 67,208 324,552 391,767
--------- --------- ---------
Net increase in cash........................ 421 1,241 1,669
Cash at beginning of period................. 1,248 7 --
--------- --------- ---------
Cash at end of period....................... 1,669 $ 1,248 $ 1,669
--------- --------- ---------
Supplemental disclosures of cash flow
information and non-cash investing and
financing activities:
Cash paid for interest, net of amount
capitalized............................... (5,118) $ 11,332 $ 6,214
Members' contributions book value
Land...................................... -- 33,407 33,407
Construction in progress.................. -- 7,000 7,000
Equipment acquired equal to assumption of
debt...................................... -- 547 547
Increase in construction payables........... 130 12,063 12,193
Preferred dividends......................... 7,836 -- --

See accompanying summary of accounting policies and notes to consolidated
financial statements.

ALADDIN GAMING HOLDINGS, LLC AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NATURE OF OPERATIONS AND PRINCIPLES OF CONSOLIDATION

Aladdin Gaming Holdings, LLC, a Nevada limited liability company ("Gaming
Holdings"), was formed on December 1, 1997. Gaming Holdings initially was owned
by Aladdin Gaming Enterprises, Inc., a Nevada corporation ("Gaming Enterprises")
(25%), Sommer Enterprises, LLC, a Nevada limited liability company ("Sommer
Enterprises") (72%), and GAI, LLC, a Nevada limited liability company ("GAI")
(3%). On February 26, 1998, London Clubs International plc ("London Clubs"),
through its subsidiary London Clubs Nevada Inc. ("LCNI"), contributed $50
million for a 25% interest in Gaming Holdings common membership interests
("Holdings Common Membership Interests"). Sommer Enterprises contributed a
portion of land for Holdings Common Membership Interests. Gaming Enterprises,
which is owned 100% by Sommer Enterprises, contributed a portion of land, $7
million of predevelopment costs and $15 million in cash for Holdings Common
Membership Interests. After the additional contributions, Sommer Enterprises
owns 47% of Gaming Holdings, Gaming Enterprises owns 25% of Gaming Holdings,
LCNI owns 25% of Gaming Holdings, and GAI owns 3% of Gaming Holdings. On
November 30, 1998, the Sommer Trust and its affiliates agreed that they will
cause Sommer Enterprises and Gaming Enterprises to vote their respective
Holdings Common Membership Interests so that (taking into account Holdings
Common Membership Interests held by London Clubs or its affiliates) London Clubs
controls fifty percent of the voting power of Gaming Holdings. See Note 3 for
additional disclosures regarding voting power. On December 10, 1999, the holders
of Holdings Common Membership Interest agreed to restate the capital structure
of Gaming Holdings, which restatement provided, in addition to other matters,
that LCNI has an option to convert certain preferred membership interests of
Gaming Holdings into 15% of Holding Common Membership Interests, the creation of
certain new classes of preferred membership interests and for LCNI's control of
the majority of the Board of Managers of Gaming Holdings; however, most material
decisions remain subject to the supermajority consent of Gaming Holdings
members. See "Note 3. Classes of Interest." Aladdin Holdings, LLC, a Delaware
limited liability company ("AHL"), indirectly holds a majority interest in
Gaming Holdings. The members of AHL are the Trust Under Article Sixth u/w/o
Sigmund Sommer ("Sommer Trust") which holds a 95% interest in AHL and GW Vegas,
LLC, a Nevada limited liability company ("GW"), a wholly owned subsidiary of
Trust Company of the West ("TCW"), which holds a 5% interest in AHL.

The operations of the Company have been primarily limited to the design,
development, financing and construction of a new Aladdin Resort and Casino
("Aladdin"). The Aladdin will be the centerpiece of an approximately 35-acre
world-class resort, casino and entertainment complex ("Complex") located on the
site of the former Aladdin hotel and casino in Las Vegas, Nevada, a premier
location at the center of Las Vegas Boulevard. The Aladdin has been designed to
include a luxury themed hotel of approximately 2,600 rooms, an approximately
116,000 square foot casino, an approximately 1,200-seat production showroom and
six restaurants.

ALADDIN GAMING HOLDINGS, LLC AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
The Complex will comprise: (i) the Aladdin; (ii) a themed entertainment
shopping mall with approximately 496,000 square feet of retail space ("Desert
Passage"); (iii) a second hotel and casino with a music and entertainment theme
("Aladdin Music Project"); (iv) the newly renovated 7,000 seat Theater of the
Performing Arts ("Theater"); and (v) an approximately 4,800 space car parking
facility ("Carpark" and, together with the Desert Passage, hereinafter, "Mall
Project"). The Mall Project will be separately owned in part by an affiliate of
the Company and Aladdin Music is currently seeking a joint venture partner for
the Aladdin Music Project.

The consolidated financial statements include the accounts of Gaming
Holdings and its wholly-owned subsidiaries. Significant inter-company accounts
are eliminated in consolidation.

CASH, CASH EQUIVALENTS AND RESTRICTED CASH

The Company considers all highly liquid investments purchased with an
original maturity of three months or less to be cash equivalents. As of December
31, 1999, restricted cash consisted of cash and cash equivalents held for
construction and development of the Aladdin.

PROPERTY AND EQUIPMENT

Property and equipment consists primarily of expenditures incurred for the
design and construction of the Aladdin and have been capitalized as construction
in progress. These amounts are expected to be reclassified to buildings and land
improvements upon completion of the facility and will be depreciated over the
useful life of the assets. Furniture, fixtures and equipment are stated at cost
and depreciation is computed using the straight-line method over the estimated
useful life of between three and ten years.

INVENTORIES

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

FAIR VALUE OF CERTAIN FINANCIAL INSTRUMENTS

The carrying amount of cash equivalents, receivables and all current
liabilities approximates fair value because of the short term maturity of these
instruments. The fair value of a financial instrument is the amount at which the
instrument could be exchanged in a current transaction between willing parties.
See Note 2 for additional fair value disclosures.

INTEREST COSTS

Interest costs associated with major construction projects are capitalized.
Interest is capitalized on amounts expended to construct the Aladdin using the
weighted-average cost of the Company's outstanding borrowings. The capitalized
interest will be recorded as part of the asset to which it relates and will be
amortized over the asset's useful life. Capitalization of interest ceases when
the project is substantially complete.

ALADDIN GAMING HOLDINGS, LLC AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
INTEREST RATE SWAPS

The Company uses interest rate swaps and similar financial instruments to
assist in managing interest incurred on its long-term debt. The difference
between amounts received and amounts paid under such agreements, as well as any
costs or fees, is recorded as a reduction of, or addition to, interest expense
as incurred over the life of the swap or similar financial instruments.

PRE-OPENING COSTS

In April 1998, the Accounting Standards Executive Committee of the American
Institute of Certified Public Accountants issued Statement of Position No. 98-5
REPORTING ON THE COSTS OF START-UP ACTIVITIES ("SOP 98-5"). The provisions of
SOP 98-5 are effective for fiscal years beginning after December 15, 1998 and
require that the costs associated with start-up activities (including
pre-opening costs of casinos) be expensed as incurred. SOP 98-5 permits early
adoption in fiscal years for which annual financial statements have not yet been
issued.

Effective January 1, 1998, the Company adopted the provisions of SOP 98-5.
Pre-opening costs include, but are not limited to, salary related expenses for
new employees and management opening team, travel and lodging expenses, training
costs, advertising and marketing, organizational costs and all temporary
facility costs (i.e. rent, insurance, utilities, etc.).

DEBT DISCOUNT AND ISSUANCE COSTS

Debt discount and issuance costs are capitalized and amortized to expense
based on the terms of the related debt agreements using the effective interest
method or a method which approximates the effective interest method.

INCOME TAXES

The Company is a limited liability company and will be taxed as a
partnership for federal income tax purposes. Accordingly, no provision for
federal income taxes was recorded because the taxable income or loss is included
in the income tax returns of the members.

IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS

In June 1998, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 133, "Accounting for
Derivative Instruments and Hedging Activities." SFAS No. 133 requires that
entities record all derivatives as assets or liabilities measured at fair value,
with the change in fair value recognized in earnings or in other comprehensive
income, depending on the use of the derivative and whether it qualifies for
hedge accounting. SFAS 133 amends or supercedes several current accounting
statements. In July 1999, the FASB issued SFAS No. 137 which delays the
effective date of SFAS No. 133 from fiscal year 2000 to fiscal year 2001. Gaming
Holdings is in the process of analyzing SFAS No. 133 and the impact on its
consolidated financial position and results of operations.

ALADDIN GAMING HOLDINGS, LLC AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
USE OF ESTIMATES

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

RECLASSIFICATIONS

Certain amounts have been reclassified to conform with 1999 presentations.

2. LONG-TERM DEBT

Long-term debt and current maturities of long-term debt are comprised of the
following:

DECEMBER 31, 1999 DECEMBER 31, 1998
----------------- -----------------
(IN THOUSANDS)

Long-term debt:
Senior Discount Notes (Net of unamortized
discount of $87,407 at 12/31/99 and
$107,147 at 12/31/98)................... $134,093 $114,353
-------- --------
Term B Loan............................... $114,000 $114,000
Term C Loan............................... 160,000 160,000
-------- --------
$408,093 $388,353
Less current maturities of long-term
debt.................................. 4,700 --
-------- --------
Total long-term debt.................... $403,393 $388,353
======== ========

SENIOR DISCOUNT NOTES

On February 26, 1998, Gaming Holdings, Capital and Gaming Enterprises
consummated a private offering ("Offering") under Rule 144A of the Securities
Act of 1933. The Offering consisted of 221,500 units ("Units"), each Unit
consisting of: (i) $1,000 principal amount of maturity of 13 1/2% Senior
Discount Notes due 2010 ("Notes") of Gaming Holdings and Capital; and (ii) 10
warrants ("Warrants") to purchase 10 shares of Class B non-voting common stock,
no par value, of Gaming Enterprises. The Notes and the Warrants became
separately transferable on July 23, 1998. The Warrants became exercisable on
July 23, 1998, and will expire on March 1, 2010.

On August 26, 1998, Gaming Holdings and Capital completed an exchange offer
for 100% of the aggregate principal amount of the Notes pursuant to a
registration statement dated July 23, 1998. The Notes were exchanged for notes
with substantially the same terms issued in the private placement on February
26, 1998.

The initial accreted value of the Notes was $519.40 per $1,000 principal
amount at maturity of the Notes. The Notes will mature on March 1, 2010. The
Notes will accrete at 13 1/2% (computed on a semi-

ALADDIN GAMING HOLDINGS, LLC AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2. LONG-TERM DEBT (CONTINUED)
annual bond equivalent basis) based on the initial accreted value, calculated
from February 26, 1998. Cash interest on the Notes will not accrue prior to
March 1, 2003. Thereafter, cash interest on the Notes will accrue at the rate of
13 1/2% per annum based on the accreted value at maturity of the Notes and will
be payable semi-annually in arrears on March 1 and September 1 of each year,
commencing on September 1, 2003. The Notes are secured by a first priority
pledge of all the issued and outstanding Series A Preferred Interests of Gaming
held by Gaming Holdings. The Indenture relating to the Notes contains certain
covenants that (subject to certain exceptions) restrict the ability of Gaming
Holdings, Capital and certain of their subsidiaries to, among other things: (i)
make restricted payments; (ii) incur additional indebtedness and issue preferred
stock; (iii) incur liens; (iv) pay dividends or make other distributions; (v)
enter into mergers or consolidations; (vi) enter into certain transactions with
affiliates; or (vii) enter into new lines of business.

Gaming Holdings' future interest and principal payments required under the
Notes will be funded from distributions by Gaming to the extent available.
Gaming has certain restrictions which limit its ability to distribute cash to
Gaming Holdings (see the following discussion under "Term Loans"). There can be
no assurance that Gaming's distributions will be sufficient to meet the required
principal and interest payments of the Notes.

TERM LOANS AND CURRENT MATURITIES OF LONG-TERM DEBT

Gaming has a credit facility ("Bank Credit Facility" or "Credit Agreement")
with various financial institutions and the Bank of Nova Scotia as the
administrative agent for the lenders (collectively, "Lenders"). The Credit
Agreement consists of three separate term loans. Term A Loan comprises a term
loan of $129.7 million and matures approximately five and one-half years after
the initial borrowing date. Term B Loan comprises a term loan of $114.0 million
and matures eight and one-half years after the initial borrowing date. Term C
Loan comprises a term loan of $160.0 million and matures ten years after the
borrowing date. The disbursement of the proceeds of the Term A Loan has not
commenced as of the date hereof. Under the Credit Agreement, Gaming had $21.3
million available for its investment in Aladdin Music. However, during the third
quarter of 1999, pursuant to the Credit Agreement, Gaming could, and did,
allocate $15 million of such funds to the Theater renovation and reduced the
Term A Loan from $136 million to $129.7 million. The Company pays interest on
the term loans as follows: Term A Loan, at the London Interbank Offered Rate
("LIBOR") plus 300 basis points until the Aladdin commences operations, then
LIBOR plus an amount between 150 basis points and 275 basis points depending
upon Gaming's earnings before interest, taxes, depreciation and amortization
("EBITDA"); Term B Loan, LIBOR plus 200 basis points while the funds are held in
the cash collateral account and LIBOR plus 350 basis points once the funds are
utilized for the construction of the Aladdin; and Term C Loan, LIBOR plus 200
basis points while the funds are held in the cash collateral account and LIBOR
plus 400 basis points once the funds are utilized for the construction of the
Aladdin. Interest on the term loans is due quarterly.

ALADDIN GAMING HOLDINGS, LLC AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2. LONG-TERM DEBT (CONTINUED)
Principal payments for the Term Loans do not commence until the end of the
first quarter following the commencement of operations of the Aladdin. The
following table details the required yearly principal amortization during
operations.

PRINCIPAL AMORTIZATION
(AFTER COMMENCEMENT
OF OPERATIONS) TERM A LOAN TERM B LOAN TERM C LOAN
- - ---------------------- ----------- ----------- -----------
(IN THOUSANDS)

Year 1 $ 16,000 $ 1,200 $ 1,600
Year 2 20,000 1,200 1,600
Year 3 28,000 1,200 1,600
Year 4 32,000 1,200 1,600
Year 5 33,750 1,200 1,600
Year 6 -- 68,000 1,600
Year 7 -- 40,000 48,400
Year 8 -- -- 102,000
-------- -------- --------
TOTALS $129,750 $114,000 $160,000
======== ======== ========

In addition to the principal amortization schedules, the Company is required
to make mandatory prepayments beginning the first quarter following the
commencement of operations of the Aladdin. The mandatory prepayments are based
on a percentage of Gaming's excess cash flow as defined in the Credit Agreement.
The mandatory prepayments are due quarterly and the percentages of excess cash
flow are detailed below:

PERCENTAGE OF
EXCESS CASH FLOW
----------------

Year 1 65%
Year 2 60%
Year 3 and thereafter 55%

As security for the Bank Credit Facility, the Company has entered into a
deed of trust in favor of the Lenders securing the Notes and all obligations of
the Company under the Bank Credit Facility, encumbering the Aladdin (including
any and all leasehold interests) as a first priority lien. In addition, the
Company has either assigned or entered into security agreements in favor of the
Lenders for all present and future leases, accounts, accounts receivable,
licenses and any other tangible or intangible assets owned or leased by the
Company, subject to the rights of the FF&E Lenders under the FF&E Financing (see
the following discussion under "Furniture, Fixtures and Equipment Financing
("FF&E Financing")).

As further security for the Bank Credit Facility and to the extent
permissible, the owners of the Company have pledged their interests in the
Company to the Lenders and Gaming Holdings has pledged its interest in Gaming to
the Lenders other than the Series A Preferred Interests.

The Bank Credit Facility contains covenants that (subject to certain
exceptions) restrict the ability of Gaming and its subsidiaries to, among other
things: (i) incur additional indebtedness, liens or other encumbrances; (ii) pay
dividends or make similar distributions; (iii) sell assets or make investments;
(iv)

ALADDIN GAMING HOLDINGS, LLC AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2. LONG-TERM DEBT (CONTINUED)
enter into mergers, consolidations, or acquisition transactions; or (v) enter
into certain transactions with affiliates.

FURNITURE, FIXTURES AND EQUIPMENT FINANCING ("FF&E FINANCING")

On June 30, 1998, the Company entered into FF&E Financing that provides for
operating lease financing of up to $60.0 million and a term loan facility of
$20.0 million to obtain gaming equipment and other specified equipment. Funding
under the FF&E Financing is available beginning six months prior to the
construction completion date of the Aladdin. Repayment of principal and interest
is due in quarterly installments upon the construction completion date of the
Aladdin. The term of the operating lease financing is 36 months (with the
Company having two, one year options to renew) and the term of the loan facility
is five years. The interest rate from the funding date until the construction of
the Aladdin is complete is either the 30-day LIBOR plus 478 basis points or the
Prime Rate plus 275 basis points. After the construction completion date, the
interest rate shall be the 90-day LIBOR plus 478 basis points. On March 6, 2000,
the disbursements under the FF&E Financing commenced.

INTEREST RATE SWAPS

Beginning June 30, 1999, Gaming has the following interest rate swaps,
interest rate ceilings and floor caps, and related notional amounts in effect:
(i) an interest rate swap with an original notional amount of $114 million
increasing to a maximum of $222.5 million whereby interest is fixed at 5.50%
through March 31, 2000. After March 31, 2000, an interest rate collar with a
notional amount of $250 million, a maximum and minimum interest rate of 7.5% and
5.15%, respectively, will go into effect and mature on September 30, 2006; and
(ii) an interest rate collar with a notional amount of $160 million, a maximum
rate of 8.00%, a minimum rate of 5.15% and a maturity date of March 31, 2003.
All rates noted above are LIBOR equivalents only and do not include the impact
of the basis point additions to LIBOR that are used in calculating interest
expense on Gaming's term loans. The LIBOR applicable to these agreements on
December 31, 1999 was set at 6.16% as of December 31, 1999. The fair market
value of the Company's interest rate swaps, interest rate ceilings and floor
caps as provided by the counterparty to the swaps, is a net receivable of
approximately $4.9 million at December 31, 1999.

The notional amounts do not represent amounts exchanged by the parties, and
thus are not a measure of exposure of the Company. The amounts exchanged are
normally based on the notional amounts and other terms of the swaps. The
variable rates are subject to change over time as LIBOR fluctuates.

Neither the Company nor the counterparty, which is a prominent financial
institution, is required to collateralize their respective obligations under
these swaps. The Company is exposed to loss if the counterparty defaults.
However, the Company considers the risk of non-performance to be minimal as the
counterparty is a member of the bank credit facility. The Company does not hold
or issue rate agreements for trading purposes.

ALADDIN GAMING HOLDINGS, LLC AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2. LONG-TERM DEBT (CONTINUED)

FAIR VALUE OF LONG-TERM DEBT

The estimated fair value of the Company's long-term debt, current maturities
of long-term debt and interest rate swaps have been determined using appropriate
market information and valuation methodologies. Considerable judgment is
required to determine the estimates of fair value; thus, the estimates provided
herein are not necessarily indicative of the amounts that the Company could
realize in a current market exchange.

DECEMBER 31, 1999
----------------------------
CARRYING AMOUNT FAIR VALUE
--------------- ----------
(IN THOUSANDS)

Senior Discount Notes.............................. $134,093 $ 88,635
Term B Loan........................................ 114,000 114,000
Term C Loan........................................ 160,000 160,000
Interest Rate Swaps (Receivable)................... -- (4,886)

The fair value of the Company's Senior Discount Notes is based on dealer
quotes for those instruments. The fair values of the Company's Term B Loan and
Term C Loan are assumed to approximate carrying values as the interest rate on
the loans fluctuate with changes in LIBOR (i.e., a variable rate loan). The fair
market value of the Company's interest rate swaps is based on the estimated
termination values at December 31, 1999 as provided by the counterparty to the
swaps.

3. CLASSES OF INTEREST

Preferred Membership Interest is comprised of the following:

SOMMER
LCNI ENTERPRISES, LLC TOTAL
-------- ---------------- --------
(IN THOUSANDS)

Series A........................................... $36,559 -- $36,559
Series C (Convertible to Common)................... 30,000 -- 30,000
Series CC.......................................... 1,496 -- 1,496
Series D........................................... 1,781 -- 1,781
Series E........................................... -- 5,208 5,208
------- ------ -------
TOTAL.............................................. $69,836 $5,208 $75,044
======= ====== =======

Prior to the execution of the Agreement, if either of the Sommer Trust or
London Clubs (each a "Guarantor") was unable to make a capital contribution to
Gaming Holdings as required under the Bank Completion Guaranty (as defined in
Note 5. "Related Party Transactions and Guarantees") and the Gaming Holdings
Operating Agreement, the contributing Guarantor could lend funds to the other
Guarantor to satisfy its obligations under the guaranty. Gaming Holdings issued
Series A Preferred Shares

ALADDIN GAMING HOLDINGS, LLC AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

3. CLASSES OF INTEREST (CONTINUED)
in exchange for all completion guaranty payments made prior to the execution of
the Agreement. The Guarantors determined that this mechanism for contributing
such amounts to Gaming Holdings was not adequate. Accordingly, they adopted the
Agreement to rescind the loans between them and restate all Completion Guaranty
Payments as contributions from the Guarantor providing the capital directly to
Gaming Holdings.

Pursuant to the Agreement, the Series A Preferred Shares previously issued
in exchange for payments made pursuant to the Bank Completion Guaranty were
rescinded and Gaming Holdings issued (i) Series A Preferred Shares to London
Clubs for $11,817,539 of Completion Guaranty Payments plus $2,534,519 of unpaid
preferred return accrued on such payments prior to October 1, 1999, (ii) Series
C Convertible Preferred Shares to London Clubs for $30,000,000 of Completion
Guaranty Payments made prior to October 1, 1999, (iii) Series CC Convertible
Preferred Shares to London Clubs for the unpaid cumulative preferred return on
the Series C Convertible Preferred Shares that accrued between October 1, 1999
and the date of conversion of the Series C Convertible Preferred Shares, (iv)
Series D Preferred Shares to London Clubs representing a profits only interest
in Gaming Holdings, and (v) Series E Preferred Shares to the Sommer Trust for
$4,333,034 of Completion Guaranty Payments made prior to October 1, 1999. The
Agreement further provides that Gaming Holdings shall issue, for all future
completion guaranty payments made by the Guarantors (i) Series A Preferred
Shares in exchange for the contribution of such payments and (ii) Series D
Preferred Shares representing a profits only interest in Gaming Holdings.

The Series C Convertible Preferred Shares shall earn a return equal to
twenty percent (20%) per annum, cumulative and compounded semi-annually from
October 1, 1999. London Clubs has the option to convert all (but not less than
all) of the Series C Convertible Preferred Shares into fifteen percent (15%) of
the Holdings Common Membership Interests at any time on or before April 30,
2000. If the Series C Convertible Preferred Shares are converted, LCNI's
ownership interest would increase to forty percent (40%) of the Holdings Common
Membership Interests and Sommer Enterprises' ownership interest would decrease
to thirty-two percent (32%) of the Holdings Common Membership Interests, so
that, when combined with Sommer Enterprises interest in Gaming Enterprises,
Sommer Enterprises would have a total ownership interest of fifty seven percent
(57%). The Series CC Preferred Shares shall earn a return equal to twenty
percent (20%) per annum, cumulative and compounded semi-annually. The Series A
Preferred Shares earn a return equal to twelve percent (12%) per annum,
cumulative and compounded semi-annually. Pursuant to a subsequent Letter
Agreement between the Guarantors dated February 23, 2000, the Series D Preferred
Shares and the Series A Preferred Shares shall earn a combined preferred return
equal to the return earned on the Series E Preferred Shares (i.e., thirty
percent (30%) per annum, cumulative and compounded semi-annually). The Series E
Preferred Shares shall earn a return equal to thirty percent (30%) per annum,
cumulative and compounded semi-annually. With respect to the allocation of
Profits and Losses, and Distributions including distributions in liquidation,
the following is the order of priority of the Preferred Shares: Series A
Preferred Shares, Series D Preferred Shares, Series C Convertible, and Series CC
Preferred Shares, and collectively (pari passu) Series E and B Preferred Shares.

Series B Preferred Shares would be issued to LCNI in the event of and in
exchange for any payment required by London Clubs to pay down Gaming's Bank
Credit Facility pursuant to Section 13 of the Keep-Well Agreement. As of
December 31, 1999, there are no Series B Preferred Shares outstanding.

ALADDIN GAMING HOLDINGS, LLC AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

3. CLASSES OF INTEREST (CONTINUED)
As a function of the Agreement, the Guarantors further amended, effective as
of October 1, 1999, the Contribution Agreement so that the "Contribution
Percentage" shall mean, for the purposes of Completion Guaranty Payments, (a)
sixty percent (60%) in the case of the Sommer Trust and (b) forty percent (40%)
in the case of London Clubs.

If the Sommer Trust, Sommer Enterprises or a wholly-owned subsidiary of the
Sommer Trust or Sommer Enterprises to be designated by the Sommer Trust is in a
position to offer payment to London Clubs or LCNI at the fully accreted value on
the date of offer to buy Redeemable Preferred Shares of Gaming Holdings held by
London Clubs and LCNI, the Sommer Trust, Sommer Enterprises or a wholly-owned
subsidiary of the Sommer Trust or Sommer Enterprises to be designated by the
Sommer Trust shall have the right from time to time but not the obligation to
purchase from London Clubs and LCNI an amount of such shares so that the total
Redeemable Preferred Shares held by the Sommer Trust, Sommer Enterprises or a
wholly-owned subsidiary of the Sommer Trust or Sommer Enterprises to be
designated by the Sommer Trust and all its Affiliates (including such Redeemable
Preferred shares they may have held) would be up to 60% of all outstanding
Redeemable Preferred Shares at a price equal to their then fully accreted value.
Purchase by the Sommer Trust of any Redeemable Preferred Shares held by London
Clubs or LCNI shall include a "make whole" payment by the Sommer Trust to London
Clubs or LCNI consisting of (i) the Sommer Trust's applicable proportionate
share of all fees, transaction costs, call premiums and other expenses borne by
London Clubs or LCNI in connection with the financing of the acquisition of the
Redeemable Preferred Shares (but solely with respect to the proportionate share
of the proceeds from such financing which are directly invested in the Aladdin)
and their purchase by the Sommer Trust including interest at the rate of prime
plus two percent (2%) per annum from the time expenses were incurred by London
Clubs to the time of the make whole payment; and (ii) 100% of any increased tax
consequences to London Clubs or LCNI resulting from the purchase of the
Redeemable Preferred Shares by the Sommer Trust as opposed to redemption by
Gaming Holdings. Upon purchase by the Sommer Trust, and at its option to be
exercised at the time of purchase, the Redeemable Preferred Shares purchased
from London Clubs or LCNI may either (i) (a) be subordinated to those Redeemable
Preferred Shares still held by London Clubs or LCNI, but rank ahead of all other
Preferred Shares, and (b) earn a reduced unit return to be no greater than
twenty percent (20%) or less than fifteen percent (15%) per annum, cumulative
and compounded semi-annually to be determined no later than the time the parties
enter into formal amendments to the Operating and Contribution Agreements; or
(ii) (a) be pari passu with the Redeemable Preferred Shares still held by London
Clubs or LCNI and (b) earn a reduced unit return equal to the yield to worst on
the Notes at the time of purchase by the Sommer Trust plus 100 basis

ALADDIN GAMING HOLDINGS, LLC AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

3. CLASSES OF INTEREST (CONTINUED)
points, such return to be per annum, cumulative and compounded semi-annually. In
the event that the Sommer Trust is in the position to offer payment as set forth
herein, and makes a good faith offer to purchase up to 60% of the Redeemable
Preferred Shares but London Clubs or LCNI, as the case may be, is unable to sell
such shares for any reason, London Clubs will negotiate in good faith with the
Sommer Trust a "make whole" agreement whereby the Sommer Trust shall be
compensated no more than its actual losses, taking account of the full costs
including financing costs and "make whole" payments it would have incurred in
acquiring and holding such shares, and in any event no more than the return it
would have received by owning the Redeemable Preferred Shares if offered to
purchase from London Clubs or LCNI and exercising the option set forth herein,
less the return the Sommer Trust would receive if it acquired an equivalent
amount of United States Treasury securities, at the then prevailing rate.

The holders of Holdings Common Membership Interests also amended the Gaming
Holdings Operating Agreement, in regards to (a) the definition of "Permitted
Transferee" and "Prohibited Transferee;" (b) to provide that the Board of
Managers of Gaming Holdings shall be expanded to seven Board Members and
appointed as follows: (i) Aladdin Enterprises shall appoint three Board Members
and (ii) LCNI shall appoint four Board Members, and as of March 15, 2000, the
Board Members are Jack Sommer, Ronald B. Dictrow and Richard J. Goeglein as
Aladdin Enterprises appointees and Alan L. Goodenough, G. Barry C. Hardy,
William Timmins and one other appointee who shall be an officer, director or
employee of LCI still to be named by LCNI; (c) to provide that the failure of
either the Sommer Trust or London Clubs to pay its pro rata shares of Completion
Guaranty Payments (i) shall not result in the removal by LCNI if London Clubs
has failed to pay its pro rata share, or Aladdin Enterprises, if the Sommer
Trust has failed to pay its pro rata share, of one of their respective
designated Board Members and (ii) shall not result in the replacement of Jack
Sommer as Chairman of the Board; (d) eliminating the requirement of the vote or
consent in writing of a Supermajority to declare setting aside or payment of any
Distribution with respect to Series A Preferred Shares; (e) including Music
within the definition of Subsidiary of Gaming Holdings.

ALADDIN GAMING HOLDINGS, LLC AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

3. CLASSES OF INTEREST (CONTINUED)
Interests to LCNI upon conversion of the Series C Convertible Preferred Shares,
no part of the Agreement shall be effective.

Except for matters affecting the rights of the holders of Preferred
Interests to distributions, including upon redemption, and matters affecting the
anti-dilution protections and tag-along participation rights of the holders of
the Warrants and the Warrant Shares (which may not be amended without the
consent of Aladdin Gaming Enterprises, Inc.), all management and voting rights
will be vested in the Gaming Holdings Common Membership Interests.

As of February 23, 2000, the holders of Holdings Common Membership Interests
entered into an agreement whereby, if certain payments are made with respect to
certain letters of credit issued in connection with the acquisition of
furniture, fixture, and equipment, such payments shall be treated in a manner
similar to Completion Guaranty Payments as set forth above.

4. LEASES

The Company leases certain real property, furniture and equipment. At
December 31, 1999 aggregate minimum rental commitments under noncancelable
operating leases with initial or remaining terms of one year or more consisted
of the following:

YEAR ENDING DECEMBER 31, OPERATING LEASES
------------------------ ----------------
(IN THOUSANDS)

2000 $804
2001 180
2002 3
----
Total Minimum Lease Payments $987
====

Rental expense amounted to approximately $.7 million and $0.5 million for
the years ended December 31, 1999 and 1998.

5. RELATED PARTY TRANSACTIONS AND GUARANTEES

LAND CONTRIBUTION AND RESTRICTED LAND

As discussed in Note 1, both Sommer Enterprises, LLC and Gaming Enterprises
contributed land to the Company. The land was originally owned by AHL, a related
party under common control, and therefore the land has been recorded at its
carryover basis. In addition, the land was subject to certain indebtedness which
was paid by the Company on the date of the contribution. The indebtedness
exceeded the carryover basis of the land and therefore resulted in a negative
contribution by Sommer Enterprises, LLC.

The carryover basis of the land was approximately $40.25 million, but a
portion of the land has been classified as restricted land due to a requirement
to transfer the land to Aladdin Bazaar, LLC. Aladdin Bazaar, LLC is owned
effectively 37.5% by the Sommer Trust. Aladdin Bazaar, LLC is currently
constructing and will operate a themed entertainment shopping mall and
4,800-space car parking facility (together known as the "Mall Project"). The
Mall Project is expected to be an integral part of the Aladdin

ALADDIN GAMING HOLDINGS, LLC AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

5. RELATED PARTY TRANSACTIONS AND GUARANTEES (CONTINUED)
entertainment complex. The carryover basis of the land was allocated to the Mall
Project based on an appraisal of the entire land parcel.

PURCHASE OF RESTRICTED MEMBERSHIP INTERESTS

Certain members of the Company's executive management have purchased
unvested restricted membership interests, in the aggregate, of 2.75% of the
Company, subject to the Company granting further unvested restricted membership
interests to certain senior executives or developing alternative economic
arrangements. Except for Mr. Goeglein, these membership interests will vest 25%
on the opening of the Aladdin and 25% upon the expiration of the term of the
executive's employment agreement. If Gaming continues to employ the executive
after the expiration of the employment agreement, 25% of the interest will
continue to vest on each anniversary of the Aladdin opening date until such
interests are fully vested. After the term of the employment agreement, if
Gaming does not continue to employ the executive, other than for Cause (as
defined), or if the officer no longer continues his employment for Good Reason
(as defined), only an additional 25% of the interest vests. Mr. Goeglein's
membership interests become fully vested at the earlier of July 1, 2002 or the
date on which such interests become publicly traded, conditioned upon Mr.
Goeglein's continued relationship with Gaming. As of December 31, 1999, none of
these membership interests had vested.

EMPLOYMENT AGREEMENTS

The Company has entered into employment contracts with six members of its
senior management. The terms of these agreements provide for an aggregate annual
amount of approximately $1.8 million, with one agreement which provided for a
signing bonus of $300,000, plus any bonuses granted by the Board of Directors
and based on relevant criteria and performance standards. The agreements have
varying duration, but no agreement has a duration exceeding five years and six
months. The agreements were entered into at varying times from 1997 to 2000. One
agreement additionally provides for the individual to be retained as a
consultant for $100,000 per year for 5 years after the initial term.

GAI, LLC CONSULTING AGREEMENT

Gaming has entered into a consulting agreement with GAI, LLC, a Nevada
limited liability company, 100% beneficially owned by Gaming's Chief Executive
Officer; however, an option to acquire a 15% interest in GAI, LLC has been
granted to a third party. This agreement requires Gaming to pay to GAI, LLC a
retainer of $12,500 per month until June 30, 2002 for remaining on call to
provide services and expertise for such month.

THE LONDON CLUB MANAGEMENT AGREEMENT

Gaming, London Clubs and LCNI are parties to a management agreement which
relates to the operations to be managed by London Clubs ("The London Club").
Under this agreement, London Clubs has agreed to guaranty the obligations of
LCNI. In consideration for the services to be furnished by LCNI under the
management agreement, Gaming will pay to LCNI a performance-based incentive fee.
This fee will be calculated based on a range of percentages applied to certain
thresholds of The London Club EBITDA (defined as gross revenue attributable to
The London Club, less all costs and expenses directly attributable to The London
Club).

ALADDIN GAMING HOLDINGS, LLC AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

5. RELATED PARTY TRANSACTIONS AND GUARANTEES (CONTINUED)
COMPLETION GUARANTY AND KEEP-WELL AGREEMENT

London Clubs, the Sommer Trust and Aladdin Bazaar Holdings, LLC ("Bazaar
Holdings"), which is owned 99% by the Sommer Trust, have entered into a
completion guaranty for the benefit of the Lenders under the Bank Credit
Facility, under which they have agreed to guarantee, among other things, the
completion of the Aladdin. The guaranty is not subject to any maximum dollar
limitations. In addition, AHL, London Clubs and Bazaar Holdings (collectively,
"Sponsors") have entered into an agreement ("Keep-Well Agreement") in favor of
the Lenders under the Bank Credit Facility. The Keep-Well Agreement requires the
Sponsors to make certain quarterly cash equity contributions to Gaming beginning
with the commencement of operations if Gaming fails to comply with the minimum
fixed charge coverage ratio set forth in the Bank Credit Facility. Under the
Keep-Well Agreement, the Sponsors are not required to contribute an aggregate of
more than $150.0 million to Gaming ($30.0 million in any one fiscal year), and
are not required to contribute any amounts to Gaming on or after the earlier of
the date on which Gaming complies with all of the financial covenants set forth
in the Credit Agreement for six consecutive quarterly periods or the date on
which the aggregate outstanding principal amounts of the Credit Agreement are
reduced below certain amounts.

The Sommer Trust, London Clubs, Aladdin Bazaar Holdings, LLC and the Bank of
Nova Scotia, as administrative agent for the Lenders, have entered into the
First Amendment to the Guaranty of Performance and Completion, dated as of March
10, 1999 ("First Amendment to the Bank Completion Guaranty"). The First
Amendment to the Bank Completion Guaranty requires that the Sommer Trust, London
Clubs and Aladdin Bazaar Holdings, LLC jointly and severally guarantee that
Gaming maintains the minimum Net Worth required by the Second Amendment to the
Credit Agreement.

During 1999, London Clubs received a fee of $2.65 million for its
obligations under the Keep-Well Agreement and in addition is entitled to an
annual fee of 1.5%, payable in arrears, of the Company's annual average
indebtedness with respect to a $265.0 million portion of the Bank Credit
Facility, which is supported by the Keep-Well Agreement. Such fees accrue from
the closing date of the Bank Credit Facility and are payable from available cash
flow after the opening of the Aladdin. As of December 31, 1999, the Company had
accrued approximately $7.3 million in Keep-Well fees to London Clubs, which is
reported in the Balance Sheet as Related Party Payables. Additionally, the
Company agreed to reimburse approximately $2.8 million to London Clubs for
certain expenses incurred relating to the Aladdin; however, London Clubs has
agreed to defer the payment of approximately $189,000 of this reimbursement
until after the opening of the Aladdin. As of December 31, 1999, London Clubs
received approximately $2.4 million of this $2.8 million reimbursement
obligation.

In consideration for certain expenses incurred by the Sommer Trust prior to
February 26, 1998, relating to the management and coordination of the
development of the Aladdin, the Company reimbursed $3.0 million to the Sommer
Trust on February 26, 1998. In addition, Gaming will reimburse certain ongoing
out-of-pocket expenses of the Sommer Trust relating to the development of the
Aladdin, not to exceed $0.9 million. The Sommer Trust agreed to defer such
reimbursement until after the opening of the Aladdin. As of December 31, 1999,
the Sommer Trust had received approximately $3.3 million of the total $3.9
million reimbursement.

ALADDIN GAMING HOLDINGS, LLC AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

5. RELATED PARTY TRANSACTIONS AND GUARANTEES (CONTINUED)
PAYMENT OF MUSIC INDEBTEDNESS

During 1998, the Sommer Trust paid approximately $260,000 to certain trade
creditors on behalf of Aladdin Music and Mr. Sommer, the Company's Chairman of
the Board, individually paid $500,000 to a trade creditor on behalf of Aladdin
Music. Further, during the first quarter of 1999, the Sommer Trust paid
approximately $747,000 to a trade creditor on behalf of Aladdin Music. To the
extent permissible, Aladdin Music has agreed, if and when Aladdin Music secures
a joint venture partner and financing for the Aladdin Music Project to reimburse
the Sommer Trust and Mr. Sommer such advanced funds.

6. COMMITMENTS AND CONTINGENCIES

CONSTRUCTION AND PRE-OPENING COSTS

During 1999, the Company increased the Main Project Budget by approximately
$79.6 million. This amount reflected an increase in construction costs of
approximately $53.2 million, an increase in pre-opening costs of approximately
$21.9 million and an increase in capitalized interest of $4.5 million. Pursuant
to the Bank Completion Guaranty, during 1999, a total of $67.2 million was paid,
approximately $62.8 million by London Clubs and approximately $4.4 million by
the Sommer Trust. The remaining $12.4 million was funded in the first quarter of
2000.

The Company is subject to risks common to developing a large scale
construction project. While the Company believes that its estimates are
reasonable, and that the projected targets can be met, there can be no assurance
that the Complex will be completed within the time period or budget currently
contemplated. In addition, if the additional identified potential funding
sources are insufficient or unavailable to fully

ALADDIN GAMING HOLDINGS, LLC AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

6. COMMITMENTS AND CONTINGENCIES (CONTINUED)
cover any excess, the Company could be materially and adversely affected. So,
while the Company believes that its estimates are reasonable, and that the
projected targets can be met, there can be no assurance that the Complex,
including the Aladdin, will be completed within the time period or budget
currently contemplated.

ENERGY SERVICES AGREEMENT

The Company entered into an energy services agreement for hot and cold water
and electricity that will be purchased by the Company and the Mall Project
(which would include the tenants of the mall) over initial terms of 20 years.

The central utility plant is being constructed by Northwind Aladdin, LLC
("Northwind") on land owned by the Company and leased to Northwind. The central
utility plant and equipment (collectively, "Costs") will be owned by Northwind,
which will pay all costs in connection with the construction, purchase and
installation. The current budget for the Costs is $40.0 million.

The charges payable under the energy services agreement will include a fixed
component applied to the Costs paid by Northwind and reimbursement of
operational-related costs.

The Company's share of Costs under its energy services agreement is based on
the total Costs (currently budgeted at $40 million) less the amounts payable by
the Mall Project and Aladdin Music, if and when, Aladdin Music enters into an
energy services agreement with Northwind. The Mall Project's share of Costs is
approximately $2.9 million. The Company will account for the energy services
contract as a capitalized power purchase obligation when the utility plant
becomes operational in the first quarter of 2000.

MALL PROJECT COSTS

In connection with the development of the Mall Project, Aladdin Bazaar, LLC
will reimburse the Company approximately, $14.2 million for the construction of
certain areas shared by the Aladdin and the Mall Project and the facade to the
Aladdin. Additionally, Aladdin Bazaar, LLC is obligated to spend no more than
$36.0 million for the parking garage. Therefore, any cost overruns associated
with these items will be borne by the Company. In addition, the Company is
obligated to pay Aladdin Bazaar, LLC: (i) a $3.2 million fee per year for a term
of 99 years, which is adjusted annually pursuant to a consumer price index-based
formula, for usage of the parking garage; and (ii) the Company's proportionate
share of the operating costs associated therewith.

CONSTRUCTION ARBITRATION

ALADDIN GAMING HOLDINGS, LLC AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

6. COMMITMENTS AND CONTINGENCIES (CONTINUED)
Builder. The Design/Builder has responded to the Company's argument in
Arbitration, alleging, among other things, that the Claims relate to unforeseen
conditions, and/or are due to the actions of the Company, and therefore, the
Company is responsible for all costs and delays associated with the Claims.
While the Company intends to aggressively and vigorously pursue the Claims, and
believes that it will ultimately prevail in arbitration, the Claims are only in
the preliminary stages of the Arbitration process, and therefore, no assurances
can be given with respect to the ultimate outcome. The Design/Builder has
presented Claims in the amount of approximately $13.8 million of which amount
the Company has funded $8.3 million.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.

Not applicable.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

The following table sets forth the executive officers and the directors of
Gaming Holdings, Gaming and Capital. A "director" of the Gaming Holdings or
Gaming as such term is used in this Form 10-K, shall refer to a person who sits
on the Board of Managers of Gaming Holdings ("Gaming Holdings Board") or Gaming
("Gaming Board").

NAME AGE POSITION
- - ---- -------- --------

Jack Sommer............................... 52 Chairman of the Gaming Holdings Board and
the Gaming Board; Director of Capital

Richard J. Goeglein....................... 65 Chief Executive Officer and President of
Gaming Holdings, Gaming and Capital;
Director of Gaming Holdings, Gaming and
Capital

Ronald Dictrow............................ 56 Executive Vice President and Director of
Gaming Holdings, Gaming and Capital

Alan Goodenough........................... 56 Director of Gaming Holdings, Gaming and
Capital

G. Barry C. Hardy......................... 52 Director of Gaming Holdings, Gaming and
Capital

William Timmins........................... 52 Director of Gaming Holdings, Gaming, and
Capital; Executive Vice President of
Gaming Holdings and Gaming,
President/Chief Operating Officer of the
Aladdin Resort & Casino

Jose A. Rueda............................. 63 Senior Vice President/Gaming of Gaming
Holdings, Gaming and Capital

David Attaway............................. 44 Senior Vice President of Gaming Holdings,
Gaming and Capital; President and Chief
Operating Officer of the Aladdin Music
Project

Patricia Becker........................... 48 Senior Vice President/Corporate Affairs
and Legal and Secretary of Gaming
Holdings, Gaming and Capital

Barbara Falvey............................ 41 Senior Vice President/Human Resources of
Gaming Holdings, Gaming and Capital

Thomas A. Lettero(1)...................... 43 Senior Vice President/Chief Financial
Officer/ Treasurer of Gaming Holdings,
Gaming and Capital

Mark A. Clayton........................... 34 Vice President and General Counsel of
Gaming Holdings and Gaming

- - ------------------------

(1) On March 7, 2000, Mr. Lettero and the Company entered into an employment
agreement which agreement becomes effective upon the expiration or waiver of
Mr. Lettero's obligations under his prior employment agreement, which the
Company anticipates will occur during the second quarter of 2000.

Jack Sommer has been the Chairman of the Gaming Holdings Board and a
director of Capital since November, 1997 and has been the Chairman of the Gaming
Board since February, 1998. Mr. Sommer has been a full time resident of Las
Vegas since 1988. Mr. Sommer is both a trustee and contingent beneficiary of the
Trust. He has over 25 years of experience in developing residential and
commercial real estate, including luxury residential projects such as North
Shore Towers, in Queens County, New York, and The Sovereign at 425 East 58th
Street in Manhattan. The Sommer family has been in the real estate development
business for over 100 years, operating for part of that time as Sommer
Properties ("Sommer Properties") founded by Mr. Sommer's father (who passed away
in 1979), and which is controlled by Mr. Sommer and his mother, Mrs. Viola
Sommer. Other developments of Sommer Properties have included 280 Park Avenue,
Manhattan, an 820,000 square foot office building in Manhattan formerly owned
and currently partially occupied by the Bankers Trust Company; 135 West 50th
Street, Manhattan, an 800,000 square foot office building also known as the AMA
Building; and 600 Third Avenue, Manhattan, a 500,000 square foot office
building. Sommer Properties has also developed over 35,000 single family homes,
primarily in New Jersey, as well as several major office buildings and mixed-use
developments.

Richard J. Goeglein has been Chief Executive Officer and a director of
Gaming Holdings and Capital since November, 1997, and has been a director of
Gaming since February, 1998. Mr. Goeglein has spent over 35 years in the
hotel/casino and food service industry. He was an Executive Vice President and a
member of the Board of Directors of Holiday Inns and Holiday Corp. from 1978
through 1987. Mr. Goeglein also served as President and Chief Executive Officer
of Harrah's Hotels and Casinos ("Harrah's") after Holiday Inns acquired Harrah's
from 1980 to the Fall of 1984 and as President and Chief Operating Officer of
Holiday Corp. (the parent company of Holiday Inns, Harrah's, Hampton Inns and
Embassy Suites) from October 1984 through 1987. From 1988 to 1992, Mr. Goeglein
participated in several corporate turnarounds in the technology and consumer
services fields. In 1992, Mr. Goeglein formed Gaming Associates, Inc. ("Gaming
Associates") to take management control of Dunes Hotel and Casino in Las Vegas
and to prepare a plan of closure for and carry out the closure of the property.
Gaming Associates provided consulting services to the lodging and gaming
industries. Mr. Goeglein recently served as a member of the Gaming Oversight
Committee of Marriott Corporation ("Marriott") and through Gaming Associates,
provided consulting services to Marriott's gaming operations situated outside of
the United States through December 1997. Mr. Goeglein served as a director of
Hollywood Park, Inc. until October 1998.

Ronald Dictrow has been Executive Vice President and a director of Gaming
Holdings and Capital since November, 1997, and has been a director of Gaming
since February, 1998. Mr. Dictrow spent the first 12 years of his professional
career as a CPA with the New York accounting firm David Berdon & Company and has
a master's degree in accounting and taxation. In 1979, he was hired by Sigmund
Sommer as Controller with financial responsibility for all of Mr. Sommer's
properties. In 1984, Mr. Dictrow became Treasurer and Chief Financial Officer of
the Sommer Trust with the additional responsibility for the operations and
management of these properties. Mr. Dictrow is an advisor and consultant to Mrs.
Viola Sommer and has been an officer and director of Sovereign Apartments, Inc.,
a New York City cooperative apartment building since 1979. Mr. Dictrow has had
business dealings with the Sommer family for over 20 years.

Alan Goodenough has been a director of Gaming Holdings, Gaming and Capital
since February, 1998. Mr. Goodenough, who is the Executive Chairman of London
Clubs, has over 30 years of experience in the leisure and gaming industry,
having worked as a public company director and at other senior levels with
several major public leisure and casino companies in the United Kingdom. Mr.
Goodenough is also presently a fellow of the United Kingdom Hotel and Catering
Institute and a member of the Institute of Directors of England and Wales.

G. Barry C. Hardy has been a director of Gaming Holdings, Gaming and Capital
since February, 1998. Mr. Hardy has served as Chief Operating Officer of London
Clubs since June 1999 and before that as Finance Director of London Clubs since
1989. Before joining London Clubs, Mr. Hardy worked in the

leisure and gaming industries. His business experience includes executive level
positions with Pleasurama plc, where he held the offices of Development
Director, Group Finance Director and Company Secretary and was actively involved
in the development of Pleasurama's leisure and casino interests. In 1988, after
the acquisition of Pleasurama by Mecca Leisure Ltd., Mr. Hardy was appointed to
Mecca's Board as Managing Director of its casino division.

William Timmins has been a director of Gaming Holdings, Gaming and Capital
since December, 1998 and has been Executive Vice President of Gaming Holdings,
Gaming and Capital and President and Chief Operating Officer of the Aladdin
Resort & Casino since February 2000. Mr. Timmins has served as Executive
Director of London Clubs since June 1999, before that as Director of
International Operations of London Clubs since March, 1996. Mr. Timmins has over
thirty years of experience in the casino industry and before joining London
Clubs, Mr. Timmins was the Managing Director of Soceite Participation
Investisments Casino, the third largest gaming company in France, from 1990
until 1995.

Jose A. Rueda has been the Senior Vice President/Gaming of Gaming Holdings,
Gaming and Capital since November, 1997. Mr. Rueda has 39 years experience in
the gaming industry, including gaming operations as well as the sale and
distribution of gaming equipment. He was the Vice President, North East Region
of Mikohn Gaming Corporation, which supplies gaming equipment to the casino
industry from 1995 to 1997. Prior to joining Mikohn, Mr. Rueda was with Harrah's
for 31 years in a variety of management positions that included Director of Slot
Operations, Harrah's Atlantic City, from 1986 to 1994; Vice President of
Gaming/Slots, Harrah's Corporate from 1984 to 1986; Vice President of
Operations, Harrah's at Trump Plaza from 1983 to 1984 and Vice President of
Gaming, Harrah's Corporate from 1980 to 1983.

David Attaway has been the Senior Vice President of Gaming Holdings, Gaming
and Capital and President and Chief Operating Officer of the Aladdin Music
Project since June 1998. Mr. Attaway has 18 years experience in the
entertainment, hotel and casino industry in a variety of executive positions. He
joined Caesars Tahoe in 1986 and held the following positions during his 12 year
tenure: Senior Vice President and General Manager from 1996 to 1998; Senior Vice
President of Casino Operations and Marketing, 1996 and Senior Vice President of
Marketing, 1992 to 1996. Prior to joining Caesars Tahoe, Mr. Attaway was the
Director of Marketing and Finance for Lawlor Event Center in Reno, Nevada from
1983 to 1985. He held management positions with Five Flag Center in Dubuque,
Iowa from 1981 to 1983.

Patricia Becker has been the Senior Vice President/Corporate Affairs and
Legal of Gaming Holdings, Gaming and Capital and Secretary of Gaming Holdings,
Gaming and Capital since March, 1999. Ms. Becker currently is a director of
Fitzgerald's Gaming Corporation and chairs the Compliance Committee. From 1993
to 1995, Ms. Becker was Chief of Staff for Nevada Governor, Bob Miller. From
1985 to 1993, Ms. Becker was with Harrah's, where she held the position of
Senior Vice President and General Counsel. Prior to joining Harrah's, she was a
member of Nevada State Gaming Control Board from 1983 to 1995.

Barbara D. Falvey has been the Senior Vice President of Human Resources of
Gaming Holdings, Gaming and Capital since February 2000. Ms. Falvey has 15 years
of human resources experience in the gaming industry. From July 1998 to January
2000, Ms. Falvey was the Vice President of Organization Development and Training
for Caesars World, Inc., where she was responsible for overseeing employee and
organization development activities for all Caesars-owned properties. From 1996
to 1998, Ms. Falvey was Vice President of Human Resources for The Desert Inn in
Las Vegas. From 1984 to 1996, she worked in a variety of positions in Human
Resources for Caesars Tahoe in Lake Tahoe, Nevada, serving as Director of Human
Resources and subsequently Vice President of Human Resources for the property
from 1990 to 1996.

Thomas A. Lettero, upon the effectiveness of his Employment Agreement, will
be Senior Vice President/Chief Financial Officer of Gaming Holdings, Gaming and
Capital. From December 1994 to March 2000, Mr. Lettero was the Senior Vice
President Administration and Chief Financial Officer of Stratosphere
Corporation, which filed for reorganization under Chapter 11 of the Bankruptcy
Code with

its wholly-owned subsidiary, Stratosphere Gaming Corp., on January 27, 1997. The
effective date for the companies' Restated Second Amended Plan of Reorganization
was October 14, 1998. From March 1994 until December 1994, Mr. Lettero was the
Vice President and Chief Financial Officer at Palace Casinos, Inc. ("Palace") in
Las Vegas. Palace filed for Chapter 11 Bankruptcy in December 1994. From
February 1993 until March 1994, Mr. Lettero served as Vice President of Casino
Marketing Administration of MGM Grand Hotel Casino in Las Vegas. From March 1992
until February 1993, Mr. Lettero served as Executive Vice President and Chief
Financial Officer of HP Casino Management, L.P. ("HP") in Golden, Colorado, the
owner and operator of three Bullwacker casinos in Central City and Blackhawk,
Colorado. At HP, as a licensed operator, Mr. Lettero was responsible for opening
the properties, all marketing efforts and daily operations. From September 1990
until March 1992, Mr. Lettero served as Chief Financial Officer of Main Street
Station in Las Vegas. Main Street Station filed for Chapter 11 Bankruptcy in
December 1991, which was converted into a Chapter 7 liquidation in September
1992. From May 1989 until September 1990, Mr. Lettero served as Director of
Operational Accounting of Mirage Hotel and Casino in Las Vegas.

Mark A. Clayton has been Vice President and General Counsel of Gaming
Holdings and Gaming since April 1999 and was from June 1998 to April 1999 Vice
President and Associate General Counsel of Gaming Holdings and Gaming. From July
1995 until June 1998, Mr. Clayton served as Vice President and General Counsel
of Showboat, Inc. From May 1993 until October 1993 and from October 1993 until
June 1995, Mr. Clayton served as Deputy Chief and the Chief, respectively, of
the Corporate Securities Division of the Nevada State Gaming Control Board.

COMMITTEES

The Gaming Holdings Operating Agreement provides that there will be
Executive Management Committees, which will be responsible for the day-to-day
management of Gaming Holdings and Gaming. The Executive Management Committee of
Gaming includes the following persons: the President and Chief Executive Officer
of Gaming; the Chief Financial Officer of Gaming; the President and Chief
Operating Officer of the Aladdin; the President and Chief Operating Officer of
the Aladdin Music Project; the Senior Vice President of Human Resources of
Gaming; the Senior Vice President/Gaming of Gaming; the Senior Vice
President/Corporate Affairs and Legal of Gaming and a London Club Board member.
The Gaming Holdings Board may also establish committees of the Gaming Holdings
Board as it may deem necessary or advisable. Each of London Clubs and Sommer
Enterprises is entitled to have one of its nominee Gaming Holdings Board members
on each such committee. The Gaming Holdings Board has established a Compensation
Committee that currently consists of Messrs. Goeglein, Timmins and Dictrow and
Ms. Falvey.

ITEM 11. EXECUTIVE COMPENSATION.

The following table summarizes the compensation earned during 1999, 1998 and
1997 by Gaming Holdings', Gamings' and Capital's Chief Executive Officer and the
four highest compensated executive officers of the Gaming Holdings, Gaming or
Capital who earned over $100,000 in 1999, 1998 and 1997.

LONG-TERM
ANNUAL COMPENSATION(1) COMPENSATION
------------------------------------- ----------------
OTHER ANNUAL RESTRICTED STOCK ALL OTHER
NAME AND PRINCIPAL OCCUPATION YEAR SALARY BONUS COMPENSATION AWARDS COMPENSATION(1)
- - ----------------------------- -------- -------- -------- ------------ ---------------- ---------------

Richard J. Goeglein, Chief
Executive Officer........ 1999 $647,753(2) $ 0 $ 17,665(3) $ 0 $ 7,911(4)
1998 $630,770(2) $ 0 $248,379(5) $ 0 $22,137(4)
1997 $650,000(2) $ 0 N/A(6) $ 0(7) $16,343(4)

Jose A. Rueda, Senior Vice
President................ 1999 $259,195 $ 0 $ 10,000(3) $ 0 $ 2,364(4)
1998 $243,423 $ 0 $ 10,833(3) $ 0 $ 1,896(4)
1997 $ 86,538(9) $ 0 N/A(8) $ 0(10) $ 0

Cornelius T. Klerk, Senior
Vice President and Chief
Financial Officer(14).... 1999 $241,652 $ 0 $ 10,000(3) $ 0 $ 348(4)
1998 $195,785 $50,000 $ 10,000(3) $ 0 $ 381(4)
1997 $ 96,154(9) $ 0 N/A(8) $ 0(11) $ 0

David Attaway, Senior Vice
President................ 1999 $308,104 $ 0 $ 12,000(3) $ 0 $ 204(4)
1998 $204,669(12) $ 0 $181,663(13) $ 0 $ 136(4)

Mark A. Clayton, Vice
President and General
Counsel.................. 1999 $175,531 $ 0 N/A(8) $ 0 $ 108(4)
1998 $ 70,908(12) $ 0 N/A(8) $ 0 $ 54(4)

- - --------------------------

(1) All of the executive officers of the Company (other than Mr. Dictrow) are
compensated by Gaming. Mr. Dictrow is principally employed by the Sommer
Trust and is compensated by the Sommer Trust. Compensation has been paid on
the Company's behalf by Aladdin Holdings, LLC for 1997 and until February
26, 1998.

(2) Includes $150,000 paid to GAI in 1999, 1998 and 1997 for consulting fees.

(3) Represents automobile allowance paid to executive including federal income
tax gross-up.

(4) Represents life and disability insurance premiums paid on behalf of the
executive.

(5) Represents automobile allowance of $19,536 and moving expenses of $228,843
including federal income tax gross-up paid to Mr. Goeglein.

(6) GAI purchased vested Holdings Common Membership Interests representing 3%
of the outstanding Holdings Common Membership Interests for $1,800. The
price paid by GAI for such interests was equal to the fair market value of
such interests at the time of purchase. The aggregate amount of all
perquisites and other personal benefits received by Mr. Goeglein in 1997
was less than $50,000.

(7) Mr. Goeglein purchased unvested Holdings Common Membership Interests
representing 2% of the outstanding Holdings Common Membership Interests for
a purchase price of $1,200. Such interests had a fair market value of
$1,200 on the date of purchase. See "Employment Agreements" for information
regarding the vesting of the Holdings Common Membership Interests.

(8) The aggregate amount of all perquisites and other personal benefits
received by the executive was less than 10% of the total annual salary and
bonus paid to the executive.

(9) Executive's employment with Gaming began during 1997.

(10) Mr. Rueda purchased unvested Holdings Common Membership Interests
representing approximately 0.75% of the outstanding Holdings Common
Membership Interests for a purchase price of $450. Such

interests had a fair market value of $450 on the date of purchase. See
"Employment Agreements" for information regarding the vesting of the
Holdings Common Membership Interests.

(11) Mr. Klerk purchased unvested Holdings Common Membership Interests
representing approximately 0.75% of the outstanding Holdings Common
Membership Interests for a purchase price of $450. Such interests had a
fair market value of $450 on the date of purchase. On March 24, 2000,
pursuant to Mr. Klerk's Employment Agreement, the Company purchased for
$450 Mr. Klerk's total unvested Holdings Common Membership Interests.

(12) The executive's employment with the Company began in 1998.

(13) Represents moving expenses of $173,163 and automobile allowance of $8,500
paid to Mr. Attaway including federal income tax gross-up.

(14) Mr. Klerk resigned all of his positions effective March 2000.

EMPLOYMENT AGREEMENTS

Richard J. Goeglein, William Timmins, Jose A. Rueda, David Attaway, Barbara
Falvey and Thomas A. Lettero (collectively, "Officers") each signed an
employment agreement ("Employment Agreement") with the Company. Patricia Becker
is currently negotiating an employment agreement with the Company that is
expected to be comparable to the employment agreements discussed herein. The
initial term of Mr. Goeglein's Employment Agreement is five years and six
months, and the remaining Officers' Employment Agreements have varying durations
depending upon when the Employment Agreements were executed. Pursuant to each
Employment Agreement, the Officers have such authority, responsibilities and
duties as are customarily associated with their positions with Gaming. The
Employment Agreements provide that, during the term of their employment, the
Officers will devote their full time, efforts and attention to the business and
affairs of Gaming.

The terms of the Employment Agreements provide for an annual base salary for
Mr. Goeglein of $500,000 ($600,000 after the opening of the Aladdin), Mr.
Timmins of $252,000 (subject to adjustment after the opening of the Aladdin),
Mr. Rueda $250,000, Mr. Attaway $312,000, Ms. Falvey $175,000 ($200,000 after
the opening of the Aladdin), and Mr. Lettero $300,000, respectively, plus any
bonus granted by the Board of Directors based on relevant criteria and
performance standards. All of the Officers have been receiving and are expected
to continue to receive their compensation from Gaming, except that prior to
February 26, 1998, such amounts were paid by AHL on Gaming's behalf. Mr.
Goeglein's Employment Agreement provides for annual bonuses based upon "on
target" performances, ranging from 50% to 75% of his base salary, and is subject
to certain tax provisions. The Gaming Board will consider increases to the
Officers' base salary no less frequently than annually, commencing at the end of
each Officer's first employment year. Any increase in base salary shall be
within the sole discretion of the Gaming Board. The Employment Agreements
provide that the Officers' salary cannot be reduced. After the initial term of
Mr. Goeglein's Employment Agreement, Gaming has agreed to retain Mr. Goeglein as
a consultant to Gaming for an additional five years at $100,000 per year. The
Officers are entitled to receive other employee benefits from Gaming, such as
health, pension and retirement and reimbursement of certain expenses. Mr.
Lettero's Employment Agreement is effective upon the earlier termination of Mr.
Lettero's prior employment agreement and all obligations therein or the waiver
of the notification and termination provisions therein. Mr. Lettero's Employment
Agreement provides for a signing bonus of $300,000 ("Signing Bonus") which (a)
if the Employment Agreement is terminated due to Mr. Lettero's disability, or by
the Company for "Cause" or by Mr. Lettero without "Good Reason," each as defined
in the Employment Agreement, Mr. Lettero is obligated to pay the Company the net
after tax amount of the Signing Bonus or (b) shall be applied to Mr. Lettero's
compensation otherwise payable in the third year of the Employment Agreement.

Pursuant to the terms of the Employment Agreements, as amended, Messrs.
Goeglein and Rueda have purchased for a total purchase price of $1,200 and $450,
respectively, unvested Gaming Common Membership Interests which were contributed
to Gaming Holdings on February 26, 1998 in return for unvested Holdings Common
Membership Interests representing approximately 2.0% and 0.75%, respectively, of
the Holdings Common Membership Interests ("Restricted Membership Interests")
subject to the receipt of applicable Nevada Gaming Approval. Gaming Enterprises'
interest in Gaming Holdings will be unaffected by the vesting of the officers'
Restricted Membership Interests. On January 27, 1999, the Gaming Holdings' Board
of Directors, except with respect to Mr. Goeglein, amended the vesting schedule
of each officer's Restricted Membership Interests during the terms of the
Employment Agreement to vest 25% on the date of the opening of the Aladdin and a
further 25% upon the expiration of the initial term of the Employment Agreement.
If Gaming continues to employ each officer after the expiration of the initial
term of his Employment Agreement, 25% of the officer's Restricted Membership
Interests will continue to vest on each anniversary of the opening date until
such interests are fully vested. After the terms of the Employment Agreements,
if Gaming does not continue to employ the officer other than for Cause, or if
the officer no longer continues his employment for Good Reason, only an
additional 25% of the officer's Restricted Membership Interests vest. Mr.
Goeglein's Restricted Membership Interests become fully vested at the earlier of
July 1, 2002 and the date on which such interests become publicly traded,
conditioned upon Mr. Goeglein's continued relationship with Gaming. If an
officer's employment with Gaming and Gaming Holdings terminates, Gaming and
Gaming Holdings have the right to repurchase any unvested portion of the
officer's Restricted Membership Interest for an amount equal to the purchase
price originally paid by the officer for the Common Membership Interests. Under
certain circumstances as set forth in the Employment Agreements, including if an
initial public offering with respect to the Restricted Membership Interests has
not occurred prior to the full vesting of such interests, the officers have the
right to sell their vested Restricted Membership Interests to Gaming Holdings at
fair market value (subject to the receipt of applicable Gaming Approvals and to
certain restrictions on restricted payments set forth in the Note Indenture and
the Bank Credit Facility). If Gaming Holdings does not satisfy its obligation to
purchase the Restricted Membership Interests within seven days, the officers
have the right to require Gaming to purchase such interests at fair market value
(subject to certain restrictions on Restricted Payments set forth in the Note
Indenture). After Gaming has satisfied its obligation to purchase the Restricted
Membership Interests, Gaming Holdings has the right to call such interests from
Gaming for nominal consideration. If, prior to the date of an initial public
offering with respect to the Restricted Membership Interests, an officer is
terminated for Cause, except with respect to Mr. Goeglein, Gaming and Gaming
Holdings have the right to purchase any vested Restricted Membership Interests
from the officers at two times the original price paid by the officer for such
interests (in each case with corresponding rights in Gaming Holdings to purchase
the Common Membership Interests which correspond to such Restricted Membership
Interests for nominal consideration).

The Company is currently developing a further equity compensation
arrangement, or the economic equivalent thereof, for Mr. Timmins, Mr. Attaway,
Ms. Falvey, Ms. Becker and Mr. Lettero.

The Employment Agreements may be terminated by Gaming with or without Cause
(as defined in each Employment Agreement) or by the Officers for Good Reason (as
defined in each Employment Agreement). If an Officer is terminated for Cause, he
shall be entitled only to such salary, bonus and benefits then accrued or
vested. If an Officer is terminated without Cause or upon a Change in Control
(as defined in the Employment Agreements), the Officer shall be entitled to such
salary, bonus and benefits to which he would have been entitled for the
remainder of the four-year term or twelve months, whichever is longer (in the
case of Mr. Goeglein, any such amount remaining in connection with his term plus
certain other amounts).

Each Officer has agreed not to compete with Gaming during the term of the
Employment Agreements (plus one additional year if the Officer was terminated
for Cause) and has agreed to refrain from certain other activities in
competition with Gaming.

Each of the Employment Agreements provides that Gaming shall indemnify and
hold the Officers harmless to the fullest extent permitted by Nevada law against
costs, expenses, liabilities and losses, including reasonable attorneys' fees
and disbursements of counsel, incurred or suffered by the Officer in connection
with his services as an employee of Gaming during the term of the respective
Employment Agreement.

Mr. Goeglein's Employment Agreement provides Mr. Goeglein with relocation
expense reimbursement, an interest-free mortgage loan of $500,000 from AHL, and
certain excise tax gross-up provisions.

GAI CONSULTING AGREEMENT

Gaming has entered into a consulting agreement (as amended, "Consulting
Agreement") with GAI. The Consulting Agreement was subsequently amended on
February 26, 1998 to add Gaming Holdings as a party and pursuant to which
amendment GAI contributed its Common Membership Interests in Gaming to Gaming
Holdings in return for Holdings Common Membership Interests. Pursuant to the
Consulting Agreement, GAI will render such consulting services as are reasonably
requested by the Gaming Board until June 30, 2002.

During the term of the Consulting Agreement, Gaming shall pay GAI a retainer
of $12,500 each month as payment for remaining on call to provide services and
expertise for such month. In addition, GAI purchased a 3% Common Membership
Interest in Gaming, which was contributed to Gaming Holdings on February 26,
1998 in return for a 3% Holdings Common Membership Interest ("GAI Membership
Interest") for a purchase price of $1,800. The GAI Membership Interest is fully
vested and is subject to certain anti-dilution provisions contained in the
Consulting Agreement (but subject to dilution upon exercise of the warrant)
issued in connection with the offering of the Notes). In addition: (a) if
Richard Goeglein is terminated from his employment with Gaming other than for
"Cause" or voluntarily terminates for "Good Reason" (as such terms are defined
in Mr. Goeglein's Employment Agreement with Gaming) after the consummation of
the Funding Transactions and the Offering; or (b) if an initial public offering
in respect of the GAI Membership Interest has not occurred prior to July 1,
2002, GAI has the right to sell any shares purchased under the Consulting
Agreement back to Gaming Holdings at their fair market value at the time of such
sale (subject to the receipt of applicable Gaming Approvals and to certain
restrictions on restricted payments set forth in the Notes Indenture and the
Bank Credit Facility). If Gaming Holdings does not satisfy its obligation to
purchase the GAI Membership Interest within seven days, GAI has the right to
require Gaming to purchase such interests at fair market value. After Gaming has
satisfied its obligation to purchase the GAI Membership Interest, Gaming
Holdings will have the right to call such interests from Gaming at nominal
value.

Pursuant to the Consulting Agreement, GAI has certain "piggyback"
registration rights with respect to its interests purchased pursuant to the
Consulting Agreement. Gaming Holdings has agreed to indemnify GAI, its legal
counsel and independent accountants against all expenses, claims, losses,
damages and liabilities which may arise out of certain acts or omissions
committed in connection with the registration of such membership interests, and,
in connection with certain acts or omissions not committed in connection with
the registration of such membership interests, to the same extent that other
senior management and directors of Gaming and Gaming Holdings are indemnified.
For further details on the Consultant Agreement, see Exhibit 10.35 to the
Company's Registration Statement on Form S-4, Amendment No. 1, filed June 10,
1998, Part II, Item 21.

Mr. Goeglein has granted a third party an option to acquire a 15% interest
in GAI. The Company believes that any exercise of the option will not have a
material adverse effect on the Company.

BONUS AND INCENTIVE PLANS

Gaming and Gaming Holdings are currently developing bonus and/or incentive
plans (subject to supermajority approval by the Gaming Holdings members, such
approval not to be unreasonably withheld). It is expected that the terms of any
such plans would be comparable to those customary in the industry.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

The following table set forth certain information with respect to the
beneficial ownership of the membership interests of Gaming Holdings by: (i) each
person who, to the knowledge of the Company, beneficially owns more than 5% of
the outstanding membership interests; (ii) the directors of Gaming Holdings;
(iii) all executive officers of Gaming Holdings included in the Executive
Compensation Table under "Item 11. Executive Compensation;" and (iv) all
directors and executive officers of Gaming Holdings as a group. The membership
interests of Gaming Holdings are not presently listed or traded on any
securities exchange or securities market.

ALADDIN GAMING HOLDINGS, LLC
---------------------------------------------------------
PERCENTAGE OWNERSHIP OF PERCENTAGE OWNERSHIP OF
GAMING HOLDINGS COMMON GAMING HOLDINGS COMMON
MEMBERSHIP INTERESTS MEMBERSHIP INTERESTS
BENEFICIALLY OWNED PRIOR TO BENEFICIALLY OWNED ASSUMING
EXERCISE OF THE FULL EXERCISE OF THE
NAME OF BENEFICIAL OWNER WARRANTS(8) WARRANTS(9)
- - ------------------------ --------------------------- ---------------------------

Viola Sommer, Jack Sommer and
Eugene Landsberg, as trustees
of the Sommer
Trust(1)(2)(3)................ 71.1% 61.6%
Jack Sommer(2)(3)............... 71.1% 61.6%
London Clubs(3)................. 50.0% 50.0%
Alan Goodenough(3).............. 0.0% 0.0%
G. Barry C. Hardy(3)............ 0.0% 0.0%
William Timmins(3).............. 0.0% 0.0%
Ronald Dictrow(4)............... * *
Richard J. Goeglein(5)(7)....... 3.0% 2.6%
Jose A. Rueda(6)(7)............. 0.0% 0.0%
David Attaway(6)................ 0.0% 0.0%
Cornelius T. Klerk(10).......... 0.0% 0.0%
Thomas A. Lettero............... 0.0% 0.0%
Mark A. Clayton................. 0.0% 0.0%
All Directors and Executive
Officers as a group (twelve
persons)...................... 75.0% 65.0%

- - ------------------------

* Represents less than one percent of the outstanding Holdings Common
Membership Interests.

(1) The Sommer Trust has an option to acquire 5% of the common membership
interests in AHL from GW Vegas (representing all of GW Vegas' common
membership interests in AHL). Such option is exercisable at any time prior
to December, 2001. The address of the Sommer Trust is 280 Park Avenue,
Floor 38 West, New York, New York 10017.

(2) Includes Gaming Holdings Common Membership Interests held by the Sommer
Trust. Mr. Jack Sommer, who is Chairman and a director of Gaming Holdings
and Gaming and a director of Capital and Gaming Enterprises, is a trustee
and contingent beneficiary of the Sommer Trust. Mrs. Sommer, Mr. Sommer and
Mr. Landsberg are each deemed to beneficially own the same interest as the

Sommer Trust owns in Gaming Holdings because each of them is a trustee of
the Sommer Trust. The address for Mrs. Sommer, Mr. Sommer and
Mr. Landsberg is 280 Park Avenue, Floor 38 West, New York, New York 10017.

(3) London Clubs owns 25% of the Gaming Holdings Common Membership Interests
and has an option to convert certain preferred membership interests of
Gaming Holdings into 15% of Holdings Common Membership Interests. On
November 30, 1998, London Clubs and the Sommer Trust agreed that the Sommer
Trust and its affiliates shall vote their respective Holdings Common
Membership Interests and cause Gaming Enterprises to vote its Holdings
Common Membership Interests so that (taking into account Holdings Common
Membership Interests held by London Clubs or its affiliates) London Clubs
controls fifty percent of the voting power of Gaming Holdings. See "Item 7.
Management's Discussion and Analysis of Financial Condition and Results of
Operations." Mr. Alan Goodenough is Executive Chairman of London Clubs and
a director of Gaming Holdings, Gaming and Capital. Mr. G. Barry C. Hardy is
Chief Operating Officer of London Clubs and a director of Gaming Holdings,
Gaming and Capital. William Timmins is Executive Director of London Clubs
and is a director of Gaming Holdings, Gaming and Capital. The address of
London Clubs and Messrs. Goodenough and Hardy is 10 Brick Street, London,
W1Y, 8HQ, United Kingdom.

(4) Mr. Ronald Dictrow is a director of Gaming Enterprises and the Executive
Vice President/Secretary and a director of Gaming Holdings, Gaming and
Capital. Mr. Dictrow's address is 280 Park Avenue, Floor 38 West, New York,
New York 10017.

(5) Mr. Richard J. Goeglein, who is Chief Executive Officer, President and a
director of Gaming Holdings, Gaming and Capital, beneficially owns 100% of
GAI, which holds 3% of the Holdings Common Membership Interests; however,
Mr. Goeglein has granted to a third party an option to acquire a 15%
interest in GAI. Mr. Goeglein's address is 831 Pilot Road, Las Vegas,
Nevada 89119.

(6) The address of Messrs. Timmins, Rueda, Attaway, Lettero and Clayton is 831
Pilot Road, Las Vegas, Nevada 89119.

(7) Messrs. Goeglein and Rueda have rights to acquire beneficial ownership of
Gaming Holdings Common Membership Interests representing an aggregate of
2.75% of such interests, which rights do not vest within 60 days. See "Item
11. Executive Compensation."

(8) Gaming Holdings owns 100% of the Common Membership Interests and Series A
Preferred Interests of Gaming. The Common Membership Interests were, on
closing of the Bank Credit Facility, pledged to the Bank Lenders. The
Series A Preferred Interests were, on closing of the Notes offering,
pledged to the Trustee for the benefit of the Note Holders.

(9) Gaming Enterprises owns 25% of the Gaming Holdings Common Membership
Interests. Upon full exercise of the warrants issued in connection with the
offering of the Notes, holders of the shares issued upon conversion of
warrants will indirectly own 10% of the outstanding Holdings Common
Membership Interests.

(10) Mr. Klerk purchased unvested Holdings Common Membership Interests
representing approximately 0.75% of the outstanding Holdings Common
Membership Interests for a purchase price of $450. Such interests had a
fair market value of $450 on the date of purchase. On March 24, 2000,
pursuant to Mr. Klerk's Employment Agreement, the Company purchased for
$450 Mr. Klerk's total invested Holdings Common Membership Interests.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

THE LONDON CLUB MANAGEMENT AGREEMENT

Gaming, London Clubs and LCNI are parties to a management agreement that
relates to The London Club at Aladdin. Under the management agreement, London
Clubs has agreed to guaranty the obligations of LCNI. In consideration for the
services to be furnished by LCNI under the management agreement, Gaming will pay
to LCNI a performance-based incentive fee ("Incentive Marketing and Consulting
Fee") calculated as follows: (i) 10% of The London Club at Aladdin EBITDA
(defined in the management agreement to mean gross revenue attributable to The
London Club at Aladdin, less all costs and expenses directly attributable to The
London Club at Aladdin), up to and including $15.0 million of EBITDA; plus (ii)
12.5% of The London Club at Aladdin EBITDA, in excess of $15.0 million, up to
and including $17.0 million; plus (iii) 25% of The London Club at Aladdin
EBITDA, in excess of $17.0 million, up to and including $20.0 million; plus (iv)
50% of The London Club at Aladdin EBITDA, in excess of $20.0 million. The
foregoing thresholds will be adjusted in accordance with consumer price index
changes every five years. For further details, see Part II, Item 21, Exhibit
10.4 to the Company's Registration Statement on Form S-4 filed April 9, 1999.

OTHER PAYMENTS TO CONTROLLING STOCKHOLDERS

In consideration for certain expenses incurred by the Sommer Trust prior to
February 26, 1998, relating to the management and coordination of the
development of the Aladdin, Gaming reimbursed $3.0 million to the Sommer Trust
on February 26, 1998. In addition, Gaming will reimburse certain ongoing out-
of-pocket expenses of the Sommer Trust relating to the development of the
Aladdin, not to exceed $0.9 million. In November 1998, the Sommer Trust agreed
to defer reimbursement until after the opening of the Aladdin. As of December
31, 1999, the Sommer Trust had received approximately $3.3 million of the total
$3.9 million reimbursement.

In consideration for its obligations under the Keep-Well Agreement (as
defined below) and related arrangements, under the London Clubs Purchase
Agreement, the parties agreed that London Clubs receive (a) an initial fee of
1.0% of Gaming's indebtedness with respect to a $265.0 million portion of the
Bank Credit Facility, which is supported and enhanced by the Keep-Well
Agreement, which fee was paid on February 26, 1998, and (b) an annual fee of
1.5%, payable in arrears, of Gaming's annual average indebtedness with respect
to a $265.0 million portion of the Bank Credit Facility, which is supported and
enhanced by the Keep-Well Agreement for each relevant twelve month period ending
on an anniversary of the closing date of the Bank Credit Facility, which amount
shall reflect the extent, if any, by which the obligations under the Keep-Well
Agreement are reduced or eliminated over time (such fees accrue from the closing
date of the Bank Credit Facility, and shall be paid from available proceeds
after the opening date of the Aladdin). Additionally, Gaming agreed to reimburse
approximately $2.8 million to London Clubs for certain expenses incurred
relating to the Aladdin; however, in November 1998, London Clubs agreed to defer
the payment of approximately $189,000 of this reimbursement until after the
opening of the Aladdin. As of December 31, 1999, London Clubs received
approximately $2.4 million of this $2.8 million reimbursement obligation.

MUSIC INDEBTEDNESS PAYMENTS BY THE SOMMER TRUST AND MR. SOMMER

During 1998, the Sommer Trust paid approximately $260,000 to certain trade
creditors on behalf of Aladdin Music, and Mr. Sommer individually paid $500,000
to a trade creditor on behalf of Aladdin Music. Further, during the first
quarter of 1999, the Sommer Trust paid approximately $747,000 to a trade
creditor on behalf of Aladdin Music. To the extent permissible, Aladdin Music
has agreed, if and when Aladdin Music secures a joint venture partner and
financing for the Aladdin Music Project, to reimburse the Sommer Trust and Mr.
Sommer such advanced funds.

KEEP-WELL AGREEMENT

On February 26, 1998, London Clubs, AHL and Bazaar Holdings (collectively,
"Sponsors") entered into the Keep-Well Agreement in favor of the Administrative
Agent and the Bank Lenders under the Bank Credit Facility. The Keep-Well
Agreement is the joint and several agreement of the Sponsors to make certain
quarterly cash equity contributions to Gaming from and after the Conversion Date
if Gaming fails to comply with certain financial ratios set forth in the Bank
Credit Facility. Under the Keep-Well Agreement, the Sponsors are not required to
contribute an aggregate of more than $150 million to Gaming ($30 million in any
one fiscal year), and are not required to contribute any amounts to Gaming on or
after the earlier of the date on which Gaming complies with all of the financial
covenants set forth in the Credit Agreement for six consecutive quarterly
periods or the date on which the aggregate outstanding principal amounts of the
Credit Agreement are reduced below certain amounts.

BANK COMPLETION GUARANTY AND NOTEHOLDER COMPLETION GUARANTY

London Clubs, the Sommer Trust and Bazaar Holdings have entered into the
Bank Completion Guaranty in favor of the Bank Lenders. Pursuant to the Bank
Completion Guaranty, such parties have guaranteed, among other things, the
timely completion of the Aladdin. The Bank Completion Guaranty is not subject to
any maximum dollar limitations. While holders of the Notes are not party to the
Bank Completion Guaranty, London Clubs, the Sommer Trust and Bazaar Holdings
have entered into the Noteholder Completion Guaranty for the benefit of the
holders of the Notes. See "Note 5. Related Party Transactions and Guarantees."

ARRANGEMENTS WITH RICHARD GOEGLEIN AND GAI

Gaming has entered into the Consulting Agreement with GAI. Pursuant to the
Consulting Agreement, GAI will render such consulting services as are reasonably
requested by the Board of Gaming until June 30, 2002. During the term of the
Consulting Agreement, Gaming shall pay GAI a retainer of $12,500 per month as
payment for remaining on call to provide services and expertise for such month.
Pursuant to the Consulting Agreement, GAI purchased 3% of the Common Membership
Interests in Gaming (which were contributed to Gaming Holdings on February 26,
1998 for a 3% interest in Gaming Holdings) for $1,800. Such membership interest
is fully vested, subject to certain anti-dilution provisions, put rights and
certain "piggyback" registration rights. See "Item 10. Directors and Executive
Officers of the Registrant-GAI Consulting Agreement." In addition, Mr.
Goeglein's Employment Agreement provided Mr. Goeglein with a relocation expense
reimbursement, an interest free mortgage loan of $500,000 from AHL and certain
excise tax gross-up provisions.

PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.

(a)(l) The following consolidated financial statements of the Company and its
subsidiaries have been filed as a part of this report (See "Part II,
Item 8: Financial Statements and Supplementary Data"):

Independent Auditor's Report;

Consolidated Balance Sheets as of December 31, 1999 and 1998;

Consolidated Statements of Operations for the Year Ended December 31,
1999 and 1998, and from inception (December 1, 1997) through December
31, 1999;

Consolidated Statements of Shareholders' Equity for the Years Ended
December 31, 1999, 1998 and 1997;

Consolidated Statements of Cash Flows for the Year Ended December 31,
1999 and 1998 and from inception (December 1, 1997) through December 31,
1999; and

Notes to Consolidated Financial Statements

(a)(2) All schedules are omitted because they are not required, inapplicable,
or the information is otherwise shown in the financial statements or
notes thereto.

(a)(3) The following exhibits (1) are filed as part of this form 10-K or
incorporated herein by reference.

EXHIBIT
NO. DESCRIPTION
- - --------------------- -----------

3.1 Articles of Organization of Aladdin Gaming Holdings, LLC
("Gaming Holdings") are incorporated herein by reference
from the Company's (SEC File Nos. 333-49717 and
333-49717-01) Registration Statement on Form S-4 filed on
April 9, 1998, Part II, Item 21, Exhibit 3.1.

3.2 Articles of Incorporation of Aladdin Capital Corp.
("Capital") are incorporated herein by reference from the
Company's (SEC File Nos. 333-49717 and 333-49717-01)
Registration Statement on Form S-4 filed on April 9, 1998,
Part II, Item 21, Exhibit 3.2.

3.3 Articles of Organization of Aladdin Gaming, LLC ("Gaming")
are incorporated herein by reference from the Company's (SEC
File Nos. 333-49717 and 333-49717-01) Registration Statement
on Form S-4 filed on April 9, 1998, Part II, Item 21,
Exhibit 3.3.

3.4 Articles of Incorporation of Aladdin Gaming Enterprises,
Inc. ("Enterprises") are incorporated herein by reference
from the Company's (SEC File Nos. 333-49717 and
333-49717-01) Registration Statement on Form S-4 filed on
April 9, 1998, Part II, Item 21, Exhibit 3.4; Amendment No.
1 to Articles of Incorporation of Enterprises is
incorporated herein by reference from the Company's (SEC
File Nos. 333-49717 and 333-49717-01) Registration Statement
on Form S-4 filed on April 9, 1998, Part II, Item 21,
Exhibit 3.5.

3.5 Operating Agreement of Gaming Holdings is incorporated
herein by reference from the Company's (SEC File Nos.
333-49717 and 333-49717-01) Registration Statement on Form
S-4, Amendment No. 1, filed on June 10, 1998, Part II, Item
21, Exhibit 3.6.

- - ------------------------

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

EXHIBIT
NO. DESCRIPTION
- - --------------------- -----------

3.6 Bylaws of Capital are incorporated herein by reference from
the Company's (SEC File Nos. 333-49717 and 333-49717-01)
Registration Statement on Form S-4 filed on April 9, 1998,
Part II, Item 21, Exhibit 3.7.

3.7 Operating Agreement of Gaming is incorporated herein by
reference from the Company's (SEC File Nos. 333-49717 and
333-49717-01) Registration Statement on Form S-4 filed on
April 9, 1998, Part II, Item 21, Exhibit 3.8.

3.8 Bylaws of Enterprises are incorporated herein by reference
from the Company's (SEC File Nos. 333-49717 and
333-49717-01) Registration Statement on Form S-4 filed on
April 9, 1998, Part II, Item 21, Exhibit 3.9.

4.1 Indenture, dated February 26, 1998, among Gaming Holdings,
Capital and State Street Bank and Trust Company, as Trustee
("Trustee") is incorporated herein by reference from the
Company's (SEC File Nos. 333-49717 and 333-49717-01)
Registration Statement on Form S-4 filed on April 9, 1998,
Part II, Item 21, Exhibit 4.1.

4.2 Note Registration Rights Agreement, dated February 26, 1998,
among Gaming Holdings, Capital and Merrill Lynch, Pierce
Fenner & Smith Incorporated, Credit Suisse First Boston
Corporation, CIBC Oppenheimer Corp. and Scotia Capital
Markets (USA) Inc. ("Initial Purchasers") is incorporated
herein by reference from the Company's (SEC File Nos.
333-49717 and 333-49717-01) Registration Statement on Form
S-4 filed on April 9, 1998, Part II, Item 21, Exhibit 4.2.

4.3 Noteholder Completion Guaranty, dated February 26, 1998,
among the Trust Under Article Sixth u/w/o Sigmund Sommer,
London Clubs International plc ("London Clubs"), Aladdin
Bazaar Holdings, LLC and the Trustee is incorporated herein
by reference from the Company's (SEC File Nos. 333-49717 and
333-49717-01) Registration Statement on Form S-4, Amendment
No. 1, filed on June 10, 1998, Part II, Item 21,
Exhibit 4.3.

4.4 Disbursement Agreement, dated February 26, 1998, among
Gaming Holdings, Gaming, the Bank of Nova Scotia, as
Administrative Agent under the Bank Credit Facility,
Disbursement Agent, and Securities Intermediary, U.S. Bank
National Association as Servicing Agent and the Trustee is
incorporated herein by reference from the Company's (SEC
File Nos. 333-49717 and 333-49717-01) Registration Statement
on Form S-4, Amendment No. 1, filed on June 10, 1998, Part
II, Item 21, Exhibit 4.4.

4.5 The LLC Interest Pledge and Security Agreement, dated
February 26, 1998, between Gaming Holdings and the Trustee
is incorporated herein by reference from the Company's (SEC
File Nos. 333-49717 and 333-49717-01) Registration Statement
on Form S-4, Amendment No. 1, filed June 10, 1998, Part II,
Item 21, Exhibit 4.5.

4.6 The Gaming Holdings Collateral Account Agreement, dated
February 26, 1998, between Gaming Holdings and the Trustee
is incorporated herein by reference from the Company's (SEC
File Nos. 333-49717 and 333-49717-01) Registration Statement
on Form S-4, Amendment No. 1, filed June 10, 1998, Part II,
Item 21, Exhibit 4.6.

4.7 Equity Participation Agreement, dated February 26, 1998,
among Sommer Enterprises, LLC, Enterprises, London Clubs
Nevada Inc. ("LCNI") and the Trustee is incorporated herein
by reference from the Company's (SEC File Nos. 333-49717 and
333-49717-01) Registration Statement on Form S-4 filed on
April 9, 1998, Part II, Item 21, Exhibit 4.7.

4.8 Subsidiary Guaranty, dated February 26, 1998, among
subsidiaries of London Clubs and the Trustee is incorporated
herein by reference from the Company's (SEC File Nos.
333-49717 and 333-49717-01) Registration Statement on Form
S-4 filed on April 9, 1998, Part II, Item 21, Exhibit 4.8.

EXHIBIT
NO. DESCRIPTION
- - --------------------- -----------

10.1 Amended and Restated London Clubs Purchase Agreement, dated
February 26, 1998, among LCNI, London Clubs, Gaming
Holdings, Aladdin Holdings, LLC, Gaming, Sommer Enterprises,
LLC, and the Trust Under Article Sixth u/w/o Sigmund Sommer
is incorporated herein by reference from the Company's (SEC
File Nos. 333-49717 and 333-49717-01) Registration Statement
on Form S-4 filed on April 9, 1998, Part II, Item 21,
Exhibit 10.1.

10.2 Closing Schedules to Amended and Restated London Clubs
Purchase Agreement are incorporated herein by reference from
the Company's (SEC File Nos. 333-49717 and 333-49717-01)
Registration Statement on Form S-4 filed on April 9, 1998,
Part II, Item 21, Exhibit 10.2.

10.3 Contribution Agreement, dated February 26, 1998, among the
Trust Under Article Sixth u/w/o Sigmund Sommer, Aladdin
Holdings, LLC, Sommer Enterprises, LLC, London Clubs and
LCNI is incorporated herein by reference from the Company's
(SEC File Nos. 333-49717 and 333-49717-01) Registration
Statement on Form S-4 filed on April 9, 1998, Part II, Item
21, Exhibit 10.3.

10.4 Salle Privee Agreement, dated February 26, 1998, among
Gaming, LCNI and London Clubs is incorporated herein by
reference from the Company's (SEC File Nos. 333- 49717 and
333-49717-01) Registration Statement on Form S-4 filed on
April 9, 1998, Part II, Item 21, Exhibit 10.4.

10.5 Warrant Agreement, dated February 26, 1998, among
Enterprises and State Street Bank and Trust Company, as
Warrant Agent (the "Warrant Agent") is incorporated herein
by reference from the Company's (SEC File Nos. 333-49717 and
333-49717-01) Registration Statement on Form S-4 filed on
April 9, 1998, Part II, Item 21, Exhibit 10.6.

10.6 Warrant Registration Rights Agreement, dated February 26,
1998, among Enterprises and the Initial Purchasers is
incorporated herein by reference from the Company's (SEC
File Nos. 333-49717 and 333-49717-01) Registration Statement
on Form S-4 filed on April 9, 1998, Part II, Item 21,
Exhibit 10.7.

10.7 Credit Agreement, dated February 26, 1998, among Gaming, a
syndicate of lenders ("Bank Lenders"), The Bank of Nova
Scotia as Administrative Agent, Merrill Lynch Capital
Corporation as Syndication Agent and CIBC Oppenheimer Corp.
as Documentation Agent is incorporated herein by reference
from the Company's (SEC File Nos. 333-49717 and
333-49717-01) Registration Statement on Form S-4, Amendment
No. 1, filed June 10, 1998, Part II, Item 21, Exhibit 10.8;
First Amendment to Credit Agreement dated January 29, 1999,
by and among Gaming, Bank Lenders, The Bank of Nova Scotia,
as Administrative Agent, Merrill Lynch Capital Corporation
as Syndication Agent and CIBC Oppenheimer Corp. as
Documentation Agent is incorporated herein by reference from
the Company's (SEC File Nos. 333-49717 and 333-49717-01)
Form 10-K for the year ended December 31, 1998 Part IV, Item
14, Exhibit 10.7; Second Amendment to Credit Agreement,
dated as of April 5, 1999, effective March 10, 1999, among
Aladdin Gaming, LLC, Various Financial Institutions, the
Bank of Nova Scotia, Merrill Lynch Capital Corporation and
CIBC Oppenheimer Corp. is incorporated herein by reference
from the Company's (SEC File Nos. 333-49717 and
333-49717-01) Form 8-K, dated April 27, 1999, Item 7(c),
Exhibit 10.01.

EXHIBIT
NO. DESCRIPTION
- - --------------------- -----------

10.8 Bank Completion Guaranty, dated February 26, 1998, among the
Trust Under Article Sixth u/w/o Sigmund Sommer, London
Clubs, Aladdin Bazaar Holdings, LLC and the Bank Lenders is
incorporated herein by reference from the Company's (SEC
File Nos. 333-49717 and 333-49717-01) Registration Statement
on Form S-4, Amendment No. 1, filed June 10, 1998, Part II,
Item 21, Exhibit 10.9. First Amendment to Guaranty of
Performance and Completion, dated as of April 5, 1999,
effective March 10, 1999, by London Clubs International plc,
the Trust under Article Sixth Under the Will of Sigmund
Sommer, Aladdin Bazaar Holdings, LLC and the Bank of Nova
Scotia is incorporated herein by reference to the Company's
(SEC File Nos. 333-49717 and 333-49717-01) Form 8-K, dated
April 27, 1999, Item 7, Exhibit 10.02.

10.9 Keep-Well Agreement, dated February 26, 1998, among Aladdin
Holdings, LLC, London Clubs and Aladdin Bazaar Holdings, LLC
is incorporated herein by reference from the Company's (SEC
File Nos. 333-49717 and 333-49717-01) Registration Statement
on Form S-4, Amendment No. 1, filed June 10, 1998, Part II,
Item 21, Exhibit 10.10.

10.10 Design/Build Contract, dated December 4, 1997, between
Gaming and Fluor Daniel, Inc. is incorporated herein by
reference from the Company's (SEC File Nos. 333-49717 and
333-49717-01) Registration Statement on Form S-4 filed on
April 9, 1998, Part II, Item 21, Exhibit 10.11; Amendment
No. 1 to Design/Build Contract, dated January 21, 1998,
between Gaming and Fluor Daniel, Inc. is incorporated herein
by reference from the Company's (SEC File Nos. 333-49717 and
333-49717-01) Registration Statement on Form S-4, Amendment
No. 1, filed June 10, 1998, Part II, Item 21, Exhibit 10.12;
Amendment No. 2 to Design/Build Contract, dated January 28,
1998, between Gaming and Fluor Daniel, Inc. is incorporated
herein by reference from the Company's (SEC File Nos.
333-49717 and 333-49717-01) Registration Statement on Form
S-4, Amendment No. 1, filed June 10, 1998, Part II, Item 21,
Exhibit 10.13; Fluor Guaranty, dated December 4, 1997,
between the Company and Fluor Corporation is incorporated
herein by reference from the Company's (SEC File Nos.
333-49717 and 333-49717-01) Registration Statement on Form
S-4, Amendment No. 1, filed June 10, 1998, Part II, Item 21,
Exhibit 10.14.

10.11 Site Work, Development and Construction Agreement, dated
February 26, 1998, among Gaming, Aladdin Bazaar, LLC and
Aladdin Holdings, LLC is incorporated herein by reference
from the Company's (SEC File Nos. 333-49717 and
333-49717-01) Registration Statement on Form S-4, Amendment
No. 1, filed June 10, 1998, Part II, Item 21,
Exhibit 10.15.

10.12 Construction, Operation and Reciprocal Easement Agreement,
dated February 26, 1998, among Gaming, Aladdin Bazaar, LLC
and Aladdin Music Holdings, LLC is incorporated herein by
reference from the Company's (SEC File Nos. 333-49717 and
333-49717-01) Registration Statement on Form S-4, Amendment
No. 1, filed June 10, 1998, Part II, Item 21, Exhibit 10.16.

10.13 Common Parking Area Use Agreement, dated February 26, 1998,
between Gaming and Aladdin Bazaar, LLC is incorporated
herein by reference from the Company's (SEC File Nos.
333-49717 and 333-49717-01) Registration Statement on Form
S-4, Amendment No. 1, filed June 10, 1998, Part II, Item 21,
Exhibit 10.17.

10.14 Music Project Lease, dated February 26, 1998, between Gaming
and Aladdin Music Holdings, LLC is incorporated herein by
reference from the Company's (SEC File Nos. 333-49717 and
333-49717-01) Registration Statement on Form S-4, Amendment
No. 2, filed on July 22, 1998, Part II, Item 21, Exhibit
10.18.

10.15 Mall Project Lease, dated February 26, 1998, between Gaming
and Aladdin Bazaar, LLC is incorporated herein by reference
from the Company's (SEC File Nos. 333-49717 and
333-49717-01) Registration Statement on Form S-4, Amendment
No. 1, filed June 10, 1998, Part II, Item 21, Exhibit 10.19.

EXHIBIT
NO. DESCRIPTION
- - --------------------- -----------

10.16 Deed of Trust, Assignment of Rents and Leases, Fixture
Filing and Security Agreement, dated February 26, 1998, made
by Gaming to Stewart Title of Nevada, as trustee for the
benefit of the Bank of Nova Scotia is incorporated herein by
reference from the Company's (SEC File Nos. 333-49717 and
333-49717-01) Registration Statement on Form S-4, Amendment
No. 1, filed June 10, 1998, Part II, Item 21, Exhibit 10.20.

10.17 Development Agreement, dated December 3, 1997, between
Aladdin and Northwind Aladdin, LLC is incorporated herein by
reference from the Company's (SEC File Nos. 333-49717 and
333-49717-01) Registration Statement on Form S-4 filed on
April 9, 1998, Part II, Item 21, Exhibit 10.21.

10.18 Energy Service Agreement, dated September 24, 1998, between
Aladdin and Northwind Aladdin, LLC is incorporated herein by
reference from the Company's (SEC File Nos. 333-49717 and
333-49717-01) Form 10-K, for the year ended December 31,
1998, Part IV, Item 14, Exhibit 10.18; Amendment and
Agreement to the Energy Service Agreement, dated September
25, 1998, between Northwind Aladdin, LLC and Aladdin Gaming,
LLC is incorporated herein by reference from the Company's
(SEC File Nos. 333-49717 and 333-49717-01) Form 10-Q filed
on August 16, 1999, Part II, Item 6, Exhibit 10.01. Second
Amendment and Agreement to the Energy Service Agreement,
dated May 28, 1999, between Northwind Aladdin, LLC and
Aladdin Gaming, LLC is incorporated herein by reference from
the Company's (SEC File Nos. 333-49717 and 333-49717-01)
Form 10-Q filed on August 16, 1999, Part II, Item 6, Exhibit
10.02. Third Amendment and Agreement to the Energy Service
Agreement, dated May 28, 1999, between Northwind Aladdin,
LLC and Aladdin Gaming, LLC is incorporated herein by
reference from the Company's (SEC File Nos. 333-49717 and
333-49717-01) Form 10-Q filed on August 16, 1999, Part II,
Item 6, Exhibit 10.03. Energy Services Coordination
Agreement, dated May 28, 1999, between Aladdin Gaming, LLC
and Aladdin Bazaar, LLC is incorporated herein by reference
from the Company's (SEC File Nos. 333-49717 and
333-49717-01) Form 10-Q filed on August 16, 1999, Part II,
Item 6, Exhibit 10.04. Consent and Ratification and
Reaffirmation Agreement, dated May 27, 1999, between The
Bank of Nova Scotia in its capacity as the Administrative
Agent for Lenders and Aladdin Gaming, LLC, is incorporated
herein by reference from the Company's (SEC File Nos.
333-49717 and 333-49717-01) Form 10-Q filed on August 16,
1999, Part II, Item 6, Exhibit 10.05. Subordination
Non-disturbance and Attornment Agreement and Consent, dated
June 7, 1999 between The Bank of Nova Scotia, as the
Administrative Agent for the Aladdin Lenders, Northwind
Aladdin LLC, Aladdin Gaming, LLC and State Street Bank and
Trust Company, as collateral agent for the Northwind
Noteholders, Aladdin Music, LLC and Aladdin Music Holdings,
LLC, is incorporated herein by reference from the Company's
(SEC File Nos. 333-49717 and 333-49717-01) Form 10-Q filed
on August 16, 1999, Part II, Item 6, Exhibit 10.06.

10.19 Energy Lease, dated December 3, 1997, between Gaming and
Northwind Aladdin, LLC is incorporated herein by reference
from the Company's (SEC File Nos. 333-49717 and
333-49717-01) Registration Statement on Form S-4 filed on
April 9, 1998, Part II, Item 21, Exhibit 10.23.

10.20 Unicom Guaranty, dated December 3, 1997, between Unicom
Corporation and Gaming is incorporated herein by reference
from the Company's (SEC File Nos. 333-49717 and
333-49717-01) Registration Statement on Form S-4 filed on
April 9, 1998, Part II, Item 21, Exhibit 10.24.

EXHIBIT
NO. DESCRIPTION
- - --------------------- -----------

10.21 Operating Agreement of Aladdin Bazaar, LLC, dated September
3, 1997, between TH Bazaar Centers, Inc. and Aladdin Bazaar
Holdings, LLC is incorporated herein by reference from the
Company's (SEC File Nos. 333-49717 and 333-49717-01)
Registration Statement on Form S-4 filed on April 9, 1998,
Part II, Item 21, Exhibit 10.25; First Amendment to the
Limited Liability Company Agreement of Aladdin Bazaar, LLC,
dated October 16, 1997, is incorporated herein by reference
to the Company's (SEC File Nos. 333-49717 and 333-49717-01)
Registration Statement on Form S-4 filed on April 9, 1998,
Part II, Item 21, Exhibit 10.26; Second Amendment to Limited
Liability Company Agreement of Aladdin Bazaar, LLC, dated
May 1998, is incorporated herein by reference from the
Company's (SEC File Nos. 333-49717 and 333-49717-01)
Registration Statement on Form S-4, Amendment No. 1, filed
June 10, 1998, Part II, Item 21, Exhibit 10.45.

10.22 Music Project Memorandum of Understanding and Letter of
Intent, dated September 2, 1997, between Gaming and Planet
Hollywood International, Inc. is incorporated herein by
reference from the Company's (SEC File Nos. 333-49717 and
333-49717-01) Registration Statement on Form S-4, Amendment
No. 1, filed June 10, 1998, Part II, Item 21, Exhibit 10.27;
Amendment to Music Project Memorandum of Understanding and
Letter of Intent, dated October 15, 1997, between Gaming and
Planet Hollywood International, Inc. is incorporated herein
by reference from the Company's (SEC File Nos. 333-49717 and
333-49717-01) Registration Statement on Form S-4, Amendment
No. 1, filed June 10, 1998, Part II, Item 21, Exhibit 10.28.

10.23 GAI Contribution and Amendment Agreement, dated February 26,
1998, among Gaming Holdings, Gaming, and GAI, LLC is
incorporated herein by reference from the Company's (SEC
File Nos. 333-49717 and 333-49717-01) Registration Statement
on Form S-4 filed on April 9, 1998, Part II, Item 21,
Exhibit 10.29.

10.24 Goeglein Contribution and Amendment Agreement, dated
February 26, 1998, among Gaming Holdings, Gaming and Richard
J. Goeglein is incorporated herein by reference from the
Company's (SEC File Nos. 333-49717 and 333-49717-01)
Registration Statement on Form S-4 filed on April 9, 1998,
Part II, Item 21, Exhibit 10.30.

10.25 McKennon Contribution and Amendment Agreement, dated
February 26, 1998, among Gaming Holdings, Gaming and James
H. McKennon is incorporated herein by reference from the
Company's (SEC File Nos. 333-49717 and 333-49717-01)
Registration Statement on Form S-4 filed on April 9, 1998,
Part II, Item 21, Exhibit 10.31.

10.26 Klerk Contribution and Amendment Agreement, dated February
26, 1998, among Gaming Holdings, Gaming and Cornelius T.
Klerk is incorporated herein by reference from the Company's
(SEC File Nos. 333-49717 and 333-49717-01) Registration
Statement on Form S-4 filed on April 9, 1998, Part II, Item
21, Exhibit 10.32.

10.27 Galati Contribution and Amendment Agreement, dated February
26, 1998, among Gaming Holdings, Gaming and Lee A. Galati is
incorporated herein by reference to the Company's (SEC File
Nos. 333-49717 and 333-49717-01) Registration Statement on
Form S-4 filed on April 9, 1998, Part II, Item 21, Exhibit
10.33.

10.28 Rueda Contribution and Amendment Agreement, dated February
26, 1998, among Gaming Holdings, Gaming and Jose A. Rueda is
incorporated herein by reference from the Company's (SEC
File Nos. 333-49717 and 333-49717-01) Registration Statement
on Form S-4 filed on April 9, 1998, Part II, Item 21,
Exhibit 10.34.

10.29 GAI Consulting Agreement, dated July 1, 1997, between GAI,
LLC and Gaming as amended as of January, 1998 is
incorporated herein by reference from the Company's (SEC
File Nos. 333-49717 and 333-49717-01) Registration Statement
on Form S-4, Amendment No. 1, filed June 10, 1998, Part II,
Item 21, Exhibit 10.35.

EXHIBIT
NO. DESCRIPTION
- - --------------------- -----------

10.30 Employment and Consulting Agreement, dated July 1, 1997,
between Gaming and Richard J. Goeglein, as amended as of
January, 1998, is incorporated herein by reference from the
Company's (SEC File Nos. 333-49717 and 333-49717-01)
Registration Statement on Form S-4, Amendment No. 1, filed
June 10, 1998, Part II, Item 21, Exhibit 10.36.

10.31 Employment Agreement, dated July 28, 1997, between Gaming
and James H. McKennon is incorporated herein by reference
from the Company's (SEC File Nos. 333-49717 and
333-49717-01) Registration Statement on Form S-4, Amendment
No. 1, filed June 10, 1998, Part II, Item 21, Exhibit 10.37.
Amendment No. 2 to the Employment Agreement between Aladdin
Gaming, LLC, Aladdin Gaming Holdings, LLC and James McKennon
dated January 27, 1999 is incorporated herein by reference
from the Company's (SEC File Nos. 333-49717 and
333-49717-01) Form 10-Q filed May 13, 1999, Part II, Item 6,
Exhibit 10.01.

10.32 Employment Agreement, dated July 26, 1997, between Gaming
and Cornelius T. Klerk is incorporated herein by reference
from the Company's (SEC File Nos. 333-49717 and
333-49717-01) Registration Statement on Form S-4, Amendment
No. 1, filed June 10, 1998, Part II, Item 21, Exhibit 10.38.
Amendment No. 2 to the Employment Agreement between Aladdin
Gaming, LLC, Aladdin Gaming Holdings, LLC and Cornelius T.
Klerk dated January 27, 1999 is incorporated herein by
reference from the Company's (SEC File Nos. 333-49717 and
333-49717-01) Form 10-Q filed May 13, 1999, Part II, Item 6,
Exhibit 10.02.

10.33 Employment Agreement, dated August 19, 1997, between Gaming
and Lee A. Galati is incorporated herein by reference from
the Company's (SEC File Nos. 333-49717 and 333-49717-01)
Registration Statement on Form S-4, Amendment No. 1, filed
June 10, 1998, Part II, Item 21, Exhibit 10.39. Amendment
No. 2 to the Employment Agreement between Aladdin Gaming,
LLC, Aladdin Gaming Holdings, LLC and Lee Galati dated
January 27, 1999 is incorporated herein by reference from
the Company's (SEC File Nos. 333-49717 and 333-49717-01)
Form 10-Q filed May 13, 1999, Part II, Item 6, Exhibit
10.04.

10.34 Employment Agreement, dated July 1, 1997, between Gaming and
Jose A. Rueda is incorporated herein by reference from the
Company's (SEC File Nos. 333-49717 and 333-49717-01)
Registration Statement on Form S-4, Amendment No. 1, filed
June 10, 1998, Part II, Item 21, Exhibit 10.40. Amendment
No. 2 to the Employment Agreement between Aladdin Gaming,
LLC, Aladdin Gaming Holdings, LLC and Jose A. Rueda dated
January 27, 1999 is incorporated herein by reference from
the Company's (SEC File Nos. 333-49717 and 333-49717-01)
Form 10-Q filed May 13, 1999, Part II, Item 6, Exhibit
10.03.

10.35 FF&E Commitment Letter, dated January 23, 1998, between
Gaming and General Electric Capital Corporation is
incorporated herein by reference from the Company's (SEC
File Nos. 333-49717 and 333-49717-01) Registration Statement
on Form S-4, filed April 9, 1998, Part II, Item 21, Exhibit
10.41; Facilities Agreement between General Electric Capital
Corporation and Gaming, dated June 26, 1998, is incorporated
herein by reference from the Company's (SEC File Nos.
333-49717 and 333-49717-01) Form 10-Q filed August 14, 1998,
Part II, Item 6, Exhibit 10.01; Amendment No. 1 to
Facilities Agreement between General Electric Capital
Corporation and Gaming, dated September 2, 1998 is
incorporated herein by reference from the Company's (SEC
File Nos. 333-49717 and 333-49717-01) Form 10-K for the year
ended December 31, 1998, Part IV, Item 14, Exhibit 10.35.

10.36 Intercreditor Agreement by and among The Bank of Nova
Scotia, General Electric Capital Corporation and Gaming,
dated as of June 30, 1998, is incorporated herein by
reference from the Company's (SEC File Nos. 333-49717 and
333-49717-01) Form 10-Q filed August 14, 1998, Part II, Item
6, Exhibit 10.02.

EXHIBIT
NO. DESCRIPTION
- - --------------------- -----------

10.37 Mall Commitment Letter, dated December 29, 1997, between
Aladdin Bazaar, LLC and Fleet National Bank, as
Administrative Agent is incorporated herein by reference
from the Company's (SEC File Nos. 333-49717 and
333-49717-01) Registration Statement on Form S-4, Amendment
No. 1, filed June 10, 1998, Part II, Item 21, Exhibit 10.42.

10.38 Purchase Agreement, dated February 18, 1998, among Gaming
Holdings, Capital, Enterprises, Aladdin Holdings, LLC, the
Trust under Article Sixth u/w/o Sigmund Sommer, London Clubs
and the Initial Purchasers is incorporated herein by
reference from the Company's (SEC File Nos. 333-49717 and
333-49717-01) Registration Statement on Form S-4 filed on
April 9, 1998, Part II, Item 21, Exhibit 10.43.

10.39 Guaranteed Land Appraisal prepared by HVS International is
incorporated herein by reference from the Company's (SEC
File Nos. 333-49717 and 333-49717-01) Registration Statement
on Form S-4, Amendment No. 1, filed June 10, 1998, Part II,
Item 21, Exhibit 10.44.

10.40 Employment Agreement dated February 25, 2000 between Aladdin
Gaming Holdings, LLC, Aladdin Gaming, LLC and William
Timmins.

10.41 Employment Agreement dated December 29, 1999 between Aladdin
Gaming Holdings, LLC, Aladdin Gaming, LLC and David Attaway.

10.42 Employment Agreement dated January 31, 2000 between Aladdin
Gaming Holdings, LLC, Aladdin Gaming, LLC and Barbara
Falvey.

10.43 Employment Agreement dated March 7, 2000 between Aladdin
Gaming Holdings, LLC, Aladdin Gaming, LLC and Thomas A.
Lettero.

10.44 Letter Agreement, dated December 10, 1999, between the Trust
under Article Sixth u/w/o Sigmund Sommer, London Clubs
International plc, London Clubs Nevada Inc., Aladdin Gaming
Holdings, LLC, Sommer Enterprises, LLC, Aladdin Gaming
Enterprises, LLC GAI, LLC, and Aladdin Holdings, LLC. Letter
Agreement, dated February 23, 2000, between the Trust under
Article Sixth u/w/o Sigmund Sommer, London Clubs
International plc, London Clubs Nevada, Inc., Aladdin Gaming
Holdings, LLC, Sommer Enterprises, LLC, Aladdin Gaming
Enterprises, Inc. and GAI, LLC.

21.01 List of Subsidiaries.

27.01 Financial Data Schedule.

- - ------------------------

(b) Reports on Form 8-K. During the fourth quarter of the fiscal year ended
December 31, 1999, the Company did not file any Current Report on Form 8-K.

(c) The exhibits required by Item 601 of Regulation S-K filed as part of this
Report or incorporated herein by reference are listed in Item 14(a)(3)
above, and the exhibits filed herewith are listed on the Index to Exhibits
which accompanies this Report.

(d) See Item 14(a)(2) of this Report.

SIGNATURES

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

REGISTRANT: ALADDIN GAMING HOLDINGS, LLC

By: /s/ RICHARD J. GOEGLEIN
-----------------------------------------
Richard J. Goeglein, PRESIDENT AND CHIEF
EXECUTIVE OFFICER (PRINCIPAL EXECUTIVE
OFFICER)

DATE: March 30, 2000

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.

March 30, 2000 By: /s/ JACK SOMMER
-----------------------------------------
Jack Sommer, CHAIRMAN OF THE BOARD

March 30, 2000 By: /s/ RICHARD J. GOEGLEIN
-----------------------------------------
Richard J. Goeglein, CHIEF EXECUTIVE
OFFICER, PRESIDENT AND MANAGER

March 30, 2000 By: /s/ RONALD DICTROW
-----------------------------------------
Ronald Dictrow, EXECUTIVE VICE PRESIDENT
AND MANAGER (PRINCIPAL ACCOUNTING OFFICER)

March 30, 2000 By: /s/ ALAN GOODENOUGH
-----------------------------------------
Alan Goodenough, MANAGER

March 30, 2000 By: /s/ G. BARRY C. HARDY
-----------------------------------------
G. Barry C. Hardy, MANAGER

March 30, 2000 By: /s/ WILLIAM TIMMINS
-----------------------------------------
William Timmins, EXECUTIVE VICE PRESIDENT
AND MANAGER

SIGNATURES

REGISTRANT: ALADDIN CAPITAL CORP.

By: /s/ RICHARD J. GOEGLEIN
-----------------------------------------
Richard J. Goeglein, PRESIDENT AND CHIEF
EXECUTIVE OFFICER (PRINCIPAL EXECUTIVE
OFFICER)

DATE: March 30, 2000

March 30, 2000 By: /s/ JACK SOMMER
-----------------------------------------
Jack Sommer, CHAIRMAN OF THE BOARD

March 30, 2000 By: /s/ RICHARD J. GOEGLEIN
-----------------------------------------
Richard J. Goeglein, CHIEF EXECUTIVE
OFFICER, PRESIDENT AND MANAGER

March 30, 2000 By: /s/ RONALD DICTROW
-----------------------------------------
Ronald Dictrow, EXECUTIVE VICE PRESIDENT
AND MANAGER (PRINCIPAL ACCOUNTING OFFICER)

March 30, 2000 By: /s/ ALAN GOODENOUGH
-----------------------------------------
Alan Goodenough, MANAGER

March 30, 2000 By: /s/ G. BARRY C. HARDY
-----------------------------------------
G. Barry C. Hardy, MANAGER

March 30, 2000 By: /s/ WILLIAM TIMMINS
-----------------------------------------
William Timmins, EXECUTIVE VICE PRESIDENT
AND MANAGER

SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED PURSUANT TO
SECTION 15(d) OF THE ACT BY REGISTRANTS WHO HAVE NOT REGISTERED SECURITIES
PURSUANT TO SECTION 12 OF THE ACT.

Other than this Form 10-K, the Company has not issued, and will not be
issuing, any annual report to its security holders covering the Company's last
fiscal year. The Company has not sent, and will not send, any proxy statement,
form of proxy or other proxy soliciting material to its security holders.

INDEX TO EXHIBITS

EXHIBIT PAGE
NO. DESCRIPTION NO.
- - --------------------- ----------- --------

10.3 Contribution Agreement, dated February 26, 1998, among the
Trust Under Article Sixth u/ w/o Sigmund Sommer, Aladdin
Holdings, LLC, Sommer Enterprises, LLC, London Clubs and
LCNI is incorporated herein by reference from the Company's
(SEC File Nos. 333-49717 and 333-49717-01) Registration
Statement on Form S-4 filed on April 9, 1998, Part II, Item
21, Exhibit 10.3.

EXHIBIT PAGE
NO. DESCRIPTION NO.
- - --------------------- ----------- --------

10.40 Employment Agreement dated February 25, 2000 between Aladdin
Gaming Holdings, LLC, Aladdin Gaming, LLC and William
Timmins.

10.41 Employment Agreement dated December 29, 1999 between Aladdin
Gaming Holdings, LLC, Aladdin Gaming, LLC and David Attaway.

10.42 Employment Agreement dated January 31, 2000 between Aladdin
Gaming Holdings, LLC, Aladdin Gaming, LLC and Barbara
Falvey.

10.43 Employment Agreement dated March 7, 2000 between Aladdin
Gaming Holdings, LLC, Aladdin Gaming, LLC and Thomas A.
Lettero.

21.01 List of Subsidiaries.

27.01 Financial Data Schedule.