RIVIERA BLACK HAWK INC, 10-K/A, 2000-05-18

RIVIERA BLACK HAWK INC
10-K/A, 2000-05-18
HOTELS & MOTELS

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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K/A
(Amendment No.1)
FOR ANNUAL AND TRANSITION REPORTS
PURSUANT TO SECTIONS 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

The Registrant meets the conditions set forth in General Instruction I(1)
- -------------------------------------------------------------------------------
(a) and (b) of Form 10-K and is therefore filing this Form with the reduced
- -------------------------------------------------------------------------------
disclosure format.
- -----------------

(Mark One)
[X] Annual report pursuant to section 13 or 15(d) of the Securities
Exchange Act of 1934 [No Fee Required] For the fiscal year ended December 31,
1999

[ ] Transition report pursuant to sections 13 or 15(d) of the Securities
Exchange Act of 1934 [Fee Required] For the transition period from
- -------- to ---------
Commission file number 333-8163
RIVIERA BLACK HAWK, INC.
(Exact name of Registrant as specified in its charter)

Colorado IRS Employer ID Number
- --------------------- (88-0886265)
(State of Incorporation)

2901 Las Vegas Boulevard South
Las Vegas, Nevada 89109
- ---------------------------------------- --------
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code: (702) 794-9527
--------------

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 amendment
to this Form 10-K.

The Registrant's Common Stock is owned 100% indirectly by its
ultimate parent Riviera Holdings Corporation, a reporting company. As of
February 28, 2000 the number of outstanding shares of the Registrant's Common
Stock was 1,000.

Documents incorporated by reference:

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Page 1 of 29 Pages
Exhibit Index Appears on Page 28 hereof.

<PAGE>

RIVIERA BLACK HAWK, INC.
ANNUAL REPORT ON FORM 10-K FOR THE FISCAL
YEAR ENDED DECEMBER 31, 1999

TABLE OF CONTENTS
<TABLE>
<CAPTION>

<S> <C> <C>
Item 1. Business................................................................................................3
General ...............................................................................................3
The Riviera Black Hawk Casino..........................................................................3
Geographical Markets...................................................................................4
Competition............................................................................................5
Employees and Labor Relations..........................................................................6
Regulation and Licensing...............................................................................6
Federal Registration..................................................................................11

Item 2. Property...............................................................................................11

Item 3. Legal Proceedings......................................................................................11

Item 4. Submission of Matters to a Vote of Security Holders....................................................11

Item 5. Market for the Registrant's Common Stock and Related Security Holder Matters...........................11

Item 6. Selected Financial Data................................................................................12

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations..................12
Results of Operations...............................................................................12
Liquidity and Capital Resources.....................................................................12
Recently Adopted Accounting Standards...............................................................12
Recently Issued Accounting Standards................................................................13
Year 2000 ..........................................................................................13
Forward Looking Statements..........................................................................13

Item 7a. Quantitative and Qualitative Market Risk Disclosure....................................................14

Item 8. Financial Statements ..................................................................................14

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure...................14

Item 10. Directors and Executive Officers of the Registrant (not applicable)....................................14

Item 11. Executive Compensation (not applicable)................................................................14

Item 12. Security Ownership of certain Beneficial Owners and Management (not applicable)........................14

Item 13. Certain Relationships and Related Transactions ........................................................15

Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8K.........................................15
</TABLE>

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PART I

General

Riviera Black Hawk, Inc., a Colorado corporation,formed on August 18, 1997
is wholly owned by Riviera Operating Corporation, a Nevada corporation, which
is, in turn, wholly owned by Riviera Holdings Corporation, a Nevada corporation.
Riviera Holdings Corporation, through its wholly owned subsidiary, Riviera
Operating Corporation, owns and operates the Riviera Hotel & Casino (Riviera Las
Vegas) located on "The Strip" Las Vegas Boulevard in Las Vegas, Nevada. Opened
in 1955, the Riviera Las Vegas has developed a long-standing reputation for
delivering high quality, traditional Las Vegas-style gaming, entertainment and
other amenities. The Company is a development stage enterprise at December 31,
1999 that had not commenced operations. Riviera Black Hawk, Inc. (Riviera Black
Hawk) operates a limited-stakes casino in Black Hawk, Colorado which opened on
February 4, 2000. Riviera Gaming Management of Colorado, Inc. an indirect wholly
owned subsidiary of Riviera Holdings Corporation will manage the casino through
a subsidiary.

Riviera Black Hawk is located at the entrance of the City of Black
Hawk, Colorado, about forty miles west of Denver and is one of the first casinos
encountered when traveling from Denver to the Black Hawk/Central City market. It
is located on the corner of Mill and Main Street, across from Colorado Central
Station, which has been the most successful casino in Colorado. In addition,
Riviera Black Hawk is located across the street from the Isle of Capri Casino,
which is of similar size to our casino in terms of gaming positions. Riviera
Black Hawk offers parking for 520 vehicles, of which 92% are covered, with
convenient and free self-park and valet options.

Gaming

Riviera Black Hawk has 30,000 square feet of casino space. The
casino has approximately 1,000 slot machines and 12 gaming tables, including
blackjack, three card poker, Let It Ride(R) and Bonus 6(R).

Restaurants

The quality, value and variety of food served are critical to
attracting Black Hawk visitors. Riviera Black Hawk offers one restaurant, the
Red Rose, a full-service, casual dining restaurant located on the second floor
of the facility with a seating capacity of up to 265 people. The flexible design
of the restaurant allows for the conversion of a portion of the dining area
into private seating for up to 88 people for private parties and special events.
In addition to the restaurant, our casino also includes two bars, one located in
the entertainment area and the other one on the casino floor. There is also a
coffee bar, the Coffee Bean, on the ground floor near valet parking.

Entertainment

Riviera Black Hawk includes a 7,000 square feet, multi-use entertainment
center located on the second level of the facility with the capacity to seat
approximately 500 people. This is one of the largest facilities in the Black
Hawk market enabling us to feature entertainment performances and special
events. When not in use, the entertainment center is available for
meetings, parties and other promotional events.

Marketing strategy

The initial participants in this market were small, privately held gaming
facilities whose inability to offer convenient parking and a full range of
traditional casino amenities limited market growth. Subsequently, larger casinos
offering such amenities have entered the market, have been gaining market share
and have contributed to the consistent growth in the overall market. As of
December 31, 1999, there were 30 casinos in the Black Hawk/Central City market,
with eight casinos each offering more than 400 gaming devices. Isle of Capri,
located across the street from our casino with approximately 1,100 gaming
machines and 1,000 covered parking spaces, has been the market leader in terms
of win per gaming device.
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We plan to attract customers to our casino by implementing marketing
strategies and promotions designed specifically for this market. In doing so, we
hope to create customer loyalty and benefit from repeat visits by our customers.
Specific marketing programs to support this strategy include the Riviera Black
Hawk Player's Club and "V.I.P." services offered to repeat gaming customers. The
Riviera Black Hawk Player's Club is a promotion that rewards casino play and
repeat visits to the casino with various privileges and amenities such as cash
bonuses, logo gift items and invitations to special events, including free slot
tournaments and parties. We have used the Player's Club promotion in our casino
in Las Vegas and, in our capacity as manager of the Riviera Black Hawk, are
tailoring it for the Black Hawk/Central City market to implement at our casino.
"V.I.P." services are available to the highest level of players and include
special valet and self-parking services, complimentary food and entertainment
offerings and special events specifically designed for this group of customers.

We believe that we will benefit from strong "walk-in" traffic due to
the proximity of our casino to the Colorado Central Station and the Isle of
Capri Casino. We intend to develop specific marketing programs designed to
attract these "walk-in" customers. We emphasize quality food and beverage
amenities with customer friendly service as a marketing tool. In addition, we
will provide entertainment programs designed to meet the tastes of the Black
Hawk/Central City market, such as live music performances by popular regional
and national groups.

We will utilize proven database marketing techniques previously
implemented by our casino in Las Vegas. We plan to rely on database marketing in
order to best identify target customer segments of the population and to tailor
the casino's promotions and amenities to our core group of customers. We will
use the current database maintained by Riviera Las Vegas to identify and
stratify slot players living in Colorado for appropriate incentives.
Approximately 7,500 of these slot players have been identified as of December
31, 1999. In addition, we will promote our casino by advertising in newspapers
and on billboards in the local areas.

Geographical Markets

The Black Hawk/Central City Market

Gaming was first introduced to the Black Hawk/Central City market in
October 1991 following a state-wide referendum where Colorado voters approved
limited stakes gaming for three historic mining towns - Black Hawk, Central City
and Cripple Creek. Limited stakes gaming is defined as a maximum single bet of
five dollars. Black Hawk and Central City are contiguous cities located
approximately 40 miles west of Denver and about ten miles north of Interstate
Highway 70, the main east-west artery from Denver. Historically, these two gold
mining communities were popular tourist towns. However, since the inception of
casino gaming in October 1991, many of the former tourist-related businesses
have been displaced by gaming establishments.

The first casino in the Black Hawk/Central City market was opened in
October 1991 with 14 casinos open by the end of that year. The pace of expansion
increased further in 1992 with the number of casinos in the market peaking at 42
casinos. However, due to a trend of consolidation in the market and the
displacement of small casinos by the entry of larger, better capitalized
operators, the number of casinos has declined to 30 as of December 31, 1999.

The Black Hawk/Central City market primarily caters to "day-trip"
customers from Denver, Boulder, Fort Collins and Golden as well as Cheyenne,
Wyoming. An estimated adult population exceeding 2.3 million people reside
within this 100-mile radius of Black Hawk. In addition, residents within a 100
mile radius of the City of Black Hawk had an estimated average household income
in excess of $50,000 per annum in 1999.

Since 1992, the number of gaming devices in the Black Hawk/Central
City market has grown approximately 33.9% from 7,252 devices in 1992 to 9,711
devices in 1999. The total number of slot machines has increased 34.9% since
1992 to 9,555 in 1999 while the total number of tables in the market has
decreased with 156 tables in the market at the end of 1999. Win per gaming
device per day has continued to grow despite the increase in the number of
gaming devices.
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The City of Black Hawk has experienced more significant growth in
gaming revenues than Central City since 1992. The popularity of Black Hawk in
comparison to Central City is due primarily to Black Hawk's superior access to
major highways, as patrons must first pass through Black Hawk to access Central
City from Denver. Due to this superior location, larger casino operators have
focused on building in the City of Black Hawk. As a result, casinos in Black
Hawk now generally feature a larger average number of gaming devices, a wider
variety of amenities and convenient free parking for patrons. These factors have
contributed to growth in Black Hawk gaming revenues at a compound annual rate of
29% since 1992 compared to a more moderate growth for Central City of 5% over
the same period. The number of slot machines and tables in the City of Black
Hawk have increased 119% and 41%, respectively since 1992, while the number of
slot machines and tables in Central City have declined 39% and 57%, respectively
over the same period.

The City of Black Hawk experienced a 30% increase in gaming revenue
in 1999, the greatest of any gaming venue in the United States.

The information contained in this discussion of the Black Hawk/ Central
City market was derived from publicly available data, except where stated
otherwise. While we believe these sources are reasonably reliable, no assurances
can be made regarding the accuracy of such information.

Competition

The Black Hawk/Central City gaming market is characterized by intense
competition. The primary competitive factors in the market are location,
availability and convenience of parking, number of slot machines and gaming
tables, types and pricing of non-gaming amenities, name recognition and overall
atmosphere. Our main competitors are the larger gaming facilities, particularly
those with considerable on-site or nearby parking and established reputations in
the local market. As of December 31, 1999 there were 19 gaming facilities in the
Black Hawk market with seven casinos each offering more than 400 gaming
positions. The "Mardi Gras" casino opened in March 2000 and features over 600
slot machines. In addition, Isle of Capri is constructing a hotel addition to
its casino. Other projects have also been announced, proposed, discussed or
rumored for the Black Hawk/Central City market.

We expect that the gaming facilities near the intersection of Main
and Mill Streets will provide significant competition to our casino. Colorado
Central Station, which has been the most successful casino in Colorado, is
located across the street from our casino and has approximately 700 slot
machines, 20 gaming tables and approximately 700 valet parking spaces. The Isle
of Capri Casino, operated by Casino America, which opened in December 1998, is
located directly across the street from our casino and features approximately
1,100 slot machines, 14 table games and 1,100 parking spaces, and had an
extremely successful first year of operation.

The number of hotel rooms currently in the Black Hawk/Central City
market is approximately 170, with only two gaming facilities providing hotel
accommodations to patrons. These include Harvey's Wagon Wheel Casino Hotel with
approximately 120 rooms and the Lodge at Black Hawk with approximately 50 rooms.
In addition, the Isle of Capri Casino began construction in 1999 of an
approximately 235 room hotel on top of its recently completed casino. Casinos
offering hotel accommodations for overnight stay may have a competitive
advantage over our casino. However, we believe that self-parking is a more
effective utilization of our available space and that providing hotel
accommodations will not be a significant factor, but instead will contribute to
growth in the overall market.

Historically, the city of Black Hawk has enjoyed an advantage over
Central City because customers have to drive through Black Hawk to reach Central
City. Central City has proposed the development of a road directly connecting
Central City and Black Hawk with Interstate 70 which would allow customers to
reach Central City without driving by or through Black Hawk. There remain
significant financial and legal obstacles to the development of this road and it
is uncertain whether it will be developed over the near to intermediate term, or
developed at all.

Currently, limited stakes gaming in Colorado is constitutionally
authorized in Central City, Black Hawk, Cripple Creek and two Native American
reservations in southwest Colorado. However, gaming could be approved in other
Colorado communities in the future. The legalization of gaming closer to Denver
would likely have a material adverse effect on our future results of operations.
We also compete with other forms of gaming in Colorado, including lottery
gaming, and horse and dog racing as well as other forms of entertainment.
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It is also possible that new forms of gaming could compete with our
casino. Currently, Colorado law does not authorize video lottery terminals.
However, Colorado law permits the legislature, with executive approval, to
authorize new types of lottery gaming, such as video lottery terminals. Video
lottery terminals are games of chance, similar to slot machines, in which the
player pushes a button that causes a random set of numbers or characters to be
displayed on a video screen. The player may be awarded a ticket, which can be
exchanged for cash or credit play. This form of gaming could compete with slot
machine gaming.

Pursuant to a license agreement, Riviera Holdings Corporation licensed the
use at the Black Hawk casino of all of the trademarks, service marks and logos
used by Riviera Las Vegas. In addition, the license agreement provides that
additional trademarks, service marks and logos acquired or developed by us and
used at our other facilities will be subject to the license agreement.

Employees and Labor Relations

Riviera Black Hawk opened on February 4, 2000 with approximately 450
employees and plans to maintain that employee level. The Black Hawk/Central City
labor market is very competitive. Riviera Black Hawk believes that it will be
able to maintain its current employee level. There can be no assurance, however,
that new and existing casinos will not affect Riviera Black Hawk's ability to
maintain its current employee level. There are currently no collective
bargaining agreements in Black Hawk casinos.

Regulation and Licensing

Colorado

Colorado Gaming and Liquor Regulation

Summary

In general , Riviera Black Hawk, our principal executive officers and
those of Riviera Holdings, and any of our employees who are involved in our
gaming operations, are required to be found suitable for licensure by the
Colorado Gaming Commission. Colorado also requires that significant stockholders
of 5% or more of our stock be certified as suitable for licensure. Riviera Black
Hawk's retail gaming license was approved by the Colorado Gaming Commission on
November 18, 1999.

Background

Pursuant to an amendment to the Colorado Constitution, limited stakes
gaming became lawful in the cities of Central City, Black Hawk and Cripple Creek
on October 1, 1991. Limited stakes gaming means a maximum single bet of five
dollars on slot machines and in the card games of blackjack and poker.

Limited stakes gaming is confined to the commercial districts of
these cities as defined by Central City on October 7, 1981, by Black Hawk on May
4, 1978, and by Cripple Creek on December 3, 1973. In addition the Colorado
Amendment restricts limited stakes gaming to structures that conform to the
architectural styles and designs that were common to the areas prior to World
War I, and which conform to the requirements of applicable city ordinances
regardless of the age of the structures. Under the Colorado Amendment, no more
than 35% of the square footage of any building and no more than 50% of any one
floor of any building may be used for limited stakes gaming. Persons under the
age of 21 cannot participate in limited stakes gaming. The Colorado Amendment
also prohibits limited stakes gaming between the hours of 2:00 a.m. and 8:00
a.m., and allows limited stakes gaming to occur in establishments licensed to
sell alcoholic beverages.

Further, the Colorado Amendment provides that, in addition to any
other applicable license fees, up to a maximum of 40% of the total amounts
wagered less payouts to players may be payable by a licensee for the privilege
of conducting limited stakes gaming. Such percentage is to be established by the
Colorado Commission on July 1 annually.
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The Colorado Act declares public policy on limited stakes gaming to be
that: (1) the success of limited stakes gaming is dependent upon public
confidence and trust that licensed limited stakes gaming is conducted honestly
and competitively; the rights of the creditors of licensees are protected;
gaming is free from criminal and corruptive elements (2) public confidence and
trust can be maintained only by strict regulation of all persons, locations,
practices, associations and activities related to the operation of licensed
gaming establishments and the manufacture or distribution of gaming devices and
equipment; (3) all establishments where limited stakes gaming is conducted and
where gambling devices are operated, and all manufacturers, sellers and
distributors of certain gambling devices and equipment must therefore be
licensed, controlled and assisted to protect the public health, safety, good
order and the general welfare of the inhabitants of the state to foster the
stability and success of limited stakes gaming and to preserve the economy,
policies and free competition in Colorado; and (4) no applicant for a license or
other approval has any right to a license or to the granting of the approval
sought. Any license issued or other commission approval granted pursuant to the
provisions of this Article is a revocable privilege, and no holder acquires any
vested rights therein.

Regulatory Structure

The Colorado Act subjects the ownership and operation of limited
stakes gaming facilities in Colorado to extensive licensing and regulation by
the Colorado Commission. The Colorado Commission has full and exclusive
authority to promulgate, and has promulgated, rules and regulations governing
the licensing, conducting and operating of limited stakes gaming. The Colorado
Act also created the Colorado Division of Gaming within the Colorado Revenue
Department to license, regulate and supervise the conduct of limited stakes
gaming in Colorado. The division is supervised and administered by the Director
of the Division of Gaming.

Gaming licenses

The Colorado Commission may issue:

slot machine manufacturer or distributor,

operator,

retail gaming,

support and

key employee gaming licenses.

The first three licenses require annual renewal by the Colorado
Commission. Support and key employee licenses are issued for two year periods
and are renewable by the Division Director. The Colorado Commission has broad
discretion to condition, suspend for up to six months, revoke, limit or restrict
a license at any time and also has the authority to impose fines.

An applicant for a gaming license must complete comprehensive
application forms, pay required fees and provide all information required by the
Colorado Commission and the Division of Gaming. Prior to licensure, applicants
must satisfy the Colorado Commission that they are suitable for licensing.
Applicants have the burden of proving their qualifications and must pay the full
cost of any background investigations. There is no limit on the cost of such
background investigations.

Gaming employees must hold either a support or key employee license.
Every retail gaming licensee must have a key employee licensee in charge of all
limited stakes gaming activities when limited stakes gaming is being conducted.
The Colorado Commission may determine that a gaming employee is a key employee
and, require that such person apply for a key employee license.
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A retail gaming license is required for all persons conducting
limited stakes gaming on their premises. In addition, an operator license is
required for all persons who engage in the business of placing and operating
slot machines on the premises of a retailer. However, a retailer is not required
to hold an operator license. No person may have an ownership interest in more
than three retail gaming licenses. A slot machine manufacturer or distributor
license is required for all persons who manufacture, import and distribute slot
machines in Colorado.

The Colorado Regulations require that every officer, director, and
stockholder of private corporations or equivalent office or ownership holders
for non-corporate applicants, and every officer, director or stockholder holding
either a 5% or greater interest or controlling interest of a publicly traded
corporation or owners of an applicant or licensee shall be a person of good
moral character and submit to a full background investigation conducted by the
Division of Gaming and the Colorado Commission. The Colorado Commission may
require any person having an interest in a license to undergo a full background
investigation and pay the cost of investigation in the same manner as an
applicant.

Persons found unsuitable by the Colorado Commission may be required
immediately to terminate any interest, association, or agreement with or
relationship to a licensee. A finding of unsuitability with respect to any
officer, director, employee, associate, lender or beneficial owner of a licensee
or applicant also may jeopardize the licensee's license or the applicant's
application. A license approval may be conditioned upon the termination of any
relationship with unsuitable persons. A person may be found unsuitable because
of prior acts, associations or financial conditions. Acts that would lead to a
finding of unsuitability are those that would violate the Colorado Act or the
Colorado Regulations or that contravene the legislative purpose of the Colorado
Act.

Duties of licensees

An applicant or licensee must report to the Division of Gaming or
Colorado Commission all leases not later than 30 days after the effective date
of the lease. Also, an applicant or a licensee, upon the request of the Colorado
Commission or the Division Director, must submit copies of all written gaming
contracts and summaries of all oral gaming contracts to which it is or intends
to become a party. The Division Director or the Colorado Commission may require
changes in the lease or gaming contract before an applicant is approved or
participation in such agreement is allowed or may require termination of the
lease or gaming contract.

The Colorado Amendment and the Colorado Regulations require licensees
to maintain detailed records that account for all business transactions. Records
must be furnished upon demand to the Colorado Commission, the Division of Gaming
and other law enforcement authorities. The Colorado Regulations also establish
extensive playing procedures and rules of play for poker, blackjack and slot
machines. Retail gaming licenses must adopt comprehensive internal control
procedures. Such procedures must be approved in advance by the Division of
Gaming and include the areas of accounting, surveillance, security, cashier
operations, key control and fill and drop procedures, among others. No gaming
devices may be used in limited stakes gaming without the approval of the
Division Director or the Colorado Commission.

Licensees have a continuing duty to immediately report to the
Division of Gaming the name, date of birth and social security number of all
persons who obtain an ownership, financial or equity interest in the licensee of
5% or greater, who have the ability to control the licensee, who have the
ability to exercise significant influence over the licensee or who loan any
money or other thing of value to the licensee. Licensees must report to the
Division of Gaming all gaming licenses, and all applications for gaming
licenses, in foreign jurisdictions.

With limited exceptions applicable to licensees that are publicly
traded entities, no person may sell, lease, purchase, convey or acquire any
interest in a retail gaming or operator license or business without the prior
approval of the Colorado Commission.
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All agreements, contracts, leases, or arrangements in violation of
the Colorado Amendment, the Colorado Act or the Colorado Regulations are void
and unenforceable.

Taxes, fees and fines

The Colorado Amendment requires an annual tax of up to 40% on the
total amount wagered less all payouts to players. With respect to games of
poker, the tax is calculated based on the sums wagered which are retained by the
licensee as compensation. Effective July 1 of each year, the Colorado Commission
establishes the gaming tax for the following 12 months. Currently, the gaming
tax is:

.25% on the first $2 million of these amounts;

2% on amounts from $2 million to $4 million;

4% on amounts from $4 million to $5 million;

11% on amounts from $5 million to $10 million;

16% on amounts from $10 million to $15 million; and

20% on amounts over $15 million.

The Colorado Commission has eliminated the annual device fee for
gaming device machines, blackjack tables and poker tables.

The municipality of Black Hawk assesses an annual device fee of $750
per device. There is no statutory limit on state or city device fees, which may
be increased at the discretion of the Colorado Commission or the city. In
addition, a business improvement fee of as much as $102 per device and a
transportation authority device fee of $77.04 per device also may apply
depending upon the location of the licensed premises in Black Hawk. The current
annual business improvement fee is $89.04.

Black Hawk also imposes taxes and fees on other aspects of the businesses
of gaming licensees, such as parking, alcoholic beverage licenses and other
municipal taxes and fees. There can be no assurance that tax rates or fees
applicable to our casino will not be increased in the future, either by the
Colorado electorate, legislation or action by the Colorado Commission, reducing
the profitability of our operations. Additionally, from time to time, some
federal legislators have proposed the imposition of a federal tax on gaming
revenues. Any such tax increase or new tax would reduce our cash flow and could
have a material adverse effect.

Violation of the Colorado Gaming Act or the Colorado Regulations
constitutes a class 1 misdemeanor which may subject the violator to fines or
incarceration or both. A licensee who violates the Colorado Gaming Act or
Colorado Regulations is subject to suspension of the license for a period of up
to six months, fines, or both or to license revocation.

Requirements for publicly traded corporations

The Colorado Commission has enacted Rule 4.5, which imposes
requirements on publicly traded corporations holding gaming licenses in Colorado
and on gaming licenses owned directly or indirectly by a publicly traded
corporation, whether through a subsidiary or intermediary company. The term
"publicly traded corporation" includes corporations, firms, limited liability
companies, trusts, partnerships and other forms of business organizations. Such
requirements automatically apply to any ownership interest held by a publicly
traded corporation, holding company or intermediary company thereof, where the
ownership interest directly or indirectly is, or will be upon approval of the
Colorado Commission, 5% or more of the entire licensee. In any event, if the
Colorado Commission determines that a publicly traded corporation, or a
subsidiary, intermediary company or holding company has the actual ability to
exercise influence over a licensee, regardless of the percentage of ownership
possessed by said entity, the Colorado Commission may require the entity to
comply with the disclosure regulations contained in Rule 4.5.
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Under Rule 4.5, gaming licensees, affiliated companies and
controlling persons commencing a public offering of voting securities must
notify the Colorado Commission no later than ten business days after the initial
filing of a registration statement with the Securities and Exchange Commission.
Licensed publicly traded corporations are also required to send proxy statements
to the Division of Gaming within 5 days after their distribution. Licensees to
whom Rule 4.5 applies must include in their charter documents provisions that:
restrict the rights of the licensees to issue voting interests or securities
except in accordance with the Colorado Gaming Act and the Colorado Regulations;
limit the rights of persons to transfer voting interests or securities of
licensees except in accordance with the Colorado Gaming Act and the Colorado
Regulations; and provide that holders of voting interests or securities of
licensees found unsuitable by the Colorado Commission may, within 60 days of
such finding of unsuitability, be required to sell their interests or securities
back to the issuer at the lesser of the cash equivalent of the holders'
investment or the market price as of the date of the finding of unsuitability.
Alternatively, the holders may, within 60 days after the finding of
unsuitability, transfer the voting interests or securities to a suitable person,
as determined by the Colorado Commission. Until the voting interests or
securities are held by suitable persons, the issuer may not pay dividends or
interest, the securities may not be voted, they may not be included in the
voting or securities of the issuer, and the issuer may not pay any remuneration
in any form to the holders of the securities.

Pursuant to Rule 4.5, persons who acquire direct or indirect beneficial
ownership of

5% or more of any class of voting securities of a publicly traded corporation
that is required to include in its articles of organization the Rule 4.5 charter
language provisions or

5% or more of the beneficial interest in a gaming licensee directly or
indirectly through any class of voting securities of any holding company or
intermediary company of a licensee, referred to as qualifying persons, shall
notify the Division of Gaming within 10 days of such acquisition, are required
to submit all requested information and are subject to a finding of suitability
as required by the Division of Gaming or the Colorado Commission. Licensees also
must notify any qualifying persons of these requirements. A qualifying person
other than an institutional investor whose interest equals 10% or more must
apply to the Colorado Commission for a finding of suitability within 45 days
after acquiring such securities. Licensees must also notify any qualifying
persons of these requirements. Whether or not notified, qualifying persons are
responsible for complying with these requirements.

A qualifying person who is an institutional investor under Rule 4.5
and who individually or in association with others, acquires, directly or
indirectly, the beneficial ownership of 15% or more of any class of voting
securities must apply to the Colorado Commission for a finding of suitability
within 45 days after acquiring such interests.

The Colorado Regulations also provide for exemption from the
requirements for a finding of suitability when the Colorado Commission finds
such action to be consistent with the purposes of the Colorado Act.

Pursuant to Rule 4.5, persons found unsuitable by the Colorado
Commission must be removed from any position as an officer, director, or
employee of a licensee, or from a holding or intermediary company. Such
unsuitable persons also are prohibited from any beneficial ownership of the
voting securities of any such entities. Licensees, or affiliated entities of
licensees, are subject to sanctions for paying dividends or distributions to
persons found unsuitable by the Colorado Commission, or for recognizing voting
rights of, or paying a salary or any remuneration for services to, unsuitable
persons. Licensees or their affiliated entities also may be sanctioned for
failing to pursue efforts to require unsuitable persons to relinquish their
interest. The Colorado Commission may determine that anyone with a material
relationship to, or material involvement with, a licensee or an affiliated
company must apply for a finding of suitability or must apply for a key employee
license.
10
<PAGE>

Alcoholic Beverage Licenses

The sale of alcoholic beverages in gaming establishments is subject
to strict licensing, control and regulation by state and local authorities.
Alcoholic beverage licenses are revocable and nontransferable. State and local
licensing authorities have full power to limit, condition, suspend for as long
as six months or revoke any such licenses. Violation of state alcoholic beverage
laws may constitute a criminal offense resulting in incarceration, fines or
both.

There are various classes of retail liquor licenses which may be
issued under the Colorado Liquor Code. A gaming licensee may sell malt, vinous
or spirituous liquors only by the individual drink for consumption on the
premises. Even though a retail gaming licensee may be issued various classes of
retail liquor licenses, such gaming licensee may only hold liquor licenses of
the same class. An application for an alcoholic beverage license in Colorado
requires notice, posting and a public hearing before the local liquor licensing
authority prior to approval of the same. The Colorado Department of Revenue's
Liquor Enforcement Division must also approve the application. Riviera Black
Hawk's hotel and restaurant license has been approved by both the local
licensing authority and the State Division of Liquor Enforcement.

Federal Registration

Riviera Black Hawk, Inc. is required to annually file with the Attorney
General of the United States in connection with the sales, distribution, or
operations of slot machines. All requisite filings for the present year have
been made.

Item 2. Property

Riviera Black Hawk owns the Black Hawk land, which is located on a 71,000
square foot parcel of real property in Black Hawk, Colorado and comprised of
approximately 32,000 square feet of gaming space and parking for approximately
520 vehicles (substantially all of which are covered), a 265 seat casual dining
restaurant, two bars and an entertainment center with seating for approximately
500 people.

Item 3. Legal Proceedings

We may be a party to several routine lawsuits both as plaintiff and
as defendant arising from the normal operations of a casino. We do not believe
that the outcome of such litigation, in the aggregate, will have a material
adverse effect on the financial position or results of our operations.

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

Not applicable.

PART II

Item 5. Market for the Registrant's Common Stock and Related Security Holder
Matters
Not applicable.
11
<PAGE>

Item 6. Selected Financial Data

Not applicable

Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations Results of Operations

Riviera Black Hawk, opened for business on February 4, 2000. Results
from Operations will be discussed in the Form 10Q for the period ending March
31, 2000. Preopening expenses for the year ending December 31, 1999, totaled
$595,000 including payroll, rent, travel and other expenses. Interest expense
not capitalized during construction was $606,000 during 1999. There were no
operating expenses in 1998 or 1997.

As of December 31, 1999, Riviera Holdings Corporation contributed $15.1
million to acquire land for the casino in Black Hawk and $4.9 million in cash
for developing the land for the casino, for a total cash capital contribution of
$20 million.

Future operating results are subject to significant business, economic,
regulatory and competitive uncertainties and contingencies, many of which are
beyond our control. We believe that the Riviera Black Hawk will be able to
attract a sufficient number of patrons and achieve the level of activity and
revenues necessary to permit us to meet our obligations. However, there can be
no assurance that we will be able to achieve these results.

Liquidity and Capital Resources

The Company had cash and short term investments of $11.8 million at
December 31, 1999. Restricted cash and cash equivalents totaled $7.1 million and
restricted short-term investments totaled $2.8 million. Restricted amounts are
for use in the completion of the Black Hawk casino project and for the related
13 percent First Mortgage Notes interest payments. Management believes that cash
flow from operations combined with the $11.8 million cash and short term
investments will be sufficient to cover the Company's debt service and enable
investment in budgeted capital expenditures for the next twelve months including
completion of the Black Hawk casino development.

On June 3, 1999, the Company completed a $45 million private placement of
13 % First Mortgage Notes. The net proceeds of the placement were used to fund
the completion of Riviera Black Hawk's casino project in Black Hawk, Colorado.
Riviera Holdings Corporation has not guaranteed the $45 million Riviera Black
Hawk notes, but has agreed to a "Keep Well Agreement" of $5 million per year (or
an aggregate limited to $10 million) for the first three years of Riviera Black
Hawk operations to cover if (i) the $5.85 million interest on such notes is not
paid by Riviera Black Hawk and (ii) the amount by which Riviera Black Hawk cash
flow is less than $9.0 million per year. The Company believes that Riviera
Holdings Corporation could satisfy this requirement if needed. In addition,
Riviera Holdings Corporation has agreed to a "Capital Completion Commitment" of
up to $10 million if the casino is not open by May 31, 2000. The opening of the
casino on February 4, 2000 satisfied the commitment which will be released in
August of 2000. The Company has registered securities identical to the 13% Notes
under the Securities Act of 1933, as amended. On January 4, 2000, the Company
completed an exchange offer for such registered securities.

Cash flow from operations may not be sufficient to pay 100% of the
principal of the $45 million 13% Notes at maturity on May 1, 2005. Accordingly,
the ability of Riviera Black Hawk to repay the Notes at maturity may be
dependent upon our future cash flows and our ability to refinance those notes.
There can be no assurance that the Company will be able to refinance the
principal amount of the Notes at maturity. Although Riviera Black Hawk, Inc.
can, at any time prior to May 1, 2001, redeem up to 35% of the aggregate
principal amount of the 13% notes at 113% with the proceeds of a qualified
public offering, the subsidiary may not redeem 100% of the 13% Notes until May
1, 2002, at premiums beginning at 106.5% and declining each subsequent year to
par in 2004.

The 13% Note Indentures provide that, in certain circumstances, Riviera
Black Hawk must offer to repurchase the Notes upon the occurrence of a change of
control or certain other events. In the event of such mandatory redemption or
repurchase prior to maturity, the Company would be unable to pay the principal
amount of the Notes without a refinancing.

The Note Indenture contains certain covenants, which limit the ability
of Riviera Black Hawk, Inc. subject to certain exceptions, to : (i) incur
additional indebtedness; (ii) pay dividends or other distributions, repurchase
capital stock or other equity interests or subordinated indebtedness; (iii)
enter into certain transactions with affiliates; (iv) create certain liens; sell
certain assets; and (v) enter into certain mergers and consolidations. As a
result of these restrictions, the ability of the Company to incur additional
indebtedness to fund operations or to make capital expenditures is limited. In
the event that cash flow from operations is insufficient to cover cash
requirements, the Company would be required to curtail or defer certain of their
capital expenditure programs under these circumstances, which could have an
adverse effect on operations. At December 31, 1999, the Company believes that it
is in compliance with the covenants.

In July 1999, the Company committed to a $11.1 million capital lease line
for 60 months at approximately 11.2 percent for gaming equipment, furniture and
fixtures at the Black Hawk, Colorado casino.

The Company made draws on the capital lease line beginning in February
through March 6 of 2000 in the amount of $9,500,000 at a weighted average
interest rate of 10.5 percent. The Company does not expect to make further draws
on the lease line.

Recently Adopted Accounting Standards - The American Institute of Certified
Public Accountants' Accounting Standards Executive Committee issued Statement of
Position No. 98-5, Reporting on the Costs of Start-Up Activities. This standard
provides guidance on the financial reporting for start-up costs and organization
costs. This standard requires costs of start-up activities and organization
costs to be expensed as incurred, and is effective for fiscal years beginning
after December 15, 1998, although earlier application is encouraged. Management
adopted this standard in 1999. The effect was to recognize approximately
$595,000 of pre-opening expenses in the current year that would otherwise have
been deferred.
12
<PAGE>

Recently Issued Accounting Standards - The Financial Accounting Standards
Board issued SFAS No. 133, "Accounting for Derivatives," which is effective for
fiscal years beginning after June 15, 2000. This statement defines derivatives
and requires qualitative disclosure of certain financial and descriptive
information about a company's derivatives. The Company will adopt SFAS No. 133
in the year ending December 31, 2001. Management has not finalized its analysis
of this SFAS or the impact of this SFAS on the Company or the Company's future
consolidated financial statements.

Year 2000

The Company conducted a comprehensive review of its computer systems
and other systems for the purpose of assessing its potential Year 2000 Problem,
and modified or replaced those systems which were not Year 2000 compliant. Based
upon this review, systems were compliant by December 1999. However, if
modifications had not been made or completed on schedule, the Year 2000 Problem
could have had a significant impact on the Company's operations.

All costs related to the Year 2000 Problem were expensed as incurred,
while the cost of new hardware and software was capitalized and amortized over
its expected useful life. The costs associated with Year 2000 compliance were
not material to the Company's financial position or results of operations. As of
December 31, 1999, the Company has incurred costs of approximately $2,000
(primarily for internal labor) related to the system applications.

In addition, the Company communicated with its major vendors and
suppliers to determine their state of readiness relative to the Year 2000
problem and the company's possible exposure to Year 2000 issues of such third
parties. The Company, through correspondence from major vendors or statements
obtained at Year 2000 disclosure sites of major vendors, was advised that such
vendors' software or products were Year 2000 compliant. The Company experienced
no failure of a major vendor or supplier which impacted operations.

Forward Looking Statements

The Private Securities Litigation Reform Act of 1998 provides a "safe
harbor" for certain forward-looking statements. Certain matters discussed in
this filing could be characterized as forward-looking statements such as
statements relating to plans for future expansion, as well as other capital
spending, financing sources and effects of regulation and competition. Such
forward-looking statements involve important risks and uncertainties that could
cause actual results to differ materially from those expressed in such
forward-looking statements
13
<PAGE>

Item 7a. Quantitative and Qualitative Disclosure about Market Risk

Market risks relating to our operations result primarily from changes
in interest rates. We invest our cash and cash equivalents in U.S. Treasury
Bills with maturities of 90 days or less.

As of December 31, 1999, we had $45.7 million in borrowings. The
borrowings include $45 million notes maturing in 2006 and a vehicle loan
maturing in 2004. Interest on the $45 million notes is 13%
with contingent interest if certain operating results are achieved. The
vehicle loan has an interest rate of 9.0%. The borrowings
also include $.7 million in a special improvement district bond offering with
the City of Black Hawk. The Company's share of the debt on the SID bonds of
$1,120,000 when the project is complete, is payable over ten years beginning in
2000. The special improvement district bonds bear interest at 5.5%.

Interest Rate Sensitivity
Principal (Notational Amount by Expected Maturity)
Average Interest Rate

(Amounts in Thousands) Fair Value
<S> <C> <C> <C> <C> <C> <C> <C> <C>
2000 2001 2002 2003 2004 Thereafter Total At 12/31/99

Assets

Short term investments $2,820 $2,820 $2,820

Average interest rate 4.75%

Long Term Debt
Including Current Portion

Vehicle loan - Black Hawk,
Colorado casino project $9 $10 $8 $27 $27

Average interest rate 9.0% 9.0% 9.0%

Special Improvement
District Bonds-Black Hawk,
Colorado casino project $60 $64 $68 $71 $76 $445 $784 $784

Average interest rate 5.5% 5.5% 5.5% 5.5% 5.5% 5.5%

13% First Mortgage Note
Black Hawk, Colorado casino
project $45,000 $45,000 $48,600
Average interest rate 13.0%
</TABLE>

Item 8. Financial Statements and Supplementary Data

See financial statements included in Item 14 (a).

Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
None

Item 10. Directors and Executive Officers of the Registrant (not applicable)

Item 11. Executive Compensation (not applicable)

Item 12. Security Ownership of certain Beneficial Owners and Management
(not applicable)
14
<PAGE>

Item 13. Certain Relationships and Related Transactions

The Company has entered into a management agreement (the "Management
Agreement") with Riviera Gaming Management of Colorado, Inc., (the "Manager") an
indirect wholly owned subsidiary of Riviera Holdings Corporation, which will
manage the Company. The management fee will consist of a revenue fee and a
performance fee. The revenue fee will be based on one percent of net revenues
(gross revenues less complimentaries) and is payable quarterly in arrears. The
performance fee will be based on the following percentages of EBITDA (earnings
before interest, taxes, depreciation and amortization, whose components are
based on generally accepted accounting principles): (1) 10 percent of EBITDA
from $5 million to $10 million, (2) 15 percent of EBITDA from $10 million to $15
million and (3) 20 percent of EBITDA in excess of $15 million. The performance
fee will be based on the preceding quarter's EBITDA, paid in quarterly
installments subject to year-end adjustment. The management fee will go into
effect on the date of the opening of the Riviera Black Hawk casino.

PART IV Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K

(a)(1) List of Financial Statements

The following Independent Auditor's Report and the Financial Statements
of the Company are incorporated by reference into this item 14 of Form 10-k by
Item 8 hereof:

Independent Auditor's Report dated February 14, 2000, except for Note 6,
as to which the date is March 6, 2000.

Balance Sheets as of December 31, 1999 and 1998

Statements of Operations for the Year Ended December 31, 1999 and Cumulative
from August 18, 1997 (Date of Inception) through December 31, 1999

Statements of Stockholder's Equity for the Years Ended December 31, 1999 and
1998 and for the Period from August 18, 1997 (Date of Inception) through
December 31, 1997

Statements of Cash Flows and for the Years Ended December 31, 1999 and 1998
and for the Period from August 18, 1997 (Date of Inception) through
December 31, 1997 and cumulative from August 18, 1997 (Date of Inception)
through December 31, 1999

Notes to Financial Statements

(a)(2) List of Financial Statement Schedules

No financial statement schedules have been filed herewith since they are either
not required, are not applicable, or the required information is shown in the
consolidated financial statements or related notes.

(a)(3) List of Exhibits

Exhibits required by Item 601 of Regulation S-K are
listed in the Exhibit Index herein, which information is incorporated by
reference.

(b) Reports on Form 8-K- No reports of Form 8-K were filed in the fourth
quarter of 1999.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
15

<PAGE>

SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Amendment to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of Las
Vegas, State of Nevada, on the 28th day of March, 2000.

RIVIERA BLACK HAWK, INC.

By: /s/ WILLIAM L. WESTERMAN

William L. Westerman Chief
Executive Officer and Director

March 28, 2000

Pursuant to the requirement of the Securities Exchange Act of 1934, this
Amendment has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dated indicated.

Signature Title Date

By: /s/ WILLIAM L. WESTERMAN
William L. Westerman Chief Executive Officer and Director March 28, 2000

By:/s/ RONALD P. JOHNSON
Ronald P. Johnson President and Director March 28, 2000

By: /s/ DUANE R. KROHN
Duane R. Krohn Treasurer, Chief Financial Officer
and Director March 28, 2000

16
<PAGE>
<TABLE>
<CAPTION>

RIVIERA BLACK HAWK, INC.
(A Development Stage Company)
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
Page
<S> <C>
INDEPENDENT AUDITORS' REPORT 1

FINANCIAL STATEMENTS:

Balance Sheets as of December 31, 1999 and 1998 2

Statements of Operations for the Year Ended December 31, 1999 and Cumulative
from August 18, 1997 (Date of Inception) through December 31, 1999 3

Statements of Stockholder's Equity for the Years Ended December 31, 1999 and
1998 and for the Period from August 18, 1997 (Date of Inception) through
December 31, 1997 4

Notes to Financial Statements 6-10
</TABLE>

<PAGE>

INDEPENDENT AUDITORS' REPORT

Riviera Black Hawk, Inc.
(A Development Stage Company):

We have audited the accompanying balance sheets of Riviera Black Hawk, Inc. (a
Development Stage Company) (the "Company") as of December 31, 1999 and 1998, and
the related statements of operations for the year ended December 31, 1999 and
for the period from August 18, 1997 (date of inception) through December 31,
1999, and of cash flows for the year ended December 31, 1999, and for the period
from August 18, 1997 (date of inception) through December 31, 1999 and the
statements of stockholder's equity for the years ended December 31, 1999 and
1998, for the period from August 18, 1997 (date of inception) through December
31, 1997. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

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

In our opinion, such financial statements present fairly, in all material
respects, the financial position of the Company as of December 31, 1999 and
1998, and the results of its operations for the year ended December 31, 1999 and
for the period from August 18, 1997 (date of inception) through December 31,
1999, and its cash flows for the years ended December 31, 1999 and 1998, for the
period from August 18, 1997 (date of inception) through December 31, 1999, in
conformity with accounting principles generally accepted in the United States of
America.

The Company is in the development stage at December 31, 1999. As discussed in
Note 1 to the financial statements, successful completion of the Company's
development program and, ultimately, the attainment of profitable operations is
dependent upon future events, including achieving a level of revenues adequate
to support the Company's cost structure.

Deloitte & Touche LLP
February 14, 2000, except for Note 6.
as to which the date is March 6, 2000

F-1
<PAGE>
<TABLE>
<CAPTION>

RIVIERA BLACK HAWK, INC.
(A Development Stage Company)

BALANCE SHEETS
DECEMBER 31, 1999 AND 1998
(In thousands, except share amounts)
- --------------------------------------------------------------------------------
ASSETS 1999 1998

CURRENT ASSETS:
<S> <C> <C>
Cash and cash equivalents $ 1,810 $ 543
Cash and cash equivalents, restricted 7,173
Short-term investments, restricted 2,820
Prepaid expenses 795 73

Total current assets 12,598 616

PROPERTY AND EQUIPMENT, NET 56,734 27,112

DEFERRED FINANCING COSTS, Net 3,446

OTHER ASSETS 12 3

CASH, RESTRICTED 407

DEFERRED INCOME TAXES 160

TOTAL $72,950 $28,138

LIABILITIES AND STOCKHOLDERS EQUITY

CURRENT LIABILITIES:
Accounts payable and accrued liabilities $ 487
Accrued payroll and benefits 110
Accrued interest expense 976
Construction accounts payable 2,566 $ 1,210
Current portion of long-term debt 69

Total current liabilities 4,208 1,210

NONCURRENT LIABILITIES:
Due to Riviera Holdings Corporation 6,241
13% First Mortgage Notes 45,000
Special improvement district bonds 724 687
Other long-term debt 18

Total noncurrent liabilities 45,742 6,928

Total liabilities 49,950 8,138

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS EQUITY:
Common stock, $.01 par value; 10,000 shares authorized;
1,000 shares issued and outstanding
Additional paid-in capital 23,474 20,000
Accumulated deficit (474)

Total stockholders equity 23,000 20,000

TOTAL $72,950 $28,138

See notes to financial statements.

</TABLE>

F-2
<PAGE>
<TABLE>
<CAPTION>

RIVIERA BLACK HAWK, INC.
(A Development Stage Company)

STATEMENTS OF OPERATIONS
YEAR ENDED DECEMBER 31, 1999 AND PERIOD FROM AUGUST 18, 1997
(DATE OF INCEPTION) THROUGH DECEMBER 31, 1999 (In thousands)
- ------------------------------------------------------------------------------

Cumulative
from
August 8,
1997
(Date of
Year Inception)
Ended through
December 31, December 31,
1999 1999

<S> <C> <C>
Selling, general and administrative $ 595 $ 595

Other income (expense):
Interest expense (2,868) (2,868)
Interest capitalized 2,262 2,262
Interest income 567 567

Total other income (expense) (39) (39)

Loss before benefit for income taxes (634) (634)

Benefit for income taxes (160) (160)

Net loss $ (474) $ (474)

See notes to financial statements.
</TABLE>
F-3
<PAGE>
<TABLE>
<CAPTION>

RIVIERA BLACK HAWK, INC.
(A Development Stage Company)

STATEMENTS OF STOCKHOLDERS EQUITY
PERIOD FROM AUGUST 18, 1997 (DATE OF INCEPTION) THROUGH DECEMBER 31, 1997
AND YEARS ENDED DECEMBER 31, 1999 AND 1998 (In thousands, except share amounts)

Additional
Common Stock Paid-in Accumulated
Shares Amount Capital Deficit Total
BALANCE, AUGUST 18, 1997
<S> <C> <C> <C> <C> <C>
(Date of Inception) - $ - $ - $ -

Common stock issued 1,000

Contributed capital 16,625 16,625

BALANCE,
DECEMBER 31, 1997 1,000 16,625 16,625

Contributed capital 3,375 3,375

BALANCE,
DECEMBER 31, 1998 1,000 20,000 20,000

Contributed capital 3,474 3,474

Net loss (474) (474)

BALANCE,
DECEMBER 31, 1999 1,000 $ - $ 23,474 $(474) $ 23,000

See notes to financial statements.

</TABLE>
F-4
<PAGE>

RIVIERA BLACK HAWK, INC.
(A Development Stage Company)

STATEMENTS OF CASH FLOWS
PERIOD FROM AUGUST 18, 1997 (DATE OF INCEPTION) THROUGH DECEMBER 31, 1997 AND
YEARS ENDED DECEMBER 31, 1999 AND 1998 AND CUMULATIVE FROM
AUGUST 18, 1997 (INCEPTION) THROUGH DECEMBER 31, 1999 (In thousands)
- -------------------------------------------------------------------------------

Cumulative
from
August 18, August 18,
1997 1997
(Date of (Date of
Year Year Inception) Inception)
Ended Ended through through
December 31, December 31, December 31, December 31,
1999 1998 1997 1999

CASH FLOWS FROM OPERATING ACTIVITIES -
<S> <C> <C> <C> <C>
Net loss $ (474) $ (474)
Adjustments to reconcile net loss to net cash used in
operating activities -
Amortization of bond offering costs 338 338
Changes in operating assets and liabilities:
Increase in prepaid expenses (722) $ (73) (795)
Increase in accounts payable and accrued
expenses 487 487
Increase in accrued payroll and benefits 110 110
Increase in accrued interest expense 976 976
Decrease in other assets (9) (3) (12)
Increase in deferred tax asset (160) (160)

Net cash used in operating activities 546 (76) 470

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (27,291) (6,667) $(15,923) (49,881)
Increase in cash - restricted (6,766) (407) (7,173)
Purchase of short-term investments (2,820) (2,820)
Deferred financing costs (3,784) (3,784)

Net cash used in investing activities (40,661) (7,074) (15,923) (63,658)

CASH FLOWS FROM FINANCING ACTIVITIES:
Payment on long term debt (2) (2)
Advances from (payments to) Riviera Holdings Corp. (6,241) 6,241
Proceeds from long-term borrowings 45,000 45,000
Contribution of paid-in capital 2,625 1,403 15,972 20,000

Net cash provided by financing activities 41,382 7,644 15,972 64,998

INCREASE IN CASH AND CASH EQUIVALENTS 1,267 494 49 1,810

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 543 49

CASH AND CASH EQUIVALENTS, END OF PERIOD $ 1,810 $ 543 $ 49 $ 1,810
INTEREST PAID $(2,403) $ - $ - $(2,403)

SUPPLEMENTAL DISCLOSURE OF NONCASH INFORMATION:
Property and equipment purchased using accounts
payable $ 2,566 $ 1,203 $ 7 $ 2,566

Property acquired using special improvement district
bonds $ 97 $ 687 $ - $ 784

Capitalized interest contributed by Riviera Holdings
Corp. $ 843 $1,972 $ 659 $ 3,474
Property acquired with debt $ 29 $ 29

Capitalized interest, other $ 2,262 $ 2,262

See notes to financial statements.

</TABLE>

F-5
<PAGE>

RIVIERA BLACK HAWK, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization and Basis of Presentation - On August 18, 1997 (date of
inception), Riviera Black Hawk,Inc.(the "Company") was formed. The Company is a
wholly owned subsidiary of Riviera Holdings Corporation. The Company is a
development stage enterprise at December 31, 1999 that had not commenced
operations. The principal purpose of the Company is to develop a casino and
entertainment complex in Black Hawk, Colorado, which commenced operations on
February 4, 2000. The Company bagan construction on this casino in Black Hawk,
Colorado, on a site that was purchased for $15.1 million in August 1997.

Cash and Cash Equivalents and Short-Term Investments - All highly liquid
investment securities with a maturity of three months or less when acquired are
considered to be cash equivalents. The Company accounts for investment
securities in accordance with Statement of Financial Accounting Standards
("SFAS") No. 115, "Accounting for Certain Investments in Debt and Equity
Securities."

The Company's investment securities, along with certain cash and cash
equivalents that are not deemed securities under SFAS No. 115, are carried on
the consolidated balance sheets in the cash and cash equivalents category. SFAS
No. 115 addresses the accounting and reporting for investments in equity
securities that have readily determinable fair values and for all investments in
debt securities, and requires such securities to be classified as either held to
maturity, trading, or available for sale.

Management determines the appropriate classification of its investment
securities at the time of purchase, including the determination as to restricted
versus nonrestricted assets, and re-evaluates such determination at each balance
sheet date. Held-to-maturity securities are required to be carried at amortized
cost. At December 31, 1999 and 1998, securities classified as held to maturity
comprised debt securities issued by the U.S. Treasury and other U.S. government
corporations and agencies, and repurchase agreements, with an amortized cost of
$2,820,000 and $0, respectively, maturing in three months or less.

Property and Equipment - Property and equipment are stated at cost, and
capitalized lease assets are stated at the present value of future minimum lease
payments at the date of lease inception. Interest incurred during construction
of new facilities or major additions to facilities is capitalized and amortized
over the life of the asset. Depreciation will be computed, upon the commencement
of gaming operations, using the straight-line method over the shorter of the
estimated useful lives or lease terms, if applicable, of the related assets. The
costs of normal maintenance and repairs will be charged to expense as incurred.
Gains or losses on disposals will be recognized as incurred.

The Company periodically assesses the recoverability of property and
equipment and evaluates such assets for impairment whenever events or
circumstances indicate that the carrying amount of an asset may not be
recoverable. Asset impairment is determined to exist if estimated future cash
flows, undiscounted and without interest charges, are less than the carrying
amount.

Other Assets - The Company is in the development stage and incurred
organizational costs, which are capitalized until operations of the casino
commence, at which time such organizational costs will be amortized over a
five-year period. Organizational costs consist primarily of legal fees
associated with establishing the gaming licenses for business.

Restricted Cash and Short-term Investments - Amounts related to the Riviera
Black Hawk Casino project in Black Hawk, Colorado, are restricted in use to that
project or for the related 13 percent First Mortgage Notes interest payments.

Fair Value Disclosure as of December 31, 1999 and 1998:

Cash and Cash Equivalents, Short-term Investments (including restricted),
Accounts Payable and Accrued Expenses - The carrying value of these items is a
reasonable estimate of their fair value.

Long-Term Debt -The fair value of the Company's long-term debt is estimated
based on the quoted market prices for the same or similar issues or on the
current rates offered to the Company for debt of the same remaining maturities.
Based on the borrowing rates currently available to the Company for debt with
similar terms and average maturities, the estimated fair value of long-term debt
is approximately $49,413,000 and $687,000 in 1999 and 1998, respectively.

Estimates and Assumptions - 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, 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 may differ from estimates.
F-6
<PAGE>

Federal Income Taxes - Riviera Holdings Corporation allocated income tax
expense or benefit to the Company as if the Company were filing separate tax
returns pursuant to a tax sharing arrangement. The Company accounts for income
taxes in accordance with Statement of Financial Accounting Standards ("SFAS")
No. 109, "Accounting for Income Taxes."

2. RELATED-PARTY TRANSACTIONS

At December 31, 1998, the Company owed approximately $6.2 million to
Riviera Holdings Corporation, representing advances made by Riviera Holdings
Corporation for costs related to the development of the Riviera Black Hawk
casino. The advances were repaid from the proceeds of the $45 million bond
offering discussed in Note 4.

If there is any default under the management agreement, the manager will
not be entitled to receive management fees, but the manager will still be
entitled to intercompany service fees billed at cost.

3. PROPERTY AND EQUIPMENT

Property and equipment consist of the following at December 31
(amounts in thousands):
<TABLE>
<CAPTION>
1999 1998

<S> <C> <C>
Land and improvements $15,774 $15,790
Vehicles 29
Construction in progress 40,931 11,322

Total property and equipment $56,734 $27,112
</TABLE>

In 1999 and 1998 and 1997, $3.1 million and $2.0 million and $0.7 million,
respectively, in interest costs were capitalized on the construction project.

F-7
<PAGE>

4. LONG-TERM DEBT
<TABLE>
<CAPTION>

Long-term debt consists of the following at December 31 (in thousands):
1999 1998
<S> <C> <C>
13% First Mortgage Notes maturing on June 3, 2005, bearing interest,
payable semiannually on November 3 and June 3 of each year;
redeemable beginning May 1, 2002 at 106.5%; 2003 at 103.25%; and
after 2004 at 100% $ 45,000

9% Notes collateralized by vehicles, payable monthly,
including interest, maturing through October 2004 27

5.5% Special Improvement District Bonds - issued by the City of Black
Hawk, Black Hawk, Colorado, interest and principal payable monthly
over 10 years beginning in 2000 784 $ 687

Total long-term debt 45,811 687
Current maturities by terms of debt (69)

Total $ 45,742 $ 687
</TABLE>

Maturities of long-term debt for the years ending December 31 are as follows
(in thousands):
<TABLE>
<CAPTION>

<S> <C>
2000 $ 69
2001 74
2002 76
2003 71
2004 76
Thereafter 45,445

Total $45,811
</TABLE>

On June 3, 1999, the Company completed a $45 million private placement of
13 % First Mortgage Notes. The net proceeds of the placement were used to fund
the completion of RBH's casino project in Black Hawk, Colorado. Riviera Holdings
Corporation has not guaranteed the $45 million RBH notes, but has agreed to a
"Keep Well Agreement" of $5 million per year (or an aggregate limited to $10
million) for the first three years of RBH operations to cover if (i) the $5.85
million interest on such notes is not paid by RBH and (ii) the amount by which
RBH cash flow is less than $9.0 million per year. In addition, Riviera Holdings
Corporation has agreed to a "Capital Completion Commitment" of up to $10 million
if the casino is not open by May 31, 2000. The opening of the casino on February
4, 2000 satisfied the commitment which will be released in August of 2000. The
Company has registered securities identical to the 13% Notes under the
Securities Act of 1933, as amended. On January 4, 2000, the Company completed an
exchange offer for such registered securities.

The notes were issued at a cost in the amount of $3.5 million. The deferred
financing cost is being amortized over the life of the notes on a straight-lines
basis, which approximates the effective interest method.

The 13% First Mortgage Note Indenture provides that, in certain
circumstances, the Company must offer to repurchase the 13 percent Notes upon
the occurrence of a change of control or certain other events. In the event of
such mandatory redemption or repurchase prior to maturity, the Company would be
unable to pay the principal amount of the 10 percent Notes without a
refinancing.
F-8
<PAGE>

The 13% First Mortgage Note Indenture contains certain covenants,
which limit the ability of RBH and its restricted subsidiaries, subject to
certain exceptions, to: (i) incur additional indebtedness; (ii) pay dividends or
other distributions and repurchase capital stock or other equity interests or
subordinated indebtedness; (iii) enter into certain transactions with
affiliates; (iv) create certain liens and sell certain assets; and (v) enter
into curtail mergers and consolidations. As a result of these restrictions, the
ability of the Company to incur additional indebtedness to fund operations or to
make capital expenditures is limited. In the event that cash flow from
operations is insufficient to cover cash requirements, the Company would be
required to curtail or defer certain of their capital expenditure programs under
these circumstances, which could have an adverse effect on RBH's operations. At
December 31, 1999, RBH believes that it is in compliance with the covenants.

The 5.5 percent Special Improvement District Bonds were issued by the City
of Black Hawk, Colorado, in July 1998 for $2,940,000. The proceeds were used for
road improvements and other infrastructure projects benefiting the Riviera Black
Hawk Casino and another nearby casino. The projects are expected to be completed
in 2000 at an estimated cost of $2,240,000, including interest and reserves. The
excess proceeds have been returned to the bondholders by the City of Black Hawk,
Colorado. RBH is responsible for 50 percent of the debt payable over 10 years
beginning in 2000.

5. FEDERAL INCOME TAXES

The Company computes deferred income taxes based upon the difference
between the financial statement and tax basis of assets and liabilities using
enacted tax rates in effect in the years in which the differences are expected
to reverse. The Company had no operations in 1998 and, accordingly, no income
tax amounts are presented for that year.

The effective income tax rates on income attributable to operations differ
from the statutory federal income tax rates for the year ended December 31,
1999, as follows (in thousands):
<TABLE>
<CAPTION>

1999
--------------------
Amount Rate

<S> <C> <C>
(Provision) benefit for income taxes at federal
statutory rate $(234) (37.0)%
Other 74 11.6 %

(Benefit) provision for income taxes $(160) (25.2)%
</TABLE>

Comparative analysis of the (benefit) provision for income taxes is as follows:

1999

Current
Deferred $(160)

Total $(160)

F-9
<PAGE>

The tax effects of the items composing the Company's net deferred tax asset
consist of the following at December 31 (in thousands):

1999

Deferred tax assets:
Net operating loss carryforward $160

Net deferred tax asset $160

6. COMMITMENTS AND CONTINGENCES

Deposit Account - Pursuant to a deposit account agreement, dated as of June
3, 1999, among Bank of America as deposit bank, Riviera Holdings Corporation and
First American Title Insurance Company, Riviera Holdings Corporation has
deposited $5.0 million to insure First American against mechanics lien claims
against the Black Hawk property. If no mechanics liens are outstanding 30 days
after the casino opens and other conditions are met, such $5.0 million deposit
will be released to Riviera Holdings Corporation.

Keep-Well Agreement - RBH and Riviera Holdings Corporation entered a
Keep-Well Agreement wherein, if (1) RBH does not have the necessary funds to
make a payment of fixed interest on the notes during its first three years of
operations or (2) consolidated cash flow is less than $9.0 million in any of the
first three years of operations, Riviera Holdings Corporation will be obligated
to contribute cash to RBH to make up those amounts (up to a maximum of $5.0
million for any one operating year and $10.0 million in the aggregate).

In July 1999, the Company committed to a $11.1 million capital lease line
for 60 months at approximately 11.2 percent for gaming equipment, furniture and
fixtures at the Black Hawk, Colorado casino.

******
F-10
<PAGE>

Item 14a(3)

EXHIBIT INDEX

Exhibit No. Description

3.01 Articles of Amendment to the Articles of Incorporation of the Company.*

3.02 Articles of Incorporation of the Company.*

3.03 Bylaws of the Company.*

4.01 Indenture, dated as of June 3, 1999, among the Company, Riviera Holdings
and the Initial Purchaser.*

4.02 Form of 13% First Mortgage Note due 2005 with Contingent Interest (included
in Exhibit 4.01).*

4.03 Purchase Agreement, dated as of May 27, 1999, by and among the Company,
Riviera Holdings and the Initial Purchaser.*

4.04 Registration Rights Agreement, dated as of June 3, 1999, by and between the
Company and the Initial Purchaser.*

10.01 The Completion Capital Commitment, dated as of June 3, 1999, by and
between the Company and Riviera Holdings.*

10.02 The Keep-Well Agreement, dated as of June 3, 1999, by and between the
Company and Riviera Holdings.*

10.03 The Tax-Sharing Agreement, dated as of June 3, 1999, by and between the
Company and Riviera Holdings.*

10.04 The Management Agreement, dated as of June 3, 1999, by and between the
Company and Riviera Gaming Management of Colorado, Inc.*

10.05 The Trademark License Agreement, dated as of June 3, 1999, by and between
the Company and Riviera Operating Corporation.*

10.06 The Deed of Trust, dated as of June 3, 1999, made by the Company to the
Public Trustee of the County of Gilpin, Colorado, for the benefit of the
Trustee.*

10.07 The Assignment of Rents.*

10.08 The Environmental Indemnity, dated as of
June 3, 1999, between the Company and the Trustee.*

10.09 The Cash Collateral and Disbursement Agreement, dated as of June 3, 1999,
among the Company, the Trustee and CRSS Constructors, Inc.*

10.10 The Account Agreement, dated as of June 3, 1999, among the Company, the
Trustee and IBJ Whitehall Bank and Trust Company.*

10.11 The Security Agreement, dated as of June 3, 1999, made by the Company in
favor of the Trustee.*

10.12 The Manager Subordination Agreement, dated as of June 3, 1999, by Riviera
Gaming Management of Colorado in favor of the Trustee.*

10.13 The Collateral Assignment of Trademark, dated as of June 3, 1999, by and
between the Company and the Trustee.*
<PAGE>

10.14 The Collateral Assignment, dated as of June 3, 1999, by and between the
Company and the Trustee.*

10.15 The Pledge and Assignment Agreement, dated as of June 3, 1999, by and
between the Company and the Trustee.*

10.16 Deposit Account Agreement, dated as of June 1999, among Bank of
America, Riviera Holdings and First American Title Insurance Company.*

10.17 Construction Contract, made as of December 29, 1997, among the Company,
Weitz-Cohen Construction Co. and Melick Associates, Inc.*

10.18 Letter Agreement, dated January 6, 1999, between Riviera Gaming Management
and Jim Davey.*

10.19 Letter Agreement, dated January 15, 1999, between Riviera Gaming
Management and Tom Guth.*

10.20 Master Lease Agreement dated December 13, 1999 between PDS Financial
Corporation-Colorado and Riviera Black Hawk, Inc. for furniture, fixtures,
gaming and other equipment.**

10.21 Lease Schedule No. 1 dated January 25, 2000 under Master Lease
Agreement dated December 13, 1999 between PDS Financial Corporation-Colorado and
Riviera Black Hawk, Inc. for furniture, fixtures, gaming and other equipment.**

10.22 Lease Schedule No. 2 dated January 25, 2000 under Master Lease
Agreement dated December 13, 1999 between PDS Financial Corporation-Colorado and
Riviera Black Hawk, Inc. for furniture, fixtures, gaming and other equipment.**

10.23 Lease Schedule No. 3 dated February 17, 2000 under Master Lease
Agreement dated December 13, 1999 between PDS Financial Corporation-Colorado and
Riviera Black Hawk, Inc. for furniture, fixtures, gaming and other equipment.**

10.24 Lease Schedule No. 4 dated February 17, 2000 under Master Lease
Agreement dated December 13, 1999 between PDS Financial Corporation-Colorado and
Riviera Black Hawk, Inc. for furniture, fixtures, gaming and other equipment.**

12.01 Statement in re Computation of Ratios.*

Pursuant to Item 601(b)(2) of Regulation S-K, the schedules to this Agreement
are omitted. The Exhibit contains a list identifying the contents of all
schedules and the Registrants agree to furnish supplementary copies of such
schedules to the Commission upon request.

* Previously filed.

** Filed herewith.

*** To be Filed in an amendment to this Form 10K.

(b) Financial Statement Schedules: Schedules not listed above
are omitted because of the absence of the conditions under which they are
required or because the information required by such omitted schedules is set
forth in the financial statements or the notes thereto.

EXHIBIT 10.20
MASTER LEASE AGREEMENT

THIS MASTER LEASE AGREEMENT ("Lease" or "Agreement") is made and entered
into on December 31, 1999, by and between PDS FINANCIAL CORPORATION-COLORADO, a
Colorado corporation ("PDS", "Lessor" or "First Party"), whose address is 6171
McLeod Drive, Las Vegas, Nevada 89120-4048 and RIVIERA BLACK HAWK, INC., a
Colorado corporation ("Lessee" or "Second Party"), whose addresses are 400 Main
Street, Black Hawk, Colorado 80422 and 2901 Las Vegas Boulevard South, Las
Vegas, NV 89109.

RECITALS

WHEREAS, First Party desires to lease to Second Party, and Second Party
desires to lease from First Party in accordance with the terms and conditions
contained herein, certain equipment more fully described in the Lease Schedule
or Schedules, referred to herein as a "Lease Schedule" or "Lease Schedules", as
may from time to time be executed by Second Party.
NOW, THEREFORE, IN CONSIDERATION of the mutual covenants and conditions
set forth below and other good and valuable consideration, the receipt and
sufficiency of which all parties acknowledge, it is agreed as follows:

AGREEMENT

1. LEASE. This Lease establishes the general terms and conditions by which First
Party shall lease the Equipment (defined below) to Second Party. Each Lease
Schedule shall be in the form provided by First Party and shall incorporate by
reference the terms of this Lease. All equipment described in such Lease
Schedules shall be collectively referred to as the "Equipment" and individually
referred to as a "Unit" and is to be installed in and to be used in connection
with the business location described in the Certificate of Delivery,
Installation and Acceptance executed by Second Party in connection with a
particular Lease Schedule ("Premises").

2. TERM: RENT AND PAYMENT.

2.1. Term. The term of this Lease shall commence on the date set forth in each
Lease Schedule (the "Commencement Date") and continue as specified in such Lease
Schedule ("Term").

2.2. Rent and Payment. Second Party's obligation to pay rent
for the Equipment shall commence on the Commencement Date and continue for the
Term. The Basic Rent, as set forth and defined in the Lease Schedules, shall be
payable in such amount and on such date as set forth in the Lease Schedule. Any
amounts payable by Second Party, other than Basic Rent, shall be deemed
Additional Charges. Additional Charges shall be due and payable in accordance
with the terms of the Lease Schedule or if not set forth therein, on the Basic
Rent payment date following the date upon which the aforesaid Additional Charges
accrue, or the last day of the Term, whichever is earlier. Second Party shall
make all payments at the address of First Party set forth above or at such other
address as First Party may designate in writing. As used herein, the term "Rent"
shall mean all Basic Rent and Additional Charges as described in the Lease
Schedules.

2.3. Late Charge. If any Rent is not received by First Party or its assignees
within ten (10) days after written notice then a late charge on such Rent shall
be due and payable with such Rent in an amount equal to four percent (4%) of the
amount past due or any part thereof, as reimbursement for administrative costs
and not as a penalty.

2.4. ACH. Second Party shall complete, execute and deliver to First Party an
Authorization for Automatic Payment form authorizing First Party to initiate
variable entries to Second Party's checking or savings account at a specified
financial institution for the purpose of making payments to Second Party as
contemplated by this Lease and the Lease Schedules.

2.5. Additional Fees and Charges. Second Party further agrees to pay all of
First Party's out-of-pocket costs and expenses incurred by First Party (not to
exceed the lessor of $50,000.00 or 3% of the total Lease Schedule amount) in
connection with the closing of all transactions contemplated by this Lease,
without limitation: (a) the fees and costs of legal counsel utilized by First
Party (including in-house counsel); (b) all other out-of-pocket expenses
incurred by or on behalf of First Party; and (c) a $500.00 document preparation
fee for each Lease Schedule.

2.6. First Party's Performance of Second Party's Obligations. If Second Party
fails to comply with any of its covenants or obligations herein within 10 days
after written notice, First Party may, at its option, perform such covenants or
obligations on Second Party's behalf without thereby waiving such conditions or
obligations or the failure to comply therewith and all sums advanced by First
Party in connection therewith shall be repayable by Second Party as Additional
Charges. No such performance shall be deemed to relieve Second Party of its
obligations herein.

3. CERTIFICATE OF ACCEPTANCE. Second Party shall deliver to First Party a
Certificate of Delivery, Installation and Acceptance
("Certificate of Acceptance") in the form provided by the First Party.
1
<PAGE>
4. NET LEASE. Except as provided in Section 13 below and except as specifically
provided elsewhere herein this Lease including each Lease Schedule is a net
lease and Second Party's obligation to pay all Rent due and the rights of First
Party or its assignees in, and to, such Rent shall be absolute and unconditional
under all circumstances, notwithstanding: [i] any setoff, abatement, reduction,
counterclaim, recoupment, defense or other right which Second Party may have
against First Party, its assignees, the manufacturer or seller of any Unit, or
any other person for any reason whatsoever, including, without limitation, any
breach by First Party of this Lease; [ii] any defect in title, condition,
operation, fitness for use, or any damage to or destruction of, the Equipment
(except for Equipment which was provide by Lessor's Slot Source division); [iii]
any interruption or cessation of use or possession of the Equipment for any
reason whatsoever; or (iv) any insolvency, bankruptcy, reorganization or similar
proceedings instituted by or against Second Party.

5. LOCATION, USE, MAINTENANCE, IDENTIFICATION AND INSPECTION.
5.1. Location, Use, Maintenance and Repairs.

5.1.1. Second Party shall keep and use the Equipment on the Premises and shall
not relocate or remove any Unit without the prior, written consent of First
Party.

5.1.2. Second Party shall at all times and, at its sole cost and expense,
properly use and maintain the Equipment in good operating condition, other than
the normal wear and tear, and make all necessary repairs, alterations and
replacements thereto (collectively, "Repairs"), all of which shall immediately
become the property of First Party and subject to this Lease.

5.1.3. Second Party shall comply with manufacturer instructions relating to the
Equipment, and any applicable laws and governmental regulations.

5.1.4. Second Party shall pay all costs and expenses associated with removal
and return of the Equipment.

5.2. Identification and Inspection. Upon request by First Party, Second Party
shall mark each Unit conspicuously with appropriate labels or tags furnished by
First Party and maintain such markings through the Term to clearly disclose that
said Unit is being leased from First Party. Subject to Second Party's reasonable
security requirements, Second Party shall permit First Party's representatives
to enter the Premises where any Unit is located to inspect such Unit.

6. LOCATION: PROPERTY RIGHTS: LIENS AND ENCUMBRANCES.
6.1. Personal Property. Each Unit is personal property and Second Party shall
not affix any Unit to realty so as to change its nature to a fixture or real
property and agrees that each Unit shall remain personal property during the
Term. First Party expressly retains ownership and title to the Equipment. Second
Party hereby agrees that it shall be responsible for all of First Party's
obligations as required by the state gaming laws and regulations regarding
maintenance, use, possession and operation of the Equipment. Second Party hereby
authorizes, empowers, and grants a limited power of attorney to First Party to
record and/or execute and file, on Second Party's behalf, any certificates,
memorandums, statements, refiling, and continuations thereof as First Party
deems reasonably necessary or advisable to preserve and protect its interest
hereunder. The parties intend to create a lease agreement and the relationship
of lessor and lessee between themselves. Nothing in this Lease shall be
construed or interpreted to create or imply the existence of a finance lease or
installment lease contract. First Party makes no representation regarding the
treatment of this Lease, the Equipment or the payment of obligations under this
Lease for financial statement reporting or tax purposes.

6.2. Protection of First Party's Property Rights. First Party has the right to
place on each Unit, a medallion or other marker of suitable size stating in
substance [i] that the Equipment is the property of First Party, and [ii] that
First Party, to protect its rights, has filed or retains the right to file in
appropriate government offices a UCC Financing Statement covering the Equipment.
Second Party will cooperate with First Party in preparing, executing and filing
such UCC Financing Statements. Second Party hereby agrees that a copy of this
Lease or any Lease Schedule signed by the Second Party when attached to any
financing statement or similar instrument, the filing of which is necessary to
perfect a security interest, shall be deemed Second Party's signature on such
instrument.

6.3. Liens and Encumbrances. Unless otherwise provided herein, Second Party
shall not directly or indirectly create, incur or suffer a mortgage, claim,
lien, charge, encumbrance or the legal process of a creditor of Second Party of
any kind upon or against this Lease or any Unit. Second Party shall at all times
protect and defend, at its own cost and expense, the title of First Party from
and against such mortgages, claims, liens, charges, encumbrances and legal
processes of creditors of Second Party and shall keep all the Equipment free and
clear from all such claims, liens and legal processes. If any such lien or
encumbrance is incurred, Second Party shall immediately notify First Party and
shall take all actions required by First Party to remove the same.

7. RETURN OF EQUIPMENT.
7.1. Duty of Return. At the expiration of any Term or upon termination of the
Lease, Second Party at its expense shall return each Unit to First Party or its
designee at the First Party's distribution facility in Las Vegas, Nevada, in
accordance with appropriate gaming laws and regulations and the terms and
conditions of the Lease Schedule. Each Unit shall include all parts,
2
<PAGE>
accessories, attachments, etc. originally delivered to Second Party and shall
conform to all of the manufacturer's specifications and gaming laws and
regulations with respect to normal function, capability, design and condition
less normal wear and tear. The term "normal wear and tear" includes minor
scratches, dents, and chips to the exterior of the device and wear to the
interior components of the Unit that is consistent with components of comparably
aged machines. Upon return of the Unit, Second Party agrees to reimburse First
Party for the full retail cost of equipment that is non-functioning or missing
components including, but not limited to, components at the following indicated
reimbursement rate, (i) Door $400.00; (ii) Validator head $550.00; (iii)
Validator Can $245.00; (iv) Monitor $250.00; (v) Circuit Board $420.00; (vi)
Hopper $350.00; (vii) Glass panels $300.00 each.
7.2. Failure to Return. If Second Party fails to return the Equipment or
any portion thereof, as provided above, within fourteen (14) days following
expiration of any Term or termination of the Lease, then Second Party shall pay
to First Party an additional month's Rent for each month, or any portion
thereof, that Second Party fails to comply with the terms of this return
provision, until all of the Equipment is returned, as provided herein.

8. RISK OF LOSS: INSURANCE.
8.1. Risk of Loss. Second Party shall bear the risk of all loss or damage to any
Unit or caused by any Unit during the period from the time the Unit is shipped
by First Party or the Unit's vendor until the time it is returned as provided
herein.

8.2. Unit Replacement. If any Unit is lost, stolen, destroyed, seized by
governmental action or, in Second Party's opinion or First Party's opinion,
damaged ("Event of Loss"), this Lease shall remain in full force and effect
without abatement of Rent and Second Party shall promptly replace such Unit at
its sole expense with a Unit of equivalent value and utility, and similar kind
and in substantially the same condition as the replaced Unit immediately prior
to the Event of Loss. Title to such replacement unit immediately shall vest and
remain in First Party, and such unit shall be deemed a Unit under this Lease.
Upon such vesting of title and provided Second Party is not in default under
this Lease, First Party shall cause to be paid to Second Party or the vendor of
the replacement unit any insurance proceeds actually received by First Party for
the replacement Unit. Second Party shall promptly notify First Party of any
Event of Loss and shall provide First Party with and shall enter into, execute
and deliver such documentation, as First Party shall request with respect to the
replacement of any such Unit.

8.3. Insurance.
8.3.1. Second Party shall obtain and maintain in full force and effect the
following insurance: [i] all risk, full replacement cost damage insurance on the
Premises; [ii] commercial general liability insurance; [iii] all risk, full
replacement cost property damage insurance on the Equipment (in no event less
than the outstanding balance of the obligations hereunder), and [iv] workers
compensation insurance.

8.3.2. Such insurance shall: [i] name First Party, its parents, subsidiaries,
affiliates and assignees, as additional insureds and as first loss payees as
their interests may appear (general liability and property only); [ii] provide a
waiver of subrogation to First Party (workers compensation only); and [iii]
provide that the POLICY MAY NOT BE CANCELED OR MATERIALLY ALTERED WITHOUT THIRTY
(30) DAYS PRIOR WRITTEN NOTICE TO LESSOR.

8.3.3. In the event the Equipment includes automobiles, trucks, boats or other
vehicles, Second Party shall obtain and maintain in full force and effect
commercial liability coverage in an amount not less than $1,000,000.00 combined
single limit. Such insurance shall: [i] name First Party, its parents,
subsidiaries, affiliates and assignees, as additional insureds and first loss
payees as their interests may appear; and [ii] provide that the policy may not
be canceled or materially altered without thirty (30) days prior written notice
to First Party.

8.3.4. All such insurance required herein shall be placed with companies having
a rating of at least A, Class XII or better by Best's rating service. Second
Party shall maintain the insurance throughout the contract period and furnish to
First Party until the payment in full of any obligations herein, insurance
certificates of a kind satisfactory to First Party showing the existence of the
insurance required hereunder and premium paid.

9. LESSOR'S PURCHASE AND PERFORMANCE. Upon receipt of a Lease Schedule executed
and delivered by Second Party, Second Party shall bear all responsibilities and
perform all obligations of First Party, which may arise as a result of any
document or agreement between First Party and a vendor in connection with the
Equipment to be leased under said Lease Schedule, other than payment of the
purchase price.

10. TAXES.
10.1. Taxes. Second Party agrees to report, file, pay promptly when due to the
appropriate taxing authority and indemnify, defend, and hold First Party
harmless from and against any and all taxes (including gross receipts),
assessments, license fees and other federal, state or local governmental charges
of any kind or nature, together with any penalties, interest or fines related
thereto (collectively, "Taxes") that pertain to the Equipment, its purchase, or
this Lease, except such Taxes based solely upon the net income of First Party,
including, but not necessarily limited to all property, sales and/or use taxes
levied or assessed regardless of whether such taxes are levied or assessed
against First Party or Second Party.
3
<PAGE>
10.2. First Party's Filing of Taxes. Notwithstanding the foregoing, First Party
at its election may report and file sales and/or use taxes, which are filed and
paid periodically through the Term, and the amounts so due may be invoiced to
Second Party and payable as specified therein.

11. INDEMNIFICATION.
11.1. Except for the negligence of First Party, its employees or agents and
assigns, Second Party hereby assumes liability for and agrees to indemnify,
defend, protect, save and hold harmless the First Party, its agents, employees,
directors and assignees from and against any and all losses, damages, injuries,
claims, administration of claims, penalties, demands and all expenses, legal or
otherwise (including reasonable attorneys' fees) of whatever kind and nature
arising from the purchase, ownership, use, condition, operation or maintenance
of the Equipment, or any agreement between First Party and a vendor (including
purchase or sales orders), until the Equipment is returned to First Party to the
extent First Party's loss is not covered by insurance. Any claim, defense,
setoff, or other right of Second Party against any such indemnified party shall
not in any way affect, limit, or diminish Second Party's indemnity obligations
hereunder. Second Party shall notify First Party immediately as to any claim,
suit, action, damage, or injury related to the Equipment of which Second Party
has actual or other notice and shall, at its own cost and expense, defend any
and all suits, including frivolous suits and claims, which may be brought
against First Party, shall satisfy, pay and discharge any and all judgments and
fines that may be recovered against First Party in any such action or actions,
provided, however, that First Party shall give Second Party written notice of
any such claim or demand. Second Party agrees that its obligations under this
section shall survive the expiration or termination of this Lease.

11.2. First Party hereby covenants and agrees to indemnify, defend, save and
hold Second Party, it's parent companies, subsidiaries, affiliates, successors,
heirs and assigns, and their directors, officers, shareholders and employees,
free, clear and harmless from and against any and all liabilities, losses,
costs, expenses (including reasonable attorneys' fees), damages, actions, suits,
debts, judgments, claims, administration of claims, liens, demands and
obligations of any and kind, nature, character and description, known or
unknown, accrued or not yet accrued, whether anticipated or unanticipated caused
by, resulting from, or in any way connected with First Party's negligent acts,
or negligent acts of First Party's agents or employees, in connection with this
Agreement.

12. REPRESENTATIONS AND WARRANTIES. Second Party hereby represents and warrants
to First Party that:

12.1. It is an entity duly organized, validly existing andin good standing
under the laws of the state of its formation;

12.2. Second Party's true legal name is as set forth in the preamble hereto and
that is shall not change its name without thirty (30) days' written notice
to First Party;

12.3. It has the corporate power and authority to execute, deliver and perform
this Agreement and other instruments and documents required or contemplated
herein;

12.4. To the best of Lessee's knowledge, the execution, delivery and
performance of this Agreement has been duly authorized by all necessary action
on the part of the corporation, do not and will not require the approval of the
shareholders of the corporation and do not and will not contravene the
Certificate of Incorporation or by-laws of the corporation, and to the best of
Lessee's knowledge does not constitute a default of any indenture, contract,
agreement, mortgage, deed of trust, document or instrument to which Second Party
is a party or by which Second Party is bound;

12.5. The person(s) executing this Agreement on behalf of Second Party has or
have been properly authorized to execute the same;

12.6. To the best of Lessee's knowledge, with reasonable due diligence, it
has obtained, maintains, and will maintain, on an active and current basis, all
licenses, permits, registrations, approvals and other authority as may be
required from any applicable federal, state, tribal and local governments and
agencies having jurisdiction over it and the subject matter of this Agreement;

12.7. To the best of Lessee's knowledge, there are no suits, actions,
proceedings or investigations pending or threatened or any basis therefore which
might materially or adversely affect the condition, business or prospects of it
or affect the ability of it to perform its obligations under this Agreement or
have a material adverse effect upon the financial condition of it or the
validity or enforceability of this Agreement;

12.8. It is not currently the subject of any pending or threatened bankruptcy
or insolvency proceeding;

12.9. As of the date hereof, it's obligations under this Agreement are not
subject to any defense, set off or counterclaim;

12.10. This Agreement constitutes a valid binding agreement and is
enforceable in accordance with its terms, except to the extent that enforcement
of any remedies may be limited by applicable bankruptcy, insolvency, general
principles of equity or other similar laws affecting generally the enforcement
of creditor's remedies;
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12.11. There have been no amendments, modifications, waivers or releases
with respect to this Agreement or any provisions hereof, whether oral or written
prior to execution hereof;

12.12. The location of Second Party's primary place of business is set
forth herein and will not be changed without thirty (30) days' prior written
notice to First Party;

12.13. Second Party is, and shall remain at all times during the Term, in
compliance with all covenants (specifically including financial covenants) and
conditions of that $45,000,000.00 Indenture for 13% First Mortgage Notes due
2005 issued by Second Party on or about May 27, 1999 (the "Indenture"), which
are hereby incorporated into this Lease by this reference; and

No further order, consent, approval, license, authorization or
validation of, or filing, recording or registration with, or exemption by, any
governmental, regulatory or public or tribal body or authority is required in
connection with the execution, delivery and performance of, or the legality,
validity, binding effect or enforceability of this Agreement.

13. WARRANTY: DISCLAIMERS AND LIMITATIONS OF LIABILITY REGARDING EQUIPMENT.
13.1. Each Unit subject to this Lease or any Lease Schedule is leased in a
functional condition. First Party warrants that for a period of thirty (30) days
following delivery, the new, custom reconditioned, Quick Ship, Fast Track and/or
functional gaming devices or equipment leased in any Lease Schedule will be
mechanically sound and in good working order ("Warranty Period"). Second Party's
sole and exclusive remedy in the event of defect is expressly limited to the
restoration of the Unit to good working condition by adjustment, repair or
replacement of defective parts, at Second Party's election. There are no other
warranties, express or implied, including, but not limited to, warranties of
merchantability or fitness for a particular purpose. No affirmation of fact,
including, but not limited to, statements regarding suitability for use or
performance of the Equipment shall be deemed to be a warranty of First Party for
any purpose.

13.2. The Second Party will bear the cost of returning any defective Unit to
First Party, including shipping and reasonable packaging. First Party will bear
the cost of returning the repaired or replacement Unit to the Second Party,
including shipping and reasonable packaging. If any Unit provided by First
Party's Slot Source Division is delivered to Second Party in a defective
condition, First Party will bear the cost of retrieving the repaired or
replacement Unit from the Second Party and returning such Unit to Second Party,
including shipping and reasonable packaging. Repair of damage caused by the
Second Party's negligence or intent, or damage caused by third parties is the
responsibility of the Second Party and shall in no event be the responsibility
of First Party. First Party shall not be responsible or liable for any revenues
foregone by the Second Party, while a Unit not functioning properly. First Party
shall also not be responsible or liable for any losses, damages, injuries,
claims, penalties, demands and all expenses, legal or otherwise (including
reasonable attorneys' fees) of whatever kind and nature arising from any patron
disputes involving the Equipment. The liability of First Party and the
manufacturer of any Unit leased hereunder, whether in contract, in tort, under
warranty, in negligence or otherwise, shall not exceed the fair market value of
the Unit itself and under no circumstances shall First Party or the manufacturer
of any Unit be liable for direct, special, indirect, or consequential damages.
Neither First Party nor any manufacturer of any Unit shall be liable in any
respect for the acceptance of counterfeit and/or fraudulent materials (i.e.
tokens, coins, bills, etc.) by the Equipment. Any unauthorized modification,
alteration, or revision of all or any portion of the Equipment shall cause the
warranty described above to be null and void. First Party, its affiliates,
subsidiaries, representatives, and agents make no other warranty, express or
implied. IN NO EVENT SHALL LESSOR BE LIABLE FOR DIRECT, INDIRECT, SPECIAL, OR
CONSEQUENTIAL DAMAGES, INCLUDING WITHOUT LIMITATION LOSS OF PROFITS, ARISING OUT
OF THIS LEASE OR ANY LEASE SCHEDULE REGARDLESS OF THE NATURE OF ANY CLAIM MADE
BY LESSEE.

14. ASSIGNMENT OF LEASE.
14.1. Assignment by First Party. Second Party acknowledges and agrees that First
Party may assign, mortgage, or otherwise transfer its interest thereunder and/or
in the Equipment to others ("Assignees") without any consent of Second Party,
provided however all such Assignees must be acceptable to all gaming authorities
with any jurisdiction over these matters and that Second Party shall be notified
of any assignment. Accordingly, Second Party and First Party agree that upon
such assignment, Second Party (i) shall acknowledge such assignment in writing
by executing a Notice, Consent and Acknowledgment of Assignment furnished by
First Party; (ii) shall promptly pay all Rent when due to the designated
Assignees, notwithstanding any defense, setoff, abatement, recoupment, reduction
or counterclaim whatsoever that Second Party may have against First Party; (iii)
shall not permit the Lease or Lease Schedule so assigned to be amended or the
terms thereof waived without the prior written consent of the Assignees; (iv)
shall not require the Assignees to perform any obligations of First Party under
such Lease Schedule; (v) shall not terminate or attempt to terminate the Lease
or Lease Schedule on account of any default by First Party; and (vi)
acknowledges that any Assignee may reassign its rights and interest with the
same force and effect as the assignment described herein.

14.2. Assignment or Sublease by Second Party. Second Party shall not assign this
Lease or any Lease Schedule or assign its rights in or sublet the Equipment, or
any interest therein without First Party's and its Assignee's prior written
consent.
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15. FINANCIAL INFORMATION; FURTHER ASSURANCES.

15.1. Financial Information. Throughout the Term, Second Party shall deliver to
First Party copies of all current financial information of Second Party, which
will reflect the financial condition and operations of Second Party as well as
such other information regarding Second Party reasonably requested by First
Party or its Assignees.

15.2. Further Assurances. Second Party shall execute and deliver to First Party,
such other documents, and take such further action as First Party may request in
order to effectively carry out the intent and purposes of this Lease and the
Lease Schedules. All documentation shall be in a form acceptable to First Party
and its Assignees.

15.3. Lease Agreement. If any court of competent jurisdiction should determine
that this Lease constitutes a security arrangement as opposed to a true lease,
the parties then agree that this Lease shall constitute a security agreement
within the meaning of the Uniform Commercial Code and that the First Party shall
be considered a secured party under the provisions thereof and shall be entitled
to all the rights and remedies of a secured party and Second Party, as debtor,
grants to First Party, as secured party, a security interest in the Equipment;
provided nothing herein shall be construed nor shall the inclusion of this
paragraph be interpreted as derogating from the stated intent and contractual
understanding of the parties that this is a true lease.

16. DEFAULT BY SECOND PARTY. Second Party shall be deemed in default under this
Agreement upon the occurrence of any one of the following events ("Event of
Default"):

16.1. Failure to make any payment due under this Agreement within ten
(10) days after written notice;

16.2. Second Party's cancellation, termination, alteration, or rescission
of the Authorization for Automatic Payment without the prior approval of First
Party;

16.3. Failure to perform any other obligation under this Agreement within
thirty (30) days after receipt of written notice of default and failure to cure;
provided, however, that no notice shall be required where a breach or threatened
breach would cause irreparable harm to First Party and First Party may
immediately seek equitable relief in a court of competent jurisdiction to enjoin
such breach;

16.4. Second Party shall fail to pay its
debts as they become due, shall make an assignment for the benefit of its
creditors, shall admit in writing its inability to pay its debts as they become
due, shall file a petition under any chapter of the Federal Bankruptcy Code or
any similar law, state or federal, now or hereafter existing, shall become
"insolvent" as that term is generally defined under the Federal Bankruptcy Code,
shall in any involuntary bankruptcy case commenced against it file an answer
admitting insolvency or inability to pay its debts as they become due, or shall
fail to obtain a dismissal of such case within one hundred twenty (120) days
after its commencement or convert the case from one chapter of the Federal
Bankruptcy Code to another chapter, or be the subject of an order for relief in
such bankruptcy case, or be adjudged a bankrupt or insolvent, or shall have a
custodian, trustee or receiver appointed for, or have any court take
jurisdiction of its property, or any part thereof, in any proceeding for the
purpose of reorganization, arrangement, dissolution or liquidation, and such
custodian, trustee or receiver shall not be discharged, or such jurisdiction
shall not be relinquished, vacated or stayed within sixty (60) days of the
appointment;

16.5. Second Party shall be dissolved, liquidated or wound up or is
enjoined, restrained, fails or is in any way prevented from maintaining its
existence as a going concern in good standing (excepting, however,
reorganizations, consolidations and/or mergers into or with affiliates owned by,
owning or under common control of or with such entity or into the parent of such
entity, provided the succeeding organization assumes and accepts such entity's
obligation hereunder);

16.6. Second Party attempts to remove, sell, transfer, encumber, part with
possession or sublet the Equipment or any unit thereof without the prior written
consent of First Party;

16.7. Second Party materially defaults (in excess of $1,000,000.00) under
any mortgage, indenture or instrument under which there may be issued or by
which there may be secured or evidenced, any indebtedness of Second Party for
money borrowed, whether such indebtedness now exists or shall be created
hereafter, which material default (monetary or otherwise) is not cured within
(30) days;

16.8. Any unit of the Equipment is lost, stolen or destroyed and not
replaced within a reasonable time with items of similar utility and value
subject to availability;

16.9. Any unit of the Equipment is attached, levied upon, encumbered,
pledged, or seized under any judicial process, which has not been bonded over,
removed, or other satisfactory assurances given to First Party within fifteen
(15) days of written notice;
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16.10. Any warranty or representation made or furnished to First Party by
or on behalf of Second Party is false or misleading in any material respect when
made or furnished and is not cured within sixty (60) days of written notice;

16.11. Failure of Second Party to maintain in full force and effect the
licenses, permits and certifications that may be required under any applicable
gaming laws for the operation of Second Party 's business, which failure is not
remedied to the satisfaction of applicable gaming authorities within fifteen
(15) days of written notice;

16.12. The revocation of any gaming license of Second Party;

16.13. The denial of any gaming license application of Second
Party (but not as to individual applicants);

16.14. Failure of Second Party to comply materially with all gaming statutes
and regulations;

16.15. Failure of Second Party to maintain the insurance required by this
Agreement, which failure has not been cured within three (3) business days of
written notice;

16.16.Except as permitted under Section 14.2 above, any other sale, change in
control or any transfer of a majority of Second Party 's business or assets;
and/or

16.17. If a material event of default (defined as a default in any transaction
in excess of $1,000,000) occurs under any mortgage, indenture or instrument
under which there may be issued or by which there may be secured or evidenced
any indebtedness of Second Party for money borrowed, whether such indebtedness
now exists or shall be created hereafter, which event of default is not cured
within thirty (30) days or, in the event of a non-monetary default, within such
reasonable period of time as may be agreed upon by the parties hereto.

17. FIRST PARTY REMEDIES.

17.1. Second Party acknowledges that the enforcement of this Agreement may
require approval of certain regulatory authorities and copies of all Default
Notices, legal proceedings, etc. will be forwarded to the appropriate agency as
required by state law or regulation. Second Party further acknowledges that upon
any Event of Default, and at any time thereafter, First Party, may in addition
to any and all rights and remedies it may have at law or in equity, without
notice to or demand upon any party to this Agreement and at its sole option:

17.1.1. Declare all amounts remaining unpaid under this Agreement immediately
due and payable and interest shall accrue on any outstanding balance due First
Party at a rate of 1.5% per month, which is 18% per annum, until paid in full;

17.1.2. Proceed by appropriate court action or other proceeding, either at law
or in equity to enforce performance by Second Party of any and all covenants of
this Agreement;

17.1.3. Enter onto Second Party's premises in person or by agentand take
possession of the Equipment;

17.1.4. Require Second Party to return the Equipment, at Second Party's
expense, to a place designated by First Party;

17.1.5. Render the Equipment unusable in such manner as is reasonable under the
circumstances;

17.1.6. Dispose of the Equipment, as First Party in the good faith exercise
of its discretion deems necessary or appropriate;

17.1.7. Without demand, advertisement or notice of any kind (except such
notice as may be required under the Uniform Commercial Code, if applicable, and
all of which are, to the extent permitted by law, hereby expressly waived),
sell, resell, lease, re-lease or dispose of the Equipment in any manner;

17.1.8. If not already the property of First Party, purchase the Equipment
at public sale with credit on any amounts owed;

17.1.9. If not already the property of First Party, purchase the Equipment at
private sale for a price and on such terms as is determined by an independent
appraiser appointed by First Party to be the price and terms at which a willing
seller would be ready to sell to an able buyer;

17.1.10. Proceed immediately to exercise each and all of the powers, rights,
and privileges reserved or granted to First Party under this Agreement;

17.1.11. Subject to applicable and appropriate gaming laws, rules, laws and
regulations, and required approvals, take possession, sell and/or re-lease any
unit of the Equipment as First Party may desire, in its sole discretion without
demand or notice, wherever the same may be located, without any court order or
pre-taking hearing, any and all damages occasioned by such retaking being
specifically waived herein by Second Party;
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17.1.12. Take control of any and all proceeds to which Second Party is entitled;

17.1.13. Exercise any other remedies available to a First Party under the
Uniform Commercial Code, if applicable;

17.1.14. Immediately seek equitable relief in a court of competent
jurisdiction to enjoin a breach of this Agreement where said breach or
threatened breach would cause irreparable harm to First Party; and/or

17.1.15. Exercise any other rights or remedies provided or available to
First Party at law or in equity.

17.2. No waiver by First Party, its affiliates, successors or assigns, of any
default, including, but not limited to, acceptance of late payment after the
same is due, shall operate as a waiver of any other default or of the same
default on a future occasion. In the Event of Default, First Party shall be
entitled to recover all costs, expenses, losses, damages and legal costs
(including reasonable attorneys' fees) incurred by First Party in connection
with the enforcement of First Party's remedies. All rights and remedies of First
Party are cumulative and are in addition to any other remedies provided for at
law or in equity, including the Uniform Commercial Code, if applicable, and may,
to the extent permitted by law, be exercised concurrently or separately. A
termination hereunder shall occur only upon written notice by First Party to
Second Party and no repossession or other act by First Party after default shall
relieve Second Party from any of its obligations to First Party hereunder unless
First Party so notifies Second Party in writing.

17.3. In the event of a default by Second Party, First Party may, at its
option, declare this Agreement terminated without further liability or
obligation to the defaulting party.

17.4. Article 2A Waivers. In the event that Article 2A of the Uniform
Commercial Code is adopted under applicable law and applies to this Lease, then
Second Party, to the extent permitted by law, waives any and all rights and
remedies conferred upon a lessee by Sections 2A-508 through 2A-522 of such
Article 2A, including, but not limited to, Second Party's rights to: (i) cancel
or repudiate this Lease; (ii) reject or revoke acceptance of the Equipment;
(iii) claim, grant or permit a security interest in the Equipment in Second
Party's possession or control for any reason; (iv) deduct from Rent all or any
part of any claimed damages resulting from First Party's default, if any, under
this Lease; (v) accept partial delivery of the Equipment; (vi) "cover" by making
any purchase or lease of or contract to purchase or lease equipment in
substitution for Equipment designated in this Lease; and (vii) obtain specific
performance, replevin, detinue, sequestration, claim and delivery or the like
for any Equipment identified to this Lease. To the extent permitted by
applicable law, Second Party also hereby waives any rights now or hereafter
conferred by statute or otherwise which may require First Party to sell, lease
or otherwise use any Equipment in mitigation of First Party's damages or which
may otherwise limit or modify any of First Party's rights or remedies,
including, without limitation, any limit on the determination of the amount of
First Party's Loss provided in Article 2A of the Uniform Commercial Code.

18. SECOND PARTY'S REMEDIES. In the event of any default by Lessor hereunder,
which is not cured within 30 days of notice after written notice, Lessee shall
have the following rights and remedies:

18.1. The right to take such action or steps as are necessary to cure Lessor's
defaults, which have not been cured within 30 days notice (except in the
event of an emergency); and

18.2. All rights and remedies available in equity or at law.

19. COMPLIANCE WITH GOVERNMENTAL AGENCIES.

19.1. All services furnished hereunder shall comply with the requirements of all
governmental authorities having jurisdiction (the "Authorities"). The terms and
conditions of the Lease or any Lease Schedule shall be conditioned upon approval
by the Authorities, if such is required. It is understood that, if at any time
either prior to or subsequent to the initial starting date of the Lease or any
Lease Schedule, the Authorities shall render a final determination either
disapproving the terms and conditions of the Lease or any Lease Schedule or
denying the application of First Party for a gaming license, vendor registration
or casino service supplier, or if First Party already has such a license, the
qualifications of First Party that then, in either of such events, the Lease or
any lease schedule shall be deemed terminated, as of the date of such
disapproval or denial, as though such date were the date originally fixed herein
for the notice of termination of the Lease or any lease schedule.

19.2. If the Lease or any lease schedule is so terminated, then Second
Party shall tender payment to First Party of (i) any amounts then due and owing
under the Lease and any lease schedule, including but not limited to such items
as rent, late charges, and taxes paid by or assessed upon First Party, and (ii)
the amount equal to the Termination Value, as defined below, and First Party
shall transfer title to the Equipment to Second Party and in that event the
parties hereto shall have no further liability to each other. Second Party
agrees to comply with all requirements of every governmental authority, which
has jurisdiction over the Lease or any lease schedule and over Second Party.
Termination Value shall be defined as the net present value of the remaining
rentals due, including the purchase option amount, discounted at the original
all-in yield, for each lease schedule.
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20. WAIVER OF JURY TRIAL. The parties hereby knowingly and voluntarily waive
their right to a jury trial on any claim or cause of action based upon or
arising out of, directly or indirectly, this Lease or any Lease Schedules, any
dealings between the parties relating to the subject matter hereof or thereof,
and/or the relationship that is being established between the parties. The scope
of this waiver is intended to be all encompassing of any and all disputes that
may be filed in any court (including, without limitation, contract claims, tort
claims, breach of duty claims, and all other common law and statutory claims).
This waiver may not be modified orally, and the waiver shall apply to any
subsequent amendment, renewals, supplement or modifications to this Agreement or
the loan agreements. In the event of litigation, this Lease may be filed as a
written consent to a trial by the court.

21. MISCELLANEOUS.
21.1. Amendments or Modifications. This Lease shall not be modified or
amended except by an instrument in writing signed by or on behalf of the
parties hereto.

21.2. Binding Effect. This Lease shall be binding upon and inure to the
benefit of the parties and their respective, permitted successors, heirs,
executors, administrators, assigns, and all persons claiming by, through or
under them.

21.3. Captions, Headings and Titles. The captions, headings and titles of the
various sections of this Lease are for convenience only and are not to be
construed as confining or limiting in any way the scope or intent of the parties
or the provisions hereof. Whenever the context requires or permits, the singular
shall include the plural, the plural shall include the singular and the
masculine, feminine and neuter shall be freely interchangeable.

21.4. Compliance with All Laws. The Second Party shall not to violate any law or
regulation including, without limitation, any gaming law or regulation or to
engage in any act or omission which tends to bring discredit upon the gaming
industry or otherwise jeopardizes the other party's ability to engage in
business with businesses licensed by any applicable regulatory authorities.

First Party shall use its good faith judgment in determining whether any such
violation, act or omission of Second Party or its directors, officers or
managers, if any, places First Party's business or licenses at risk and upon
such determination First Party shall have the right to immediately terminate
this Lease or any Lease Schedule without further liability to Second Party.

21.5. Conduct. Second Party acknowledges that First Party, its subsidiaries and
affiliates, have a positive reputation in the finance and gaming industry and
that First Party and its subsidiaries and affiliates are subject to regulation
and licensing and desire to maintain their reputation and receive positive
publicity. Second Party therefore agrees that throughout the Term, Second
Party`s directors, officers and managers will not conduct themselves in a manner
which is contrary to the best interests of, nor in any manner that adversely
affects or is detrimental to, First Party, its subsidiaries or affiliates, and
will not directly or indirectly make any oral, written or recorded private or
public statement or comment that is disparaging, critical, defamatory or
otherwise not in the best interests of PDS or its subsidiaries or affiliates.
First Party shall use its good faith business judgment in determining whether
the conduct of Second Party`s directors, officers or managers adversely affects
PDS, its subsidiaries or affiliates, and upon such determination PDS shall have
the right to immediately terminate this Lease or any Lease Schedules without
further liability to Second Party.

21.6. Confidentiality.
21.6.1. Second Party shall not disclose information relating to the operations
of PDS, its affiliates or subsidiaries, to persons other than the management of
PDS or to those governmental or regulatory authorities having competent
jurisdiction over PDS or it's business, unless PDS shall have given prior
written consent for the release of such information. PDS may require Second
Party to execute a nondisclosure agreement in connection with this Agreement and
Second Party, if so requested by PDS, agrees to execute the same.

21.6.2. PDS and its employees shall keep all statistical, financial,
confidential, and/or personal data requested, received, stored or viewed by PDS
in connection with this Agreement in the strictest confidence. PDS agrees not to
divulge to third parties, without the written consent of Second Party, any such
information unless: [i] the information is known to PDS prior to obtaining the
same; [ii] the information is, at the time of disclosure by PDS, then in the
public domain; [iii] the information is obtained by PDS from a third party who
did not receive same, directly or indirectly from Second Party and who has no
obligation of secrecy with respect thereto; or [iv] the information is requested
by and divulged to a governmental or regulatory authority having competent
jurisdiction over PDS or it's business. PDS further agrees that it will not,
without the prior written consent of Second Party, disclose to any third party
any information developed or obtained by PDS in the performance of this
Agreement except to the extent that such information falls within one of the
categories described above.

21.7. Counterparts. This Lease may be executed in as many counterparts as may be
deemed necessary and convenient, and by the different parties hereto on separate
counterparts, each of which, when so executed, shall be deemed to be an
original, but all such counterparts together shall constitute but one and the
same document.
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21.8. Effective Only Upon Execution by Authorized Officer. Neither this Lease
nor any Lease Schedule shall be deemed to constitute an offer or be binding upon
First Party until executed by First Party's authorized officer. No
representations made by any First Party's salespersons or anyone else shall be
binding unless incorporated herein in writing. 21.9. Entire Agreement. This
Lease along with any Lease Schedules and related instruments executed in
connection therewith constitutes the entire agreement between the parties with
respect to the subject matter hereof and supersedes all prior agreements,
promises, negotiations, representations or understandings, whether written or
oral, between the parties hereto relating to the subject matter of this Lease or
any Lease Schedules. Any prior agreements, promises, negotiations,
representations or understandings, either oral or written, not expressly set
forth in this Lease, any Lease Schedule, or related instruments executed in
connection therewith shall no force or effect.

21.10. Further Assurances. The parties further covenant and agree to do, execute
and deliver, or cause to be done, executed and delivered, and covenant and agree
to use their best efforts to cause their successors and assigns to do, execute
and deliver, or cause to be done, executed and delivered, all such further acts,
transfers and assurances, for implementing the intention of the parties under
this Agreement, as the parties reasonably shall request. The parties agree to
execute any additional instruments or agreements necessary to effect the intent
of this Lease.

21.11. Governing Law.
21.11.1. The substantive and procedural laws of the State of Colorado shall
govern the validity, construction, interpretation, performance and enforcement
of this Agreement and the parties agree to jurisdiction in Colorado. The parties
also hereby agree that any action and/or proceeding in connection with this
Agreement shall only be brought in the venue of Gilpin County, Colorado.

21.11.2. In the event that Second Party is an Indian Tribe as defined by the
Indian Gaming Regulatory Act, 25 U.S.C. ss.2701 et seq. or a sovereign nation,
the parties agree that the immediate section above shall be null and void and
Second Party hereby grants a limited waiver of its Sovereign Immunity, for the
sole benefit of First Party, such waiver being limited to actions or claims by
First Party against Second Party, or by Second Party against First Party, which
shall arise directly from, or are related to, this Agreement. Any action brought
by or against First Party may be brought only in the United States District
Court most near Second Party`s primary place of business. The law to be applied
by said United States District Court in any such action shall be the law of the
State of Nevada, including the Uniform Commercial Code, as adopted by the State
of Nevada, without reference to any Nevada choice of law provisions.

21.11.3. Without in any way limiting the generality of the foregoing, Second
Party expressly authorizes any governmental or other agency authorities who have
the right and duty under applicable law to take any and all action authorized or
ordered by any court, including without limitation, entering the land of Second
Party and repossessing the Equipment or otherwise giving effect to any judgment
entered. It is the intent of the parties that First Party will be able to obtain
possession of the Equipment in accordance with the rights afforded it under
applicable laws and/or any court order.

21.12. Governmental Regulations. Notwithstanding anything in this Lease or any
Lease Schedule to the contrary, in the event any federal, state, local or other
governmental body's statutes, laws, rules, or regulations are
enacted/promulgated, the impact of which will materially impact the methods
and/or costs of First Party under this Lease or any Lease Schedule, then, in
that event, First Party, upon written notice to Second Party, may request a
renegotiation of this Lease or any Lease Schedule. Any modifications to this
Lease or any Lease Schedule resulting from such renegotiation shall become
effective on the latest date as permitted by the governmental body. In the event
the parties are unable to reach a satisfactory agreement during said
renegotiations, First Party shall have the right to cancel the Lease or any
Lease Schedule at any time by not less than sixty (60) days prior written notice
to Second Party, whereupon the Lease and/or Lease Schedule shall be null and
void.

21.13. Independence of Parties. All persons hired or employed by each party in
the discharge of this Lease shall be considered employees of that party and not
of any other party to this Lease and shall be solely and exclusively under the
hiring or employing party's direction and control. Neither party nor any of its
employees [i] shall be held or deemed in any way to be an agent, employee or
official of the other party, or [ii] shall have the authority to bind the other
party in any manner whatsoever. Each party further agrees to have all persons
employed by it properly covered by worker's compensation or employer's liability
insurance, as required by law and to assume and pay at its own cost all taxes
and contributions required by an employer under any and all unemployment
insurance, old age pensions, and other applicable so-called Social Security
Acts.

21.14. Intellectual Property Rights not conveyed. Nothing in this Lease shall be
construed as to grant or convey to Second Party any right, title or interest in
and to any intellectual property rights (including software, patent, copyright
and/or trademark) to any part of the Equipment.

21.15. Lease Irrevocable. This Lease is irrevocable for the full Term hereof and
the Rent shall not abate by reason of termination of Second Party's right of
possession and/or the taking of possession by the First Party or for any other
reason.
10
<PAGE>
21.16. License and Permits. Each party shall obtain and maintain on an
active and current basis, all licenses, permits, registrations, approvals and
other authority as may be required from any applicable federal, state, tribal
and local governments and agencies having jurisdiction over the subject matter
of this Lease and any Lease Schedule.

21.17. Multiple Second Parties. If more than one Second Party is named in this
Lease or a Lease Schedule the liability of each shall be joint and several.

21.18. No Joint Venture, Partnership or Agency Relationship. Neither this Lease
nor any Lease Schedule shall create any joint venture or partnership between the
parties. Nothing contained in this Lease and any Lease Schedule shall confer
upon either party any proprietary interest in, or subject a party to any
liability for or in respect of the business, assets, profits, losses or
obligations of the other. Nothing herein contained shall be read or construed so
as to make the parties a partnership, nor shall anything contained herein be
read or construed in any way to restrict the freedom of either party to conduct
any business or activity whatsoever without any accountability to the other
party. Neither party shall be considered to be an agent or representative of the
other party or have any authority or power to act for or undertake any
obligation on behalf of the other party except as expressly authorized by the
other party in writing. Any such unauthorized representation or action shall be
considered a breach of this Lease and any Lease Schedule.

21.19. Nondiscrimination. Neither party shall discriminate against any person on
the basis of race, color, sex, national origin, disability, age, religion,
handicapping condition (including AIDS or AIDS related conditions), or any other
class protected by United States federal law or regulation.

21.20. Non-Party Beneficiaries. Nothing herein, whether express or implied shall
be construed to give any person other than the parties, and their successors and
permitted assigns, any legal or equitable right, remedy of claim under or in
respect of this Lease and any Lease Schedule; but this Lease and any Lease
Schedule shall be held to be for the sole and exclusive benefit of the parties,
and their successors and assigns.

21.21. Notices. Except as otherwise required by law, all notices required herein
shall be in writing and sent by prepaid certified mail or by courier, addressed
to the party at the address or addresses of the party specified herein or such
other address designated in writing. Notices are deemed to have been received
[i] on the fourth business day following posting thereof in the U.S. Mail,
properly addressed and postage prepaid, [ii] when received in any medium if
confirmed or receipted for in the manner customary in the medium employed, or
[iii] if acknowledged in any manner by the party to whom the communication is
directed.

21.22. Privileged Licenses.

21.22.1. Second Party acknowledges that First Party, its parent company,
subsidiaries and affiliates, are businesses that are or may be subject to and
exist because of privileged licenses issued by governmental authorities. If
requested to do so by First Party, Second Party, and its agents, employees and
subcontractors, shall obtain any license, qualification, clearance or the like
which shall be requested or required of any of them by First Party or any
regulatory authority having jurisdiction over First Party or any parent company,
subsidiary or affiliate of First Party. If Second Party, or its agents,
employees, or subcontractors, fails to satisfy such requirement or if First
Party or any parent company, subsidiary or affiliate of First Party is directed
to cease business with Second Party or its agents, employees or subcontractors
by any such authority, or if First Party shall in good faith determine, in First
Party's sole and exclusive judgment, that Second Party, or any of its agents,
employees, subcontractors, or representatives [i] is or might be engaged in, or
is about to be engaged in, any activity or activities, or [ii] was or is
involved in any relationship, either of which could or does jeopardize First
Party's business or such licenses, or those of a parent company, subsidiary or
affiliate, or if any such license is threatened to be, or is, denied, curtailed,
suspended or revoked, this Lease and any Lease Schedule may be immediately
terminated by First Party without further liability to Second Party.

21.22.2. Second Party further acknowledges its understanding that it is
illegal for a denied gaming license applicant or a revoked gaming licensee, or a
business entity under such a person's control, to enter or attempt to enter into
a contract with First Party, its parent company, subsidiaries or any affiliate,
without the prior approval of the Nevada Gaming Commission or other applicable
gaming authorities. Second Party affirms that it is not such a person or entity
and that it is not under the control of such a person; and agrees that this
Lease and any Lease Schedule is subject to immediate termination by First Party,
without further liability to Second Party, if Second Party is or becomes such a
person or entity or is under the control of such a person.

21.23. Pronouns.Masculine or feminine pronouns shall be substituted for the
neuter form and vice versa, and the plural shall be substituted for the singular
form and vice versa, in any place or places herein in which the context requires
such substitution or substitutions.
11
<PAGE>
21.24. Regulatory Approvals. Certain transactions contemplated by this Lease and
any Lease Schedule may require the approval of governmental regulatory
authorities. Those transactions are entirely conditional upon and subject to the
prior approval of such authority. If the transactions are not so approved, they
shall be null and void ab initio. The parties shall cooperate with one another
and move promptly with due diligence and in good faith to request any required
or appropriate regulatory approvals. If the action or inaction of any
governmental regulatory authority renders the parties unable to consummate any
transaction contemplated by this Lease and any Lease Schedule which thereby
denies a party a material benefit contemplated by this Lease and any Lease
Schedule resulting in the unjust enrichment of the other party, the parties
shall negotiate in good faith an amendment to this Lease and any Lease Schedule
which fairly compensates the party denied the benefit.

21.25. Riders. In the event that any riders are attached hereto and made a part
hereof and if there is a conflict between the terms and provisions of any rider,
including any Lease Schedule and the terms and provisions herein, the terms and
provisions of the rider or Lease Schedule shall control to the extent of such
conflict.

21.26. Setoffs. The monies owed by Second Party herein shall be paid in full
when due under the terms of this Lease and any Lease Schedule without right of
setoff of any monies owed by First Party to Second Party under any other
agreement or for any other purpose. 21.27. Severability. Each term, covenant,
condition or provision of this Lease and any Lease Schedule shall be viewed as
separate and distinct, and in the event that any such term, covenant, condition
or provision shall be held by a court of competent jurisdiction to be invalid,
the remaining provisions shall continue in full force and effect.

21.28. Subcontracting. Second Party shall not subcontract any of its obligations
herein, or any portion thereof, without First Party's prior written consent.
Consent by First Party to any subcontracting of Second Party`s obligations or
responsibilities as set forth in this Lease and any Lease Schedule shall not be
deemed to create a contractual relationship between First Party and the
subcontracting party.

21.29. Suitability. Second Party understands and acknowledges that this Lease
and any Lease Schedule, at First Party's discretion, may be subject to Second
Party and its principals completing and submitting to First Party a due
diligence compliance questionnaire (including an Authorization for the Release
of Information) and being found suitable by First Party's Compliance Committee.
Notwithstanding any other provision in this Lease and any Lease Schedule to the
contrary, First Party may terminate this Lease and any Lease Schedule without
further obligation or liability to Second Party if, in the judgment of First
Party's Compliance Committee, the relationship with Second Party or its
principals could subject First Party to disciplinary action or cause First Party
to lose or become unable to obtain or reinstate any federal, state and/or
foreign registration, license or approval material to First Party's business or
the business of any First Party subsidiary.

21.30. Survival of Indemnities. All indemnities of Second Party shall survive
and continue in full force and effect for events occurring prior to the return
of the Equipment to the First Party, notwithstanding the expiration or
termination of the Term.

21.31. Third Party Beneficiary. Second Party agrees that First Party is an
express Third Party Beneficiary of the covenants and representations made in the
Indenture (as defined in section 12 of this Lease) and all documents or
instruments executed by and between Second Party and its parent corporation,
Riviera Holdings Corporation, including, but not necessarily limited to that
Keep-Well Agreement dated as of June 3, 1999, and that First Party shall be
entitled to rely on the terms contained therein and to enforce this Lease and
any Lease Schedules.

21.32. Time of Essence. Time is of the essence of this Lease and any Lease
Schedules. In the event the provisions of this Lease or any Lease Schedule
require any act to be done or to be taken hereunder on a date which is a
Saturday, Sunday or legal holiday, such act or action shall be deemed to have
been validly done or taken on the next succeeding day which is not a Saturday,
Sunday or legal holiday.

21.33. Waiver. The failure of any party to insist, in any one or more instances,
upon performance of any of the provisions of this Lease or any Lease Schedule or
to take advantage of any of its rights hereunder shall not operate as a waiver
thereof or preclude any other or further exercise thereof or the exercise of any
other right or power. Accordingly, the acceptance of rent by First Party after
it is due shall not be deemed to be a waiver of any breach by Second Party of
its obligations under this Lease or any Lease Schedule.
12
<PAGE>

IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the date set forth above.

LESSEE: PDS:

By: s/s Duane Krohn By:s/s Joe S. Rolston IV
------------------------------- ---------------------------------

Print Name:Duane Krohn Print Name:Joe S. Rolston IV
----------------------- -------------------------

Its: Treasurer Its:Vice President/General Counsel
----------------------------- --------------------------------

CONSENT AND AGREEMENT

The undersigned hereby consents and agrees to the Third Party beneficiary status
of PDS Financial Corporation-Colorado as more particularly set forth in section
21.31 of this Agreement.

RIVIERA HOLDINGS CORPORATION

By:s/s Duane Krohn
-------------------------
Print Name:Duane Krohn
-----------------
Its:Treasurer
-----------------------
13
<PAGE>

EXHIBIT 10.21

AMENDED AND RESTATED
LEASE SCHEDULE NO. 1 TO MASTER LEASE AGREEMENT
(with Purchase/Renewal and/or Upgrade Option)

THIS AMENDED AND RESTATED LEASE SCHEDULE NO. 1 ("Amended Lease
Schedule") with an effective date of December 13, 1999 amends and restates that
Lease Schedule No. 1 dated December 13, 1999 and is attached to and made a part
of the Master Lease Agreement ("Lease") between PDS FINANCIAL
CORPORATION-COLORADO, a Colorado corporation ("Lessor"), and RIVIERA BLACK HAWK,
INC., a Colorado corporation ("Lessee"), dated December 13, 1999.

1.DEFINITIONS. Terms not otherwise defined in this Amended Lease Schedule
shall have the meaning attributed to such terms in the Lease.

2.DESCRIPTION OF EQUIPMENT. The equipment listed on Attachment "A" to this
Amended Lease Schedule (the "Equipment") is added to the equipment leased under
the Lease and made subject to the provisions of the Lease.

3. COMMENCEMENT DATE. The Commencement Date for the Equipment leased under this
Amended Lease Schedule shall be the Acceptance Date set forth in the Certificate
of Delivery, Installation and Acceptance executed by Lessee in connection with
this Amended Lease Schedule (December 20, 1999).

4.TERM. The Term shall commence on the Commencement Date and shall continue for
60 consecutive months.

5.BASIC RENT AND PAYMENTS. The Basic Rent due each month during the Term for
the Equipment is as follows:

a. The first payment of basic rent (not including applicable taxes) under this
Amended Lease Schedule in an amount equal to $29,608.15 shall be initially due
and payable on February 1, 2000. The second payment of basic rent (not including
applicable taxes) under this Amended Lease Schedule in an amount equal to
$29,608.15 shall be due and payable on March 1, 2000

b. The Third payment of basic rent (not including applicable taxes) under
this Amended Lease Schedule in an amount equal to $57,375.40 ("Basic Rent")
shall be initially due and payable on April 1, 2000. Basic Rent in the amount of
$57,375.40 shall be due and payable on the same calendar day of the subsequent
months. All remaining payments of Basic Rent shall be due and payable on the
same calendar day of each month for the remainder of the Term.

c. In addition to the monthly Basic Rent due as set forth above, Lessee shall
pay or reimburse Lessor for all taxes which may be imposed by any Federal, State
or local authorities in connection with the delivery, transfer and/or leasing of
the Equipment, including, but not necessarily limited to all property, sales
and/or use taxes levied or assessed regardless of whether such taxes are levied
or assessed against Lessor or Lessee.

6. SECURITY DEPOSIT. Due and payable on the Commencement Date, Lessee shall pay
to Lessor, a Security Deposit in an amount equal to one (1) month of the Basic
Rent. The Security Deposit will be held by the Lessor for the Term of the Lease
and will be returned to Lessee upon satisfactory completion of the terms and
conditions of the Lease or may be applied to the last payment of Basic Rent, at
Lessee's option.

7.PURCHASE, RENEWAL AND/OR UPGRADE OPTION TO AMENDED LEASE SCHEDULE.

a.Except as set forth in Section 13 of the Lease, if Lessee has not been in
default under the Term (as defined above), Renewal Term (defined below) or
Automatic Renewal Term (defined below) of the Lease or this Amended Lease
Schedule, Lessor grants Lessee the following option(s):

(i) Purchase Option: At the expiration of the Term, Renewal Term or Automatic
Renewal Term, Lessee may purchase all but not less than all of the Equipment
described in the Amended Lease Schedule for the fair market value of the
Equipment as of the date of expiration of the Term ("Exercise Price") as
determined by an independent appraiser mutually selected by Lessor and Lessee
(the "Purchase Option").

(ii) Renewal Option: At the expiration of the Term, Lessee may renew the Lease
Term for a period of 12 months ("Renewal Term") at the then fair market rental
as determined by an independent appraiser mutually selected by Lessor and Lessee
(the "Renewal Option").
1
<PAGE>
(iii) Upgrade Option: After 18 months from the Commencement Date, Lessee
shall have the right to replace or upgrade up to 10% of the Equipment (at the
then fair market wholesale value) at anytime prior to the expiration of the 19th
month of this Amended Lease Schedule and after 30 months from the Commencement
Date, Lessee shall have the right to replace or upgrade up to 10% of the
original Equipment (at the then fair market wholesale value) at anytime prior to
the expiration of the 31st month of this Amended Lease Schedule (collectively
the "Upgrade Option") with new slot machines acceptable to Lessor (the
"Replacement Equipment") in its sole discretion only if the following conditions
are met to the reasonable satisfaction of Lessor: (i) Lessee is not in default
under the Lease, (ii) there are no material changes to Lessee's condition
(financial, business or otherwise), (iii) Lessee gives Lessor 90 days' written
notice of the exercise of the Upgrade Option, (iv) Lessee agrees to lease the
Replacement Equipment from Lessor under a new Equipment lease schedule
reflecting terms and rental factor consistent with terms generally available
from Lessor at that time, and (v) Lessee delivers the returned Equipment to
Lessor in like new condition, normal wear and tear excepted. Upon receipt of the
returned Equipment and execution of the appropriate documents evidencing the
obligation of the Lessee to lease the Replacement Equipment, Lessor shall reduce
the Basic Rent due under the Equipment Schedule based on the then established
wholesale value (as determined by Lessor) of the Equipment. .

(iv) Option to Return Equipment: At the expiration of the Term, Renewal Term or
Automatic Renewal Term, Lessee shall return the Equipment to Lessor at a
facility designated by Lessor, according to the terms of the Lease. b. Unless
otherwise specified above, Lessee must give written notice of the exercise of
any option 120 days prior to the expiration of any term. If written notice of
exercise of any Purchase Option or Renewal Option is not received within a
notification period as specified herein, the applicable term shall be
automatically renewed for an additional 120 days at the most recent Basic Rent
as set forth under the Amended Lease Schedule (the "Automatic Renewal Term").
Upon timely receipt of such notice of exercise, receipt of the payment of all
Rent due under the Lease and payment of the Exercise Price, Lessor will, with
exercise of the Purchase Option, execute and deliver to Lessee a Bill of Sale
for the Equipment described in the Amended Lease Schedule. Upon failure of the
Lessor to so deliver a Bill of Sale, this Option shall then constitute a
conveyance of the Equipment in accordance herewith. Payment in full of the
Exercise Price shall be due and payable on or before the expiration of the Term,
Renewal Term or Automatic Renewal Term. If Lessee has not been in default under
the terms of the Lease at the expiration of the Term, Renewal Term or Automatic
Renewal Term, Lessee may, upon 120 days advance written notice, notify Lessor of
its decision to terminate the Amended Lease Schedule and thereupon Lessee shall,
at Lessee's expense, return the Equipment to Lessor at a facility designated by
Lessor, according to the terms of the Lease. Lessee shall in all respects remain
obligated under the Lease for payment of Rent, care, maintenance, delivery, use
and insurance of the Equipment until Lessor inspects and accepts the Equipment.
In the event it shall at any time be determined that by reason of the options
hereby given or otherwise that the lease of the Equipment to which the Purchase
Option or the Renewal Option applies was in fact a sale to the Lessee of the
Equipment, the Lessee agrees that neither it nor its successors or assigns has
or will have any claim or cause of action against Lessor, its successors or
assigns, for any reason for loss sustained by virtue of such determination.
c. Lessee acknowledges that the Equipment sold by Lessor under the Purchase
Option is being sold in an "as is, where is" condition. Lessor makes, and will
make, no representations or warranties regarding the Equipment, its suitability
for Lessee's purpose, or its compliance with any laws. Lessee hereby assumes all
liability for the Equipment and agrees to indemnify Lessor per the terms of the
Lease for any claims whatsoever arising out of the purchase of the Equipment.

8. INCORPORATION OF LEASE. All of the provisions of the Lease are
incorporated by reference herein as if set forth fully herein.

Dated: 1/25/00
------------------

LESSEE: LESSOR:

By:s/s Duane Krohn By:s/s Joe S. Rolston IV
---------------------------------- ----------------------------
(Authorized Officer) (Authorized Officer)
Print Name: Duane Krohn Print Name:Joe S. Rolston IV
-------------------------- --------------------
Title:Treasurer Title:Vice Pres/General Counsel
------------------------------- ------------------------
2
<PAGE>
EXHIBIT 10.22

AMENDED AND RESTATED
LEASE SCHEDULE NO. 2 TO MASTER LEASE AGREEMENT
(with Purchase/Renewal and/or Upgrade Option)

THIS AMENDED AND RESTATED LEASE SCHEDULE NO. 2 ("Amended Lease
Schedule") with an effective date of December 13, 1999 amends and restates that
Lease Schedule No. 2 dated December 13, 1999 and is attached to and made a part
of the Master Lease Agreement ("Lease") between PDS FINANCIAL
CORPORATION-COLORADO, a Colorado corporation ("Lessor"), and RIVIERA BLACK HAWK,
INC., a Colorado corporation ("Lessee"), dated December 13, 1999.

1.DEFINITIONS. Terms not otherwise defined in this Amended Lease Schedule shall
have the meaning attributed to such terms in the Lease.

2.DESCRIPTION OF EQUIPMENT. The equipment listed on Attachment "A" to this
Amended Lease Schedule (the "Equipment") is added to the equipment leased
under the Lease and made subject to the provisions of the Lease.

3.COMMENCEMENT DATE. The Commencement Date for the Equipment leased under this
Amended Lease Schedule shall be the Acceptance Date set forth in the Certificate
of Delivery, Installation and Acceptance executed by Lessee in connection with
this Amended Lease Schedule (December 20, 1999).

4.TERM. The Term shall commence on the Commencement Date and shall continue
for 60 consecutive months.

5. BASIC RENT AND PAYMENTS. The Basic Rent due each month during the Term for
the Equipment is as follows:

a. The first payment of basic rent (not including applicable taxes) under this
Amended Lease Schedule in an amount equal to $32,299.80 shall be initially due
and payable on February 1, 2000. The second payment of basic rent (not including
applicable taxes) under this Amended Lease Schedule in an amount equal to
$32,299.80 shall be due and payable on March 1, 2000

b. The Third payment of basic rent (not including applicable taxes) under
this Amended Lease Schedule in an amount equal to $65,529.79 ("Basic Rent")
shall be initially due and payable on April 1, 2000. Basic Rent in the amount of
$65,529.79 shall be due and payable on the same calendar day of the subsequent
months. All remaining payments of Basic Rent shall be due and payable on the
same calendar day of each month for the remainder of the Term.

7.PURCHASE, RENEWAL AND/OR UPGRADE OPTION TO AMENDED LEASE SCHEDULE.
a. Except as set forth in Section 13 of the Lease, if Lessee has not been in
default under the Term (as defined above), Renewal Term (defined below) or
Automatic Renewal Term (defined below) of the Lease or this Amended Lease
Schedule, Lessor grants Lessee the following option(s):

(i) Purchase Option: At the expiration of the Term, Lessee may purchase all but
not less than all of the Equipment described in the Lease Schedule for the sum
of $1.00 ("Exercise Price") (the "Purchase Option").

b. Lessee acknowledges that the Equipment sold by Lessor under the Purchase
Option is being sold in an "as is, where is" condition. Lessor makes, and will
make, no representations or warranties regarding the Equipment, its suitability
for Lessee's purpose, or its compliance with any laws. Lessee hereby assumes all
1
<PAGE>
liability for the Equipment and agrees to indemnify Lessor per the terms of the
Lease for any claims whatsoever arising out of the purchase of the Equipment.

8. INCORPORATION OF LEASE. All of the provisions of the Lease are
incorporated by reference herein as if set forth fully herein.

Dated:1/25/00
------------------

LESSEE: LESSOR:

By:s/s Duane Krohn By: s/s Joe S. Rolston IV
---------------------------------- ----------------------------
(Authorized Officer) (Authorized Officer)
Print Name: Duane Krohn Print Name: Joe S. Rolston IV
-------------------------- --------------------
Title:Treasurer Title:Vice Pres/General Counsel
------------------------------- ------------------------
2
<PAGE>

EXHIBIT 10.23

LEASE SCHEDULE NO. 3 TO MASTER LEASE AGREEMENT
(with Purchase/Renewal and/or Upgrade Option)

THIS LEASE SCHEDULE NO. 3 ("Lease Schedule") is attached to and made a part
of the Master Lease Agreement ("Lease") between PDS FINANCIAL
CORPORATION-COLORADO, a Colorado corporation ("Lessor"), and RIVIERA BLACK HAWK,
INC., a Colorado corporation ("Lessee"), dated December 13, 1999.

1. DEFINITIONS. Terms not otherwise defined in this Lease Schedule shall
have the meaning attributed to such terms in the Lease.

2. DESCRIPTION OF EQUIPMENT. The equipment listed on Attachment "A" to this
Lease Schedule (the "Equipment") is added to the equipment leased under the
Lease and made subject to the provisions of the Lease.

3. COMMENCEMENT DATE. The Commencement Date for the Equipment leased under
this Lease Schedule shall be March 15, 2000.

4.TERM. The Term shall commence on the Commencement Date and shall continue
for 60 consecutive months.

5.BASIC RENT AND PAYMENTS. The Basic Rent due each month during the Term for
the Equipment is as follows:

a. The first payment of basic rent (not including applicable taxes) under this
Lease Schedule in an amount equal to $25,391.85 shall be initially due and
payable on March 15, 2000. The second payment of basic rent (not including
applicable taxes) under this Lease Schedule in an amount equal to $25,391.85
shall be due and payable on April 15, 2000

b. The Third payment of basic rent (not including applicable taxes) under
this Lease Schedule in an amount equal to $49,204.96 ("Basic Rent") shall be
initially due and payable on May 15, 2000. Basic Rent in the amount of
$49,204.96 shall be due and payable on the same calendar day of the subsequent
months. All remaining payments of Basic Rent shall be due and payable on the
same calendar day of each month for the remainder of the Term.

7. PURCHASE, RENEWAL AND/OR UPGRADE OPTION TO LEASE SCHEDULE.

a. Except as set forth in Section 13 of the Lease, if Lessee has not been in
default under the Term (as defined above), Renewal Term (defined below) or
Automatic Renewal Term (defined below) of the Lease or this Lease Schedule,
Lessor grants Lessee the following option(s):

(i) Purchase Option: At the expiration of the Term, Renewal Term or Automatic
Renewal Term, Lessee may purchase all but not less than all of the Equipment
described in the Lease Schedule for the fair market value of the Equipment as of
the date of expiration of the Term ("Exercise Price") as determined by an
independent appraiser mutually selected by Lessor and Lessee (the "Purchase
Option"). (ii) Renewal Option: At the expiration of the Term, Lessee may renew
the Lease Term for a period of 12 months ("Renewal Term") at the then fair
market rental as determined by an independent appraiser mutually selected by
Lessor and Lessee (the "Renewal Option"). (iii) Upgrade Option: After 18 months
from the Commencement Date, Lessee shall have the right to replace or upgrade up
to 10% of the Equipment (at the then fair market wholesale value) at anytime
prior to the expiration of the 19th month of this Lease Schedule and after 30
months from the Commencement Date, Lessee shall have the right to replace or
upgrade up to 10% of the original Equipment (at the then fair market wholesale
value) at anytime prior to the expiration of the 31st month of this Lease
Schedule (collectively the "Upgrade Option") with new slot machines acceptable
to Lessor (the "Replacement Equipment") in its sole discretion only if the
following conditions are met to the reasonable satisfaction of Lessor:
1
<PAGE>
(i)Lessee is not in default under the Lease,(ii)there are no material changes to
Lessee's condition (financial, business or otherwise), (iii) Lessee gives Lessor
90 days' written notice of the exercise of the Upgrade Option (iv) Lessee agrees
to lease the Replacement Equipment from Lessor under a new Equipment lease
schedule reflecting terms and rental factor consistent with terms generally
available from Lessor at that time, and (v) Lessee delivers the return Equipment
to Lessor in like new condition, normal wear and tear excepted. Upon receipt of
the returned Equipment and execution of the appropriate documents evidencing the
obligation of the Lessee to lease the Replacement Equipment, Lessor shall reduce
the Basic Rent due under the Equipment Schedule based on the then established
wholesale value (as determined by Lessor) of the Equipment.
(iv) Option to Return Equipment: At the expiration of the Term, Renewal Term or
Automatic Renewal Term, Lessee shall return the Equipment to Lessor at a
facility designated by Lessor, according to the terms of the Lease. b. Unless
otherwise specified above, Lessee must give written notice of the exercise of
any option 120 days prior to the expiration of any term. If written notice of
exercise of any Purchase Option or Renewal Option is not received within a
notification period as specified herein, the applicable term shall be
automatically renewed for an additional 120 days at the most recent Basic Rent
as set forth under the Lease Schedule (the "Automatic Renewal Term"). Upon
timely receipt of such notice of exercise, receipt of the payment of all Rent
due under the Lease and payment of the Exercise Price, Lessor will, with
exercise of the Purchase Option, execute and deliver to Lessee a Bill of Sale
for the Equipment described in the Lease Schedule. Upon failure of the Lessor to
so deliver a Bill of Sale, this Option shall then constitute a conveyance of the
Equipment in accordance herewith. Payment in full of the Exercise Price shall be
due and payable on or before the expiration of the Term, Renewal Term or
Automatic Renewal Term. If Lessee has not been in default under the terms of the
Lease at the expiration of the Term, Renewal Term or Automatic Renewal Term,
Lessee may, upon 120 days advance written notice, notify Lessor of its decision
to terminate the Lease Schedule and thereupon Lessee shall, at Lessee's expense,
return the Equipment to Lessor at a facility designated by Lessor, according to
the terms of the Lease. Lessee shall in all respects remain obligated under the
Lease for payment of Rent, care, maintenance, delivery, use and insurance of the
Equipment until Lessor inspects and accepts the Equipment. In the event it shall
at any time be determined that by reason of the options hereby given or
otherwise that the lease of the Equipment to which the Purchase Option or the
Renewal Option applies was in fact a sale to the Lessee of the Equipment, the
Lessee agrees that neither it nor its successors or assigns has or will have any
claim or cause of action against Lessor, its successors or assigns, for any
reason for loss sustained by virtue of such determination. c. Lessee
acknowledges that the Equipment sold by Lessor under the Purchase Option is
being sold in an "as is, where is" condition. Lessor makes, and will make, no
representations or warranties regarding the Equipment, its suitability for
Lessee's purpose, or its compliance with any laws. Lessee hereby assumes all
liability for the Equipment and agrees to indemnify Lessor per the terms of the
Lease for any claims whatsoever arising out of the purchase of the Equipment.

8. INCORPORATION OF LEASE. All of the provisions of the Lease are
incorporated by reference herein as if set forth fully herein.

Dated: 2/17/00
------------------

LESSEE: LESSOR:

By: s/s Duane Krohn By: s/s Joe S. Rolston IV
---------------------------------- ----------------------------
(Authorized Officer) (Authorized Officer)
Print Name: Duane Krohn Print Name:Joe S. Rolston IV
-------------------------- --------------------
Title: Treasurer Title: Vice Pres/General Counsel
------------------------------- ------------------------
2
<PAGE>

EXHIBIT 10.24

LEASE SCHEDULE NO. 4 TO MASTER LEASE AGREEMENT
(with Purchase/Renewal and/or Upgrade Option)

THIS LEASE SCHEDULE NO. 4 ("Lease Schedule") is attached to and made a part
of the Master Lease Agreement ("Lease") between PDS FINANCIAL
CORPORATION-COLORADO, a Colorado corporation ("Lessor"), and RIVIERA BLACK HAWK,
INC., a Colorado corporation ("Lessee"), dated December 13, 1999.

1.DEFINITIONS. Terms not otherwise defined in this Lease Schedule shall have
the meaning attributed to such terms in the Lease.

2.DESCRIPTION OF EQUIPMENT. The equipment listed on Attachment "A" to this
Lease Schedule (the "Equipment") is added to the equipment leased under the
Lease and made subject to the provisions of the Lease. The capitalized cost of
the Equipment is $1,215,081.67 ("Capitalized Equipment Cost").

3.COMMENCEMENT DATE. The Commencement Date for the Equipment leased under this
Lease Schedule shall be March 1, 2000.

4.TERM. The Term shall commence on the Commencement Date and shall continue
for 60 consecutive months.

5.BASIC RENT AND PAYMENTS. The Basic Rent due each month during the Term for
the Equipment is as follows:

a. The first payment of basic rent (not including applicable taxes) under this
Lease Schedule in an amount equal to $20,000.00 shall be initially due and
payable on April 1, 2000. The second payment of basic rent (not including
applicable taxes) under this Lease Schedule in an amount equal to $20,000.00
shall be due and payable on May 1, 2000

b. The Third payment of basic rent (not including applicable taxes) under
this Lease Schedule in an amount equal to $26,546.82 ("Basic Rent") shall be
initially due and payable on June 1, 2000. Basic Rent in the amount of
$26,546.82 shall be due and payable on the same calendar day for the remaining
56 consecutive months with a final monthly payment due and owing on the 60th
month in the amount of $117,677.95. All payments of Basic Rent shall be due and
payable on the 1st day of each month for the entire Term.

c. In addition to the monthly Basic Rent due as set forth above, Lessee
shall pay or reimburse Lessor for all taxes which may be imposed by any Federal,
State or local authorities in connection with the delivery, transfer and/or
leasing of the Equipment, including, but not necessarily limited to all
property, sales and/or use taxes levied or assessed regardless of whether such
taxes are levied or assessed against Lessor or Lessee.

7. PURCHASE, RENEWAL AND/OR UPGRADE OPTION TO LEASE SCHEDULE.

a. If Lessee has not been in default under the Term (as defined above), Renewal
Term (defined below) or Automatic Renewal Term (defined below) of the Lease or
this Lease Schedule, Lessor grants Lessee the following option(s):

(i)Purchase Option: At the expiration of the Term, Lessee may purchase all but
not less than all of the Equipment described in the Lease Schedule for the sum
of $1.00 ("Exercise Price") (the "Purchase Option").

b. Unless otherwise specified above, Lessee must give written notice of the
exercise of any option 120 days prior to the expiration of any term. If written
notice of exercise of any Purchase Option or Renewal Option is not received
within a notification period as specified herein, the applicable term shall be
automatically renewed for an additional 120 days at the most recent Basic Rent
as set forth under the Lease Schedule (the "Automatic Renewal Term"). Upon
timely receipt of such notice of exercise, receipt of the payment of all Rent
due under the Lease and payment of the Exercise Price, Lessor will, with
1
<PAGE>
exercise of the Purchase Option, execute and deliver to Lessee a Bill of Sale
for the Equipment described in the Lease Schedule. Upon failure of the Lessor to
so deliver a Bill of Sale, this Option shall then constitute a conveyance of the
Equipment in accordance herewith. Payment in full of the Exercise Price shall be
due and payable on or before the expiration of the Term, Renewal Term or
Automatic Renewal Term. If Lessee has not been in default under the terms of the
Lease at the expiration of the Term, Renewal Term or Automatic Renewal Term,
Lessee may, upon 120 days advance written notice, notify Lessor of its decision
to terminate the Lease Schedule and thereupon Lessee shall, at Lessee's expense,
return the Equipment to Lessor at a facility designated by Lessor, according to
the terms of the Lease. Lessee shall in all respects remain obligated under the
Lease for payment of Rent, care, maintenance, delivery, use and insurance of the
Equipment until Lessor inspects and accepts the Equipment. In the event it shall
at any time be determined that by reason of the options hereby given or
otherwise that the lease of the Equipment to which the Purchase Option or the
Renewal Option applies was in fact a sale to the Lessee of the Equipment, the
Lessee agrees that neither it nor its successors or assigns has or will have any
claim or cause of action against Lessor, its successors or assigns, for any
reason for loss sustained by virtue of such determination.

c. Lessee acknowledges that the Equipment sold by Lessor under the Purchase
Option is being sold in an "as is, where is" condition. Lessor makes, and will
make, no representations or warranties regarding the Equipment, its suitability
for Lessee's purpose, or its compliance with any laws. Lessee hereby assumes all
liability for the Equipment and agrees to indemnify Lessor per the terms of the
Lease for any claims whatsoever arising out of the purchase of the Equipment.

8. INCORPORATION OF LEASE. All of the provisions of the Lease are
incorporated by reference herein as if set forth fully herein.

Dated: 2/25/00
------------------

LESSEE: LESSOR:

By: s/s Duane Krohn By: s/s Peter D. Cleary
---------------------------------- ----------------------------
(Authorized Officer) (Authorized Officer)
Print Name: Duane Krohn Print Name: Peter D. Cleary
-------------------------- --------------------
Title: Treasuer Title: Treasurer
------------------------------- ------------------------
2
<PAGE>

<ARTICLE> 5
<MULTIPLIER> 1

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
<CASH> 1,810,000
<SECURITIES> 9,993,000
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 12,598,000
<PP&E> 56,734,000
<DEPRECIATION> 0
<TOTAL-ASSETS> 72,950,000
<CURRENT-LIABILITIES> 4,208,000
<BONDS> 45,000,000
0
0
<COMMON> 1,000
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 72,950,000
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 595,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 39,000
<INCOME-PRETAX> (634,000)
<INCOME-TAX> (160,000)
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (474,000)
<EPS-BASIC> 0
<EPS-DILUTED> 0

</TABLE>