BALLYS PARK PLACE INC, 10-K, 1995-03-31

BALLYS PARK PLACE INC
10-K, 1995-03-31
MISCELLANEOUS AMUSEMENT & RECREATION

Previous: WESTAMERICA BANCORPORATION, 8-A12G/A, 1995-03-31

Next: KIDDER PEABODY CASH RESERVE FUND INC, NSAR-A, 1995-03-31

<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K

(Mark One)

{X} ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
ACT OF 1934.

For the fiscal year ended December 31, 1994

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

Commission file number: 1-8540

BALLY'S PARK PLACE, INC.
(Exact name of registrant as specified in its charter)

Delaware 36-3432384
(State or other jurisdiction (I.R.S. Employer
of incorporation or Identification No.)
organization)

Park Place & The Boardwalk
Atlantic City, New Jersey 08401
(Address of principal executive offices) (Zip code)

Registrant's telephone number, including area code: (609) 340-2000

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

At March 23, 1995, all 100 outstanding shares of the registrant's common stock
were held by Bally's Casino Holdings, Inc., an indirect wholly owned
subsidiary of Bally Entertainment Corporation.

The registrant meets the conditions set forth in General Instruction J (1) (a)
and (b) of Form 10-K and is therefore filing this form with the reduced
disclosure format.<PAGE>
PART I

Except as otherwise stated, the information contained in this Annual Report
is as of December 31, 1994, the end of the registrant's last fiscal year.

ITEMS 1 and 2. BUSINESS AND PROPERTIES

Introduction

The registrant, Bally's Park Place, Inc. (the "Company"), is incorporated
in Delaware and was a wholly owned subsidiary of Bally Entertainment
Corporation ("BEC") until June 16, 1993, when BEC contributed all of the
capital stock of the Company to Bally's Casino Holdings, Inc. ("Casino
Holdings"). Casino Holdings was formed as a subsidiary of BEC in April 1993
for acquiring and developing gaming operations, including those in newly
emerging gaming jurisdictions. The Company, through its wholly owned
subsidiary Bally's Park Place, Inc., a New Jersey corporation ("Bally's Park
Place--New Jersey"), operates a casino hotel resort in Atlantic City, New
Jersey. Unless otherwise specified in the text, references to the Company
include the Company and its subsidiaries.

Bally's Park Place

Bally's Park Place--New Jersey operates the Bally's Park Place Casino
Hotel and Tower ("Bally's Park Place") situated on an eight-acre site with
ocean frontage at the well-known intersection of Park Place and the Boardwalk
in Atlantic City, New Jersey. The casino hotel resort is centrally located
among the nine other casino hotels adjacent to the Boardwalk and is within
four blocks of both the existing Atlantic City Convention Hall and the new
convention facility, which is currently under construction. A corridor
project which will link the Boardwalk with the new convention center is under
development. The Company's strategic location on the Boardwalk contributes
to its success in attracting significant walk-in casino business, including
strong crossover business from competing casinos located nearby. Equipped
with two multi-story parking garages and surface valet parking lots,
management believes that the Company is also strongly positioned to attract
desirable drive-in business.

The Company is one of the largest casino hotel resorts in Atlantic City,
currently encompassing approximately 2.2 million square feet of space,
including approximately 80,100 square feet of gaming space, a 30-story hotel
tower, a 12-story hotel facility and two multi-story parking garages providing
over 2,000 parking spaces. In 1994, the casino floor space was expanded from
68,100 to 71,400 square feet and another 8,700 square feet of gaming space was
added to accommodate 24 poker tables, horse race simulcasting and keno. At
December 31, 1994, the Company offered over 2,200 slot machines and 95 table
games, including baccarat, blackjack, craps, roulette and poker, among others.

The Company recently completed a slot machine upgrade, replacing the
majority of its slot machine inventory with state-of-the-art machines with
embedded bill acceptors. In conjunction with the expansion of casino floor
space, the Company added approximately 220 slot machines, including nearly 130
machines in its new high denomination slot area and opened Magnums, a posh new
premium players lounge. The Company employs the latest slot machine
technology and places particular emphasis on the location, design and lighting
of its slot machine areas to further develop and compete for slot machine
play.

The Company has more than 1,250 rooms (including 98 suites), making it
the largest four-star hotel in New Jersey, and contains approximately 50,000
square feet of meeting and exhibition space and a 38,000-square foot health
spa facility. Dining areas include three specialty restaurants, two cocktail
lounges, a coffee shop, a buffet, a delicatessen, two fast food facilities and
a restaurant with a bar and lounge in the spa. The Company offers a variety
of other facilities and amenities to its patrons.

The Company's operating strategy continues to capitalize on its central
location and quality facilities, which serves to maximize the profitability
of the Company and allows the Company to increase its gaming offerings to
expand its success with mid-level and high-end players. Historically believed
to be a leader in Atlantic City's middle to upper-middle tier slot player
segments, the Company intends to broaden its appeal and target premium table
game and slot players through enhanced facility accommodations without
compromising its focus on mid-level slot play. During 1994, the Company
expanded its marketing efforts to attract table game players. Increased
spending for marketing and promotional programs, as well as the hiring of
additional host and player development personnel, were implemented to grow its
share of table game players and revenues. The marketing strategy of the
Company is to generate a high volume of play from casino customers from New
York, Philadelphia and other northeastern metropolitan areas, as well as to
further develop its position in all segments of the Atlantic City hotel and
convention market.

The Company plans to make capital expenditures of approximately $13
million during 1995 for the completion of the penthouse floor in the hotel
tower, restaurant and kitchen renovations and other improvements and equipment
necessary to maintain the facility in first-class condition. In December
1994, the Company acquired 3.1 acres of land adjacent to its existing
facility, which the Company intends to develop to provide additional casino
space and a state-of-the-art entertainment complex. This project is presently
in the planning stage; therefore, the cost and specifics of the design and
funding of this project have yet to be determined.

The Company's revenues and earnings from its casino hotel peak during the
summer season, with less favorable operating results during the winter. The
Company employs approximately 4,100 persons.

Casino Hotel Competition

The Company faces intense competition in the Atlantic City market from
other companies in the gaming industry, some of which have significantly
greater financial resources than the Company. Since April 1990, there have
been 11 casino hotel facilities operating in Atlantic City in competition with
the Company, including GNAC, CORP., another wholly owned subsidiary of BEC
which owns and operates the casino hotel resort known as "The Grand." Several
Atlantic City casino hotels have recently expanded or are currently in the
process of expanding their facilities. These expansions will increase
competition in the Atlantic City market, particularly as additional slot
machines and rooms are added.

The Company believes that casino competition in Atlantic City is based
primarily on the location and physical design of the casino and hotel
accommodations, the extent and quality of personalized service offered to
guests and casino customers, the price and quality of rooms and food and
beverages, the number and quality of its restaurants, convention and other
public facilities, promotional allowances, the entertainment offered, the
variety of table games and slot machines, table limits, casino credit granted
to customers and parking availability. Management believes that the Company's
reputation as a first-class facility enhances its competitiveness in the
Atlantic City market. In addition, the Company's central location positively
affects its competitive position.

The Company also competes for gaming customers to a lesser extent with
casino hotel operations located in Nevada and elsewhere and with other forms
of legalized gaming, including state-sponsored lotteries and off-track
wagering. The Company believes that the legalization of casino gaming in
various jurisdictions over the last several years and the opening of gaming
facilities operated by Native Americans have not, to date, had a material
adverse impact on its operations. There have been proposals made for casinos
in several jurisdictions near New Jersey. The Company believes that the
adoption of legislation approving casino gaming in any of these jurisdictions
(particularly New York or Pennsylvania) or the advent of full-scale gaming on
nearby Native American lands could have a material adverse effect on its
operations.

New Jersey Regulation

Gaming activities in Atlantic City are subject to the New Jersey Casino
Control Act (the "Act"), regulations of the New Jersey Casino Control
Commission (the "CCC") and other applicable laws. No casino may operate
unless the required permits or licenses and approvals are obtained from the
CCC. The CCC is authorized under the Act to adopt regulations covering a
broad spectrum of gaming and gaming-related activities and to prescribe the
methods and forms of applications from all classes of licensees. These laws
and regulations concern primarily: (i) the financial stability, integrity,
responsibility, good character, honesty and business ability of casino service
suppliers and casino operators, their directors, officers and employees, their
security holders and others financially interested in casino operations, (ii)
the nature of casino hotel facilities, and (iii) the operating methods and
financial and accounting practices used in connection with the casino
operations. Taxes are imposed by the State of New Jersey on gaming operations
at the rate of 8% of gross gaming revenues. In addition, the Act provides for
an investment alternative tax of 2 1/2% of gross gaming revenues. This
investment alternative tax may be offset by investment tax credits equal to
1 1/4% of gross gaming revenues, which are obtained by purchasing bonds issued
by or investing in housing or other development projects approved by the New
Jersey Casino Reinvestment Development Authority (the "CRDA"), a state agency.
New laws and regulations, as well as amendments to existing laws and
regulations, relating to gaming activities in Atlantic City are periodically
introduced or proposed and sometimes adopted. In January 1995, a
comprehensive package of amendments to the Act was enacted into law, which
amendments, among other things, reduce certain regulatory requirements.

The CCC has broad discretion with regard to the issuance, renewal and
revocation or suspension of casino licenses. A casino license is not
transferable, is issued for a term of up to one year for the first two
renewals and thereafter for a term of up to two years (subject to
discretionary reopening of the licensing hearing by the CCC at any time), and
must be renewed by filing an application which must be acted on by the CCC
prior to the expiration of the license in force. At any time, upon a finding
of disqualification or noncompliance, the CCC may revoke or suspend a license
or impose fines. An amendment to the Act signed into law in January 1995
provides that casino licenses may be renewed for a period up to four years.

The Act imposes certain restrictions on the ownership and transfer of
securities issued by a corporation that holds a casino license or is deemed
a holding company, intermediary company, subsidiary or entity qualifier (each,
an "affiliate") of a casino licensee. "Security" is defined by the Act to
include instruments that evidence either a beneficial ownership in an entity
(such as common stock or preferred stock) or a creditor interest in an entity
(such as a bond, note or mortgage). Pursuant to the Act, the corporate
charter of a publicly traded affiliate of a casino licensee must require that
a holder of the company's securities dispose of such securities if the
holder's continued holding would result in the company or any other affiliate
being no longer qualified to continue as a casino licensee under the Act. The
corporate charter of a casino licensee or any privately held affiliate of the
licensee must: (i) establish the right of prior approval by the CCC with
regard to a transfer of any security in the company and (ii) create the
absolute right of the company to repurchase at the market price or purchase
price, whichever is less, any security in the company in the event the CCC
disapproves a transfer of such security under the Act. The corporate charter
of the Company and the charters of its privately held affiliates conform with
the Act's requirements described above for privately held companies.

If the CCC finds that an individual owner or holder of securities of a
corporate licensee or an affiliate of such corporate licensee is not qualified
under the Act, the CCC may propose remedial action. The CCC may require
divestiture of the securities held by any disqualified holder who is required
to be qualified under the Act (e.g., officers, directors, security holders and
key casino and other employees). In the event that disqualified persons fail
to divest themselves of such securities, the CCC may revoke or suspend the
license. However, if an affiliate of a casino licensee is a publicly traded
company and the CCC finds disqualified any holder of any security thereof who
is required to be qualified, and the CCC also finds that: (i) such company has
complied with aforesaid charter provisions, (ii) such company has made a good
faith effort, including the prosecution of all legal remedies, to comply with
any order of the CCC requiring the divestiture of the security interest held
by the disqualified holder, and (iii) such disqualified holder does not have
the ability to control the corporate licensee or the affiliate, or to elect
one or more members of the board of directors of such affiliate, the CCC will
not take action against the casino licensee or its affiliate with respect to
the continued ownership of the security interest by the disqualified holder.

For purposes of the Act, a security holder is presumed to have the
ability to control a publicly traded corporation, or to elect one or more
members of its board of directors, if such holder owns or beneficially holds
5% or more of any class of the equity securities of such corporation, unless
such presumption of control or ability to elect is rebutted by clear and
convincing evidence. An "institutional investor," as that term is defined
under the Act, is entitled to a waiver of qualification if it holds less than
10% of any class of the equity securities of a publicly traded holding or
intermediary company of a casino licensee and: (i) the holdings were purchased
for investment purposes only, (ii) there is no cause to believe the
institutional investor may be found unqualified, and (iii) upon request by the
CCC, the institutional investor files a certified statement to the effect that
it has no intention of influencing or affecting the affairs of the issuer, the
casino licensee or its other affiliates. The CCC may grant a waiver of
qualification to an institutional investor holding 10% or more of such
securities upon a showing of good cause and if the conditions specified above
are met.

With respect to debt securities, the CCC generally requires a person
holding 15% or more of a debt issue of a publicly traded affiliate of a casino
licensee to qualify as a "financial source" where the use of the proceeds from
the debt issue is related in any way to the financing of the casino licensee.
There can be no assurance that the CCC will continue to apply the 15%
threshold, and the CCC could at any time establish a lower threshold for
qualification. An exception to the qualification requirement is made for
institutional investors, in which case the institutional holder is entitled
to a waiver of qualification if the holder's position in the aggregate is less
than 20% of the total outstanding debt of the affiliate and less than 50% of
any outstanding publicly traded issue of such debt, and if the conditions
specified in the above paragraph are met. As with equity securities, a waiver
of qualification may be granted to institutional investors holding larger
positions upon a showing of good cause and if all conditions specified in the
above paragraph are met.

Generally, the CCC would require each institutional holder seeking a
waiver of qualification to execute a certificate to the effect that: (i) the
holder has reviewed the definition of institutional investor under the Act and
believes that it meets the definition of institutional investor, (ii) the
holder purchased the securities for investment purposes only and holds them
in the ordinary course of business, (iii) the holder has no involvement in the
business activities of, and no intention of influencing or affecting the
affairs of, the issuer, the casino licensee or any affiliate, and (iv) if the
holder subsequently determines to influence or affect the affairs of the
issuer, the casino licensee or any affiliate, it shall provide not less than
30 days' notice of such intent and shall file with the CCC an application for
qualification before taking any such action.

Commencing on the date the CCC serves notice on a corporate licensee or
an affiliate of such corporate licensee that a security holder of such
corporation has been found disqualified, it will be unlawful for the security
holder to: (i) receive any dividends or interest upon any such securities,
(ii) exercise, directly or through any trustee or nominee, any right conferred
by such securities, or (iii) receive any remuneration in any form from the
corporate licensee for services rendered or otherwise.

Persons who are required to qualify under the Act by reason of holding
debt or equity securities are required to place the securities into an Interim
Casino Authorization ("ICA") trust pending qualification. Unless and until
the CCC has reason to believe that the investor may not qualify, the investor
will retain the ability to direct the trustee how to vote, or whether to
dispose of, the securities. If at any time the CCC finds reasonable cause to
believe that the investor may be found unqualified, it can order the trust to
become "operative," in which case the investor will lose voting power, if any,
over the securities but will retain the right to petition the CCC to order the
trustee to dispose of the securities.

Once an ICA trust is created and funded, and regardless of whether it
becomes operative, the investor has no right to receive a return on the
investment until the investor becomes qualified. Should an investor
ultimately be found unqualified, the trustee would dispose of the trust
property, and the proceeds would be distributed to the unqualified applicant
only in an amount not exceeding the actual cost of the trust property. Any
excess proceeds would be paid to the State of New Jersey. If the securities
were sold by the trustee pending qualification, the investor would receive
only actual cost, with disposition of the remainder of the proceeds, if any,
to await the investor's qualification hearing.

In the event it is determined that a licensee has violated the Act or its
regulations, then under certain circumstances, the licensee could be subject
to fines or have its license suspended or revoked. In addition, if a person
who is required to qualify under the Act fails to qualify, or if a security
holder who is required to qualify fails to qualify and does not dispose of the
related securities in the licensee or in any affiliate of the licensee, as may
be required by the Act, then, under certain circumstances, the licensee could
have its license suspended or revoked.

If a casino license was not renewed, was suspended for more than 120 days
or was revoked, the CCC could appoint a conservator. The conservator would
be charged with the duty of conserving and preserving the assets so acquired
and continuing the operation of the hotel and casino of a suspended licensee
or with operating and disposing of the casino hotel facilities of a former
licensee. Such suspended licensee or former licensee, however, would be
entitled only to a fair return on its investment, to be determined under New
Jersey law, with any excess to go to the State of New Jersey, if so directed
by the CCC. Suspension or revocation of any licenses or the appointment of
a conservator by the CCC would have a material adverse effect on the business
of the Company.

In June 1994, the CCC renewed the casino license of the Company through
June 1996.

Federal Registration

The Company is required to make annual filings with the Attorney General
of the United States in connection with the operation of slot machines. All
requisite filings for the present year have been made.
<PAGE>
ITEM 3. LEGAL PROCEEDINGS

None

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

Item 4 is omitted pursuant to General Instruction J of Form 10-K.

<PAGE>
PART II

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

Item 5 is inapplicable.

ITEM 6. SELECTED FINANCIAL DATA

Item 6 is omitted pursuant to General Instruction J of Form 10-K.

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

Item 7 is presented in the reduced disclosure format pursuant to
General Instruction J of Form 10-K.

RESULTS OF OPERATIONS

Revenues of the Company for 1994 were $377.0 million compared to $352.8
million for 1993, an increase of $24.2 million (7%). The Company achieved
this increase in revenues despite extremely adverse weather in the first
quarter of 1994 when revenues grew only $.3 million. Casino revenues for 1994
were $321.5 million compared to $297.7 million in 1993, an increase of $23.8
million (8%). Slot revenues increased $13.5 million (7%) due to a 16% increase
in slot handle (volume) offset, in part, by a decline in the win percentage
from 9.6% in 1993 (which includes the positive impact from the discontinuation
of certain progressive linked jackpots) to 8.8% in 1994. The Company added
223 slot machines (an 11% increase) during 1994. Slot revenues represented
68% of the Company's casino revenues in 1994 compared to 69% in 1993. Table
game revenues, excluding poker, increased $6.4 million (7%) from 1993 due to
a 3% increase in the drop (amount wagered) and an increase in the hold
percentage from 16.5% in 1993 to 17.1% in 1994. Poker operations, which
commenced in July 1993, generated revenues of $4.7 million for 1994 compared
to $2.6 million for 1993. Horse race simulcasting and keno operations, which
commenced in June 1994, contributed $1.8 million to casino revenues for 1994.
Rooms and food and beverage revenues remained essentially unchanged. Other
revenues increased $1.0 million (11%) due to higher entrance fees for
promotional events, dividends from a multi-casino linked progressive trust and
increased interest income.

Atlantic City 1994 citywide casino revenues for all operators, excluding
poker, horse race simulcasting and keno, increased approximately 3% from 1993
due to a 4% increase in slot revenues and a 1% increase in table game
revenues. During the first quarter of 1994 and 1993, Atlantic City's results
were negatively affected by severe weather in the northeastern United States.
However, management believes the severity, duration and number of storms in
1994 had a more dramatic impact on attendance and operating performance than
in 1993. During 1994, the number of slot machines in Atlantic City increased
approximately 10%, while the number of table games, excluding poker tables,
decreased approximately 1%. Slot revenues represented 67% of total gaming
revenues in Atlantic City for 1994 and 1993.

Management believes that the reduced rate of slot revenue growth in
Atlantic City as compared to the last several years, in conjunction with the
expanded number of slot machines, has caused and will continue to cause
intense promotional efforts to attract slot players as both the Company and
its competitors seek to expand their share of slot revenues and maximize the
utilization of their slot machine inventory. Further, as a result of the
aggressive competition for slot patrons, the Atlantic City slot win percentage
has declined. Management believes that the slot win percentage will continue
to be subject to competitive pressure and may further decline. However, the
addition of poker, horse race simulcasting and keno over the last year has had
a favorable impact on the Atlantic City gaming environment. The Company
believes it is well-positioned to compete for additional casino revenues by
continuing to offer attractive promotional slot and table game programs and
special events and by enhancing the appearance and comfort of its gaming
space. In February 1994, the Company expanded its casino floor space from
68,100 to 71,400 square feet and in June 1994, the Company added another 8,700
square feet of gaming space to offer horse race simulcasting and keno, and to
relocate and expand its poker operations. In July 1994, the Company placed
in operation an additional 127 high denomination slot machines in the gaming
space formerly occupied by its poker operations. Further, the Company
recently completed a slot machine upgrade, replacing the majority of its slot
machine inventory with state-of-the-art machines with embedded bill acceptors,
and reconfigured its slot machine layout, adding additional slot stools and
aisle space.

Operating income of the Company for 1994 was $88.3 million compared to
$85.8 million for 1993, an increase of $2.5 million (3%) as the aforementioned
revenue increase was offset, in part, by a $21.7 million (8%) increase in
operating expenses. Despite the increase in operating expenses, the 1994
operating margin (before depreciation and amortization) remained unchanged
from 1993's level of nearly 32%. Casino expenses increased $11.3 million
(10%) due to an increase in salaries, benefits and other costs associated with
the introduction and operation of horse race simulcasting and keno in 1994 and
the operation of poker throughout all of 1994 compared to only six months in
1993, and expanded marketing and promotional efforts. Rooms expense increased
$.7 million (7%) mainly due to increased salaries and benefits associated with
higher room occupancy. Food and beverage expenses remained essentially
unchanged. Other operating expenses increased $3.1 million (6%) due to an
increase in the cost of property operations and ancillary services. Selling,
general and administrative expenses remained essentially unchanged.
Depreciation and amortization expense increased $5.2 million (20%) primarily
due to accelerated depreciation associated with the slot machine upgrade and
an increase in capital expenditures in 1994 and 1993. In addition, operating
costs and expenses include allocations from BEC of its overhead (including
executive salaries and benefits, public company reporting costs and other
corporate headquarters' costs) of $5.7 million and $4.1 million for 1994 and
1993, respectively. Management of BEC believes that the methods used to
allocate these costs are reasonable and expects similar allocations (subject
to changes in circumstances which may warrant modification) in future years.

Interest expense was $42.3 million for 1994 compared to $44.9 million for
1993. The decrease of $2.6 million (6%) reflects the March 1994 refinancing
of the Company's long-term debt at a more favorable rate, as well as lower
average line of credit and intercompany borrowings.

Effective rates of the provision for income taxes were 40% in 1994 and
45% in 1993. The 1994 and 1993 income tax rates differ from the U.S.
statutory tax rate of 35% due principally to state income taxes, net of the
related federal income tax benefit. In addition, the provision for income
taxes for 1993 was affected by adjustments of prior years' taxes. A
reconciliation of the provision for income taxes with amounts determined by
applying the U.S. statutory tax rate to income before income taxes,
extraordinary item and cumulative effect on prior years of change in
accounting for income taxes is included in Notes to consolidated financial
statements.

Effective January 1, 1993, the Company changed its method of accounting
for income taxes as required by Statement of Financial Accounting Standards
("SFAS") No. 109, "Accounting for Income Taxes." As permitted by SFAS No.
109, the Company elected to use the cumulative effect approach rather than to
restate the consolidated financial statements of any prior years to apply the
provisions of SFAS No. 109. The cumulative effect on prior years of this
change in accounting for income taxes was a charge of $11.4 million.
<PAGE>
ITEM 8. CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

INDEX

Reference

Report of independent auditors. . . . . . . . . . . . . . . . . . 12
Consolidated balance sheet. . . . . . . . . . . . . . . . . . . . 13
Consolidated statement of income. . . . . . . . . . . . . . . . . 15
Consolidated statement of stockholder's equity. . . . . . . . . . 16
Consolidated statement of cash flows. . . . . . . . . . . . . . . 17
Notes to consolidated financial statements. . . . . . . . . . . . 19

<PAGE>
REPORT OF INDEPENDENT AUDITORS

The Board of Directors and Stockholder
BALLY'S PARK PLACE, INC.

We have audited the accompanying consolidated balance sheet of Bally's
Park Place, Inc. (an indirect wholly owned subsidiary of Bally Entertainment
Corporation) as of December 31, 1994 and 1993, and the related consolidated
statements of income, stockholder's equity, and cash flows for each of the
three years in the period ended December 31, 1994. Our audits also included
the financial statement schedule listed in the Index at Item 14(a). These
financial statements and the schedule are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements and the schedule based on our audits.

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

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position
of Bally's Park Place, Inc. at December 31, 1994 and 1993, and the
consolidated results of its operations and its cash flows for each of the
three years in the period ended December 31, 1994, in conformity with
generally accepted accounting principles. Also, in our opinion, the related
financial statement schedule, when considered in relation to the basic
financial statements taken as a whole, presents fairly in all material
respects the information set forth therein.

As discussed in the "Summary of significant accounting policies -- Income
taxes" note to the consolidated financial statements, in 1993 the Company
changed its method of accounting for income taxes.

ERNST & YOUNG LLP
Philadelphia, Pennsylvania
February 15, 1995

<PAGE>
<TABLE>
BALLY'S PARK PLACE, INC.
(An Indirect Wholly Owned Subsidiary of Bally Entertainment Corporation)
CONSOLIDATED BALANCE SHEET
(In thousands)

<CAPTION>
December 31
--------------------
1994 1993
-------- --------
ASSETS
<S> <C> <C>
Current assets:
Cash and equivalents. . . . . . . . . . . . . $ 13,949 $ 12,295
Receivables -
Hotel and casino, less allowances of
$1,167 and $1,265 . . . . . . . . . . . . 2,936 3,964
Affiliates. . . . . . . . . . . . . . . . . 731 555
Notes and other . . . . . . . . . . . . . . 2,178 1,469
-------- --------
5,845 5,988
Income taxes receivable . . . . . . . . . . . 5,378 ---
Inventories . . . . . . . . . . . . . . . . . 2,228 1,834
Prepaid expenses. . . . . . . . . . . . . . . 1,748 1,025
Deferred income taxes . . . . . . . . . . . . 6,972 6,161
-------- --------
Total current assets . . . . . . . 36,120 27,303

Property and equipment, at cost:
Land. . . . . . . . . . . . . . . . . . . . . 90,745 82,825
Buildings and improvements. . . . . . . . . . 549,466 541,667
Furniture, fixtures and equipment . . . . . . 152,323 142,250
Construction in progress. . . . . . . . . . . 507 4,447
-------- --------
793,041 771,189
Accumulated depreciation. . . . . . . . . . . 309,672 284,691
-------- --------
Net property and equipment . . . . 483,369 486,498

Deferred finance costs, less accumulated
amortization of $1,270 and $7,388 . . . . . . 13,628 7,502
Casino Reinvestment Development Authority
investment obligations. . . . . . . . . . . . 11,681 11,314
Other assets. . . . . . . . . . . . . . . . . . 1,516 1,236
-------- --------
$546,314 $533,853
======== ========

<FN>
(Continued)
</TABLE>
<PAGE>
<TABLE>
BALLY'S PARK PLACE, INC.
(An Indirect Wholly Owned Subsidiary of Bally Entertainment Corporation)
CONSOLIDATED BALANCE SHEET
(In thousands, except share data)

<CAPTION>
December 31
--------------------
1994 1993
-------- --------
LIABILITIES AND STOCKHOLDER'S EQUITY
<S> <C> <C>
Current liabilities:
Accounts payable . . . . . . . . . . . . . . . $ 2,805 $ 4,479
Payable to affiliates. . . . . . . . . . . . . 707 944
Income taxes payable . . . . . . . . . . . . . 1,159 5,562
Accrued liabilities -
Interest . . . . . . . . . . . . . . . . . . 11,933 15,655
Compensation and payroll taxes . . . . . . . 8,038 7,895
Group insurance. . . . . . . . . . . . . . . 2,350 1,950
Other. . . . . . . . . . . . . . . . . . . . 15,630 15,497
Current maturities of long-term debt . . . . . 47 44
-------- --------
Total current liabilities . . . . . 42,669 52,026

Long-term debt, less current maturities. . . . . 427,641 354,727
Deferred income taxes. . . . . . . . . . . . . . 41,306 31,760
Pension liability. . . . . . . . . . . . . . . . 9,866 9,089
Other long-term liabilities. . . . . . . . . . . 859 1,071

Stockholder's equity:
Common stock, no par value, at stated value,
3,000 shares authorized, 100 shares
issued and outstanding . . . . . . . . . . . 1 1
Additional paid-in capital . . . . . . . . . . 23,972 85,179
Retained earnings. . . . . . . . . . . . . . . --- ---
-------- --------
Total stockholder's equity. . . . . 23,973 85,180
-------- --------
$546,314 $533,853
======== ========

<FN>
See accompanying notes.
</TABLE>
<PAGE>
<TABLE>
BALLY'S PARK PLACE, INC.
(An Indirect Wholly Owned Subsidiary of Bally Entertainment Corporation)
CONSOLIDATED STATEMENT OF INCOME
(In thousands)

<CAPTION>
Years Ended December 31
--------------------------------
1994 1993 1992
-------- -------- --------
<S> <C> <C> <C>
Revenues:
Casino . . . . . . . . . . . . . . $321,465 $297,688 $277,997
Rooms. . . . . . . . . . . . . . . 24,988 25,019 23,724
Food and beverage. . . . . . . . . 20,432 20,993 20,515
Other. . . . . . . . . . . . . . . 10,118 9,107 8,896
-------- -------- --------
377,003 352,807 331,132

Costs and expenses:
Casino . . . . . . . . . . . . . . 129,060 117,718 116,879
Rooms. . . . . . . . . . . . . . . 10,784 10,116 8,049
Food and beverage. . . . . . . . . 18,995 18,993 17,844
Other operating expenses . . . . . 56,149 53,060 54,154
Selling, general and
administrative . . . . . . . . . 36,240 36,352 40,488
Depreciation and amortization. . . 31,819 26,581 27,358
Allocations from Bally
Entertainment Corporation. . . . 5,659 4,141 3,660
-------- -------- --------
288,706 266,961 268,432
-------- -------- --------

Operating income . . . . . . . . . . 88,297 85,846 62,700
Interest expense . . . . . . . . . . 42,260 44,919 47,960
-------- -------- --------
Income before income taxes,
extraordinary item and cumulative
effect on prior years of change
in accounting for income taxes . . 46,037 40,927 14,740
Provision for income taxes . . . . . 18,450 18,500 6,800
-------- -------- --------
Income before extraordinary item
and cumulative effect on prior
years of change in accounting
for income taxes . . . . . . . . . 27,587 22,427 7,940
Extraordinary loss on
extinguishment of debt . . . . . . (20,735) --- ---
Cumulative effect on prior years of
change in accounting for income
taxes. . . . . . . . . . . . . . . --- (11,377) ---
-------- -------- --------
Net income . . . . . . . . . . . . . $ 6,852 $ 11,050 $ 7,940
======== ======== ========

<FN>
See accompanying notes.
/TABLE
<PAGE>
<TABLE>
BALLY'S PARK PLACE, INC.
(An Indirect Wholly Owned Subsidiary of Bally Entertainment Corporation)
CONSOLIDATED STATEMENT OF STOCKHOLDER'S EQUITY
(In thousands, except share data)

<CAPTION>
Number Additional Total
of shares Common paid-in Retained stockholder's
issued stock capital earnings equity
--------- ------- ---------- --------- -------------

<S> <C> <C> <C> <C> <C>
Balance at December 31, 1991 . . . . . 100 $ 1 $128,640 $ 4,249 $132,890

Net income . . . . . . . . . . . . -- -- -- 7,940 7,940
Receivable due from Bally
Entertainment Corporation
declared as a dividend . . . . . -- -- (37,811) (12,189) (50,000)
----- ----- -------- -------- --------
Balance at December 31, 1992 . . . . . 100 1 90,829 --- 90,830

Net income . . . . . . . . . . . . -- -- -- 11,050 11,050
Dividends paid . . . . . . . . . . -- -- (5,650) (11,050) (16,700)
----- ----- -------- -------- --------
Balance at December 31, 1993 . . . . . 100 1 85,179 --- 85,180

Net income . . . . . . . . . . . . -- -- -- 6,852 6,852
Dividends paid . . . . . . . . . . -- -- (61,207) (6,852) (68,059)
----- ----- -------- -------- --------
Balance at December 31, 1994 . . . . . 100 $ 1 $ 23,972 $ --- $ 23,973
===== ===== ======== ======== ========

<CAPTION>
Years Ended December 31
------------------------------
1994 1993 1992
-------- -------- --------
<S> <C> <C> <C>
Operating:
Income before extraordinary item and
cumulative effect on prior years of
change in accounting for income taxes. $ 27,587 $ 22,427 $ 7,940
Adjustments to reconcile to cash
provided-
Depreciation and amortization. . . . . 31,819 26,581 27,358
Other amortization included in
interest expense . . . . . . . . . . 1,592 1,712 3,209
Deferred income taxes. . . . . . . . . 8,735 6,753 1,049
Provision for doubtful receivables . . 144 421 889
Change in operating assets and
liabilities. . . . . . . . . . . . . (1,434) (8,092) (5,089)
-------- -------- --------
Cash provided by operating
activities . . . . . . . . . . . 68,443 49,802 35,356
Investing:
Purchases of property and equipment. . . (27,906) (14,436) (10,268)
Proceeds from disposal of property
and equipment. . . . . . . . . . . . . 293 750 345
Purchases of Casino Reinvestment
Development Authority investment
obligations and credits. . . . . . . . (1,444) (1,350) (2,692)
-------- -------- --------
Cash used in investing
activities . . . . . . . . . . . (29,057) (15,036) (12,615)
Financing:
Debt transactions -
Net repayments under revolving
credit agreements. . . . . . . . . . (2,000) (1,000) (22,000)
Advances from (repayments to)
affiliate, net . . . . . . . . . . . --- (16,000) 1,700
Proceeds from issuance of long-term
debt . . . . . . . . . . . . . . . . 425,000 --- ---
Repayments of long-term debt . . . . . (377,775) (1,046) (2,296)
Debt issuance costs. . . . . . . . . . (14,898) --- (375)
-------- -------- --------
Cash provided by (used in) debt
transactions . . . . . . . . . . 30,327 (18,046) (22,971)
Equity transactions -
Dividends paid to Bally's Casino
Holdings, Inc. . . . . . . . . . . . (68,059) (16,700) ---
-------- -------- --------
Cash used in financing
activities . . . . . . . . . . . (37,732) (34,746) (22,971)
-------- -------- --------
Increase (decrease) in cash and
equivalents. . . . . . . . . . . . . . 1,654 20 (230)
Cash and equivalents, beginning of
year . . . . . . . . . . . . . . . . . 12,295 12,275 12,505
-------- -------- --------
Cash and equivalents, end of year. . . . . $ 13,949 $ 12,295 $ 12,275
======== ======== ========
<FN>
(Continued)
/TABLE
<PAGE>
<TABLE>
BALLY'S PARK PLACE, INC.
(An Indirect Wholly Owned Subsidiary of Bally Entertainment Corporation)
CONSOLIDATED STATEMENT OF CASH FLOWS
(In thousands)
<CAPTION>
Years Ended December 31
-------------------------------
1994 1993 1992
-------- -------- ---------
SUPPLEMENTAL CASH FLOW INFORMATION
<S> <C> <C> <C>
Changes in operating assets and
liabilities were as follows:
Increase in receivables. . . . . . . . $ (1) $ (2,506) $ (189)
Increase in income taxes receivable. . (5,378) --- ---
(Increase) decrease in inventories . . (394) 138 151
(Increase) decrease in prepaid
expenses. . . . . . . . . . . . . . (1,003) 4,082 (612)
Increase (decrease) in accounts
payable, payable to affiliates
and accrued liabilities . . . . . . (4,957) 2,160 (463)
Increase in income taxes payable . . . 9,734 1,374 1,956
Increase (decrease) in pension
liability . . . . . . . . . . . . . 777 (13,150) (5,764)
Decrease in other long-term
liabilities. . . . . . . . . . . . . (212) (190) (168)
-------- -------- --------
$ (1,434) $ (8,092) $ (5,089)
======== ======== ========

Operating activities include cash
payments for interest and income
taxes as follows:
Interest paid. . . . . . . . . . . . . $ 44,733 $ 43,278 $ 45,141
Interest capitalized . . . . . . . . . (342) (71) (74)
Income taxes paid (net of refunds) . . 5,359 10,373 3,795

Investing and financing activities
exclude the following non-cash
activities:
Donation of Casino Reinvestment
Development Authority investment
obligations, net . . . . . . . . . . $ 245 $ 950 $ ---
Receivable due from Bally
Entertainment Corporation
declared as a dividend . . . . . . . --- --- 50,000

<FN>
See accompanying notes.
</TABLE>
<PAGE>
Summary of significant accounting policies

Basis of presentation

The accompanying consolidated financial statements include the accounts
of Bally's Park Place, Inc., a Delaware corporation (the "Company") and its
subsidiaries. The Company was a direct wholly owned subsidiary of Bally
Entertainment Corporation ("BEC") until June 16, 1993, when BEC contributed
all of the capital stock of the Company to Bally's Casino Holdings, Inc.
("Casino Holdings"). Casino Holdings was formed as a subsidiary of BEC in
April 1993 for acquiring and developing gaming operations, including those in
emerging gaming jurisdictions. Unless otherwise specified in the text,
references to the Company include the Company and its subsidiaries.

The Company operates in one industry segment. All significant revenues
arise from its casino and supporting hotel operations.

Certain reclassifications have been made to prior years' financial
statements to conform with the 1994 presentation.

Cash equivalents

The Company considers all highly liquid investments with maturities of
three months or less when purchased to be cash equivalents.

Inventories

Inventories of provisions and supplies are stated at the lower of cost
(first-in, first-out basis) or market, which approximates replacement cost.

Property and equipment

Depreciation of property and equipment is provided principally on the
straight-line method over the estimated economic lives of the related assets
and the terms of the applicable leases for leasehold improvements.
Depreciation expense was $30,742, $26,581 and $26,462 for 1994, 1993 and 1992,
respectively.

Deferred finance costs

Deferred finance costs are amortized over the terms of the related debt
using the bonds outstanding method.

Revenue recognition

Casino revenues consist of the net win from gaming activities, which is
the difference between gaming wins and losses. Operating revenues exclude the
retail value of complimentary food, beverage and hotel services furnished to
customers, which were approximately $34,920, $31,780 and $36,809 for 1994,
1993 and 1992, respectively. The estimated costs of providing such
complimentary services, which are classified as casino expenses through
interdepartment allocations from the departments granting the services, were
as follows:
<TABLE>
<CAPTION>
1994 1993 1992
-------- -------- --------
<S> <C> <C> <C>
Rooms................................... $ 5,653 $ 4,919 $ 5,592
Food and beverage....................... 19,818 17,449 16,478
Other................................... 892 513 630
-------- -------- --------
$ 26,363 $ 22,881 $ 22,700
======== ======== ========
</TABLE>

Income taxes

Taxable income or loss of the Company is included in the consolidated
federal income tax return of BEC. Under agreements between the Company, BEC
and Casino Holdings, income taxes are allocated to the Company based on
amounts the Company would pay or receive if it filed a separate consolidated
federal income tax return, except that the Company receives credit from BEC
for the tax benefit of the Company's net operating losses and tax credits, if
any, that can be utilized in BEC's consolidated federal income tax return,
regardless of whether these losses or credits could be utilized by the Company
on a separate consolidated federal income tax return basis. Payments to BEC
are due at such time and in such amounts as payments are required to be made
for income tax purposes. Payments by BEC for such tax benefits are due at the
time BEC files the applicable consolidated federal income tax return. Under
the tax sharing agreement, the Company had federal income taxes receivable
from BEC of $5,378 at December 31, 1994 and federal income taxes payable to
BEC of $5,013 at December 31, 1993, which are included in income taxes
receivable and income taxes payable, respectively, on the accompanying
consolidated balance sheet.

Fair value of financial instruments

The fair value of the Company's financial instruments approximates their
recorded book values at December 31, 1994 and 1993, excluding the 9 1/4% First
Mortgage Notes due 2004 (the "9 1/4% Notes") whose fair market value based on
quoted market prices was approximately $361,250 at December 31, 1994 and the
11 7/8% First Mortgage Notes due 1999 (the "11 7/8% Notes") whose fair market
value was approximately $378,875 at December 31, 1993. The fair values are
not necessarily indicative of the amounts the Company could realize in a
current market exchange.

Casino licensing

In June 1994, the New Jersey Casino Control Commission (the "CCC")
granted a renewal of the Company's casino license to operate Bally's Park
Place-New Jersey through June 1996. A New Jersey casino license is not
transferable and must be renewed by filing an application. The CCC requires
notification and in some instances prior approval of dividends and other
payments made by the Company to BEC and Casino Holdings, other than
specifically defined payments made in the ordinary course of business.

Casino Reinvestment Development Authority investment obligations

The New Jersey Casino Control Act provides, among other things, for an
assessment of licensees equal to 1 1/4% of their gross gaming revenues in lieu
of an investment alternative tax equal to 2 1/2% of gross gaming revenues.
The Company may satisfy this investment obligation by investing in qualified
eligible direct investments, by making qualified contributions or by
depositing funds with the New Jersey Casino Reinvestment Development Authority
("CRDA"). Funds deposited with the CRDA may be used to purchase bonds
designated by the CRDA or, under certain circumstances, may be donated to the
CRDA in exchange for credits against future CRDA investment obligations. CRDA
bonds have terms up to fifty years and bear interest at below market rates.
The Company records a charge to operations when it deposits funds with the
CRDA to reflect the estimated realizable value of its CRDA investment
obligations and these charges totaled $2,604, $2,059 and $2,228 in 1994, 1993
and 1992, respectively.

Allocations from BEC and transactions with related parties

BEC allocates costs to the Company consisting of the Company's allocable
share of BEC's corporate overhead including executive salaries and benefits,
public company reporting costs and other corporate headquarters' costs. While
the Company does not obtain a measurable direct benefit from these allocated
costs, management believes that the Company receives an indirect benefit from
BEC's oversight. BEC's method for allocating costs is designed to apportion
the majority of its operating costs to its subsidiaries and is generally based
upon many subjective factors including various measures of operational size
and extent of BEC's oversight requirements. Management of BEC believes that
the methods used to allocate these costs are reasonable and expects similar
allocations in future years. Because of BEC's controlling relationship with
the Company and the allocation of certain BEC costs, the operating results of
the Company could be significantly different if the Company operated
autonomously. In addition, certain of the Company's insurance coverage is
negotiated by BEC pursuant to corporate-wide programs. In these
circumstances, BEC charges the Company its proportionate share of the
respective insurance premiums.

Certain executive officers of the Company function in a similar capacity
for GNAC, CORP. (a wholly owned subsidiary of BEC which owns and operates the
casino hotel resort in Atlantic City known as the "The Grand"), and exercise
decision-making and operational authority over both entities. No allocation
of cost is made from the Company to The Grand for these executive officers as
management deems the direct allocable cost to be immaterial. In addition,
certain administrative and support operations of the Company and The Grand are
consolidated, including limousine services, legal services and purchasing.
Costs of these operations are allocated to or from the Company either directly
or using various formulas based on estimates of utilization of such services.
On a net basis, allocations to The Grand were $99, $1,096 and $2,568 in 1994,
1993 and 1992, respectively, which management believes were reasonable.

The Company leases surface area parking lots to The Grand, and rental
income was $696 in each of 1994, 1993 and 1992. In addition, the Company paid
$869 to The Grand during 1992 for CRDA credits which were used by the Company
in satisfaction of a portion of its CRDA obligations.

The Company and The Grand have a cash management arrangement whereby The
Grand has advanced excess funds to the Company which the Company used to
reduce the outstanding balance under its revolving credit agreement. The
Company paid interest monthly on these advances (at the prime rate of its
agent bank) which totaled $432 and $1,249 in 1993 and 1992, respectively. No
amounts were advanced during 1994.

In April 1990, the Company advanced BEC $50,000, with interest earned at
the prime rate of its agent bank. In October 1992, BEC petitioned the CCC to
allow the Company to declare the receivable due from BEC as a dividend. The
CCC approved this request in December 1992. No interest was paid to the
Company subsequent to April 1, 1992. Intercompany interest earned on this
advance was $808 in 1992.

Long-term debt
<TABLE>
<CAPTION>
December 31
---------------------
1994 1993
--------- ---------
<S> <C> <C>
9 1/4% Notes................................... $ 425,000 $ ---
11 7/8% Notes.................................. --- 350,000
Revolving credit agreement..................... --- 2,000
Other secured and unsecured debt............... 2,688 2,771
--------- ---------
Total long-term debt......................... 427,688 354,771
Less current maturities........................ 47 44
--------- ---------
Total long-term debt less current maturities. $ 427,641 $ 354,727
========= =========
</TABLE>
In March 1994, the Company issued $425,000 principal amount of the 9 1/4%
Notes. The 9 1/4% Notes are not subject to any sinking fund requirement, but
may be redeemed beginning March 1999, in whole or in part, with premiums
ranging from 4.5% in 1999 to zero in 2002 and thereafter. In addition, on or
before March 15, 1997, a portion of the 9 1/4% Notes may be redeemed at a
premium of 9.25% out of the proceeds of one or more public equity offerings
by the Company or Casino Holdings if such offerings were to occur, provided
that at least $100,000 principal amount of the 9 1/4% Notes remains
outstanding after the redemption. The 9 1/4% Notes are secured by a first
mortgage on and security interest in substantially all property and equipment
of the Company. The Company used the net proceeds from the sale of the 9 1/4%
Notes to purchase and retire certain of its 11 7/8% Notes, defease the
remaining 11 7/8% Notes at a price of 104.45% of their principal amount plus
accrued interest through the redemption date, thereby satisfying all
obligations thereunder, and pay dividends of $30,214 to Casino Holdings. The
retirement and defeasance of the 11 7/8% Notes resulted in an extraordinary
loss of $20,735, net of an income tax benefit of $14,137. In connection with
the sale of the 9 1/4% Notes, the Company terminated its former credit
facility and entered into an agreement for a new $50,000 revolving credit
facility which expires on December 31, 1996, at which time all amounts
outstanding become due. The new credit facility provides for interest on
borrowings payable, at the Company's option, at the agent bank's prime rate
or the LIBOR rate plus 2%, each of which increases as the balance outstanding
increases. The new credit facility is secured by a pari passu lien on the
collateral securing the 9 1/4% Notes. The Company pays a fee of 1/2% on the
unused commitment and the entire credit line was available at December 31,
1994.

The indenture for the 9 1/4% Notes and the new credit facility impose
restrictions on the Company's ability to incur debt and issue preferred stock,
make acquisitions and certain restricted payments, create liens, sell assets
or enter into transactions with affiliates. The new credit facility is, in
certain circumstances, more restrictive than the indenture for the 9 1/4 %
Notes. In connection with the sale of the 9 1/4% Notes, the CCC requires,
among other things, that dividends paid by the Company to Casino Holdings
which are not paid pursuant to a net income test (generally limited to 50% of
aggregate consolidated net income, as defined, earned since April 1, 1994)
receive prior approval from the CCC. The indenture for the 9 1/4% Notes
limits dividends that are not paid pursuant to the net income test to $50,000
in aggregate, of which $25,000 was paid in 1994. At December 31, 1994, $2,059
was available to be paid under the net income test.

The Company has aggregate annual maturities of long-term debt for the
five years after December 31, 1994 of $47, $49, $51, $53 and $55.

Income taxes

The provision for income taxes consists of the following:
<TABLE>
<CAPTION>
1994 1993 1992
-------- -------- --------
<S> <C> <C> <C>
Current:
Federal.......................... $ 5,217 $ 9,792 $ 4,539
State............................ 4,498 1,955 1,212
-------- -------- --------
9,715 11,747 5,751

Deferred:
Federal.......................... 9,583 4,627 764
State............................ (848) 2,126 285
-------- -------- --------
8,735 6,753 1,049
-------- -------- --------
$ 18,450 $ 18,500 $ 6,800
======== ======== ========
</TABLE>

Deferred income taxes reflect the net tax effect of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
and income tax purposes. Significant components of the Company's deferred tax
assets and liabilities as of December 31, 1994 and 1993, along with their
classification, are as follows:
<TABLE>
<CAPTION>
1994 1993
--------------------- ---------------------
Assets Liabilities Assets Liabilities
------- ----------- ------- -----------
<S> <C> <C> <C> <C>
Expenses which are not
currently deductible
for tax purposes:
Bad debts............... $ 484 $ --- $ 500 $ ---
Deferred compensation
and pension........... 4,038 --- 3,739 ---
CRDA investment
obligation............ 4,156 --- 2,405 ---
Other................... 6,569 --- 5,956 ---
Depreciation and
capitalized costs......... --- 40,508 --- 41,225
Other, net.................. --- 9,073 3,026 ---
------- ------- ------- -------
$15,247 $49,581 $15,626 $41,225
======= ======= ======= =======

Current..................... $ 6,972 $ --- $ 6,161 $ ---
Long-term................... 8,275 49,581 9,465 41,225
------- ------- ------- -------
$15,247 $49,581 $15,626 $41,225
======= ======= ======= =======
</TABLE>

The deferred income tax provision for 1992, which was determined pursuant
to Accounting Principles Board Opinion No. 11, arose from the tax effect of
timing differences primarily related to deferred compensation and pension,
accrued expenses and depreciation and amortization.

A reconciliation of the provision for income taxes with amounts
determined by applying the U.S. statutory tax rate to income before income
taxes, extraordinary item and cumulative effect on prior years of change in
accounting for income taxes is as follows:
<TABLE>
<CAPTION>
1994 1993 1992
-------- -------- --------
<S> <C> <C> <C>
Provision at U.S. statutory tax rate (35%
in 1994 and 1993 and 34% in 1992)...... $ 16,113 $ 14,324 $ 5,012
Add (deduct):
State income taxes, net of related
federal income tax benefit........... 2,376 2,647 988
Effect of change in state (1994) and
U.S. (1993) statutory tax rates on
deferred tax balances................ (171) 427 ---
Prior years' taxes..................... --- 1,107 380
Other, net............................. 132 (5) 420
-------- -------- --------
Provision for income taxes................. $ 18,450 $ 18,500 $ 6,800
======== ======== ========
</TABLE>

Retirement and stock plans

The Company has a noncontributory supplemental executive retirement plan
(the "SERP") for certain key executives. Normal retirement under the SERP is
age 60 and participants receive benefits based on years of service and
compensation. Pension costs of the SERP are unfunded. The net periodic
pension cost for the Company's SERP consists of the following:
<TABLE>
<CAPTION>
1994 1993 1992
-------- -------- --------
<S> <C> <C> <C>
Amortization of transition costs........... $ 142 $ 251 $ 126
Service cost-benefits earned during
the year................................. 100 2,329 412
Interest cost on projected benefit
obligations.............................. 707 510 478
Other...................................... --- --- 220
-------- -------- --------
Net periodic pension cost............. $ 949 $ 3,090 $ 1,236
======== ======== ========
</TABLE>

The benefit obligations and funded status of the SERP as of December 31,
1994 and 1993 are as follows:
<TABLE>
<CAPTION>
1994 1993
-------- --------
<S> <C> <C>
Actuarial present value of benefit obligations:
Vested benefits................................... $ 7,976 $ 6,773
Nonvested benefits................................ --- 694
-------- --------
Accumulated benefit obligations................... 7,976 7,467
Effect of projected salary increases.............. 3,756 4,235
-------- --------
Projected benefit obligations..................... 11,732 11,702
Unrecognized transition obligation.................. (462) (603)
Unrecognized obligation due to change in
assumptions....................................... (1,404) (2,010)
-------- --------
Accrued pension liability........................... $ 9,866 $ 9,089
======== ========
</TABLE>

The discount rate was 6.0% in 1994 and 1993 and 8.0% in 1992, and the
rate of increase in future compensation levels used in determining the
actuarial present value of the projected benefit obligations was 6.0% in 1994,
1993 and 1992.

In addition to the defined benefit pension plan described above, the
Company also has defined contribution plans that provide retirement benefits
for eligible non-union employees. Eligible employees may elect to participate
by contributing a percentage of their pre-tax earnings to the plans. Employee
contributions to the plans, up to certain limits, are matched in various
percentages by the Company. In addition, one plan has profit sharing
features, with discretionary Company contributions allocable based on eligible
employee compensation. The expense for such plans was $3,101, $3,129 and
$2,608 for 1994, 1993 and 1992, respectively.

Certain employees of the Company are covered by union-sponsored,
collectively bargained, multi-employer defined benefit pension plans. The
contributions and charges to expense for these plans were $638, $583 and $562
in 1994, 1993 and 1992, respectively.

Eligible employees of the Company may also participate in BEC's Employee
Stock Purchase Plan, which provides participating employees the opportunity
to purchase (through payroll deductions) shares of BEC common stock at a price
equal to 85% of the fair market value of the stock at specified dates. In
addition, certain officers and key employees of the Company participate in the
1989 Incentive Plan of BEC, pursuant to which BEC has granted these
individuals options (generally becoming exercisable in three equal annual
installments commencing one year after the date of grant) to purchase BEC
common stock at a price equal to the fair market value of the stock at the
date of grant. Since these plans are noncompensatory, no expense has been
recorded by the Company in connection with the plans.

Guarantee

At December 31, 1994, the Company was contingently liable for the
guarantee of payments (up to $24,100) in the event certain affiliates fail to
make required payments pursuant to various contractual obligations.
<PAGE>
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

Item 9 is inapplicable.

<PAGE>
PART III

Part III is omitted pursuant to General Instruction J of Form 10-K.

<PAGE>
PART IV

ITEM 14. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) 1. Index to Financial Statements.

Reference

Report of independent auditors . . . . . . . . . . . . . . . . . . 12

Consolidated balance sheet at December 31, 1994 and 1993 . . . . . 13

For each of the three years in the period ended December 31, 1994:
Consolidated statement of income . . . . . . . . . . . . . . . . 15

Consolidated statement of stockholder's equity . . . . . . . . . 16

Consolidated statement of cash flows . . . . . . . . . . . . . . 17

Notes to consolidated financial statements . . . . . . . . . . . . 19

2. Index to Financial Statement Schedules.

Schedule II Valuation and qualifying accounts for each of
the three years in the period ended December 31,
1994. . . . . . . . . . . . . . . . . . . . . . . . 32

All other schedules specified under Regulation S-X are omitted because they
are not applicable, not required under the instructions or all information
required is set forth in the Notes to consolidated financial statements.

3. Index to Exhibits.

*3.1 Restated Certificate of Incorporation of the Company.
**3.2 Amended and Restated By-laws of the Company.
**3.3 Certificate of Incorporation of Bally's Park Place Funding, Inc.
**3.4 Amended and Restated By-laws of Bally's Park Place Funding, Inc.
*3.5 Amended and Restated Certificate of Incorporation of Bally's
Park Place-New Jersey.
*3.6 Amended and Restated By-laws of Bally's Park Place-New Jersey.
*4.1 Form of Indenture governing 11 7/8% First Mortgage Notes due
1999 of Bally's Park Place Funding, Inc.
*4.1.1 Form of First Mortgage Note.
*4.1.2 Form of Guaranty of the Company.
**4.2 Form of Indenture governing 9 1/4% First Mortgage Notes due 2004
of Bally's Park Place Funding, Inc.
**4.2.1 Form of Note (included as part of Article II of the Indenture).
**4.2.2 Form of Guaranty of the Company of the Notes (included as part
of Article II of the Indenture).
***10(i).1 Intercorporate Agreement dated as of June 24, 1993 among Casino
Holdings, Bally's Park Place-New Jersey and BEC.
***10(i).2 Tax Sharing Agreement dated as of June 17, 1993 between BEC and
Casino Holdings.
***10(i).3 Tax Sharing Agreement dated as of June 17, 1993 between BEC and
Bally's Park Place-New Jersey.
*10(i).4 Amended and Restated Loan Agreement dated as of June 30, 1992
among Bally's Park Place-New Jersey, the Company, Bally's Park
Place Realty Co. ("Realty Co."), and the Senior Lender, as agent
and the other banks named therein governing the existing credit
facility (filed as an exhibit to the Annual Report on Form 10-K
for the Company for the year ended December 31, 1992).
**10(i).5 Form of Mortgage and Security Agreement with Assignment of Rents
among Bally's Park Place-New Jersey, Realty Co., Bally's
Park Place Funding, Inc. and First Bank.
**10(i).6 Form of Assignment of Leases and Rents among Bally's Park Place-
New Jersey, Realty Co. and First Bank.
**10(i).7 Form of Note Pledge Agreement among Bally's Park Place-New
Jersey, Bally's Park Place Funding, Inc. and First Bank.
**10(i).8 Form of Note.
**10(i).9 Form of Intercreditor Agreement.
*10(i).10 Mortgage and Security Agreement with Assignment of Rents dated
August 31, 1989 among Bally's Park Place-New Jersey, Realty Co.,
Bally's Park Place Funding, Inc. and First Fidelity Bank.
*10(i).11 Assignment of Leases and Rents dated August 31, 1989 among
Bally's Park Place-New Jersey, Realty Co. and First Fidelity
Bank.
*10(i).12 Note Pledge Agreement dated August 31, 1989 among Bally's Park
Place-New Jersey, Realty Co. and First Fidelity Bank.
*10(i).13 $350,000,000 Note dated August 31, 1989.
10(i).14 Loan and Guaranty Agreement dated March 8, 1994 among the
Company, Bally's Park Place-New Jersey, Realty Co., Inc. and
First Fidelity Bank, as agent and lender and Midlantic National
Bank as lender.
10(i).15 First Amendment to Credit and Guaranty Agreement dated as of
December 5, 1994 among the Company, Bally's Park Place-New
Jersey, Realty Co., Inc. And First Fidelity Bank, as agent and
lender and Midlantic National Bank as lender.
10(i).16 Guaranty of the Company to Arthur Goldberg in an amount up to
$10,000,000.
*10(ii).1 Lease Agreement dated June 8, 1977, between Bally's Park Place-
New Jersey and the Palley Blatt Company respecting the
Marlborough-Blenheim Hotel Property (filed as an exhibit to the
Company's Registration Statement on Form S-1, Registration No.
2-65017).
*10(ii).2 Letter dated April 27, 1979, from Bally's Park Place-New Jersey
to Alexander K. Blatt and Norman Palley, as Trustees, agreeing
to the purchase and modification of the First Peoples National
Bank of New Jersey's $4,000,000 mortgage loan to the Palley
Blatt Company (filed as an exhibit to the Company's Registration
Statement on Form S-1, Registration No. 2-65017).
*10(iii).1 Retirement and Separation Agreement dated January 8, 1993
between BEC, Bally's Park Place-New Jersey and Richard Gillman
(filed as an exhibit to the Company's Annual Report on Form 10K
for the year ended December 31, 1992).
*10(iii).2 Split-Dollar Life Insurance Agreements and Collateral
Assignments by and among the Company's, Bally's Park Place-New
Jersey, Richard Gillman and Scott Gillman dated February 1,
1985.
*10(iii).3 Split-Dollar Life Insurance Agreements and Collateral
Assignments by and among the Company's, Bally's Park Place-New
Jersey, Richard Gillman and Marc Gillman dated February 1, 1985.
*10(iii).4 Employee Incentive Stock Option Plan of Bally's Park Place-New
Jersey (filed as an exhibit to the Company's Registration
Statement on Form S-8, Registration No. 2-76757).
*10(iii).5 Amendment to Employee Incentive Stock Option Plan of Bally's
Park Place-New Jersey dated May 6, 1985.
*10(iii).6 Amendments to Employee Incentive Stock Option Plan of Bally's
Park Place-New Jersey dated January 24, 1986.
*10(iii).7 Supplemental Executive Retirement Plan of Bally's Park Place-New
Jersey effective as of January 1, 1987.
*10(iii).8 Group Travel Accident Policy between Bally's Park Place-New
Jersey and Hartford Insurance Group effective February 5, 1988.
*10(iv).1 Employment Agreement dated as of November 1, 1990, as amended,
between BEC and Arthur Goldberg (filed as an exhibit to the
Company's Annual Report on Form 10-K for the year ended December
31, 1991).
*10(iv).1.1 First Amendment to Employment Agreement effective as of November
1, 1991 between BEC and Arthur Goldberg (filed as an exhibit to
the Company's Annual Report on Form 10K for the year ended
December 31, 1992).
**10(iv).1.2 Second Amendment to Employment Agreement effective September 29,
1993 between BEC and Arthur Goldberg.
***10(iv).2 Employment Agreement effective as of January 1, 1993 between BEC
and Wallace R. Barr.
***10(iv).3 Employment Agreement effective as of July 1, 1992 between BEC
and Robert Conover.
**10(iv).4 Severance Agreement effective as of March 1, 1993 between
Bally's Park Place-New Jersey and C. Patrick McKoy.
***10(iv).5 Settlement Agreement and Release dated July 30, 1993 between
Bally's Park Place-New Jersey and Charles Tannenbaum.

**22 Subsidiaries of Bally's Park Place-New Jersey.

27 Financial Data Schedule. (Filed electronically only.)

*Incorporated herein by reference and filed as an exhibit to Bally Park Place
Funding's, Inc. Registration Statement on Form S-1, Registration No. 33-26464,
unless otherwise indicated.

**Incorporated herein by reference and filed as an exhibit to Bally's Park
Place Funding's, Inc. Registration Statement on Form S-1, Registration
No. 33-51765.

***Incorporated herein by reference and filed as an exhibit to Bally's Casino
Holdings, Inc. Registration Statement on Form S-1, Registration No. 33-654438.

<TABLE>
BALLY'S PARK PLACE, INC.

SCHEDULE II-VALUATION AND QUALIFYING ACCOUNTS

Years Ended December 31, 1994, 1993 and 1992
(In thousands)

<CAPTION>
Additions
--------------------
Balance at Charged to Charged Balance at
beginning costs and to other end of
Description of period expenses accounts Deductions period
-------------- ---------- ----------- -------- ------------ ----------
<S> <C> <C> <C> <C> <C>
Allowance for
doubtful
receivables:

1994. . . . . $1,265 $ 144 $ --- $ 242 $1,167
====== ====== ====== ====== ======

1993. . . . . $1,800 $ 421 $ --- $ 956 $1,265
====== ====== ====== ====== ======

1992. . . . . $6,210 $ 889 $ --- $5,299 $1,800
====== ====== ====== ====== ======

<FN>
Note:

Deductions consist of write-offs of uncollectible amounts, net of
recoveries.
</TABLE>
<PAGE>
SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this Annual Report to be signed on its behalf by
the undersigned thereunto duly authorized.

Bally's Park Place, Inc.

Dated: March 31, 1995 /s/ Joseph A. D'Amato
---------------------------------
Joseph A. D'Amato
Vice President and Treasurer
(principal financial and accounting
officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this
Annual Report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated. This Annual
Report may be signed in multiple identical counterparts, all of which taken
together, shall constitute a single document.

Dated: March 31, 1995 /s/ Arthur M. Goldberg
---------------------------------
Arthur M. Goldberg
Chairman of the Board,
Chief Executive Officer
and Director
(principal executive officer)

Dated: March 31, 1995 /s/ Wallace R. Barr
---------------------------------
Wallace R. Barr
President, Chief Operating
Officer and Director

Dated: March 31, 1995 /s/ Joseph A. D'Amato
---------------------------------
Joseph A. D'Amato
Vice President and Treasurer
(principal financial and accounting
officer)

Dated: March 31, 1995 /s/ Lee S. Hillman
---------------------------------
Lee S. Hillman
Director

Dated: March 31, 1995 /s/ J. Kenneth Looloian
---------------------------------
J. Kenneth Looloian
Director

<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONDENSED CONSOLIDATED BALANCE SHEET AT DECEMBER 31, 1994, AND THE
CONSOLIDATED STATEMENT OF OPERATIONS AND THE CONSOLIDATED STATEMENT OF
STOCKHOLDER'S EQUITY FOR THE YEAR ENDED DECEMBER 31,1994 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994
<CASH> 13,949
<SECURITIES> 0
<RECEIVABLES> 2,936
<ALLOWANCES> 1,167
<INVENTORY> 2,228
<CURRENT-ASSETS> 36,120
<PP&E> 793,041
<DEPRECIATION> 309,672
<TOTAL-ASSETS> 546,314
<CURRENT-LIABILITIES> 42,669
<BONDS> 427,641
<COMMON> 1
0
0
<OTHER-SE> 23,972
<TOTAL-LIABILITY-AND-EQUITY> 546,314
<SALES> 0
<TOTAL-REVENUES> 377,003
<CGS> 0
<TOTAL-COSTS> 158,695
<OTHER-EXPENSES> 56,149
<LOSS-PROVISION> 144<F1>
<INTEREST-EXPENSE> 42,260
<INCOME-PRETAX> 46,037
<INCOME-TAX> 18,450
<INCOME-CONTINUING> 27,587
<DISCONTINUED> 0
<EXTRAORDINARY> (20,735)
<CHANGES> 0
<NET-INCOME> 6,852
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<FN>
<F1>
THE PROVISION FOR DOUBTFUL ACCOUNTS IS INCLUDED IN CASINO OPERATING COSTS AND
EXPENSES IN THE CONSOLIDATED STATEMENT OF OPERATIONS FOR THE YEAR ENDED
DECEMBER 31, 1994.
</FN>

</TABLE>

GUARANTY

Bally's Park Place, Inc. a Delaware corporation ("Company"),
hereby unconditionally guarantees to Arthur M. Goldberg ("Holder") the full
payment (up to an aggregate of $10,000,000.00) of amounts ("Obligations")
due Holder (i) on optional and mandatory redemption of the Series A
Cumulative Exchangeable Preferred Stock, par value $1.00 per share
("Preferred Stock") of Bally's Casino, Inc., a Delaware corporation
("Bally's Casino"), in accordance with the terms ("Terms") of that certain
Certificate of the Designations, Preferences and Relative, Participating,
Optional or other Special Rights of the Series A Cumulative Exchangeable
Preferred Stock, Par Value $1.00 Per Share of Bally's Casino, Inc., as
filed with the Secretary of State of Delaware on December 28, 1994; (ii) if
Holder is entitled to payment of the Underlying Value (as defined in
Section ID1 of the Terms) and (iii) on account of monetary damages
sustained by Holder as the result of the failure of Bally's Casino to
deliver Bally Common Stock (as defined in Section ID1 of the Terms) when
and as required under Article D of the Terms under circumstances when the
provisions entitling Holder to payment of the Underlying Value would be
inapplicable.

This Guaranty is made for valuable consideration, receipt of
which the Company hereby acknowledges, and in order to induce Holder to
enter into that certain Stock Subscription Agreement dated as of December
30, 1994 among Holder, Bally's Casino, Inc., a Delaware corporation
("Casino") and Bally Entertainment Corporation which provides for the
subscription by Holder for shares of preferred stock of Casino. Failing
payment when due of any amounts so guaranteed for whatever reason, Company
agrees to pay the same immediately. This is a guaranty of payment and not
of collectibility. Company hereby agrees that its obligations hereunder
shall be unconditional irrespective of the validity of the Preferred Stock
or the enforceability (in whole or in part) of the Terms. Company hereby
waives acceptance of this Guaranty, diligence, presentment and demand of
payment, and covenants that this Guaranty will not be discharged except by
complete performance by Bally's Casino of the Obligations or complete
performance by the Company hereunder.

Payment by the Company under this Guaranty shall not be made (a)
if at the time such payment is due (the "Payment Date"), there exists a
Payment Postponement Condition (as hereinafter defined) and (b) unless
First Fidelity Bank, N.A. and Midlantic Bank, N.A. (the "Lenders") are in
receipt of a Compliance Certificate (as hereinafter defined) delivered
within the prior 10 days; provided, however, that such payment, together
with interest at the rate of eight (8%) percent per annum from the Payment
Date to the date such payment is made (subject to the $10,000,000 aggregate
limit of this Guaranty), shall be made by the Company as soon after the
Payment Date as no Payment Postponement Condition shall exist and the
Lenders are in receipt of a Compliance Certificate delivered within the
prior 10 days.

As used herein, "Loan Agreement" shall mean that certain Loan and
Security Agreement dated March 8, 1994 as amended by the First Amendment to
Credit and Guaranty Agreement dated December 5, 1994, by and among Bally's
Park Place, Inc., a New Jersey corporation as borrower, and the Lenders;
and "Payment Postponement Condition" shall mean the following:

(a) An Event of Default (as defined in the Loan Agreement
as in effect on the date of this Agreement [the "Current Loan Agreement"]
or as defined in any amendment to the Current Loan Agreement, if the effect
of such amendment is to delete an Event of Default or to define any Event
of Default so that it is less restrictive than under the Current Loan
Agreement) shall have occurred and is continuing on the Payment Date; or

(b) The Company is aware of any event that is likely
to occur before (i) the end of the fiscal quarter after the fiscal quarter
in which the Payment Date occurs or (ii) the next 90 days, whichever is
later, which would cause there to be such an Event of Default.

If payment is due to Holder under this Guaranty and no Payment
Postponement Condition exists, the Company shall, upon the demand of the
Holder and from time to time, deliver to the Lenders a certificate of the
Chief Executive Officer of the Company stating that no Payment Postponement
Condition exists (a "Compliance Certificate").

Without in any way limiting the generality of the foregoing,
Company covenants and agrees that this Guaranty shall be a continuing
guaranty, and that Holder may at any time and from time to time, without in
any way affecting, diminishing or impairing Company's obligations under
this Guaranty or Holder's rights to enforce this Guaranty, do any of the
following, all whether with or without notice to Company and with or
without Company's consent:

(a) Upon the occurrence of any default in the payment
of the Obligations when due, exercise or not exercise any and all rights
and remedies available to Holder in such circumstances;

(b) Change the manner, place or terms of payment of the
Obligations, or extend the time for payment or performance, or renew or
compromise any of the Obligations;

(d) Settle or compromise any of the Obligations or
subordinate the payment of all or any part of the Obligations to the
payment of any other liability of Bally's Casino to creditors other than
Holder; or

(e) Consent to or waive any breach, omission or default in
the performance by Bally's Casino of all or any of its obligations created
by the Terms, and amend, modify or supplement the Terms.

In addition, without in any way limiting the generality of the
foregoing, Company covenants and agrees that Company's obligations under
this Guaranty, and Holder's rights to enforce this Guaranty, shall not in
any way be affected, diminished or impaired by:

(a) Any insolvency, bankruptcy, liquidation,
reorganization, readjustment, composition, dissolution, winding up,
assignment for the benefit of creditors, receivership or trusteeship
involving Bally's Casino, any of its affiliates or any other person or
entity liable on the Obligations as guarantor or otherwise; or

(b) Any merger, consolidation, or sale of all or
substantially all of the assets of, or of a controlling stock interest in,
Bally's Casino, any of its affiliates or any other person or entity liable
on the Obligations as a guarantor or otherwise, even if following the
transaction, Company no longer is a subsidiary of Bally's Casino; or

(c) The existence of any other circumstances which might
constitute a legal or equitable discharge of a surety or guarantor under
applicable law.

Company covenants and agrees that Holder may at all times deal
with Bally's Casino and its affiliates in the same manner and as freely as
if this Guaranty did not exist, without in any way terminating, diminishing
or impairing the validity of this Guaranty or Company's obligations under
this Guaranty.

Company waives any claim for reimbursement, contribution,
subrogation, indemnification, or other relief which Company may have
against Bally's Casino, any of its affiliates or anyone else who may be
liable in respect of the Obligations as obligor, guarantor or otherwise, by
reason of Company's making any payment or otherwise performing in respect
of this Guaranty.

If any payments made to Holder in respect of the Obligations are
required to be rescinded or must otherwise be restored or surrendered by
Holder in the event of the bankruptcy, insolvency, reorganization or
similar event involving Bally's Casino, any of its affiliates, or any other
person who may be liable in respect of the Obligations as obligor or
guarantor, or for any other reason, Company covenants and agrees that this
Guaranty shall continue in effect or shall be reinstated, as the case may
be, and that Company shall remain liable under this Guaranty for the
payment and performance in full of the Obligations, including any portion
required to be rescinded, restored or surrendered by Holder, subject to the
$10,000,000 aggregate limit of this Guaranty.

If pursuant to any proceeding before any court or administrative
body having jurisdiction, or any settlement or compromise of such a
proceeding, claim is ever made on Holder for repayment or recovery of any
amount received in payment of the Obligations, Company agrees that such
proceeding or settlement or compromise shall be binding upon Company, and
that in addition to Company's other obligations under this Guaranty,
Company shall be liable to Holder for the entire amount so repaid or
recovered, subject to the $10,000,000 aggregate limit of this Guaranty.

Company covenants and agrees to be responsible for and to pay all
costs, charges and expenses, including reasonable attorneys' fees and
disbursements, incurred by Holder to enforce this Guaranty or to exercise
any rights or remedies available to Holder under this Guaranty or under
applicable law, together with interest. Any amount payable under this
paragraph shall be subject to the $10,000,000 aggregate limit of this
Guaranty.

In the event any agreement contained in this Guaranty shall be
breached by Company but waived by Holder, such waiver shall be limited to
the particular breach so waived and shall not be deemed to apply to any
other breach.

Company covenants and agrees that this Guaranty shall be binding
on Company and on Company's successors and assigns, and that this Guaranty
is made for the benefit of Holder and Holder's heirs, personal
representatives and assigns, and may be enforced against Company by any of
them.

Company hereby waives all rights to trial by jury in any
litigation relating to this Guaranty.

This Guaranty shall be governed by and construed in accordance
with the laws of the State of New Jersey.

BALLY'S PARK PLACE, INC.

/s/ Dennis P. Venuti
Senior Vice President

FIRST AMENDMENT TO CREDIT AND GUARANTY AGREEMENT

This is the first amendment (the "Amendment") dated December 5,
1994, to a credit and guaranty agreement dated as of March, 8, 1994 (the
"Agreement") by and among:

Bally's Park Place, Inc., New Jersey corporation (the "Borrower"),
Bally's Park Place, Inc., a Delaware corporation, and Bally's Park
Place Realty Corp., a New Jersey corporation (each a "Guarantor" and
collectively the "Guarantors),

and

First Fidelity Bank, National Association and Midlantic Bank, National
Association, successor by consolidation to Midlantic National Bank,
(each a "Bank" and collectively the "Banks").

RECITALS

A. The Borrower, the Guarantors and the Banks have previously
entered into the Agreement.

B. The Banks, the Guarantors and the Borrower desire to make the
amendments to the Agreement set forth herein.

NOW, THEREFORE, in consideration of the agreement of the parties
contained herein, and intending to be legally bound, the parties hereto
agree as follows:

1. Amendments to Section 1.01 - The following definition is added in
SECTION 1.01 and reads as follows:

"Required Banks" means at any time, Banks holding
at least 66-2/3% of the Commitment Percentages."

2. Amendment to Subsection 5.05(B) - Subsection 5.05(B) of the
Agreement is amended to read as follows:

"(B) obligations of Bally's Casino, Inc. to the holders of
certain shares of preferred stock of Bally's Casino, Inc., whether or
not issued on the date hereof and one of which holders may be an
officer of Park Place-Delaware, in an amount up to $10,000,000 under a
written agreement satisfactory to the Banks (the "Preferred Stock
Guaranty"), which agreement provides, among other things, that it will
be a condition precedent to payment under the Preferred Stock Guaranty
that (i) no Event of Default (as defined in the Preferred Stock
Guaranty) shall have occurred or be continuing, and (ii) Park
Place-Delaware is not aware of any event that is likely to occur
before the end of the next fiscal quarter or the next 90 days,
whichever is later, which would cause there to be such an Event of
Default. If payment under the Preferred Stock Guaranty is to be made,
satisfaction of the two conditions listed as (i) and (ii), above,
shall be evidenced by a certificate of the Chief Executive Officer of
Park Place-Delaware delivered to the Banks no more than ten days prior
to such payment. Prior to the issuance of the Preferred Stock
Guaranty, Park Place-Delaware shall provide to the Banks an opinion of
Counsel containing customary exclusions and exceptions, and reasonably
acceptable in form and substance to the Banks in the form of Exhibit
5.05B."

3. Amendment to Section 9.01 - Section 9.01 is amended to read as
follows:

"SECTION 9.01. Amendments and Waivers. Neither this Agreement
nor any other Loan Document, nor any terms hereof or thereof may be
amended, supplemented or modified except in accordance with the
provisions of this subsection. With the prior written consent of the
Required Banks, the Agent, the Guarantors and the Borrower may, from
time to time, enter into written amendments, supplements or
modifications to the Loan Documents for the purpose of adding any
provisions or changing in any manner the rights of the Banks, the
Guarantors or the Borrower hereunder or thereunder or waiving, on such
terms and conditions as the Agent may specify in such instrument, any
of the requirements of the Loan Documents or any Potential Default or
Event of Default and its consequences; provided, however, that no such
waiver and no such amendment, supplement or modification shall (a) (i)
increase or decrease the Commitment of any Bank (except for a ratable
decrease in the Commitments of all of the Banks) or subject any Bank
to any additional obligation for reimbursement or indemnification, or
(ii) reduce the principal of or rate of interest on any Loan or Letter
of Credit Obligation or any fees hereunder, (iii) change any payment
date, or (b) amend, modify or waive any provision of this subsection
or reduce the percentage specified in the definition of Required
Banks, or consent to the assignment or transfer by the Borrower of any
of its rights and obligations under this Agreement or the other Loan
Documents or consent to the release of all or substantially all of the
collateral upon which Liens have been created pursuant to the Loan
Documents or consent to the release of any guaranty, in each case
without the prior written consent of all the Lenders, or (c) amend,
modify or waive any provision of Article VIII without the prior
written consent of the then Agent. Any such waiver and any such
amendment, supplement or modification shall apply equally to each of
the Banks and shall be binding upon the Borrower, the Banks, the
Guarantors, the Agent and all future holders of the Revolving Credit
Notes. In the case of any waiver, the Borrower, the Banks, the
Guarantors and the Agent shall be restored to their former position
and rights hereunder and under the outstanding Notes and any other
Loan Documents, and any Potential Default or Event of Default waived
shall be deemed to be cured and not continuing; but no such waiver
shall extend to any subsequent or other Potential Default or Event of
Default, or impair any right consequent thereon."

4. Approval of forms of Guaranty and Opinion of Counsel - It is
agreed that the form of guaranty attached to the Amendment as Exhibit A and
the form of opinion of counsel attached as Exhibit B are, for purposes of
determining compliance with Section 5.05(B) of the Agreement, satisfactory
to the Banks and that such guaranty, when executed, shall be a "Preferred
Stock Guaranty" for purposes of 5.05(B) of the Agreement. It is expressly
understood that the Banks may, at their sole discretion, condition any
further amendments of the Agreement on an amendment to the definition of
the term "Event of Default" under the Preferred Stock Guaranty.

5. Representations and Warranties.

a. The representations and warranties contained in the Loan
Agreement are true and correct in all material respects except to the
extent that (i) such statements expressly are made only as of the Closing
Date, or (ii) the Borrower has previously provided to the Banks written
notice of any material change in the facts set forth in such
representations and warranties.

b. No Potential Default or Event of Default has occurred and is
continuing.

c. This amendment has been duly executed and delivered by the
Borrower and each of the Guarantors and is enforceable in accordance with
its terms, except as such enforceability may be limited by bankruptcy,
insolvency, or other similar laws affecting the enforcement of creditors'
rights generally or general principles of equity.

6. Continuing Effect; No other Amendments - Except as expressly
amendment hereby, all the terms and provisions of the Agreement are and
shall remain in full force and effect. The amendments provided for herein
are limited to the specific subsection of the Agreement specified herein
and shall not constitute an amendment of, or an indication of the Banks'
willingness to amend any other provisions of the Agreement.

7. Fees of Agent's Counsel - The Borrower shall pay the fees and
expenses of McCarter & English, counsel to the Agent, and Robinson, St.
John and Wayne, counsel to Midlantic Bank, National Association, in
connection with the preparation and negotiation of this Amendment.

8. Counterparts - This Amendment may be executed by one or more of
the parties on any number of separate counterparts, and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument.

<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Amendment
to be executed by their respective officers thereunto duly authorized, as
of the date first above written.

Address and Telecopier Nos.

BALLY'S PARK PLACE, INC., Park Place and the Boardwalk
a New Jersey corporation, Atlantic City, NJ 08401
as Borrower Telecopier: 609-340-2647

/s/Joseph A. D'Amato
Vice President

BALLY'S PARK PLACE, INC., Park Place and the Boardwalk
a Delaware corporation, Atlantic City, NJ 08401
as Guarantor Telecopier: 609-340-2647

/s/Joseph A. D'Amato
Vice President

BALLY'S PARK PLACE REALTY CO., Park Place and the Boardwalk
a New Jersey corporation, Atlantic City, NJ 08401
as Guarantor Telecopier: 609-340-2647

/s/Joseph A. D'Amato
Vice President

MIDLANTIC BANK, NATIONAL 499 Thornall Street
ASSOCIATION as lender Metro Park Plaza
Edison, NJ 08137
Telecopier: 908-321-2144
Attention: Edward M. Tessalone
/s/Edward M. Tessalone
Vice President

FIRST FIDELITY BANK, 550 Broad Street
NATIONAL ASSOCIATION, Newark, NJ 07102
as lender and Agent Telecopier: 201-565-6681
Attention: Robert K. Strunk, II

/s/Robert K. Strunk, II
Vice President