1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549

FORM 10-Q

(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the period ended June 30, 2001

[ ] 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 1-12168

BOYD GAMING CORPORATION
(Exact name of registrant as specified in its charter)

NEVADA 88-0242733
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

2950 INDUSTRIAL ROAD
LAS VEGAS, NEVADA
89109
(Address of principal executive offices)
(Zip Code)

(702) 792-7200
(Registrant's telephone number, including area code)

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 filing requirements
for the past 90 days.

Yes [X] No [ ]

Shares outstanding of each of the Registrant's classes of common stock as of
July 31, 2001:

Class Outstanding
- ---------------------------- ----------
Common stock, $.01 par value 62,246,407

BOYD GAMING CORPORATION

QUARTERLY REPORT ON FORM 10-Q
FOR THE PERIOD ENDED JUNE 30, 2001

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION

Page No.

Item 1. Unaudited Condensed Consolidated Financial Statements

Condensed Consolidated Balance Sheets at June 30, 2001
and December 31, 2000 3

Condensed Consolidated Statements of Operations for the
three and six month periods ended June 30, 2001 and 2000 4

Condensed Consolidated Statement of Changes in
Stockholders' Equity for the six month period ended
June 30, 2001 5

Condensed Consolidated Statements of Cash Flows for the six
month periods ended June 30, 2001 and 2000 6

Notes to Condensed Consolidated Financial Statements 7

Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 21

Item 3. Quantitative and Qualitative Disclosure about Market Risk 30

PART II. OTHER INFORMATION

Item 4. Submission of Matters to a Vote of Security Holders 31

Item 6. Exhibits and Reports on Form 8-K 32

Signature Page 33

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PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

BOYD GAMING CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE DATA)
- --------------------------------------------------------------------------------

ASSETS
JUNE 30, DECEMBER 31,
2001 2000
---------- ------------

Current assets
Cash and cash equivalents ............................................. $ 83,938 $ 88,059
Accounts receivable, net .............................................. 12,015 14,260
Inventories ........................................................... 5,387 6,200
Prepaid expenses and other ............................................ 13,092 11,837
Income taxes receivable ............................................... -- 66
Deferred income taxes ................................................. 8,199 8,149
---------- ----------
Total current assets .......................................... 122,631 128,571
Property and equipment, net .............................................. 972,194 959,966
Investments in unconsolidated subsidiaries ............................... 113,300 105,560
Other assets and deferred charges, net ................................... 37,937 38,213
Intangible assets, net ................................................... 438,465 345,304
---------- ----------
Total assets .................................................. $1,684,527 $1,577,614
========== ==========

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities
Current maturities of long-term debt .................................. $ 2,473 $ 2,485
Account payables ...................................................... 37,881 38,540
Construction payables ................................................. 3,037 9,816
Accrued liabilities
Payroll and related ............................................... 33,896 36,115
Interest and other ................................................ 76,420 70,061
Income taxes payable .............................................. 253 --
---------- ----------
Total current liabilities ..................................... 153,960 157,017
Long-term debt, net of current maturities ................................ 1,105,590 1,016,813
Deferred income taxes and other liabilities .............................. 80,241 74,006
Commitments and contingencies ............................................ -- --
Stockholders' equity
Preferred stock, $.01 par value; 5,000,000 shares authorized .......... -- --
Common stock, $.01 par value; 200,000,000 shares authorized;
62,235,954 and 62,234,954 shares outstanding ....................... 622 622
Additional paid-in capital ............................................. 142,024 142,020
Retained earnings ...................................................... 201,602 187,136
Accumulated other comprehensive income ................................. 488 --
---------- ----------
Total stockholders' equity .................................... 344,736 329,778
---------- ----------
Total liabilities and stockholders' equity .................... $1,684,527 $1,577,614
========== ==========

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

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BOYD GAMING CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
- --------------------------------------------------------------------------------

THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
------------------------- -------------------------
2001 2000 2001 2000
--------- --------- --------- ---------

Revenues
Gaming ...................................... $ 231,267 $ 215,490 $ 462,465 $ 441,118
Food and beverage ........................... 40,616 38,821 81,827 79,731
Room ........................................ 19,955 19,305 39,409 37,700
Other ....................................... 19,949 18,863 39,994 36,071
Management fee .............................. -- -- -- 3,815
Termination fee, net ........................ -- -- -- 70,988
--------- --------- --------- ---------
Gross revenues ................................. 311,787 292,479 623,695 669,423
Less promotional allowances .................... 30,506 27,659 61,993 57,163
--------- --------- --------- ---------
Net revenues ........................ 281,281 264,820 561,702 612,260
--------- --------- --------- ---------

Costs and expenses
Gaming ...................................... 107,983 101,784 216,022 206,332
Food and beverage ........................... 27,421 25,603 55,103 50,878
Room ........................................ 6,136 5,848 11,615 11,554
Other ....................................... 20,395 18,495 40,447 35,010
Selling, general and administrative ......... 43,455 42,398 87,538 84,037
Maintenance and utilities ................... 13,722 12,100 27,004 23,806
Depreciation ................................ 22,002 19,682 43,719 38,784
Amortization of intangible license rights and
acquisition costs ........................ 2,457 2,450 4,907 4,900
Corporate expense ........................... 4,596 4,769 11,217 12,107
Preopening expense .......................... 51 1,950 412 2,332
--------- --------- --------- ---------
Total ............................... 248,218 235,079 497,984 469,740
--------- --------- --------- ---------
Operating income ............................... 33,063 29,741 63,718 142,520
--------- --------- --------- ---------

Other income (expense)
Interest income ............................. 2 328 2 462
Interest expense, net of amounts capitalized (18,932) (19,250) (39,407) (39,368)
--------- --------- --------- ---------
Total ............................... (18,930) (18,922) (39,405) (38,906)
--------- --------- --------- ---------
Income before provision for income taxes ....... 14,133 10,819 24,313 103,614
Provision for income taxes ..................... 5,724 4,166 9,847 39,892
--------- --------- --------- ---------
Net income ..................................... $ 8,409 $ 6,653 $ 14,466 $ 63,722
========= ========= ========= =========

Basic and diluted net income per common share .. $ 0.14 $ 0.11 $ 0.23 $ 1.02
========= ========= ========= =========

Average basic shares outstanding ............... 62,235 62,230 62,235 62,229
Average diluted shares outstanding ............. 62,262 62,302 62,248 62,303
========= ========= ========= =========

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

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BOYD GAMING CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE SIX MONTH PERIOD ENDED JUNE 30, 2001

(UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE DATA)
- --------------------------------------------------------------------------------

ACCUMULATED
COMMON STOCK ADDITIONAL OTHER TOTAL
-------------------------- PAID-IN RETAINED COMPREHENSIVE STOCKHOLDERS'
SHARES AMOUNT CAPITAL EARNINGS INCOME EQUITY
---------- ---------- ---------- ---------- ---------- ----------

Balances, January 1, 2001.. 62,234,954 $ 622 $ 142,020 $ 187,136 $ -- $ 329,778
Net income ................ -- -- -- 14,466 -- 14,466
Derivative instruments
market adjustment ....... -- -- -- -- 488 488
Stock options exercised.... 1,000 -- 4 -- -- 4
---------- ---------- ---------- ---------- ---------- ----------
BALANCES, JUNE 30, 2001.... 62,235,954 $ 622 $ 142,024 $ 201,602 $ 488 $ 344,736
========== ========== ========== ========== ========== ==========

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

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BOYD GAMING CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)
(IN THOUSANDS)
- --------------------------------------------------------------------------------

SIX MONTHS ENDED
JUNE 30,
-------------------------
2001 2000
--------- ---------

CASH FLOWS FROM OPERATING ACTIVITIES
Net income .................................................. $ 14,466 $ 63,722
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization .......................... 48,626 43,684
Deferred income taxes .................................. 5,564 14,018
Preopening expense ..................................... 412 2,332
Equity (income) loss in unconsolidated subsidiaries .... (216) 678
Changes in assets and liabilities:
Accounts receivable, net ............................. 2,708 4,697
Inventories .......................................... 849 936
Prepaid expenses and other ........................... (1,255) 1,180
Other assets ......................................... (1,966) 290
Other current liabilities ............................ 2,311 6,748
Other liabilities .................................... 335 338
Income taxes receivable .............................. 66 1,108
Income taxes payable ................................. 253 10,662
--------- ---------
Net cash provided by operating activities ................... 72,153 150,393
--------- ---------

CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of property, equipment and other assets ...... (34,595) (55,975)
Net cash paid for acquisition of Delta Downs ............. (60,000) --
Investments in and advances to unconsolidated subsidiaries (5,037) (4,514)
Preopening expense ....................................... (412) (2,332)
--------- ---------
Net cash used in investing activities ....................... (100,044) (62,821)
--------- ---------

CASH FLOWS FROM FINANCING ACTIVITIES
Payments on long-term debt ............................... (235) (429)
Net borrowings (payments) under credit agreements ........ 24,000 (101,300)
Proceeds from issuance of common stock ................... 5 34
--------- ---------
Net cash provided by (used in) financing activities ......... 23,770 (101,695)
--------- ---------
Net decrease in cash and cash equivalents ................... (4,121) (14,123)
Cash and cash equivalents, beginning of period .............. 88,059 86,192
--------- ---------
Cash and cash equivalents, end of period .................... $ 83,938 $ 72,069
========= =========

SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION
Cash paid for interest, net of amounts capitalized ....... $ 38,416 $ 36,612
Cash paid for income taxes, net of refunds ............... 3,964 14,104
========= =========

SUPPLEMENTAL SCHEDULE OF NON-CASH
INVESTING AND FINANCING ACTIVITIES
Property additions acquired on construction and trade
payables which were accrued, but not yet paid .......... $ 4,060 $ 15,966
Seller note issued for Delta Downs acquisition ........... 65,000 --
========= =========

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

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BOYD GAMING CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
- --------------------------------------------------------------------------------

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The accompanying condensed consolidated financial statements include the
accounts of Boyd Gaming Corporation and its wholly-owned subsidiaries. We own
and operate twelve gaming facilities located in Las Vegas, Nevada, Tunica,
Mississippi, East Peoria, Illinois, Kenner and Vinton, Louisiana, and Michigan
City, Indiana as well as a travel agency located in Honolulu, Hawaii. All
material intercompany accounts and transactions have been eliminated. We are
also a 50% partner in a joint venture that is developing The Borgata in Atlantic
City, New Jersey, which is expected to open in the summer of 2003. Investments
in 50% or less owned subsidiaries over which we have the ability to exercise
significant influence, including joint ventures such as The Borgata, are
accounted for using the equity method.

Basis of Presentation

In our opinion, the accompanying unaudited condensed consolidated
financial statements contain all adjustments, consisting only of normal
recurring adjustments, necessary to present fairly the results of our operations
for the three and six month periods ended June 30, 2001 and 2000 and cash flows
for the six month periods ended June 30, 2001 and 2000. We suggest reading this
report in conjunction with our audited consolidated financial statements
included in the Annual Report on Form 10-K for the year ended December 31, 2000.
The operating results for the three and six month periods ended June 30, 2001
and 2000 and cash flows for the six month periods ended June 30, 2001 and 2000
are not necessarily indicative of the results that will be achieved for the full
year or future periods.

Use of Estimates

The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires us to
make estimates and assumptions that affect the reported amounts in the condensed
consolidated financial statements and accompanying notes. Our significant
estimates include the estimated useful lives for depreciable and amortizable
assets, the estimated allowance for doubtful accounts receivable, the estimated
valuation allowance for deferred tax assets, and estimated cash flows in
assessing the recoverability of long-lived assets. Actual results could differ
from those estimates.

Capitalized Interest

Interest costs associated with major construction projects are
capitalized. When no debt is incurred specifically for a project, interest is
capitalized on amounts expended for the project using our weighted average cost
of borrowing. Capitalization of interest ceases when the project or discernible
portions of the project are substantially complete. Capitalized interest during
the three and six month periods ended June 30, 2001 was $3.6 million and $6.6
million, respectively. Capitalized interest during the three and six month
periods ended June 30, 2000 was $1.3 million and $2.2 million, respectively.

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BOYD GAMING CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------

Preopening Expenses

We expense certain costs of start-up activities as incurred. During the
three and six month periods ended June 30, 2001, we expensed $0.1 million and
$0.4 million, respectively, in preopening costs that related to our share of
preopening expense in The Borgata, the Company's Atlantic City joint venture as
well as preopening expense at Delta Downs where we are in the process of
expanding the property and equipping it for a new casino. During the three and
six month periods ended June 30, 2000, we expensed $2.0 million and $2.3
million, respectively, in preopening costs, $1.5 million of which related to our
unsuccessful efforts to assist in the development and operation of a Rhode
Island Indian casino with the Narragansett Indian Tribe. The remainder of the
preopening expenses incurred during the three and six month periods ended June
30, 2000 related primarily to our share of preopening expense in The Borgata.

Derivative Instruments

The Financial Accounting Standards Board, or FASB, issued Statement of
Financial Accounting Standards, or SFAS, No. 133, Accounting for Derivative
Instruments and Hedging Activities which requires all derivative instruments to
be recognized on the balance sheet at fair value. Derivatives that are not
designated as cash flow hedges must be adjusted to fair value through income. If
the derivative is a hedge, depending on the nature of the hedge, changes in its
fair value will either be offset against the change in fair value of the hedged
item through earnings or recognized in other comprehensive income until the
hedged item is recognized in earnings. The ineffective portion of a derivative's
change in fair value will be immediately recognized in earnings. We do not
currently have any derivative items. However, The Borgata, our unconsolidated
subsidiary, has entered into derivative instruments to comply with the
requirements of its bank credit agreement. These derivative instruments have an
initial aggregate notional amount of approximately $310 million and cover
various periods ranging from 2002 to 2005. These derivative instruments received
cash flow hedging designation on May 1, 2001. During the three month period
ended June 30, 2001, we recorded $0.9 million of preopening income on the
accompanying condensed consolidated statement of operations, and other
comprehensive income of $0.5 million, net of $0.3 million in taxes, representing
our portion of the increase in fair value of the derivative instruments. During
the six month period ended June 30, 2001, we recorded $0.5 million of preopening
income on the accompanying condensed consolidated statement of operations and
other comprehensive income of $0.5 million, net of $0.3 million in taxes,
representing our portion of the increase in fair value of the derivative
instruments.

Recently Issued Accounting Standards

In January 2001, the Emerging Issues Task Force of the FASB reached a
consensus in EITF Issue No. 00-22, Accounting for `Points' and Certain Other
Time-Based or Volume-Based Sales Incentive Offers, and Offers for Free Products
or Services to be Delivered in the Future. EITF Issue No. 00-22 requires that
the redemption of "Points" for cash be recognized as a reduction of revenues. We
complied with the requirements of EITF Issue No. 00-22 on the accompanying
condensed consolidated statement of operations for the three and six month
periods ended June 30, 2001. Amounts in the condensed consolidated statement of
operations for the three and six month periods ended June 30, 2000 were also
reclassified, from that previously reported, to conform with this consensus.

In June 2001, the FASB issued SFAS No. 141, Business Combinations, and
SFAS No. 142, Goodwill and Other Intangible Assets. These statements require
that the purchase method of accounting be used for all business combinations
initiated after June 30, 2001 and prohibit the pooling-of-interest method and
change

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the accounting for goodwill from an amortization method to an impairment-only
approach. We are required to adopt the new method of accounting for goodwill and
other intangible assets on January 1, 2002. The new method of accounting for
goodwill and other intangible assets applies to all existing and future
unamortized balances at the time of adoption. As part of the adoption of these
standards, we must reassess the useful lives of our goodwill and intangible
assets and perform impairment tests. We are currently in the process of
performing these steps but have not yet determined the impact of this standard
on our future goodwill and intangible asset amortization expense.

Reclassifications

Certain prior period amounts in the condensed consolidated financial
statements have been reclassified to conform to the June 30, 2001 presentation.
These reclassifications had no effect on our net income.

NOTE 2. NET INCOME PER COMMON SHARE

Basic per share amounts are computed by dividing net income by the
average shares outstanding during the period. Diluted per share amounts are
computed by dividing net income by average shares outstanding plus the dilutive
effects of common share equivalents. Diluted net income per share during the
three and six month periods ended June 30, 2001 and 2000 is determined
considering the dilutive effects of outstanding stock options. The effect of
stock options outstanding to purchase approximately 5.2 million and 7.6 million
shares, respectively, were not included in the diluted calculation during the
three and six month periods ended June 30, 2001, and 5.4 million shares were not
included in the diluted calculation during the three and six month periods ended
June 30, 2000, since the exercise price of such options was greater than the
average price of our common shares during each of the periods.

NOTE 3. ACQUISITION

On May 31, 2001, we acquired substantially all of the assets of the
Delta Downs Racetrack near Vinton, Louisiana, together with an off-track betting
facility in Mound, Louisiana, for a purchase price of $125 million. The purchase
price is subject to adjustment based on the number of slot machines we receive
approval to operate and other performance based criteria. The purchase price
will be reduced if we receive approval to operate fewer than 1,700 slot
machines, and at its lowest, could be $115 million if we receive approval to
operate fewer than 1,600 slot machines. The purchase price could be increased by
up to $27 million if we achieve certain defined income targets over a period of
two and one-half years after the start of slot operations at the facility, or if
there is regulatory authorization to increase the number of slot machines at
Louisiana racetracks to a predefined target and certain other conditions are met
within a period of five years from the closing of the transaction. We plan to
begin casino operations upon receiving the appropriate licenses and approvals
and completing necessary improvements to the facility, including the purchase of
slot machines and related equipment, which improvements are expected to cost $35
million. We expect to open the Delta Downs casino in October 2001. We funded the
acquisition through borrowings under our bank credit facility and the issuance
of a $65 million note payable to the sellers. We plan to fund the improvements
to the facility through our bank credit facility.

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NOTE 4. DEBT

Bank Credit Facility. On May 21, 2001, we amended our bank credit
facility, primarily to allow for the acquisition of the Delta Downs Racetrack,
the completion of necessary improvements to the facility, and the financing of
the acquisition and improvements.

Seller Note. In connection with the purchase of substantially all of the
assets of the Delta Downs Racetrack, we issued a promissory note to the sellers
dated May 31, 2001. We are obligated to pay the sellers, subject to certain
conditions, $65 million, together with simple interest assessed at a rate per
annum pursuant to the following schedule:

7% from May 31, 2001 through July 31, 2001;

10% from August 1, 2001 through March 31, 2002; and

12% from April 1, 2002 until the seller note is paid.

The seller note is secured by a mortgage on the property and security
interests in all personal property. The Delta Downs mortgage is subject and
subordinate to $60 million of the mortgage under our bank credit facility. In
addition, the principal amount due under the seller note may be reduced pursuant
to offsets in certain instances and may be prepaid in full or in part without
penalty.

Pursuant to the terms of the seller note, we are required to pay the
sellers accrued interest monthly beginning on June 30, 2001. In addition, we are
required to pay the sellers a principal payment of $15 million on December 31,
2001 if the seller note is still outstanding as of that date. The entire unpaid
balance of the seller note, including any additional amounts due to the sellers
pursuant to the seller note, are due and payable in full upon the earlier of:

- five business days after the State of Louisiana issues all
required permits under the applicable laws for the operation of
slot machines at Delta Downs;

- the closing of any sale of the Delta Downs business we acquired;
or

- June 30, 2003.

The following items constitute events of default under the seller note,
entitling the seller to accelerate the maturity date of the amounts due and to
foreclose on the property encumbered by the Delta Downs mortgage:

- acceleration or maturity of our bank loans; and

- our failure to pay the seller note in full on the date it is
due.

See "Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations -- Liquidity and Capital Resources -- Indebtedness."

Subsequent Event. On July 26, 2001, we issued, through a private
placement, $200 million principal amount of 9.25% Senior Notes due August 2009.
The notes require semi-annual interest payments in February and August each year
through August 2009, at which time the entire principal balance becomes due and
payable. The notes contain certain restrictive covenants regarding, among other
things, incurrence of debt, sales of assets, mergers and consolidations and
limitations on restricted payments (as defined in the indenture governing the
notes). At any time prior to August 2004, we may redeem up to 35% of the
aggregate principal amount of the outstanding notes with the net proceeds from
equity offerings at a redemption price of 109.25% of the principal amount, plus
accrued and unpaid interest, subject to certain conditions. On or after August
2005, we may redeem all or a portion of the notes at redemption prices ranging
from 104.625% in 2005 to 100% in 2007 and thereafter. We reduced outstanding
indebtedness under our bank credit facility with the net proceeds from this
offering. Upon consummation of the offering, our bank credit facility
availability was permanently reduced by approximately $69 million. We are
obligated to register and have declared effective the notes or exchange them for
identical notes that have been registered with the Securities and

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Exchange Commission within certain predefined time parameters. If we do not
consummate an effective registration of the notes within the required time
frame, we must pay certain liquidated damages.

NOTE 5. SEGMENT INFORMATION

We review the results of operations based on the following distinct
geographic gaming market segments: the Stardust Resort and Casino on the Las
Vegas Strip; Sam's Town Hotel and Gambling Hall, the Eldorado Casino and Jokers
Wild Casino on the Boulder Strip; the Downtown Properties; Sam's Town Hotel and
Gambling Hall in Tunica, Mississippi; Par-A-Dice Hotel and Casino in East
Peoria, Illinois; Treasure Chest Casino in Kenner, Louisiana; Blue Chip Casino
in Michigan City, Indiana; Delta Downs Racetrack near Vinton, Louisiana
(acquired May 31, 2001); and management fee income from Silver Star Resort and
Casino located near Philadelphia, Mississippi (through January 31, 2000). As
used herein, "Downtown Properties" consist of the California Hotel and Casino,
the Fremont Hotel and Casino, Main Street Station Casino, Brewery and Hotel and
Vacations Hawaii.

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THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
---------------------- ----------------------
2001 2000 2001 2000
-------- -------- -------- --------
(IN THOUSANDS)

Gaming Revenues
Stardust .................................. $ 23,915 $ 24,172 $ 49,462 $ 49,868
Sam's Town Las Vegas ...................... 29,278 26,506 58,816 57,466
Eldorado and Jokers Wild .................. 7,680 7,099 15,403 14,855
Downtown Properties ....................... 34,938 34,109 69,526 67,688
Sam's Town Tunica ......................... 25,704 20,140 50,239 42,533
Par-A-Dice ................................ 34,494 32,327 68,813 64,531
Treasure Chest ............................ 29,318 25,926 58,838 52,971
Blue Chip ................................. 45,340 45,211 90,768 91,206
Delta Downs ............................... 600 -- 600 --
-------- -------- -------- --------
Total gaming revenues ............. $231,267 $215,490 $462,465 $441,118
======== ======== ======== ========

EBITDA(1)
Stardust .................................. $ 3,662 $ 4,044 $ 8,617 $ 8,801
Sam's Town Las Vegas ...................... 6,183 5,353 11,377 14,080
Eldorado and Jokers Wild .................. 1,690 1,468 3,613 3,388
Downtown Properties ....................... 11,523 11,511 21,676 21,598
Sam's Town Tunica ......................... 2,013 1,002 3,014 4,005
Par-A-Dice ................................ 13,394 12,132 26,458 24,314
Treasure Chest ............................ 4,242 4,224 10,362 9,929
Silver Star ............................... -- -- -- 74,803
Blue Chip ................................. 19,450 18,858 38,844 39,725
Delta Downs ............................... 12 -- 12 --
-------- -------- -------- --------
Property EBITDA .................... 62,169 58,592 123,973 200,643
-------- -------- -------- --------

Other Costs and Expenses
Corporate expense ......................... 4,596 4,769 11,217 12,107
Depreciation and amortization ............. 24,459 22,132 48,626 43,684
Preopening expense ........................ 51 1,950 412 2,332
Other expense, net ........................ 18,930 18,922 39,405 38,906
-------- -------- -------- --------
Total other costs and expenses .... 48,036 47,773 99,660 97,029
-------- -------- -------- --------

Income before provision for income taxes .... 14,133 10,819 24,313 103,614
Provision for income taxes .................. 5,724 4,166 9,847 39,892
-------- -------- -------- --------
Net income .................................. $ 8,409 $ 6,653 $ 14,466 $ 63,722
======== ======== ======== ========

(1) EBITDA is earnings before interest, taxes, depreciation, amortization and
preopening expense. We believe that EBITDA is a useful financial
measurement for assessing the operating performances of our properties.
EBITDA does not represent net income or cash flows from operating,
investing or financing activities as defined by accounting principles
generally accepted in the United States of America.

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NOTE 6. GUARANTOR INFORMATION

Our 9.25% notes due in 2003 are guaranteed by a majority of our
wholly-owned existing significant subsidiaries. These guaranties are full,
unconditional, and joint and several. We have significant subsidiaries that do
not guaranty these notes. As such, the following consolidating schedules present
separate condensed financial statement information on a combined basis for the
parent only, as well as our guarantor subsidiaries and non-guarantor
subsidiaries, as of June 30, 2001 and December 31, 2000 and for the three and
six month periods ended June 30, 2001 and 2000.

CONDENSED CONSOLIDATING BALANCE SHEET INFORMATION
AS OF JUNE 30, 2001

COMBINED
COMBINED NON- ELIMINATION
PARENT GUARANTORS GUARANTORS ENTRIES CONSOLIDATED
----------- ----------- ----------- ----------- -----------
(IN THOUSANDS)

ASSETS
Current assets ............................... $ 2,213 $ 86,126 $ 34,390 $ (98)(1) $ 122,631
Property and equipment, net .................. 49,066 750,933 172,195 -- 972,194
Investments in unconsolidated
subsidiaries, net ........................ -- 1,590 111,710 -- 113,300
Other assets and deferred charges, net ....... 1,317,412 (404,016) 520,525 (1,395,984)(1)(2) 37,937
Intangible assets, net ....................... -- 111,220 327,245 -- 438,465
----------- ----------- ----------- ----------- -----------
Total assets $ 1,368,691 $ 545,853 $ 1,166,065 $(1,396,082) $ 1,684,527
=========== =========== =========== =========== ===========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities .......................... $ 40,460 $ 71,805 $ 41,623 $ 72(1) $ 153,960
Long-term debt, net of current maturities .... 983,150 57,440 65,000 -- 1,105,590
Deferred income taxes and other liabilities .. 833 72,332 7,076 -- 80,241
Stockholders' equity ......................... 344,248 344,276 1,052,366 (1,396,154)(2) 344,736
----------- ----------- ----------- ----------- -----------
Total liabilities and stockholders'
equity .............................. $ 1,368,691 $ 545,853 $ 1,166,065 $(1,396,082) $ 1,684,527
=========== =========== =========== =========== ===========

- ----------

Elimination Entries

(1) To eliminate intercompany payables and receivables.

(2) To eliminate investment in subsidiaries and subsidiaries' equity.

13
14

CONDENSED CONSOLIDATING BALANCE SHEET INFORMATION
AS OF DECEMBER 31, 2000

COMBINED
COMBINED NON- ELIMINATION
PARENT GUARANTORS GUARANTORS ENTRIES CONSOLIDATED
----------- ----------- ----------- ----------- -----------
(IN THOUSANDS)

ASSETS
Current assets ............................. $ 1,354 $ 96,701 $ 30,285 $ 231(1) $ 128,571
Property and equipment, net ................ 44,493 766,603 148,870 -- 959,966
Investments in unconsolidated subsidiaries,
net ...................................... -- 1,700 103,860 -- 105,560
Other assets and deferred charges, net ..... 1,285,373 (459,081) 462,906 (1,250,985)(1)(2) 38,213
Intangible assets, net ..................... -- 112,849 232,455 -- 345,304
----------- ----------- ----------- ----------- -----------
Total assets ........................... $ 1,331,220 $ 518,772 $ 978,376 $(1,250,754) $ 1,577,614
=========== =========== =========== =========== ===========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities ........................ $ 30,304 $ 86,993 $ 39,516 $ 204(1) $ 157,017
Long-term debt, net of current maturities .. 959,150 57,663 -- -- 1,016,813
Deferred income taxes and other liabilities 11,988 55,321 6,697 -- 74,006
Stockholders' equity ....................... 329,778 318,795 932,163 (1,250,958)(2) 329,778
----------- ----------- ----------- ----------- -----------
Total liabilities and stockholders'
equity ............................ $ 1,331,220 $ 518,772 $ 978,376 $(1,250,754) $ 1,577,614
=========== =========== =========== =========== ===========

- ----------

Elimination Entries

(1) To eliminate intercompany payables and receivables.

(2) To eliminate investment in subsidiaries and subsidiaries' equity.

14
15

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS INFORMATION
FOR THE THREE MONTHS ENDED JUNE 30, 2001

COMBINED
COMBINED NON- ELIMINATION
PARENT GUARANTORS GUARANTORS ENTRIES CONSOLIDATED
--------- --------- --------- --------- ---------
(IN THOUSANDS)

Revenues
Gaming ............................ $ -- $ 156,010 $ 75,257 $ -- $ 231,267
Food and beverage ................. -- 36,045 4,571 -- 40,616
Room .............................. -- 19,119 836 -- 19,955
Other ............................. 3,357 8,015 12,377 (3,800)(1) 19,949
Management fee and equity income .. 31,156 687 15,872 (47,715)(1) --
--------- --------- --------- --------- ---------
Gross revenues ...................... 34,513 219,876 108,913 (51,515) 311,787
Less promotional allowances ......... -- 25,534 4,972 -- 30,506
--------- --------- --------- --------- ---------
Net revenues .............. 34,513 194,342 103,941 (51,515) 281,281
--------- --------- --------- --------- ---------

Costs and expenses
Gaming ............................ -- 79,312 28,671 -- 107,983
Food and beverage ................. -- 22,620 4,801 -- 27,421
Room .............................. -- 5,818 318 -- 6,136
Other ............................. -- 10,872 17,938 (8,415)(1) 20,395
Selling, general and administrative -- 29,453 14,002 -- 43,455
Maintenance and utilities ......... -- 10,513 3,209 -- 13,722
Depreciation and amortization ..... 654 17,996 5,809 -- 24,459
Corporate expense ................. 8,113 26 262 (3,805)(1) 4,596
Preopening expense ................ 21 -- 30 -- 51
--------- --------- --------- --------- ---------
Total ..................... 8,788 176,610 75,040 (12,220) 248,218
--------- --------- --------- --------- ---------
Operating income .................... 25,725 17,732 28,901 (39,295) 33,063
Other income (expense), net ......... (17,414) (1,280) (236) -- (18,930)
--------- --------- --------- --------- ---------
Income before income taxes .......... 8,311 16,452 28,665 (39,295) 14,133
Provision for income taxes .......... (98) 3,528 2,294 -- 5,724
--------- --------- --------- --------- ---------
Net income .......................... $ 8,409 $ 12,924 $ 26,371 $ (39,295) $ 8,409
========= ========= ========= ========= =========

- ----------

Elimination Entries

(1) To eliminate intercompany revenues and expenses.

15
16

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS INFORMATION
FOR THE THREE MONTHS ENDED JUNE 30, 2000

COMBINED
COMBINED NON- ELIMINATION
PARENT GUARANTORS GUARANTORS ENTRIES CONSOLIDATED
--------- --------- --------- --------- ---------
(IN THOUSANDS)

Revenues
Gaming ............................ $ -- $ 144,353 $ 71,137 $ -- $ 215,490
Food and beverage ................. -- 34,476 4,345 -- 38,821
Room .............................. -- 18,525 780 -- 19,305
Other ............................. 2,999 7,222 12,388 (3,746)(1) 18,863
Management fee and equity income .. 30,797 708 17,152 (48,657)(1) --
--------- --------- --------- --------- ---------
Gross revenues ...................... 33,796 205,284 105,802 (52,403) 292,479
Less promotional allowances ......... -- 24,119 3,540 -- 27,659
--------- --------- --------- --------- ---------
Net revenues .............. 33,796 181,165 102,262 (52,403) 264,820
--------- --------- --------- --------- ---------

Costs and expenses
Gaming ............................ -- 75,493 26,291 -- 101,784
Food and beverage ................. -- 20,607 4,996 -- 25,603
Room .............................. -- 5,465 383 -- 5,848
Other ............................. -- 9,603 17,103 (8,211)(1) 18,495
Selling, general and administrative -- 27,969 14,429 -- 42,398
Maintenance and utilities ......... -- 8,759 3,341 -- 12,100
Depreciation and amortization ..... 624 16,182 5,326 -- 22,132
Corporate expense ................. 8,059 31 425 (3,746)(1) 4,769
Preopening expense ................ 1,549 133 268 -- 1,950
--------- --------- --------- --------- ---------
Total ..................... 10,232 164,242 72,562 (11,957) 235,079
--------- --------- --------- --------- ---------
Operating income .................... 23,564 16,923 29,700 (40,446) 29,741
Other income (expense), net ......... (17,823) (1,264) 165 -- (18,922)
--------- --------- --------- --------- ---------
Income before income taxes .......... 5,741 15,659 29,865 (40,446) 10,819
Provision for income taxes .......... (912) 2,771 2,307 -- 4,166
--------- --------- --------- --------- ---------
Net income .......................... $ 6,653 $ 12,888 $ 27,558 $ (40,446) $ 6,653
========= ========= ========= ========= =========

- ----------

Elimination Entries

(1) To eliminate intercompany revenues and expenses.

16
17

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS INFORMATION
FOR THE SIX MONTHS ENDED JUNE 30, 2001

COMBINED
COMBINED NON- ELIMINATION
PARENT GUARANTORS GUARANTORS ENTRIES CONSOLIDATED
--------- --------- --------- --------- ---------
(IN THOUSANDS)

Revenues
Gaming ............................ $ -- $ 312,259 $ 150,206 $ -- $ 462,465
Food and beverage ................. -- 72,612 9,215 -- 81,827
Room .............................. -- 37,787 1,622 -- 39,409
Other ............................. 6,714 17,147 23,756 (7,623)(1) 39,994
Management fee and equity income .. 62,824 1,824 34,759 (99,407)(1) --
--------- --------- --------- --------- ---------
Gross revenues ...................... 69,538 441,629 219,558 (107,030) 623,695
Less promotional allowances ......... -- 51,487 10,506 -- 61,993
--------- --------- --------- --------- ---------
Net revenues .............. 69,538 390,142 209,052 (107,030) 561,702
--------- --------- --------- --------- ---------

Costs and expenses
Gaming ............................ -- 160,188 55,834 -- 216,022
Food and beverage ................. -- 45,490 9,613 -- 55,103
Room .............................. -- 10,981 634 -- 11,615
Other ............................. -- 22,504 34,924 (16,981)(1) 40,447
Selling, general and administrative -- 60,107 27,431 -- 87,538
Maintenance and utilities ......... -- 20,327 6,677 -- 27,004
Depreciation and amortization ..... 1,359 35,844 11,423 -- 48,626
Corporate expense ................. 18,257 50 533 (7,623)(1) 11,217
Preopening expense ................ 73 -- 339 -- 412
--------- --------- --------- --------- ---------
Total ..................... 19,689 355,491 147,408 (24,604) 497,984
--------- --------- --------- --------- ---------
Operating income .................... 49,849 34,651 61,644 (82,426) 63,718
Other income (expense), net ......... (36,766) (2,552) (87) -- (39,405)
--------- --------- --------- --------- ---------
Income before income taxes .......... 13,083 32,099 61,557 (82,426) 24,313
Provision for income taxes .......... (1,383) 6,618 4,612 -- 9,847
--------- --------- --------- --------- ---------
Net income .......................... $ 14,466 $ 25,481 $ 56,945 $ (82,426) $ 14,466
========= ========= ========= ========= =========

- -----------
Elimination Entries

(1) To eliminate intercompany revenues and expenses.

17
18

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS INFORMATION
FOR THE SIX MONTHS ENDED JUNE 30, 2000

COMBINED
COMBINED NON- ELIMINATION
PARENT GUARANTORS GUARANTORS ENTRIES CONSOLIDATED
--------- --------- --------- --------- ---------
(IN THOUSANDS)

Revenues
Gaming ............................ $ -- $ 296,941 $ 144,177 $ -- $ 441,118
Food and beverage ................. -- 70,950 8,781 -- 79,731
Room .............................. -- 36,584 1,116 -- 37,700
Other ............................. 5,998 14,426 23,140 (7,493)(1) 36,071
Management fee and equity income .. 135,430 5,598 37,612 (174,825)(1) 3,815
Termination fee, net .............. -- 70,988 -- -- 70,988
--------- --------- --------- --------- ---------
Gross revenues ...................... 141,428 495,487 214,826 (182,318) 669,423
Less promotional allowances ......... -- 50,488 6,675 -- 57,163
--------- --------- --------- --------- ---------
Net revenues .............. 141,428 444,999 208,151 (182,318) 612,260
--------- --------- --------- --------- ---------

Costs and expenses
Gaming ............................ -- 153,474 52,858 -- 206,332
Food and beverage ................. -- 41,188 9,690 -- 50,878
Room .............................. -- 10,974 580 -- 11,554
Other ............................. -- 69,553 33,448 (67,991)(1) 35,010
Selling, general and administrative -- 56,427 27,610 -- 84,037
Maintenance and utilities ......... -- 17,157 6,649 -- 23,806
Depreciation and amortization ..... 1,128 32,142 10,414 -- 43,684
Corporate expense ................. 18,628 93 879 (7,493)(1) 12,107
Preopening expense ................ 1,563 161 608 -- 2,332
--------- --------- --------- --------- ---------
Total ..................... 21,319 381,169 142,736 (75,484) 469,740
--------- --------- --------- --------- ---------
Operating income .................... 120,109 63,830 65,415 (106,834) 142,520
Other income (expense), net ......... (36,634) (2,625) 353 -- (38,906)
--------- --------- --------- --------- ---------
Income before income taxes .......... 83,475 61,205 65,768 (106,834) 103,614
Provision for income taxes .......... 19,753 15,252 4,887 -- 39,892
--------- --------- --------- --------- ---------
Net income .......................... $ 63,722 $ 45,953 $ 60,881 $(106,834) $ 63,722
========= ========= ========= ========= =========

- -----------
Elimination Entries

(1) To eliminate intercompany revenues and expenses.

18
19

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOW INFORMATION
FOR THE SIX MONTHS ENDED JUNE 30, 2001

COMBINED
COMBINED NON-
PARENT GUARANTORS GUARANTORS CONSOLIDATED
--------- --------- --------- ---------
(IN THOUSANDS)

Cash flows from operating activities .................. $ 41,822 $ 14,499 $ 15,832 $ 72,153
--------- --------- --------- ---------

Cash flows from investing activities
Acquisition of property, equipment and other assets .. (5,932) (24,127) (4,536) (34,595)
Net cash paid for acquisition of Delta Downs ......... -- -- (60,000) (60,000)
Investments in and advances to unconsolidated
subsidiaries ....................................... -- -- (5,037) (5,037)
Investment in consolidated subsidiaries .............. (60,000) -- 60,000 --
Preopening expense ................................... (73) -- (339) (412)
--------- --------- --------- ---------
Net cash used in investing activities ................. (66,005) (24,127) (9,912) (100,044)
--------- --------- --------- ---------

Cash flows from financing activities
Net borrowings under credit agreements .............. 24,000 -- -- 24,000
Receipt/(payment) of dividends ...................... -- 1,109 (1,109) --
Payments on long-term debt .......................... (27) (208) -- (235)
Proceeds from issuance of common stock .............. 5 -- -- 5
--------- --------- --------- ---------
Net cash provided by (used in) financing activities ... 23,978 901 (1,109) 23,770
--------- --------- --------- ---------
Net increase (decrease) in cash and cash equivalents .. (205) (8,727) 4,811 (4,121)
Cash and cash equivalents, beginning of period ........ 358 61,219 26,482 88,059
--------- --------- --------- ---------
Cash and cash equivalents, end of period .............. $ 153 $ 52,492 $ 31,293 $ 83,938
========= ========= ========= =========

19
20

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOW INFORMATION
FOR THE SIX MONTHS ENDED JUNE 30, 2000

COMBINED
COMBINED NON-
PARENT GUARANTORS GUARANTORS CONSOLIDATED
--------- --------- --------- ---------
(IN THOUSANDS)

Cash flows from operating activities .................. $ 93,614 $ 39,392 $ 17,387 $ 150,393
--------- --------- --------- ---------

Cash flows from investing activities
Acquisition of property, equipment and other assets .. (3,866) (47,818) (4,291) (55,975)
Investments in and advances to unconsolidated
subsidiaries ....................................... -- -- (4,514) (4,514)
Preopening expense ................................... (1,563) (161) (608) (2,332)
--------- --------- --------- ---------
Net cash used in investing activities ................. (5,429) (47,979) (9,413) (62,821)
--------- --------- --------- ---------

Cash flows from financing activities
Net payments under credit agreements ................ (101,300) -- -- (101,300)
Proceeds from issuance of common stock .............. 34 -- -- 34
Receipt/(payment) of dividends ...................... 3,459 911 (4,370) --
Receipt/(payments) on long-term debt ................ 9,766 (10,195) -- (429)
--------- --------- --------- ---------
Net cash used in financing activities ................. (88,041) (9,284) (4,370) (101,695)
--------- --------- --------- ---------
Net increase (decrease) in cash and cash equivalents .. 144 (17,871) 3,604 (14,123)
Cash and cash equivalents, beginning of period ........ 138 62,755 23,299 86,192
--------- --------- --------- ---------
Cash and cash equivalents, end of period .............. $ 282 $ 44,884 $ 26,903 $ 72,069
========= ========= ========= =========

20
21

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

RESULTS OF OPERATIONS

The following table sets forth, for the periods indicated, certain
operating data for our properties. As used herein, "Boulder Strip Properties"
consist of Sam's Town Hotel and Gambling Hall ("Sam's Town Las Vegas"), the
Eldorado Casino (the "Eldorado") and Jokers Wild Casino ("Jokers Wild");
"Downtown Properties" consist of the California Hotel and Casino (the
"California"), the Fremont Hotel and Casino (the "Fremont"), Main Street
Station, Casino, Brewery and Hotel ("Main Street Station") and Vacations Hawaii,
the Company's wholly-owned travel agency which operates for the benefit of the
Downtown gaming properties; and "Central Region Properties" consist of Sam's
Town Hotel and Gambling Hall in Tunica, Mississippi ("Sam's Town Tunica"),
Par-A-Dice Hotel and Casino ("Par-A-Dice"), Treasure Chest Casino ("Treasure
Chest"), Blue Chip Casino ("Blue Chip"), Delta Downs Racetrack ("Delta Downs")
(acquired May 31, 2001) and management fee income from Silver Star Resort and
Casino (through January 31, 2000). Net revenues displayed in this table and
discussed in this section are net of promotional allowances; as such, references
to gaming, room, and food and beverage revenues do not agree with the amounts on
the Condensed Consolidated Statements of Operations. For the purpose of this
table, information enclosed therein excludes corporate expense, including
related depreciation and amortization, preopening expense and the one-time $72
million Silver Star termination fee.

THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
---------------------- ----------------------
2001 2000 2001 2000
-------- -------- -------- --------
(IN THOUSANDS)

Net revenues
Stardust ...................... $ 37,574 $ 37,050 $ 76,442 $ 75,546
Boulder Strip Properties ...... 45,474 41,103 92,541 87,899
Downtown Properties (a) ....... 57,997 57,452 114,309 112,018
Central Region Properties ..... 140,236 129,215 278,410 265,809
-------- -------- -------- --------
Total properties ....... $281,281 $264,820 $561,702 $541,272
======== ======== ======== ========

Operating income
Stardust ...................... $ 285 $ 205 $ 1,696 $ 1,273
Boulder Strip Properties ...... 2,788 3,290 5,119 10,428
Downtown Properties ........... 7,211 7,392 13,123 13,387
Central Region Properties ..... 28,274 26,630 57,158 62,887
-------- -------- -------- --------
Total properties ....... $ 38,558 $ 37,517 $ 77,096 $ 87,975
======== ======== ======== ========

- --------

(a) Includes revenues related to Vacations Hawaii, our Honolulu Travel Agency,
of $11,458 and $11,029, respectively, for the three month periods ended
June 30, 2001 and 2000 and revenues of $21,910 and $20,680, respectively,
for the six month periods ended June 30, 2001 and 2000.

REVENUES

Consolidated net revenues increased 6.2% during the quarter ended June
30, 2001 compared to the quarter ended June 30, 2000. Company-wide gaming
revenues increased 6.5%, food and beverage revenues increased 9.0%, and room
revenues declined 1.9%. Net revenues from the Stardust, Boulder Strip and
Downtown Properties (the "Nevada Region") increased 4.0% during the quarter
ended June 30, 2001 compared to the quarter ended June 30, 2000. Net revenues in
the Central Region increased 8.5% during the quarter ended June 30, 2001
compared to the same period in the prior year. These increases in net revenues
in both the

21
22

Nevada and Central Regions during the quarter are due to aggressive marketing in
the areas of advertising, promotions, and entertainment.

Consolidated net revenues before the termination fee increased 3.8%
during the six month period ended June 30, 2001 compared to the six month period
ended June 30, 2000. Company-wide gaming revenues increased 4.0%, food and
beverage revenues increased 8.1% and room revenues decreased 1.3%. Net revenues
from the Nevada Region increased 2.8% during the six month period ended June 30,
2001 compared to the six month period ended June 30, 2000. Net revenues in the
Central Region increased 4.7% during the six month period ended June 30, 2001
compared to the same period in the prior year despite the absence of management
fee income from Silver Star due to the termination of the management contract in
January 2000. See further discussion under "Termination Fee" later in this
section. These increases in net revenues in both the Nevada and Central Regions
during the six month period ended June 30, 2001 are due to aggressive marketing
in the areas of advertising, promotions, and entertainment.

OPERATING INCOME

Consolidated operating income before preopening expense increased 4.5%
to $33 million during the quarter ended June 30, 2001 from $32 million during
the quarter ended June 30, 2000. Operating income in the Nevada Region declined
$0.6 million or 5.5% primarily due to the $0.7 million decline experienced at
Sam's Town Las Vegas as a result of the competitive environment on the Boulder
Strip. In the Central Region, operating income increased $1.6 million or 6.2%
due primarily to the increase in net revenues.

Consolidated operating income before preopening expense and termination
fee decreased 13.2% to $64 million during the six month period ended June 30,
2001 from $74 million during the six month period ended June 30, 2000. Operating
income in the Nevada Region declined $5.2 million or 21% primarily due to the
$5.5 million decline experienced at Sam's Town Las Vegas as a result of the
competitive environment on the Boulder Strip. In the Central Region, operating
income decreased $5.7 million or 9.1% due primarily to the termination of the
Silver Star management contract in January 2000 and the $3.3 million operating
loss experienced at Sam's Town Tunica due to the competitive environment in that
gaming market.

STARDUST

For the quarter ended June 30, 2001, net revenues at the Stardust
increased 1.4% as compared to the same period in the prior year. Non-gaming
revenues increased 7.7% while gaming revenues declined 2.2% primarily due to a
decline in table game wagering. Operating income and operating income margin at
the Stardust increased slightly during the quarter ended June 30, 2001 as
compared to the quarter ended June 30, 2000 as an increase in utility costs
partially offset the increase in net revenues.

For the six months ended June 30, 2001, net revenues at the Stardust
increased by 1.2% versus the six month period ended June 30, 2000. Non-gaming
revenues increased 6.7% while gaming revenues declined 1.9% primarily due to a
decline in table game wagering. Operating income at the Stardust increased $0.4
million or 33% and operating income margin increased slightly to 2.2% during the
six month period ended June 30, 2001 as compared to 1.7% during the same period
in the prior year.

22
23

BOULDER STRIP PROPERTIES

Net revenues at the Boulder Strip Properties increased 10.6% during the
quarter ended June 30, 2001 compared to the quarter ended June 30, 2000 due
primarily to a 11.3% increase in net revenues at Sam's Town Las Vegas. Sam's
Town Las Vegas recently completed an $84 million renovation and expansion
project during the fourth quarter of 2000. Gaming revenues at the Boulder Strip
Properties increased 8.3% due primarily to an increase in slot wagering at all
three properties. Non gaming revenues increased 21% due to the new food and
beverage and entertainment amenities at Sam's Town Las Vegas. Operating income
at the Boulder Strip Properties declined $0.5 million or 15.3% during the
quarter ended June 30, 2001 as compared to the same period in the prior year.
Much of the decline in operating income is attributable to increased marketing
and promotional expenses due to the competitive environment on the Boulder
Strip, as well as an increase in depreciation expense related to the completion
of the renovation and expansion project at Sam's Town Las Vegas.

For the six month period ended June 30, 2001, net revenues at the
Boulder Strip Properties increased 5.3% as compared to the same period in the
prior year. Gaming revenues at the Boulder Strip Properties increased 1.7% due
primarily to an increase in slot win and non-gaming revenues increased 21% due
to the new food and beverage and entertainment amenities at Sam's Town Las
Vegas. Operating income at the Boulder Strip Properties declined $5.3 million or
51% during the six month period ended June 30, 2001 compared to the same period
in the prior year. Much of the decline in operating income is attributable to
increased marketing and promotional expenses due to the competitive environment
on the Boulder Strip, as well as an increase in depreciation expense related to
the completion of the renovation and expansion project at Sam's Town Las Vegas.

DOWNTOWN PROPERTIES

Net revenues at the Downtown Properties increased slightly during the
quarter ended June 30, 2001 compared to the quarter ended June 30, 2000 due
primarily to a 3.9% increase in revenues from Vacations Hawaii, our Honolulu
travel agency. Operating income at the Downtown Properties decreased 2.4% to
$7.2 million during the quarter ended June 30, 2001 compared to the quarter
ended June 30, 2000. The decline in operating income is attributable to slightly
higher marketing expenses at the Downtown casino properties.

During the six month period ended June 30, 2001, net revenues at the
Downtown Properties increased 2.0% as compared to the same period in the prior
year. The increase in net revenues is due primarily to a 5.9% increase in
revenues from Vacations Hawaii. Operating income at the Downtown Properties
decreased 2.0% to $13.1 million during the six month period ended June 30, 2001
compared to the six month period ended June 30, 2000. This decline in operating
income is attributable to slightly higher marketing expenses at the Downtown
casino properties.

CENTRAL REGION

Net revenues from the Central Region increased 8.5% during the quarter
ended June 30, 2001 compared to the quarter ended June 30, 2000. Increased
marketing and promotional programs at both Sam's Town Tunica and Treasure Chest
were the primary reasons for the increase in net revenues from the Central
Region. Operating income in the Central Region increased $1.6 million or 6.2%
due primarily to the increase in net revenues, partially offset by higher gaming
taxes at Treasure Chest that accompanied the April 1, 2001 implementation of
dockside gaming in Treasure Chest's market. In addition, Sam's Town Tunica
experienced a decline in its operating loss to $1.1 million during the quarter
ended June 30, 2001 as compared to an operating loss of $1.4 million during the
quarter ended June 30, 2000.

23
24

Net revenues from the Central Region increased 4.7% during the six month
period ended June 30, 2001 compared to the same period in the prior year despite
the absence of management fee income from Silver Star due to the termination of
the management contract in January 2000. Increased marketing and promotional
programs at both Sam's Town Tunica and Treasure Chest were the primary reasons
for the increase in net revenues from the Central Region. Operating income in
the Central Region decreased $5.7 million or 9.1% due primarily to the
termination of the Silver Star contract. In addition, Sam's Town Tunica
experienced a $2.4 million increase in its operating loss to $3.3 million during
the six month period ended June 30, 2001 as compared to the same period in the
prior year. Much of the decline in operating income at Sam's Town Tunica is
attributable to the increase in marketing and promotional expenses due to the
competitive environment in that gaming market. We continue to focus on our
marketing efforts to reintroduce the newly renovated Sam's Town Tunica facility
to its marketplace and return the property to profitable operations.

TERMINATION FEE

On October 20, 1999, the Company agreed to terminate its management
contract with the Mississippi Band of Choctaw Indians (the "Tribe") prior to the
contract's expiration date in June 2001 in exchange for a one-time payment of
$72 million. Pursuant to that agreement, the Company continued to manage Silver
Star under the terms of the management contract through January 31, 2000, at
which time the Tribe made the one-time termination payment and the Company
recorded the termination fee, net of certain expenses.

OTHER EXPENSES

Depreciation expense increased 11.8% during the quarter ended June 30,
2001 compared to the quarter ended June 30, 2000 and increased 12.7% during the
six month period ended June 30, 2001 as compared to the same period in the prior
year primarily as a result of the increase in fixed assets at Sam's Town Las
Vegas and Sam's Town Tunica due to the completion of their respective renovation
and expansion projects in the fourth quarter of 2000.

OTHER INCOME (EXPENSE)

Other income and expense is primarily comprised of interest expense, net
of capitalized interest. Total interest costs, including capitalized interest,
were $23 million and $21 million, respectively, during the quarter ended June
30, 2001 compared to the quarter ended June 30, 2000, and $46 million and $42
million, respectively, during the six month periods ended June 30, 2001 and
2000. These increases are attributable to higher average debt levels principally
due to the borrowings related to fund the renovation and expansion projects at
Sam's Town Las Vegas and Sam's Town Tunica, as well as the purchase of Delta
Downs.

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NET INCOME

As a result of these factors, the Company reported net income of $8.4
million and $6.7 million, respectively, during the quarters ended June 30, 2001
and 2000 and $14.5 million and $63.7 million, respectively, during the six month
periods ended June 30, 2001 and 2000.

LIQUIDITY AND CAPITAL RESOURCES

CASH FLOW FROM OPERATING ACTIVITIES AND WORKING CAPITAL

Our policy is to use operating cash flow in combination with debt
financing to fund renovations and expansion of our business.

During the six month period ended June 30, 2001, we generated operating
cash flow of $72 million compared to $150 million during the six month period
ended June 30, 2000. The decline in operating cash flow is primarily
attributable to the one-time $72 million termination payment we received from
Silver Star in the prior year. As of June 30, 2001 and 2000, we had balances of
cash and cash equivalents of $84 million and $72 million, respectively, and
working capital deficits of $31 million and $47 million, respectively. We have
historically operated with minimal or negative levels of working capital in
order to minimize borrowings and related interest costs under our bank credit
facility. We believe that our bank credit facility and cash flows from operating
activities will be sufficient to meet our operating and capital expenditure
requirements for the next twelve months. In the longer term, or if we experience
a significant decline in revenues, or in the event of unforeseen circumstances,
we may require additional funds and may seek to raise such funds through public
or private equity or debt financing, bank lines of credit, or other sources. No
assurance can be given that additional financing will be available or, if
available, will be on terms favorable to us.

CASH FLOWS FROM INVESTING ACTIVITIES

We are committed to continually maintaining and enhancing our
facilities, most notably by upgrading and remodeling our casinos, hotel rooms,
restaurants, and other public spaces and by providing the latest slot machines
for our customers. Our capital expenditures primarily related to these purposes
were approximately $28 million and $26 million, respectively, during the six
month periods ended June 30, 2001 and 2000. We also paid approximately $1.8
million for capital expenditures related to the renovation and expansion of
Sam's Town Las Vegas and $4.3 million for capital expenditures related to the
renovation of Sam's Town Tunica during the six month period ended June 30, 2001.
During the six month period ended June 30, 2000, we paid $30 million for capital
expenditures related to the renovation and expansion of Sam's Town Las Vegas.

On May 31, 2001, we acquired substantially all of the assets of the
Delta Downs Racetrack, near Vinton, Louisiana, together with an off-track
betting facility in Mound, Louisiana, for a purchase price of $125 million,
subject to certain conditions. See "Expansion and Other Projects -- Delta
Downs". We funded the acquisition with $60 million of cash borrowed under our
bank credit facility and the issuance of a $65 million note payable to the
sellers.

CASH FLOWS FROM FINANCING ACTIVITIES

Substantially all of the funding for our acquisitions and renovation and
expansion projects comes from cash flows from existing operations as well as
debt financing. During the six month period ended June 30, 2001, we incurred an
additional $24 million in debt on our bank credit facility due primarily to the
$60 million cash

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payment for the acquisition of Delta Downs. During the six month period ended
June 30, 2000, we reduced debt by $102 million due primarily to the one-time $72
million Silver Star termination payment.

EXPANSION AND OTHER PROJECTS

The Borgata. Our subsidiary, Boyd Atlantic City, Inc., or BAC, owns half
of the membership interests in Marina District Development Holding Co., LLC, or
the Holding Company. MAC, Corp., or MAC, a subsidiary of MGM MIRAGE, owns the
other half of the membership interests. The Holding Company owns all of the
membership interests of Marina District Development Company, LLC, or MDDC. MDDC
is developing The Borgata, a casino resort in Atlantic City. The Borgata will be
constructed on property adjacent to and will be connected to MGM MIRAGE's
planned wholly-owned resort. The operating agreement contemplates a total
project cost of $1.035 billion for The Borgata. We expect to open The Borgata
during the summer of 2003.

The operating agreement requires us and MGM MIRAGE to make equity
contributions aggregating $207 million each toward the development of The
Borgata. We have invested approximately $107 million in cash as of June 30, 2001
and MGM MIRAGE has also contributed approximately $107 million, consisting of
land, personal property and intangible property valued at $90 million and cash
of approximately $17 million. We expect that we will each invest an additional
$75 million between now and March 31, 2002, and the remaining $25 million during
the summer of 2003.

The remaining $621 million of total project costs will be drawn down
under a $630 million credit facility that a subsidiary of MDDC entered into on
December 13, 2000. Under the terms of this bank credit facility no dividends or
funds may be advanced to us except for our share of taxes based on income or
upon achievement of certain performance milestones. Except for an unlimited
completion guaranty, pursuant to which we have agreed to guaranty the
performance of certain obligations, the bank credit facility is non-recourse to
us and MGM MIRAGE. If we contribute additional cash pursuant to performance
under the completion guaranty, there will be no proportionate increase in our
ownership of The Borgata.

Delta Downs. On May 31, 2001, we acquired substantially all of the
assets of the Delta Downs Racetrack near Vinton, Louisiana, together with an
off-track betting facility in Mound, Louisiana, for a purchase price of $125
million. The purchase price is subject to adjustment based on the number of slot
machines for which we receive approval to operate and other performance based
criteria. The purchase price will be reduced if we receive approval to operate
fewer than 1,700 slot machines, and at its lowest, could be $115 million if we
receive approval to operate fewer than 1,600 slot machines. The purchase price
could be increased by up to $27 million if we achieve certain defined income
targets over a period of two and one-half years after the start of slot
operations at the facility, or if there is regulatory authorization to increase
the number of slot machines at Louisiana racetracks to a predefined target and
certain other conditions are met within a period of five years from the closing
of the transaction. We plan to begin casino operations upon receiving the
appropriate licenses and approvals and completing necessary improvements to the
facility, including the purchase of slot machines and related equipment, which
improvements are expected to cost $35 million. We expect to open the Delta Downs
casino in October 2001. We funded the acquisition through borrowings under our
bank credit facility and the issuance of a $65 million note payable to the
sellers. We plan to fund the improvements to the facility through our bank
credit facility.

Customer Information System. We have undertaken a Customer Information
System, or CIS, project that will standardize our customer tracking systems.
During the three month period ended June 30, 2001, we incurred $2.2 million in
costs associated with the CIS project, $2.0 million of which was capitalized. We

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expect to spend $10 million in 2001 on the next phases of the CIS project. The
Company has incurred $28 million in cumulative costs related to the CIS Project,
$25 million of which has been capitalized. There can be no assurance that the
CIS project will be completed successfully, on schedule, or within budget.

Substantial funds are required for the completion of The Borgata and the
expansion and improvements at Delta Downs. There can be no assurances that any
of the above mentioned projects will go forward on a timely basis, if at all, or
ultimately become operational. The source of funds required to meet our working
capital needs (including maintenance capital expenditures) is expected to be
cash flow from operations and availability under our bank credit facility. The
source of funds for our expansion and other projects may come from cash flow
from operations and availability under our bank credit facility, incremental
bank financing, additional debt or equity offerings, joint venture partners or
other sources. No assurance can be given that additional financing will be
available or that, if available, such financing will be obtainable on terms
favorable to us or our stockholders.

The Borgata project and the Delta Downs casino project are subject to
the many risks inherent in the development and operation of a new business
enterprise, including potential unanticipated design, construction, regulatory,
environmental and operating problems, increased project costs, timing delays,
lack of adequate financing and the significant risks commonly associated with
implementing a marketing strategy for a market in which we have not previously
operated. If The Borgata project or the Delta Downs casino project do not become
operational within the time frames and budgets currently contemplated or do not
compete successfully in their new markets, it could have a material adverse
effect on our business, financial condition and results of operations.

INDEBTEDNESS

Bank Credit Facility. Our $700 million bank credit facility consists of
a $500 million revolving credit facility and two term loan components (the term
loan B and the term loan C) each with original principal balances of $100
million. Our revolving credit facility, term loan B and term loan C all mature
in June 2003. At June 30, 2001, $197.3 million of borrowings were outstanding
under our term loans and $388.8 million was outstanding under our revolving
credit facility, leaving availability under the bank credit facility of $111.1
million. Pursuant to the terms of The Borgata credit agreement, we are required
to maintain $50 million of unused availability under our revolving credit
facility until The Borgata opens. Availability under our revolving credit
facility will be reduced by $15.6 million on December 31, 2001 and at the end of
each quarter thereafter until March 31, 2003. Term loan B repayments are in
increments of $0.25 million per quarter which began on September 30, 1999 and
will continue through March 31, 2003. Term loan C repayments are in increments
of $0.25 million per quarter which began on December 31, 2000 and will continue
through March 31, 2003. The interest rate on the bank credit facility is based
upon either the alternate base rate or the eurodollar rate, plus an applicable
margin that is determined by the level of a predefined financial leverage ratio.
The blended interest rate under the bank credit facility at June 30, 2001 was
6.8%. In addition, we incur a commitment fee on the unused portion of the
revolving credit facility which ranges from 0.375% to 0.50% per annum. The bank
credit facility is secured by substantially all of our real and personal
property and that of our subsidiaries. Our obligations under the bank credit
facility are guaranteed by all our significant subsidiaries.

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On May 21, 2001, we amended our bank credit facility, primarily to allow
for the acquisition of the Delta Downs Racetrack, the completion of necessary
improvements to the facility, and the financing of the acquisition and
improvements.

The bank credit facility contains certain financial and other covenants,
including, without limitation, various covenants (i) requiring the maintenance
of a minimum net worth, (ii) requiring the maintenance of a minimum interest
coverage ratio, (iii) establishing a maximum permitted total leverage ratio and
senior secured leverage ratio, (iv) imposing limitations on the incurrence of
additional indebtedness, (v) imposing limitations on the maximum permitted
expansion capital expenditures during the term of the bank credit facility, (vi)
imposing limits on the maximum permitted maintenance capital expenditures during
each year of the term of the bank credit facility, and (vii) imposing
restrictions on investments, dividends and certain other payments. We believe we
are in compliance with the bank credit facility covenants at June 30, 2001.

Notes. Our $200 million principal amount of senior notes due in 2003 and
$250 million principal amount of senior subordinated notes due in 2007 contain
limitations on, among other things, (a) our ability and our restricted
subsidiaries' (as defined in the indentures governing the notes) ability to
incur additional indebtedness, (b) the payment of dividends and other
distributions with respect to our capital stock and of our restricted
subsidiaries and the purchase, redemption or retirement of our capital stock and
our restricted subsidiaries, (c) the making of certain investments, (d) asset
sales, (e) the incurrence of liens, (f) transactions with affiliates, (g)
payment restrictions affecting restricted subsidiaries and (h) certain
consolidations, mergers and transfers of assets. We believe we are in compliance
with the covenants related to these notes at June 30, 2001.

Seller Note. In connection with the purchase of substantially all of the
assets of the Delta Downs Racetrack, we issued a promissory note to the sellers
dated May 31, 2001. We are obligated to pay the sellers, subject to certain
conditions, $65 million, together with simple interest ranging from 7% to 12%
until the seller note is paid.

- five business days after the State of Louisiana issues all
required permits under the applicable laws for the operation of
slot machines at Delta Downs;

- the closing of any sale of the Delta Downs business we acquired;
or

- June 30, 2003.

See "Note 4. to the Notes to Condensed Consolidated Financial
Statements."

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indenture governing the notes). At any time prior to August 2004, we may redeem
up to 35% of the aggregate principal amount of the outstanding notes with the
net proceeds from equity offerings at a redemption price of 109.25% of the
principal amount, plus accrued and unpaid interest, subject to certain
conditions. On or after August 2005, we may redeem all or a portion of the notes
at redemption prices ranging from 104.625% in 2005 to 100% in 2007 and
thereafter. We reduced outstanding indebtedness under our bank credit facility
with the net proceeds from this offering. Upon consummation of the offering, our
bank credit facility availability was permanently reduced by approximately $69
million. We are obligated to register and have declared effective the notes or
exchange them for identical notes that have been registered with the Securities
and Exchange Commission within certain predefined time parameters. If we do not
consummate an effective registration of the notes within the required time
frame, we must pay certain liquidated damages.

Our ability to service our debt will be dependent on our future
performance, which will be affected by, among other things, prevailing economic
conditions and financial, business and other factors, certain of which are
beyond our control.

PRIVATE SECURITIES LITIGATION REFORM ACT

The Private Securities Litigation Reform Act of 1995 provides a "safe
harbor" for forward looking statements. Certain information included in this
Form 10-Q 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, such as statements relating to
plans for future expansion and other business development activities as well as
capital spending, financing sources, and the effects of regulation (including
gaming and tax regulation) and competition. Such forward looking statements
involve important risks and uncertainties that could significantly affect
anticipated results in the future, and accordingly, actual results may differ
materially 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 related to acquisition, construction, expansion and
development activities, the availability and price of energy, economic
conditions, regulatory approvals, changes in tax laws, changes in laws or
regulations affecting gaming licenses, changes in competition, financing
sources, and factors affecting leverage and debt service including sensitivity
to fluctuation in interest rates. In particular, there can be no assurance that
our construction of The Borgata or our renovation of the Delta Downs Racetrack
will be completed on time or within budget. In addition, there can be no
assurance that we will be able to obtain the permits and licenses necessary to
operate the Delta Downs casino as planned, including obtaining approval to
install the full number of slot machines that we have anticipated. Both Delta
Downs and The Borgata are subject to the many risks inherent in the development
and operation of a new business enterprise, including potential unanticipated
design, construction, regulatory, environmental and operating problem, increased
project costs, timing delays, lack of adequate financing and the significant
risks commonly associated with implementing a marketing strategy in a new
market. Additional factors that could cause actual results to differ are
described from time to time in the Company's reports filed with the Securities
and Exchange Commission, including the Company's Annual Report on Form 10-K for
the year ended December 31, 2000. Any forward looking statements are made
pursuant to the Private Securities Litigation Reform Act of 1995 and, as such,
speak only as of the date made.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

Market risk is the risk of loss arising from adverse changes in market
rates and prices, such as interest rates, foreign currency exchange rates and
commodity prices. Our primary exposure to market risk is interest rate risk
associated with our long-term debt. We attempt to limit our exposure to interest
rate risk by managing the mix of our long-term fixed-rate borrowings and
short-term borrowings under our bank credit facility. Borrowings under our bank
credit facility are based upon either the alternate base rate or the eurodollar
rate, plus an applicable margin that is determined by the level of a predefined
financial leverage ratio. However, the amount of outstanding borrowings is
expected to fluctuate and may be reduced from time to time. At June 30, 2001, we
did not utilize any hedging instruments.

A subsidiary of MDDC entered into a credit agreement to borrow up to
$630 million to be used in connection with the development of The Borgata.
Except for an unlimited completion guaranty, the credit agreement is
non-recourse to us. The credit agreement requires the borrower to enter into
interest rate protection agreements. During the three month period ended March
31, 2001, a subsidiary of MDDC entered into interest rate protection agreements
with an initial aggregate notional amount of approximately $310 million that
cover various periods ranging from 2002 to 2005. The interest rate protection
agreements are accounted for as derivative instruments in accordance with SFAS
No. 133, Accounting for Derivative Instruments and Hedging Activities. These
derivative instruments received cash flow hedging designation on May 1, 2001.
During the three month period ended June 30, 2001, we recorded $0.9 million of
preopening income on the accompanying condensed consolidated statement of
operations, and other comprehensive income of $0.5 million, net of $0.3 million
in taxes, representing our portion of the increase in fair value of the
derivative instruments. During the six month period ended June 30, 2001, we
recorded $0.5 million of preopening income on the accompanying condensed
consolidated statement of operations and other comprehensive income of $0.5
million, net of $0.3 million in taxes, representing our portion of the increase
in fair value of the derivative instruments.

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PART II. OTHER INFORMATION

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

Our Annual Meeting was held on May 17, 2001. The stockholders re-elected
William S. Boyd, Philip J. Dion, and Perry B. Whitt to three year terms, ending
on the date of the Company's Annual Meeting in 2004. The number of shares voting
as to the election of each nominee and the ratification of the appointment of
Deloitte & Touche LLP to serve as independent auditors for the year ending
December 31, 2001 is set forth below:

Votes
---------------------------------
Election of Class I Directors For Withheld
- ----------------------------- ---------- -------

William S. Boyd 58,657,587 937,716
Philip J. Dion 58,915,388 679,915
Perry B. Whitt 59,003,160 592,143

The Stockholders ratified the selection of Deloitte & Touche LLP as
independent auditors for the Company for the year ending December 31, 2001 with
voting as follows: 59,232,721 for; 301,666 against; 60,916 non-votes.

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ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits

10.31 Second Amendment to First Amended and Restated Credit Agreement
dated as of May 21, 2001, by and among the Company as the
Borrower, and certain commercial lending institutions as named
therein.

(b) Reports on Form 8-K

(i) We filed a current report on Form 8-K dated July 12, 2001 related
to a private placement of $200 million of 8-year notes.

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SIGNATURES

Pursuant to the requirements of the Securities and Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized, on August 9, 2001.

BOYD GAMING CORPORATION

By: /s/ JEFFREY G. SANTORO
-------------------------------------
Jeffrey G. Santoro
Vice President and Controller
(Principal Accounting Officer)

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EXHIBIT INDEX

Exhibits

10.31 Second Amendment to First Amended and Restated Credit Agreement
dated as of May 21, 2001, by and among the Company as the
Borrower, and certain commercial lending institutions as named
therein.